tag:blogger.com,1999:blog-1141932539860553199.post7621135220608909709..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: The supply and demand curve for "money" (1)Mark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-1141932539860553199.post-3363173750277557402013-11-25T14:11:28.820+00:002013-11-25T14:11:28.820+00:00If ever someone created a intricate system whereby...If ever someone created a intricate system whereby the whole community bartered with each other based on largely credit secured on their land, and further sent this credit around to other communities as the basis for trade... oh wait.Kjhttps://www.blogger.com/profile/13530243002915410700noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-87657860079567718432013-11-25T13:44:16.220+00:002013-11-25T13:44:16.220+00:00There's no such thing as barter, part 94.There's no such thing as barter, <a href="http://www.dailymail.co.uk/news/article-2513154/Farmer-builds-house-just-150-using-materials-skips--current-tenant-pays-rent-MILK.html" rel="nofollow">part 94</a>.Mark Wadsworthnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-3795440361339140712013-11-25T12:59:45.269+00:002013-11-25T12:59:45.269+00:00Din, that is a very fair summary indeed :-) Questi...Din, that is a very fair summary indeed :-) Question is, do people agree with or accept this? Or am I way off piste?<br /><br />L, more good examples.<br /><br />In any event, I don't mean that we are literally a barter economy, swapping goods nad services for goods and services, we use the medium of "money" for convenience.<br /><br />But you can quite happily model the economy ignoring the "money" itself and just use it as a unit of measurement of flows of wealth and value of exchanges, rather than a thing itself.Mark Wadsworthnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-67694665751617072852013-11-25T12:52:52.265+00:002013-11-25T12:52:52.265+00:00In re barter. Know a bloke who worked for Dowty i...In re barter. Know a bloke who worked for Dowty installing coal pit face machinery. Apparently the Brazilians wanted some but had no cash. So they did a deal for coffee (yes, really). I think it was a forward sale. That is the pit chocks were installed and when the coffee season arrived they sent the stuff to the UK. Don't know the rest of the story.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-87978139480159703002013-11-25T12:20:50.549+00:002013-11-25T12:20:50.549+00:00Is it a fair summary of the post that the credit ...Is it a fair summary of the post that the credit system is relatively stable when used by individuals for deferred barter , but fragile when individuals act to use the dynamics of the credit system itself to generate more credit for themselves.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-46138556399293984192013-11-25T11:06:19.628+00:002013-11-25T11:06:19.628+00:00RM, thanks for barter examples.
You say "Mar...RM, thanks for barter examples.<br /><br />You say <i>"Mark: Your claim in the above article that ALL MONEY is created by commercial banks isn't quite right."</i><br /><br />No that's not what I said. As Kj's linked article explains, there is a huge grey area between barter and payments in cash, "money" as a means of exchanging value is very useful and appears to have invented itself many times over, and not just by banks.<br /><br />What I actually said was:<br /><br /><i>"All banks do is a glorified bookkeeping exercise saying who owes whom how much and running the debt-collection service on behalf of the people owed money... It is actually the borrower who creates credit or prints money."</i><br /><br />We can do QE/government borrowing later on, let's just try and agree some basic observable facts before we get onto that. Mark Wadsworthhttp://markwadsworth.blogspot.co.uknoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-91379890495190699412013-11-25T10:57:23.388+00:002013-11-25T10:57:23.388+00:00The claim by RS that barter “never existed” is den...The claim by RS that barter “never existed” is dented by the fact that much of the trade between communist countries prior to the collapse of communism was on a barter basis. E.g. Russia sent X million barrels to oil to Czechoslovakia, and the latter sent Russia Y thousand vehicles in return.<br /><br />Also, barter takes place in every street in the country right now. E.g. I regularly borrow or cadge stuff off my next door neighbour and he regularly borrows / cadges stuff off me. Plus the standard husband / wife relationship involves a lot of barter. E.g. one spouse goes out to work, while the other does housekeeping chores.<br /><br />Mark: Your claim in the above article that ALL MONEY is created by commercial banks isn't quite right. In normal times about 95% is commercial bank created and about 5% central bank created. But at the moment, thanks to QE, the central bank share will have swollen significantly. I saw 10% quoted in a German publication.<br /><br />Commercial bank money nets to nothing, as you imply: i.e. for every creditor or “someone holding £Z of money”, there is someone in debt to the tune of £Z. In contrast, in the case of central bank created money (so called “monetary base”), that’s a pure asset as viewed by the private sector. You can count the central bank / government as a debtor of sorts. But it’s a slightly strange sort of debtor: the debtor has the power to confiscate (via tax) any amount of money from his creditor at any time.<br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-54178257248482642932013-11-25T10:33:45.321+00:002013-11-25T10:33:45.321+00:00MW: yeah it´s the numerical consistency and transa...MW: yeah it´s the numerical consistency and transactions outside an "in-group" that makes money different, a question of degree. Where Graeber weers off in the end is trying to explain away most of modern economics because the premise of Adam Smith et al was not based in historical evidence. When we do have value measured in money, economics is actually somewhat predictable, if not an exact science.Kjhttps://www.blogger.com/profile/13530243002915410700noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-30831589541903709662013-11-25T10:16:06.607+00:002013-11-25T10:16:06.607+00:00RS, as per usual, I have no idea what you are tryi...RS, as per usual, I have no idea what you are trying to say.<br /><br />B, ta for back up. <br /><br />Kj, that article is a bit more nuanced. It's hard to disagree with this bit:<br /><br /><i>"What anthropologists have in fact observed where money is not used is not a system of explicit lending and borrowing, but a very broad system of non-enumerated credits and debts."</i><br /><br />You can call it what you like, it's all barter.<br /><br />DBC, yes, that is illustrated in the last chart - the "common sense" model only covers about a third of all bank lending, two-thirds of it is land speculation. And as I said, I'll do that next week when I have time.<br /><br />Banking is like booze - up to a certain level, it is A Good Thing, beyond that it is A Bad Thing. And I'm bored with all this wailing about FRB from people who don't understand it and try and make it seem more complicated than it is.<br /><br />L, ta.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-14365042457156059762013-11-25T10:09:25.905+00:002013-11-25T10:09:25.905+00:00Coo!Coo!Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-27036979540097076572013-11-25T09:04:41.868+00:002013-11-25T09:04:41.868+00:00Would have thought the supply of money is affected...Would have thought the supply of money is affected/effected by the Guv's economic policies and their efforts (now) to pump up property loans/house prices with low interest rates before the next election.<br />For a more critical view of Fractional Reserve Banking see that scourge of LVT, Murray Rothbard ,and his polemic on FRB (on the Net).DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-65333975635285324652013-11-25T09:00:54.369+00:002013-11-25T09:00:54.369+00:00Bayard: even if it´s an esoteric point now, it´s s...Bayard: even if it´s an esoteric point now, it´s something you can argue about. <a href="http://www.nakedcapitalism.com/2011/09/david-graeber-on-the-invention-of-money-%E2%80%93-notes-on-sex-adventure-monomaniacal-sociopathy-and-the-true-function-of-economics.html" rel="nofollow">Here</a> is a blogpost by anthropologist David Graeber, which claims that there is no evidence for barter preceding money/credit. In your example, there isn´t the value-for-value exchange like you have with monetary exchange, a subtle difference. You may do the transaction with a reference to money because it exists. <br />But OTOH we do, as MW describes, have barter now, with the system of money and credit.Kjhttps://www.blogger.com/profile/13530243002915410700noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-35683925186053993832013-11-24T22:09:25.965+00:002013-11-24T22:09:25.965+00:00RS, I let a man keep his pony in my field and in r...RS, I let a man keep his pony in my field and in return he blast-cleaned my woodburning stove. Does this make me a unicorn?Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-76460415148179987422013-11-24T19:41:23.444+00:002013-11-24T19:41:23.444+00:00Do you have a chart with the supply/demand curve f...Do you have a chart with the supply/demand curve for Love? Ask your kids to figure it out.<br /><br />BTW Barter is a myth. It never ever existed. Not sure if you are saying it ever did.<br /><br />The most exchanged thing IS the money by nature.<br /><br />Something cannot be both goods AND money at the same time.<br /><br />So the means of exchange, once money, is not longer as valuable as goods. And use it as goods and its you will be a very silly person.<br /><br />So barter never existed. Its a myth.Robin Smithhttps://www.blogger.com/profile/04648517992918303543noreply@blogger.com