Zeitgeist Addendum

[Clem Fandango]

Exactly. If we owe more money than what's actually in circulation wouldn't debt and ultimately a full collapse simply be inevitable?

But that's not even how it works, hence I was making fun of you. If that were true every economist- and every layperson versed in economics- would be up in arms. Also, how do you explain the fact that many countries have Reserve Banks but have a budget surplus (meaning they have more money than they spend).

[GrandMaster Smith]

 

Exactly. If we owe more money than what's actually in circulation wouldn't debt and ultimately a full collapse simply be inevitable?

But that's not even how it works, hence I was making fun of you. If that were true every economist- and every layperson versed in economics- would be up in arms. Also, how do you explain the fact that many countries have Reserve Banks but have a budget surplus (meaning they have more money than they spend).

 

So, how does it work? Correct me if I'm wrong but doesn't the Fed Res. charge interest whenever we take out loans? Or something along those lines. I'm definitely not the most knowledgeable when it comes to economics so don't be too harsh

 

 

And other countries aren't ruled by the federal reserve, so no doubts they could work differently.

[Clem Fandango]

None of that is true. The Federal Reserve is not a private corporation, so when loans are taken out any interest goes to administration costs. Moreover, you're confusing loans and printing money. The loans are just the purchase of government bonds, currency is not issued via "loans" because like you say, that would be an unpayable debt and nobody would stand for that. Money is issued by the Treasury Department.

 

While the Fed does own a lot of government bonds, that doesn't mean they are issuing currency, you have been misled. Zeitgeist (and other conspiracy spiel) claims that, because the Federal Reserve loans money to banks and banks loan money to the population, that all money comes from the Federal Reserve, which is completely false; it's not even a misconception, it's a blatant, sensationalist lie. While member banks who have contributed to the Fed can borrow money from the Fed that is not the national source of currency, and the loans are paid back with interest. The profit from the interest is considered the property of the United States Government- so America is not "ruled" by the Fed.

[Triple Vacuum Seal]

 

The "it" you are referring to is an economic system.  Give me one example of a marketless society.  A marketless society isn't feasible for humans in the foreseeable future.  I was just pointing out how these films try to divorce the human experience and market forces.  That's just silly.

Numerous agricultural (some industrial) communities throughout history?

 

 

You still danced around my question. Name one specific marketless society?

 

By word-for-word definition, a society is a community of people living in a particular region and having shared customs, laws, and organizations. None of these entities operate without resources (both tangible and intangible). Where ever there are humans handling resources, market forces are present.

[Clem Fandango]

The "it" you are referring to is an economic system.  Give me one example of a marketless society.  A marketless society isn't feasible for humans in the foreseeable future.  I was just pointing out how these films try to divorce the human experience and market forces.  That's just silly.

Numerous agricultural (some industrial) communities throughout history?

 

 

You still danced around my question. Name one specific marketless society?

 

By word-for-word definition, a society is a community of people living in a particular region and having shared customs, laws, and organizations. None of these entities operate without resources (both tangible and intangible). Where ever there are humans handling resources, market forces are present.

I'm not really understanding your point. Are you saying Communism still counts as having a market because there are exchanges? If so, why are you telling me this?

[Triple Vacuum Seal]

 

That's exactly what I'm saying. My point is pretty clear. I'm telling you this because you contradict yourself by claiming communism is feasible yet....

 

Your direct words==>"if it has a market of any kind it isn't Communism"

 

A marketless system isn't feasible.

[Clem Fandango]

That's exactly what I'm saying. My point is pretty clear. I'm telling you this because you contradict yourself by claiming communism is feasible yet....

 

Your direct words==>"if it has a market of any kind it isn't Communism"

 

A marketless system isn't feasible.

I was obviously defining "market" as being implicit of private ownership. Maybe you are right that a market is any economic system, but what bearing does this have on the discussion?

 

Also, just for the sake of it:

Market - Noun: A regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.

 

In Communism there is no sale or purchase because of collective ownership, hence I define Communism as marketless.

[TheGodDamnMaster]

All of these economic debates have made me think of a rather controversial subject.

 

What are your opinions on the Federal Reserve? I see waves of hate for it from millions of people. Is it really that bad? What did the Fed do that was so wrong?

[Clem Fandango]

All of these economic debates have made me think of a rather controversial subject.

 

What are your opinions on the Federal Reserve? I see waves of hate for it from millions of people. Is it really that bad? What did the Fed do that was so wrong?

They don't understand how it works. They think the government should distribute the currency, even though they already do. The Federal Reserve is a depository for government surplus that lends to money to banks and buys government bonds (so the government can, in very simplistic terms, lend money to itself) and also regulated the banking industry to some extent. It's maybe not the best system but it's not ruling the world or trying to enact a new world order as people seem to believe.

[3niX]

Well...

 

 

Also, just for the sake of it:

Market - Noun: A regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.

 

If thats the definition you go by then you guys are arguing over completely different things.

canttakemyid is talking about the concept of market while you are refering to a physical market (at least with that definition).

 

[Triple Vacuum Seal]

 

Well...

 

 

Also, just for the sake of it:

Market - Noun: A regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.

 

If thats the definition you go by then you guys are arguing over completely different things.

canttakemyid is talking about the concept of market while you are refering to a physical market (at least with that definition).

That's why I let the issue die last night (on my time zone). He was referring more to the marketplace than the market in general. We really weren't getting anywhere anyway.

 

 

@whatsstrength

 

There's a lot of blind activism in America right now as it's kind of become a fad to protest things we don't understand. The hate for the Fed will get us no where since we have some of the most qualified professionals on the job. The one thing I couldn't stress enough is the fact that even the most well-educated economist working for central banks suffer from the "recognition lag" AKA making decisions in the dark. In laymen's, the Fed must react in real time while the useful data for proper decision making is not in real time. In macroeconomics, those in charge of regulating the economy must also work in an environment where they can react quickly enough to the market with the proper monetary policy to prevent the hazards that await. We also suffer from a series of political hurdles between recognition and approval of proper monetary policy referred to as the "legislative lag". Then, we suffer from a series of political hurdles between the approval and implementation of proper policy called the "implementation lag". The Fed also lacks absolute control of the money supply. This hinders their effectiveness in conducting monetary policy. I personally think that humans can only be trusted so much with such a task.

 

The Fed has two goals -(1) regulate and ensure the health of the US Banking system (2) conduct monetary policy (money supply). They do this through influencing the Fed funds interest rate (the rate at which commercial banks lend their own Fed deposits with each other), the discount interest rate (the rate at which banks borrow from the Fed), open market operations (buying and selling of US gov't debt/bonds to adjust the monetary base), and adjusting reserve requirements (the amount of money banks must hold on to and the interest paid on that money). IMPORTANT: The US Mint under the department of Treasury is in charge of the physical production of the money (so we can physically interact with it), while the Federal reserve is in charge of creating the money itself by buying US debt. Money and currency are not always the same thing. In modern times, the political buzzword "printing money" doesn't refer to physically printing currency anymore. It refers to the Fed increasing the monetary base by purchasing US debt via an electronic purchase which is essentially the same thing as printing money in an economic sense.

 

 

 

 

 

I don't understand the hate for Ben Bernanke to be honest. He was a "working class" student from South Carolina with an interest in economics who went to Harvard. He then pursued the study through his Ph.D to eventually become the department head at some of the world's leading business schools. After being on public service leave, he then became involved with the Fed. He never worked on Wall Street contrary to what the political left would want you to think.

 

*Fun Fact: For any of you that live on the east coast and/or have taken road trips down I-95, Ben Bernanke actually worked here in the summer to help meet college expenses. I used to laugh every time I passed that place even as a child...

(all but abandoned Mexican-themed travel stop)

Edited February 16, 2013 by canttakemyid

[Clem Fandango]

I'm pretty obviously not talking about a physical market- the economic concept of a market is derived from the idea of a physical market, due to the exchanges consisting of sales and purchases. In Communism, the exchanges are "internal" and therefore, the system has no market. Otherwise, why would there be a school of thought called "Market Socialism" named specifically to differentiate from marketless forms of Socialism?

[Triple Vacuum Seal]

 

I'm pretty obviously not talking about a physical market- the economic concept of a market is derived from the idea of a physical market, due to the exchanges consisting of sales and purchases. In Communism, the exchanges are "internal" and therefore, the system has no market. Otherwise, why would  there be a school of thought called "Market Socialism" named specifically to differentiate from marketless forms of Socialism?

Market Socialism is just a term used to describe the system for incorporating socialism as a philosophy into real life economics, not a separate school of thought juxtaposed with anything marketless. Thus, "Market Socialism" doesn't affirm that a marketless economy exist. There is no such thing as a marketless human procedure for producing and distributing goods (essentially an economy) yet. All human interactions involve consciousness of a market on some level. Furthermore, communism can't be a marketless implementation because it involves sellers (communists) who outline a price ('cooperation' that could easily be interpreted as labor by many) for a service (economic security for the proletariat) provided to the buyers (citizens).

 

 

I'm not sure what you mean by "internal" exchanges either. Can you provide a valid example.

[Clem Fandango]

Market Socialism is just a term used to describe the system for incorporating socialism as a philosophy into real life economics, not a separate school of thought juxtaposed with anything marketless.

Wait, what? That's exactly what Market Socialism is, maybe you're thinking of a different- incorrect- way of using the term? Market Socialism is an economic system where worker owned (therefore: Socialist) firms compete in a market (read:mutualism) instead of society having collective ownership over the means of production, as in Communism or state-socialism.

 

 

All human interactions involve consciousness of a market on some level. [...] I'm not sure what you mean by "internal" exchanges either. Can you provide a valid example.

The exchanges are "internal" because there are no separate economic entities, only the commune.

 

 

Furthermore, communism can't be a marketless implementation because it involves sellers (communists) who outline a price ('cooperation' that could easily be interpreted as labor by many) for a service (economic security for the proletariat) provided to the buyers (citizens).

What you're describing isn't Communism, it's state-socialism. Communism is not about trading your labour to the state in exchange for security, in fact, the whole point of Socialism in general is that labour isn't a commodity that can be exchanged for capital- that's considered to be an unequal, coercive relationship. In Communism there is no state (assuming that is what you mean by "communists") and there is no "citizens" distinct from the state because there is no state.

 

Of course, the point is that whatever system being proposed by that Zeitgeist movie is not Communism, regardless of how you define markets. It's a Capitalist economy run on a barter system.

[3niX]

Well...

 

 

The exchanges are "internal" because there are no separate economic entities, only the commune.

 

Are you trying to imply that the communes are somehow homogeneous and thus should be treated as one entity?

[Clem Fandango]

Well...

 

 

The exchanges are "internal" because there are no separate economic entities, only the commune.

 

Are you trying to imply that the communes are somehow homogeneous and thus should be treated as one entity?

Economically, yes. There aren't any purchases or sales, only "transfers" so how do we view Communism as having a market?

[3niX]

Well...

 

 

Economically, yes. There aren't any purchases or sales, only "transfers" so how do we view Communism as having a market?

Firstly, a huge monolithic community is unviable in the real world. At a certain point it becomes either unmanagable or the equlibrium of power among the people starts shifting (which is counter to what your interpretation of communism is about).

 

Secondly, you can't treat several smaller communities/communes as homogeneous because they inevitably have different resources and different goals.

 

A market is necessary for distributing resources. It would be foolish to assume that communities wouldn't pursue their own interests. Exchanging goods is essential for such goals because there aren't that many regions (if any) which have essentialy unlimited assortment of resources. And even if there are some communities which have such resources, theres no guarantee that they will ever put them to use.

 

Going back to my first point, the mechanisms of your supposed "transfers" in a large monolithic community are rather unclear. Wouldn't that imply some sort of power structure which co-ordinates these "transfers" (and with some resources might even have to enforce)?

 

If you suggest that organizing these "transfers" would be the job of "the community" then thats a rather bad approach. The reason is because reaching a well reasoned decision is stifled by an overall lack of understanding in such decisions. Another thing is that there would inevitably be a varying degree of interest for the resources and their distribution in different regions and communities. One part of community might not care at all what happens to some particular resource (which would prove detrimental for the decision making), while two other parts would essentially be at each others throats, which brings in all sorts of nasty power struggles among the regions/communities.

 

Sure, you can claim that communism has no market. As an idea on paper it sounds dandy but current reality would through too many hurdles at it to be considered as part of a viable definition.

[Triple Vacuum Seal]

 

Sure, you can claim that communism has no market. As an idea on paper it sounds dandy but current reality would through too many hurdles at it to be considered as part of a viable definition.

This is exactly what I was trying to say in regards to a "marketless" communism being unfeasible. A collective ownership over the means of production still involves a market.

Edited February 17, 2013 by canttakemyid