What is the money entity? What does it do.
Well.....that is why I write this blog. It amuses me to think that I can attempt to discover what it is and what it does based on empirical analysis using some scientific method based on an Object Oriented methodology. Darwin did the same.
Money is a nebulous big marshmallow. Tough to get my mind around it and grasp and understanding. The current money/finance system could certainly be understood as an entity compose of inter-related "truths" to the extent that they are stated descriptions of the objects and their related properties and behaviors that compose the system. To learn all that I would have to have a Phd in economics. Then I would know and understand. I could also get a Phd in religion and know and understand it as well. Equally, I could get a Phd in engineering, math or any of the hard sciences.
Money is not a hard science. Far from it. It has beliefs more associated with religion. Humor is not a hard science but actually, the question: What makes people laugh can be structurally explain with greater scientific credibility than either current social systems of money or religion.
The world wide web is a social system existing on the structure of a complex physical system built on the given properties of a hard science physical universe. Without that physical structure our social system would be based on word of mouth and the capacity of the human mind to store memories and the accuracy of those stored memories.
The world wide web can do a couple of things. It can structure human social systems in its physical likeness as far as it provides a guiding framework and tool that is logic based to manage and extend our intelligence for the common good and its advancement. It can be a tool to perpetuate and enhance social system behaviors that have always impeded the advancement of the general good.
Money and finance are world wide conceptual systems built on the application of modern technology to what are fundamentally mathematical systems of account with a controlling structure beyond the nature of math that is a body of contractual law.
It appears to me that money is a thing with primarily mathematical properties.
It appears to me that finance is a thing with primarily two party contractual properties related to money obligations that can conceptually be anything we wish them to be.
The world of finance is a loosey goosey thing. The hard science math properties of money would seem to be the one and only thing that might enforce a dominant regulatory control over the concept and operation of finance as the entity of last resort to keep the entire system operating.
The fact is that finance dominates money and over rules its enforceable mathematical capacity to regulate the system. Money is a product of finance double entry book keeping balance sheet concepts that create money. As long as money is a child product of finance and not an equal controlling object finance will be beyond the control of our society to assure that it benefits us all and not inordinately the small segment that the profit motive of finance seeks to benefit greatly in the allocation of asset value expressed in and fungible to money as a medium of exchange.
When systems that have a combined physical and logical entity relationship get too big and begin to produce an adverse function as a product of the dysfunction of its physical and logical design and control being under the managerial administration of the controlling authority that sub-optimizes system operation at the expense of its objective then it needs to be broken up into two parts. One part being and its independent physical aspect and the other being its conceptual application. The application cannot dominate the its independent physical aspect based on the dictates of natural science law.
The communication industry was broken up when a dominant controlling system administrator industry dictated its systemic physical system operation to be a function subject to a conceptual application for profit making to the detriment of the users of the system.
Looking back at the recent domination of finance over money and the dysfunction of management and the adverse resulting impact on our society gives the reason to separate money from finance, make money an object entity independent of finance contracts.
Naked Capitalism presents the dysfunction of the recent financial crises at this link and demonstrates that the tail of finance was wagging the dog of money to the extent that tail wagging the dog was supported by a government authority to the detriment of the public it owes its obligations to.
AIG Bailout Trial Bombshell III: Paulson Lied to Congress About TARPPosted on by Yves Smith
The government established a system where a financial conceptual sytem dominated a money structural system when it established the Federal Reserve. The money system will not control the financial contractual debt system until that present system is broken up into separate independently managed but functionally related money and finance entity systems.(long sentence following here with a concept not parsed by punctuation because it must be parsed by thought)
If and when (and inevitably there certainly will be if the financial system is not restructured) there is another liquidity crises and there is not enough liquid money available to resolve it and the solution continues to be the creation through financial means of money to resolve it rather than have the mathematics of an independent money system dictate failure of a financial institution (or any other institutional application) of the money system without failure of the monetary system then the entire system will collapse because of its inherent dysfuctional design.
The break up of too big to fail that insures the dominance of the financial system as a creator of money to serve finance must be accomplished by separating the creation of money from finance and giving that power to an independent monetary system authority.
The role of money is a basic operating system to serve our various social application programs that utilize the operating system for our public and private allocation of resource decisions. While finance is a stakeholder in that application system it is a user of the operating system, not its designer nor its self serving owner.
The conceptual governance structure of our nation was built on a separation of related powers. Seems to work fairly well after a fashion, at least better than any alternative. Money is a power that must likewise be separated from but related to in a balancing control manner to the power of finance to keep the system self controlling, honest and beneficially functioning in operation to serve us.
We are good at system design. Why is this most obviously dysfunctional system of finance allowed to continue? The power of money is the answer and who holds that power (meaning finance) that enables the dysfunction of society and our government.
The framers of our constitution were design engineers. Where are the design engineers today that would see the dysfunction of our financial system and the need to separate money from contractual debt finance?
Maybe the answer is that there is no money in it for the system design engineers. On the other hand there is no money in Open Source system design and implementation yet look at the generous contributions that the concept of Open Source has made to our social benefit.
Maybe selfless Open Source system designers are the modern day patriots on which falls the responsibility of restructuring the money system for the common good.
A common world wide monetary operating system supporting all financial public and private resource allocation applications is the end game level playing field self regulating objective.
Is that too complicated? Too hard to see? To big to comprehend? How it must all be put together?
Kaoru Yamaguchi explains the Debt Free Money System extremely well at this link to his pdf.
It is a system proposed by the American Monetary Act.
Professor Yamaguchi is a presenter at the American Monetary Institute Conference
Prof. Kaoru Yamaguchi will Skype from Japan on:
Public vs Debt Money Systems
- the American Monetary Act in a Nutshell -
 Prof.
Kaoru Yamaguchi |
Professor Kaoru Yamaguchi has continued to refine his
highly advanced modelling system to project how HR 2990 will
achieve monetary reform. He concluded it will: pay off the US national
debt as it comes due; provide the funding for infrastructure, which
solves the unemployment problem; and does these things without
inflation! Professor Yamaguchi has headed the System Dynamics Group of the Doshisha Business School at Doshisha University in Kyoto Japan. He presented hismacroeconomic model on the to a plenary session of the System Dynamics International Conference in Seoul (2010), being attended by more than 300 researchers. It was so well received that on July 26th, the same International Conference asked him to speak on this matter again, at their meeting in Washington, DC. Prof. Yamaguchi made a well received briefing to a packed room at the Cannon House Office Building in Washington DC, to congressional aides. This year he presents his updated study of the American Monetary Act, which also revisits the 1930s Chicago Plan. |
Martin Wolf, Financial Times: Stop banks from creating money (Positive Money) Is an enlightening video published 14 Oct. 2014.
Joseph Huber is also a presenter at this conference. This is his paper on New Currency Theory
His website is at this link.
This contrast his Currency School concept with Bank School concepts of money:
Currency School
Separation of money and bank credit |
Banking School
Money and credit are identical and thus cannot be separate. |
Separation of powers between the creation
of money and the use of money in banking
and the economy in general.
Banks should be free enterprises, but must not have the privilege to create themselves |
(... which is certainly true if asserting a
banking perspective of loaning money
into circulation).
|
the money on which they operate.
Control of the quantity of money is the
responsibility of a state authority (e.g.
central bank, treasury, currency
commission).
|
|
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