I have shown how monetary policy is incapable of improving the problem it is claimed to improve and actually makes it worse; and how freedom of contract in money and banking is a viable alternative.

The only critical arguments I am left facing depend on an underlying belief in magic:
• That forced re-distributions from A to B magically create net wealth
• That we can magically create real wealth by printing paper
• That the state mystically ‘represents’ the people when it uses force and fraud to expropriate them
• That the state has the magic power to manage the economy in the absence of economic calculation which it forcibly displaces.

Q.E.D.

The end

Quite possibly, Jefferson.

>>I have shown how monetary policy is incapable of improving the problem it is claimed to improve and actually makes it worse; and how freedom of contract in money and banking is a viable alternative.<<

Unfortunately, you also claim to show that i) barter can work in the twentyfirst century, ii) returning to the gold standard is a really neat idea and iii) that one or the other of these is actually a cure for what ails us, right now.

You are living in "if only..." land.

If only we had done y instead of x.

No-one will ever know whether your theories would have left us in a better place, so it is easy to present alternatives without the need to test them out in real life. Which is of course the really useful thing about theories presented after the fact.

I have very little quibble with the "if only..." part, except for the fact that it is self-indulgent dreaming. Nothing wrong with that. We all do it.

What does disturb me though, is the suggestion that we can instantly magic ourselves into that land of milk-and-honey, without any transitional pain.

What an astonishing bad article that was. If individuals are going to introduce accusations of ‘quackery’ then they should not be protected from receiving the same currency – the face at the bottom of the well is their own.

The issue is one of balance. Why mention;

“… a hundred million lives sacrificed in the 20th century to the communist and socialist experiments” without mentioning the two hundred million lives sacrificed during feudalism, colonial slavery and capitalism.

The Jefferson pamphleteer has earned his degree in quackery. Capitalism is not “the private ownership of the means of production”. Private owners can choose whether to operate as feudalists, capitalists or socialists. Capitalism only exists if private owners of means of production subsequently use their position (however gained) to expropriate wealth from others. If there is no expropriation by capital – there is no capitalism.

You can have capitalism even when the means of production are owned socially, or even by the State. If publicly owned means of production use their market power to expropriate wealth from the rest of society – they are capitalists. Those who simply associate capitalism with private ownership, and delve no deeper, are Jefferson quacks.

As we are now finding out, capitalism can only be imposed for a relatively short time while its inherent contradictions (particularly increasing per capita debt) build up into crisis proportions. Jefferson has not differentiated money (which exists under socialism), from capitalist markets that are falsely fueled by money plus debt.

Jefferson thinks the solution is to:

“…reduce both taxes and government. A good start would be to stop restricting and penalising the population for engaging in employment, saving, business, and investment.”

But this means more:
- capitalist wage expropriation,
- larger piles of capital seeking expropriation,
- more capitalists trying desperately sack workers to protect themselves, and
- more and more debt, interest payments on yesterdays debt, and future interest on today’s $20 trillion dollar bailouts.

So, properly considered, it appears Jefferson quackery leads directly to an unmitigated capitalist catastrophe.

You cannot rectify bad economics with bad politics.

Fozz,

I understand that governments create money out of nothing, but I do not understand exactly how they do it and i have been searching for an explanation for some time. Are you able to direct me to a comprehensive explanation? Thank you.

Chris - gov may 'create' a very small amount of our money out of thin air as it prints and provides the 'hard cash' currency and coins you (and most of us in other western 'democracies') use, but it is actually private banks who do most of the 'out of thin air' creation, although they expect something tangible for 'service' on that money they create, which is a lot of money, a lot of interest, and the source of all of our problems. It's much too long to get into in 350 words, but you might find some enlightenment of what is happening here - Global Financial Meltdown: Forces beyond our control, or the greatest scam ever? http://www.rudemacedon.ca/greatest-sting-ever.html . Our correspondent Justin might also benefit from a read, as he seems to have any number of - ummm - nonsensical ideas in his pamphleteering defence-of-capitalism lexicon.

Thanks, slamdave. I will read your link with interest.