What role should money and markets play in a good society?

There has been talk that money and markets have been getting in the way of a good society. So people say that people may be better off without money altogether. Some of these ideas are surly based in truth, but the question is how many of these problems are caused by the current financial regulatory framework? Given that the framework should work with haman nature, rather than fight it, probably all of the fault lies with the current system.

That being said, the idea of completely eliminating money and markets seems an unachieveable extreem. The current market framework may not be balancing which may cause distortions in price signals, but the market’s price rankings of valuable services in the Main St. Market will always support educational progress and technological dispersion. 

The next stage in the evolution of money is a cultural shift in it’s perceived purpose. We have thought of money as mostly economic (that we primarily use it to value material things.) We are headed towards a mostly political understanding of money. Especially as services (including the exchange of things) make up the relevant portion of all money spent in a year (GDP.)

What changes when we think of money as primarily political rather than primarily economic is striking. Mosly because we have been conditioned to make a distinction between the two. Economics is money and markets while politics is democracy and Ballots. When this barrier between the two first breaks down in the mind it can be perplexing. All of a sudden ideas from previously different subjects combine causeing initial confusion.

Typically, the idea that there must be one leader or set of leaders is the primary hinderance. When we consider the democratic political system we are keenly aware that it is loser gets nothing and winner takes all. This is based on the democratic ideal during any term of time everyone within a geographical border must be lead the same way by the one leader or set of leaders. This ideal is in fundamental contradiction to the market. 

The question becomes can one leader really dictate from the top down what is right for hundreds of millions of people spread over thousands of miles? It is commonly understood that such dictitorial power is dangerous and even morally wrong. Especially, when the leader is not liked. While some haven’t yet considered it, the market allows for the choosing of political leaders and it has for thousands of years.

The primary difference in ideal is that within a Republican market there are many many leaders who are specialized and who most compeat for a limited amount of constituent support. What is striking is that a Democratic Ballot is like a Republican markets money. In a Republic everyone is a representative while in Democracy a few representatives compromise an oligarchy.

Of course, what we have today is democracy, but there is also a market. That market is sosialisticly controlled by the the democracy’s oligarchy. Saddly, many of the rules that we are accustomed to today trace back to the essential planks outlined in the Communist Manifesto that was first published in 1848. Things like the centralization of credit via the monopoly on money and the graduated income tax are Communist ideals. 

While ideas like ending central banking and the income tax are commonly discussed online among peers the so-called mainstream media still promote such ideals. Such ideals are what keep the wealthiest people in the world in control of the markets and all of the organizations and individuals affected by them. While those in the so-called 1% plutocracy make the right decisions for the world there is prosperity, but the Republican ideal is certainly very different than rule-by-the-rich.

From an ideal perspective democracy and republic are nearly identical. People are generally equal via the entitement to vote by Ballot. The primary difference is what we’ve already partially introduced. In democracy there is majority rule. Since there is a limited number of Representatives those who vote in the minority always loose. Whereas in a Republic there is a market and every constituent is a potential representative who is chosen via market exchange.

The challenge is overcoming the fact that we have had drilled into ourselves the idea that an individual’s opinion doesn’t count if that person doesn’t agree with the majority of other people. The truth is that every individual in the market deserves the dignity of having their opinions matter by casting them in the market. The effort will need to be to understand Ballot provision as continous rather than periodic.

When every individual in a Republic’s market gets a Ballot every term the periodic provision of the entire ballin a democracy becomes the continous provision of the ballot during the term at  a rate. Implicit in this is that fact that in a Republic a Ballot must be divisable. Just like a Dollar can be divided into cents a decimal point and six zeros can be appended to a Ballot.

This is, once again, the increadable idea that a Ballot is money that is political in nature. It is the idea that when I spend money hiring you I govern your behavior and you are under my political control while working form me. An idea anyone who’s ever had a job naturally understands, but has often hoped that the “political” oligarchy or “economic” plutocracy would somehow promote reciprocal balance or even take on their responsibilitys. 

Regardless, The ironic thing is that the Republican ideal promotes balance in a reciprocateing market by via the provision of Ballots in a continuous manner. Since, every Ballot is the same for every member of the Republic and each gets it every term the incoming rate is the same for everyone. Ballot provision is a basic income that is universal to everone who agrees with the Republic’s Constitutional contract. 

Ballot provision via a continuous universal basic income requiers a significant change to the financial system framework. It is obvious that the Communist plank, the graduated income tax, is the incorrect source for a basic income. Such a scheme would balance all incomes and leave the market disabled. There would be no way to keep track of an individuals debit or credit which is a vital function of money. 

Central Banking is a Soviet Ideal

​Wall St’s beginning was wealthy people lending to the government to fund war campaigns. This lending in the for of bonds has thousands of years of tradition. 
It isn’t difficult to understand today that a standard measure of value like the Dollar   doesn’t have to be centrally controlled. There was a time when a physical quantity of gold was used as a standard measure of value. People would deposit their gold at an independent local bank vault and get a receipt that circulates like  paper cash Dollar. 
So each local bank essentially had different forms of cash that could only be redeemed for gold at the local bank. Banks didn’t have multiple branches in different locations. (Reference the book Fragile By Design.) The legalization of bank branches and the central bank created the standard Dollar receipt we are accustomed to today. 
There is a total stock of Dollars in existence at any point in time. The ratio of Dollars people are willing to exchange for things establishes prices. For example the floating price of gold since the Dollar became a standard measure of value separate from an ounce of physical gold in 1971.
The stock of Dollars constantly increases because the central bank and commercial banks intentionally create more credit on behalf of the collective that uses Dollars. The central bank creates Dollars to buy government debt thus allowing Congress to centrally determine how Dollars should be cast ostensibly on behalf of their constituents. In the 2008 crisis the central bank bought mortgages also. Commercial banks create Dollars to buy all kinds of bonds in the Wall St. bond market. The total stock of Dollars in existence increases because more bonds are bought with newly created money than existing bonds (that were bought with newly created money) have their principal repaid.
Price inflation occurs where newly created Dollars bid prices higher. As I stated, newly created money is cast buying bonds which results in higher bond prices. (Bond price inflation then causes lower interest rates on bonds.) This is why those who own bonds get richer. When too large a proportion of his or her wealth is in bonds he or she sells bonds on Wall St. and buys stocks thus trickling the newly created money into stock price inflation. Occasionally, people may sell Wall St. stocks and bonds to bid house prices higher or even to buy everyday things on Main St. thus bidding prices and wages higher.
Banks creates new money on behalf of the collective and by legal regulation chronically determines that the bonds in the bond market should be supported with newly created money. From there it trickles down to companies and individuals. This is wonderful for those who currently have wealth via bond ownership. It is obviously dependent on each individuals differing level of bond ownership.
The government has laws that require banks to behave this way. This is the current standard for our market system. New money is created and literally given to owners of bonds which trickles to owners of stocks. All this is true independent of discussion of interest on bonds or dividends on stocks. Or even, income taxes, sales taxes, VAT, or property taxes. 
The glaring problem with this is that there is little clarity regarding how quickly or in which direction the total stock of money will change over time. It floats based on arbitrary ancillary ideas such as employment levels and the price of a basket of common consumer items. Meanwhile, the population that uses this money is commonly growing (rather than shrinking) at an unpredictable rate as well.   
These issues aside it is glaringly obvious that the Dollar system supports centralized control of the government, stock market companies and the Main St. market as well as the individuals influenced by them via the bond market. The organizations that get newly created money lent to them have money to spend which keeps the economy circulating the way those organizations leaders see fit. This is top trickle down socialism in which the means of production are determined by collective ownership of companies via stocks and by government regulations.
Centralized control of credit via a monopoly on money was a essential point of the 1848 Communist Manifesto. The worldwide central banks of today are the existing embodiment of this foundational plank of Soviet society. Amd, while it is good to have a standard form of credit that is ubiquitously understood by us all, a system that only give credit to bond owners violates Republican ideals.

 

Quick Recap

I was saying that banks create the money stock when they buy government bonds. That money stock is destroyed when bond principal and interest is paid.

The government spends the newly created borrowed money how the few in Congress guess is best for the collective. Then they income tax the productively of the collective to pay the principal and interest on the bonds.

Since the government always runs a deficit the total stock of money is always increasing. Which causes price inflation somewhere in the market.

This system structure leaves us with two   problems. Workers are income taxed to pay principal and interest to wealthy bond owners on Wall St. And, the oligarchy in Washington steals the dignity of individuals in the collective by not trusting him or her to be mature enough to make decisions independently.

The solution is to acknowledge that a Ballot and a Dollar are the same. They both wield political power. Ballot provision is a universal basic income. Both the wealth concentrating power of bonds and the exchange destroying power of income tax can be eliminated while funding the balance producing ballot provision with an inflation-like tax that taxes every Dollar at the same rate.

Michael Parziale