Economics as if People Really Mattered - Week One

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Presentation from workshop in Amnesty Centre, Galway. Week one of the six-week series, Economics As If People Really Mattered, organised by the Vicky Donnelly of the Galway One World Centre

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Economics as if People Really Mattered - Week One

  1. 1. Econom cs As I f iPeopl e Real l yM t er ed atW eek One -I nt r oduct i on Gal way One W l d Cent r e or Amnest y Cent r e, Gal way. 19 Febr uar y 2013
  2. 2. Br evi ar i d’ Amour ( Br evi ar y of Love) by M f r é Er m at engau of Bézi er c. 1288CE Fr anc i sc an f r i ar
  3. 3. Week One – I nt r oduct i onWeek Two – What i s Money? – ( Fut ur e of Money, Chapt er One)Week Thr ee – The Pr i vat i sat i on of Money – ( Fut ur e of Money, Chapt er Two)Week Four – Fi nanci al i sat i on and Debt – ( Fut ur e of Money, Chapt er Thr ee)Week Fi ve – Cr edi t and Capi t al i sm – ( Fut ur e of Money, Chapt er Four )Week Si x – Concl usi on / Open Di scussi on
  4. 4. Capi t al i sm i s f i r st and f or emost a hi st or i cal soci al syst em.What di st i ngui shes t he hi st or i cal soci al syst em we ar e cal l i nghi st or i cal capi t al i sm i s t hat i n t hi s hi st or i cal syst em capi t al cam t o ebe used ( i nvest ed) i n a ver y speci al way. I t cam t o be used wi t h t he epr i m y obj ect i ve or i nt ent of sel ar f - expansi on.I t was t hi s r el ent l ess and cur i ousl y sel f - r egar di ng goal of t he hol derof capi t al , t he accum at i on of st i l l ul m e capi t al , and t he r el at i ons ort hi s hol der of capi t al had t her ef or e t o est abl i sh wi t h ot her per sons i nor der t o achi eve t hi s goal , whi ch we denom nat e as capi t al i sm i .Hi st or i cal capi t al i sm i nvol ved t her ef or e t he wi despr ead com odi f act i on mof pr ocesses – not m el y exchange pr ocesses, but pr oduct i on pr ocesses, erdi st r i but i on pr ocesses, and i nvest m ent pr ocesses – t hat had pr evi ousl ybeen conduct ed ot her t han vi a a ‘ m ket . ’ arAnd i n t he cour se of seeki ng t o accum at e m e and m e capi t al , ul or orcapi t al i st s have sought t o com odi f y m e and m e of t hese soci al m or orpr ocesses i n al l spher es of econom c l i f e. i
  5. 5. -
  6. 6. “Marx, for example, emphasizes that all of these forms of capital – merchants’capital, money capital and rent on land – had an historical existence which stretchesback well before the advent of industrial capital in the modern sense.
  7. 7. “Marx, for example, emphasizes that all of these forms of capital – merchants’capital, money capital and rent on land – had an historical existence which stretchesback well before the advent of industrial capital in the modern sense.We therefore have to consider an historical process of transformation in whichthese separate and independently powerful forms of capital became integrated into apurely capitalist mode of production .
  8. 8. “Marx, for example, emphasizes that all of these forms of capital – merchants’capital, money capital and rent on land – had an historical existence which stretchesback well before the advent of industrial capital in the modern sense.We therefore have to consider an historical process of transformation in whichthese separate and independently powerful forms of capital became integrated into apurely capitalist mode of production .These different forms of capital had to be rendered subservient to a circulationprocess dominated by the production of surplus value by wage labour.
  9. 9. “Marx, for example, emphasizes that all of these forms of capital – merchants’capital, money capital and rent on land – had an historical existence which stretchesback well before the advent of industrial capital in the modern sense.We therefore have to consider an historical process of transformation in whichthese separate and independently powerful forms of capital became integrated into apurely capitalist mode of production .These different forms of capital had to be rendered subservient to a circulationprocess dominated by the production of surplus value by wage labour.The form and manner of this historical process must therefore be a focus ofattention.” David Harvey, Limits to Capital (London: Verso, 2006), 73.
  10. 10. The purpose of capitalism is self-expansion – capital begets capital – and it does so by monetizing social value and human labour.This is a circuit of transformation.
  11. 11. The purpose of capitalism is self-expansion – capital begets capital – and it does so by monetizing social value and human labour.This is a circuit of transformation.“Historical capitalism involved therefore the widespread commodification of processes – not merely exchange processes, butproduction processes, distribution processes, and investment processes – that had previously been conducted other than via a‘market’. And, in the course of seeking to accumulate more and more capital, capitalists have sought to commodify more and moreof these social processes in all spheres of economic life.” Immanuel Wallerstein, Historical Capitalism (London: Verso, 2011), 15.
  12. 12. Br evi ar i d’ Amour ( Br evi ar y of Love) by M f r é Er m at engau of Bézi er c. 1288CE Fr anc i sc an f r i ar
  13. 13. M oney i s a com ex phenom pl enon whose econom c if unct i oni ng r el i es on soci al t r ust and publ i caut hor i t y.The exposur e of t he r el i ance of t he pr i vat ef i nanci al sect or on t he st at e has br ought t hef i nanci al syst em i nt o f ul l vi ew and opens i tup f or anal ysi s. The oppor t uni t y m ust bet aken t o chal l enge t he pr i vat e cont r ol off i nance and ask whet her such an i m por t antaspect of hum an soci et y shoul d be owned by,and ser ve, t he i nt er est s of capi t al i sm .The money syst em needs t o be r ecl ai m ed f r omt he pr of i t - dr i ven m ket econom and soci al l y ar yadm i ni st er ed f or t he benef i t of soci et y as awhol e as a publ i c r esour ce.The capi t al i st m ket i s not cr eat ed t o m ar eetneeds, i t i s cr eat ed t o m ake pr of i t s. [ Weneed ‘ bet t er ’ capi t al i sm et c]
  14. 14. M oney i ssue and ci r cul at i on has moved bet weent he pr i vat e and publ i c sect or i n an i nt r i cat er el at i onshi p bet ween t he st at e, com er ce and mt he banki ng sect or .The pr i vat i sat i on of m oney i ssue andci r cul at i on has l ed t o t he em gence of a erf i nanci al i sed soci et y wher e m oney val uepr edom nat es. Thi s has under m nded publ i c and i icol l ect i ve appr oaches t o soci al sol i dar i t yand secur i t y, par t i cul ar l y wi t hi n t he Angl o-am i can econom es. er iThe case wi l l be m ade f or seei ng m oney as asoci al l y const r uct ed and publ i cl y aut hor i sedr esour ce t hat shoul d be subj ect t o dem ocr at i ccont r ol .Money i s a soci al cont r act .
  15. 15. Far from being a precious commodity that had become readily accepted through trade as the barter theorists thought, moneyas coin has generally been accepted by fiat, that is, issued and guaranteed by an authority, such as a powerful leader, an office-holder or a religious organisation.Making coin out of a precious metal confuses the role of money as a measure of value with the value of the coin itself.Gold can change value both as a commodity and as a coin in terms of purchasing power. Therefore gold/silver as a commoditydoes not ‘have’ a value. It is valued, but at any point in time the exact value will vary and will need to be designated in someother form of commodity or money, such as silver or dollars. Money does not in itself embody a value, it measures relative values. (p,10)
  16. 16. Money is more helpfully seen not as a ‘thing’ but as a social form.
  17. 17. Money is more helpfully seen not as a ‘thing’ but as a social form.‘Sound money’ is a product of society, not of nature.
  18. 18. Money is more helpfully seen not as a ‘thing’ but as a social form.‘Sound money’ is a product of society, not of nature.When we say people trust in money we mean that they are trusting in theorganisations, society and authorities that create and circulate it, other people,traders, the banks and the state.
  19. 19. Money is more helpfully seen not as a ‘thing’ but as a social form.‘Sound money’ is a product of society, not of nature.When we say people trust in money we mean that they are trusting in theorganisations, society and authorities that create and circulate it, other people,traders, the banks and the state.Money, whatever its form, is a social construction, not a natural form.
  20. 20. Money is more helpfully seen not as a ‘thing’ but as a social form.‘Sound money’ is a product of society, not of nature.When we say people trust in money we mean that they are trusting in theorganisations, society and authorities that create and circulate it, other people,traders, the banks and the state.Money, whatever its form, is a social construction, not a natural form.It has not inherent value but it has vast social and political power. (p.11)
  21. 21. - MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED LABOUR HAVE BEEN IMPOSED ONPEOPLE WHO HAVE BEEN FROM SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THELAND.
  22. 22. - MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED LABOUR HAVE BEEN IMPOSED ONPEOPLE WHO HAVE BEEN FROM SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THELAND.- AS ECONOMIES BECAME MONETISED, PEASANT POPULATIONS WERE FORCED TO SELL THEIR LABOURAS LANDS WERE ENCLOSED AND PRIVATISED, AND OFTEN MORTGAGED.
  23. 23. - MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED LABOUR HAVE BEEN IMPOSED ONPEOPLE WHO HAVE BEEN FROM SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THELAND.- AS ECONOMIES BECAME MONETISED, PEASANT POPULATIONS WERE FORCED TO SELL THEIR LABOURAS LANDS WERE ENCLOSED AND PRIVATISED, AND OFTEN MORTGAGED.- FOR THOSE WITHOUT LAND, JOINING THE MONEY ECONOMY MEANT OBTAINING SUSTENANCETHROUGH WAGED LABOUR – THE CIRCULATION AND USE OF COIN FROM THE EARLY MIDDLE AGESENABLED RICH LANDOWNERS TO EXTRACT MORE FLEXIBLE WEALTH FROM THEIR FEUDALPOPULATIONS. (P.19)
  24. 24. - RATHER THAN EXTRACTING PRODUCE OR LABOUR, THEY BEGAN TO DEMANDS MONEY FROM THEIRPEASANT POPULATIONS.
  25. 25. - RATHER THAN EXTRACTING PRODUCE OR LABOUR, THEY BEGAN TO DEMANDS MONEY FROM THEIRPEASANT POPULATIONS.- MONEY SYSTEMS ALSO ENABLED THE EMERGENCE OF FINANCE CAPITAL WHICH ENABLEDEXPLOITATION AND THE EXTRACTION OF PROFIT. (P.19)- MONEY CAN BE AN INSTRUMENT OF SPECULATION AND A TOOL OF EMPIRE. - WHILE CONVENTIONAL ECONOMICS AND MUCH OF Marxist theory sees money as being a reflection of the‘real economy’ of production and exchange, social analyses of money see it as being a phenomenon that has its ownpolitical dynamics.- money cannot be neutral; it is the most powerful of the social technologies. (p.22)
  26. 26. The argument of this book is that as money is such a critical force in the circulation of goods and services andtherefore provisioning, it is vital to question how money is issued and circulated, owned and controlled. From thisperspective money is more than just a reflection of value in the ‘real’ economy. (p.22)
  27. 27. The argument of this book is that as money is such a critical force in the circulation of goods and services andtherefore provisioning, it is vital to question how money is issued and circulated, owned and controlled. From thisperspective money is more than just a reflection of value in the ‘real’ economy. (p.22)The so-called ‘real economy’ – (the economy of capitalist production and exchange) – is in reality an economydetermined by capitalism and by patriarchy. Outside its boundaries lie the natural world and the un-monetised labourand needs of women, children and the poor, as well as non-monetised subsistence economies.
  28. 28. The argument of this book is that as money is such a critical force in the circulation of goods and services andtherefore provisioning, it is vital to question how money is issued and circulated, owned and controlled. From thisperspective money is more than just a reflection of value in the ‘real’ economy. (p.22)The so-called ‘real economy’ – (the economy of capitalist production and exchange) – is in reality an economydetermined by capitalism and by patriarchy. Outside its boundaries lie the natural world and the un-monetised labourand needs of women, children and the poor, as well as non-monetised subsistence economies.It is not a neutral ‘economic’ choice to give something a monetary value, it is in essence a social and political choicethat dominant groups and classes have imposed. (p.23)

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