On 8/15/2010 3:27 PM, Jim Devine wrote: > John Vertegaal wrote:> [First off, I don't know if anyone else is > affected the same way, but although I still do, I find it rather > bothersome to read your missives delivered in the above mode [with a > bunch of ">" interspersed in the text]. I think it's been happening > since you heeded the call to turn off html. Having a couple of words > joined on each line of text has probably a cause all its own though; > I'm no expert either...] [[HERE, I INSERTED A BREAK]] < It's strange. I don't understand why web > communications two or evenmore modes of communication with different > rules. When I copy a bunchof text from Harper's Weekly, for example, > sometimes it has a bunch ofregular paragraph marks within each > paragraph, sometimes there are abunch of line-feeds instead, and > sometimes they only appear at the endof each paragraph. This > confusion seems to be the result ofdecentralized decision-making > leading to the absence of standards. Above and below, I got rid of > all of the breaks at the ends of thelines. Did that make it more > readable? [[HERE, I INSERTED A BREAK]] (I'm sure you get the idea now)
Your messages come through as one continuous line, stripped from all LF's and paragraph breaks. This causes the last and first word of your own text lines to merge. I checked the source code and it's possibly (though not very likely) the result of my ISP auto-converting from the 64base code it receives into 8bit. Other senders of pure text I checked send in 7bit code; no auto-conversion, no problem. I guess the question is, why do your messages (as non-attachment) get sent as a binary file through the mail system. I wrote:>> It's not the social security trust fund that's > "powerful." Rather, it's the US federal government, which has the > power to tax people enough to pay the interest on that part of its > outstanding debt held by that fund and to pay for those bonds when > they are sold.<< John:> Nothing in the above disagrees with my > argument that accumulated funds aren't a depletable wealth. In the > final analysis, it's all about taxation anyway.< Yes, I wasn't > saying that accumulated funds are true "depletablewealth," if by that > you mean real resources (capital goods, iron ore,or whatever). I was more thinking in terms of final goods output, the stuff that provides us with our standard of living; soon to be use-values in other words. Don't know any retirees in the market for capital goods, iron ore... :) Rather > the accumulated funds (i.e., the OASI trustfund's pile of government > bonds) represents claims on the government'sability to tax, just as > the savings bonds that your grandmother givesyou are claims on the > power to tax -- and the stock you might own inApple Computer is based > on their ability to grab a piece of society'ssurplus-value. All government income, i.e taxes levied and bonds issued, is part of the private sector's I. The latter are the debit expenditures the capitalists need to get back in order to stay in business. These are passed on until ending up on the retail level where they finally need to be resolved (through C). Whatever portion in the mean time ended up in the coffers of government, and expended as public service (private) income, is now required by retailers in order to make good on their initial outlays. Society's surplus value is a red herring in this process. It's still a _cost_ born by retailers, who can't have the foggiest idea what portion of their outlays consists of embedded higher level achieved profits, interest charges, and taxes. Their only concern is to get those back, as otherwise they won't be able to reproduce the next time around. The latter is the mojo that keeps it all going. According to my set of first principles; reiterated once more as: WHAT the economy is (a human-made system), WHY it exists (to _add_ a variety of use-values to humanity, that couldn't as commonly be obtained in the absence of a formal economic structure), and WHO is supposed to benefit from it all (everybody; as a birthright); a unit of account is required in order to keep track of who is going to be owed what in terms of a final restitution. This is my theory of money. It designates that in those terms, the economy is a circular process of debt acquisition and a subsequent redemption; netting to zero in terms of exchange value and leading to use-values that are beyond economics nomenclature. You are of course free to reject my assumptions and provide a set of your own; like c + v + s, ...? The question now becomes, which set is more comprehensive. Yours doesn't have monetary theory, and any losses are ad hoc. It not only assumes that a numeraire is superfluous to its essence, but also that a dynamic economy can be made sense of in static terms. As I said before, it argues as if capitalists are hellbent to raid the output of their own workers for self-betterment. How is this not a caricature of reality? Although Marxian economics might make perfect sense in a use-value world, it totally loses its bearings in an exchange-value world. >> Since both interest and bond redemption payments by government only >> add claims to, without adding to, private sector output; the >> current convention is no more than a particular source of potential >> inflation. In other words through borrowing, government >> surreptitiously changes the value of the unit of account.< > I don't understand this, especially its most important assumption. > Thegovernment adds a lot to private sector output. What would the > the"private" sector do if the it were truly private, i.e., on its > own,and the government didn't enforce its contracts, protect its > propertyrights, avoid major plagues, etc.? In addition, during the > aftermathof a recession (e.g., now), the government borrowing can > help theprivate sector by financing increased government expenditure > and/ortax cuts, stimulating aggregate demand and allowing business > toutilize their productive capacity more fully. Government helps > buildroads and other infrastructure without which business would > bestifled. Etc. I was getting to make a distinction between government borrowing and taxation, and of course know full well that governmental output puts a lot of value back into society. This is not at all the same as putting it into the economy. The difference, in short for now, is that the former occurs in terms of use values and the latter would be in terms of exchange value. In no way is whatever it borrows however a surplus. It may be considered as such by the individuals who buy those bonds, but the foregone direct spending of their incomes still leaves a shortfall on the retail level and is about to lead to the economy's contraction. The establishment of a plain (trust)fund has no way to rectify that disequilibrium situation. But if the borrowed moneys end up on the big pile of government expenditures, whoever gets their income from those sources is now enabled to remediate the shortfall. The final output however will thereby be gone, leaving bondholders with claims but with nothing to buy. Virtually all government initiated output from taxation and borrowing occurs in the form of use values, and as such disappears into economic exogeneity just like all final output does also, but without the making of a conscious/conscientious purchasing decision. It is neither an additional product, showing up on the retail level and acquirable by bondholders with their interest payments and/or maturity redemptions, nor forced to be bought there with levied personal taxes. Modeling the economy, as if the latter is the case, would be double-counting governmental effort; as its output had already been accounted for by embedding the passed-on cost of taxation into retail output. In other words, it is through the consumption of retail output that governmental output becomes credited. And retailers couldn't care less whether their own (all-encompassing) output is taken off the market (consumed) by those getting their income from the public or from the private sector. Following the above exposed reasoning, (G) fully intertwines with (I) and isn't a separate entity at all. Countering my argument needs an altogether different theory of what money _is_; e.g., you could show me how your (s) turns into borrowing material. If that's an impossible task, I'm afraid Keynesianism won't help you out either. According to a couple of its eminent proponents, Hicks, Davidson, 'money is as money does'! Forrest Gump buffoonery might do for amusing entertainment, but God help us all if that's the intellectual level of economists. >> Thus taxing progressively (like in the 60s) to meet ongoing needs >> is always the most efficient.< > efficiency is a completely different issue. You're right, sloppy thinking/writing on my part. My "Thus" is a non-sequitur, placed here prematurely. I guess what I was thinking is that there is a small army involved in bond trading, pension-fund maintenance and the like; entirely superfluous to the well-being of society. Pay-as-you-go would force these people to seek real jobs and perhaps be productive. me:>> Currently,not only > is the federal government powerful enough [to , but it's legally > obligated to do so.<< John:> This too has no bearing on my > contention that all government borrowing is a mug's game.< But it > does say that the OASI trust fund has a real meaning. Until you show me what it's "really" made up from, its meaning remains chimerical. In anyevent, > your contention is wrong. Another assertion without meaningful content. John continues:> ...I must concede that > both raghu and Max raised valid objections to my critique on Dean > Baker. I'll keep those in mind for whenever I think about > criticizing him in the future. My point is that regardless of any > "built-up" funds, a society can always afford to keep its retirees in > the standard of living they had become accustomed to in their > productive years. The only constraints are exogenously located > natural resources, including labor power. Labor-power is > "natural"?? Yes, the ability to perform useful work is identical whether performed within or outside the commodification process with its monetary return. It seems to me that what John is saying is that saving > now (puttingmoney into the OASI trust fund or the stock market or > whatever) doesnot automatically cause real income that will be > received in thefuture. That is, it only creates paper _claims_ on > future income. Not quite. What I'm saying is such saving creates paper claims on future output that will be additional to the claims inherent in the income disbursed on behalf of producing that output, passed on down to the retail level and assumed there as straight costs by retailers. That's right. [??] In addition to paper claims, what's > needed to paydividends to stockholders, interest to creditors, > benefits to socialsecurity recipients, etc. right now is the > production of actual goodsand services at the same time, beyond that > needed to pay the wages ofcurrent labor-power, the depreciation of > capital equipment, and thecost of raw materials. No. If retailers find themselves in receipt of those additional paper claims, that are (a fair bit) beyond their assumed costs (and whose beneficiaries you correctly listed above), they will start raising the pricelevel. Inflation is a retailing decision. The amount of paper claims in existence only provides its potential. That is, the paper > claims don't always correspond to an actual accrualof real benefits > (goods and services). Last fall I read an article in the HuffPost that outstanding paper claims are about an order of magnitude greater than goods and services for sale. (thought I saved it but cannot find it again) If those claims draw a rent income of say 10% av., and the economy in a reigning dynamic equilibrium supports that because the embedded interest cost in retail output is resolved by rent-income earners, the outstanding paper claims could increase by _another order of magnitude_ if rent-income earners would be satisfied with an av. 1% return; as the rent carrying capacity of this economy wouldn't have to change to remain operating, inflation free, in a dynamic equilibrium... So what you're saying above is kind of understating the situation, don't you think? If, for example, the claim byproperty owners > on profits, interest, and rent (flows of propertyincome) exceeds the > actual surplus-product, then _either_ they have tosqueeze the > working people (raising the surplus-product) or cut theamount of > replacement investment _or_ there's inflation. The "actual surplus-product" is finally determined on the retail level by the direct spending of property income. It wouldn't change if the working people were squeezed all the way down to slavery. Where would all that "property income" come from? In an exchange-value world, Marxian thought has gone off the deep end I'm afraid. The potential size of the actual surplus-product is: increased output per cost of unit input due to _having learned by doing_. It's an issue entirely separate from monetary rewards and their distribution. Similarly, ifthere > are not enough actual goods and services being produced (afterthey > are distributed to property income, wage income, and the like) topay > social security benefits, inflation results. In both case,inflation > does not automatically result if the economy is startingwith a low > rate of resource utilization and that rate can beincreased. Can't find enough wrong with the points you make, to make it worthwhile arguing about it. In other words, we basically agree. >> Baker's argumentation regarding wealth always includes pecuniary >> aspects. Like all economists, he considers money as a part and >> parcel of the economy's territory.< > The "Chicago schoolers" tend to see money as only a veil, > somethingthat can be safely ignored in most situations (with the > exceptionbeing the issue of inflation). As Keynes pointed out, that's > amistake. If money were indeed neutral, NC economics although still tautological would not be entirely without merit; as it stands, it's all a bunch of nonsense. >> As a unit of account however, money is an attribute of the >> economy's _map_; and as such it isn't subject to any (net) >> territorial accumulation, at least not without having thereby its >> own value changed. Axiomatically holding (fiat) money to be >> territorial, to whatever degree, prevents the establishment of a >> coherent monetary theory; for the twain can never meet.< > I don't understand this at all.--Jim Devine You must be familiar with the truism that the map isn't the territory; each being made up from components that get their individual meaning from the whole they form. So if the nature of each whole has it own entirely separate identity, the meaning of its components isn't freely interchangeable between the two. I'm afraid this explanation will have to do for now. Not claiming any philosophical expertise, much of my thinking process is intuitive. A dialectic back and forth is required to establish its validity. John V _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
