Showing posts with label Money Creation. Show all posts
Showing posts with label Money Creation. Show all posts

Thursday, September 12, 2024

Financial Oligarchies vs. State Power | Michael Hudson

My articles about the origins of credit, money, and interest share a common frame of reference. From the inception of economic practices and enterprise in the ancient Near East, through classical antiquity and medieval Europe to today, wealthy classes have sought to transform themselves into an oligarchy that controls government and religion to protect, legitimize, and increase their wealth, especially their rent-extraction privileges as creditors, monopolists, or landlords.

 Marcus Licinius Crassus (115 – 53 BC): 
general, statesman, the richest man in Rome, and a textbook oligarch.
 
We see the same struggle through the ages, with financial elites opposing any government power capable of restricting their self-serving rent-seeking and creditor power at society’s expense. We see it today in the pro-creditor economic policies of the International Monetary Fund, the World Bank, and the ‘libertarian’ ideology, all of which seek to centralize power to allocate resources and plan economies within the financial sector instead of democratic governments. Today’s neoliberal idea is to eliminate government authority (except where it is controlled by rentier sectors) and let banks in the privatized financial sector control money and credit, which is the most important public utility.
 

That should be the context in which one examines every epoch’s economic view of the world, above all its perspective concerning how ‘free’ a market should be and just whose freedom is being endorsed. This has been the great question throughout the history of civilization—from the Bronze Age Near East, when rulers regularly proclaimed Clean Slates debt cancellations to restore economic order and check incipient oligarchies, through the five centuries of civil war in the Roman Republic and Jesus’s fight against the emerging Jewish oligarchy, to today’s civilizational struggle between the NATO West, dominated by U.S.-oriented rentier oligarchies, and the global majority now centered on the BRICS.

 Rare Anomaly: Populist Pariah Oligarchs Proclaiming to Serve the Common Good —  September 2, 2024.

China’s government has financed its remarkable industrial takeoff without having to borrow from private creditors. There was little money to borrow from its domestic population, so the Bank of China printed its own money. Unlike typical financial practice, it did not demand personal wealth be pledged as collateral because stock and bond holdings or substantial real estate did not yet exist. The government did not need to turn to bondholders to increase its public spending—and in any case, there were no domestic bondholders to borrow from in the wake of its Revolution. China did what any sovereign national government can do—what Abraham Lincoln did in the Civil War. It simply printed the money.
 

Friday, November 2, 2012

Conjure away Debt

Ambrose Evans-Pritchard- 21 Oct 2012: ... A paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan. ... The conjuring trick is to replace our system of private bank-created money - roughly 97% of the money supply - with state-created money. ... If lenders are forced to put up 100% reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air. The nation regains sovereign control over the money supply. ... The IMF study came out in August and has begun to acquire a cult following around the world. Entitled "The Chicago Plan Revisited", it revives the scheme first put forward by professors Henry Simons and Irving Fisher in 1936 during the ferment of creative thinking in the late Depression. Read all HERE and watch THIS