Wednesday, March 28, 2012

Mixed review 3-28-12

I'm going to start posting my nightly readings and a few words of opinion on their contents.

Money and money Reforms by Christ Jelset
This little booklet is a Marxian history of money from the times of barter through the early days of mercantilism on into our current credit system. It is clear concise and to the point with real numbers and a few dates.

Tonight I read the chapters entitled, Government Regulation of Money, and An adequate supply of Money,

The chapter "Government Regulation of money" traces the development of governmental rule concerning the value of coins from the setting of standard waits of value, through the discovery that wait need not correspond to the inscribed value, and re-minting prices, to the governmental changing of wait requirements.

When it was discovered that coins that had been worn to a degree that their inscribed wait no longer corresponded with their actual wait it was then that governments realized that they could control the difference between wait requirement and inscribed value through the rule of law.

At this point in my reading it seems that the writer is unaware of the U.S. current fiat money system when he says "(about non backed currency) This too has had its trial in practical application, but with less success. Governments in distress, as e. g., when wars are carried on, have resorted to paper issues of currency when gold was no longer available as backing. Such practices have automatically raised prices and, if the practice were carried far enough, values represented have disappeared altogether as in Germany following World War I." The writer goes on to identify debtor's as likely to support inflationary printing of money on account that the new money could be used to pay off their debts. (oh! I looked in front of the booklet and now see that it's copyright was 1947 that’s 24 years before Nixon took the U.S. of the Gold standard, so that explains the writers unawareness of current monetary policy.)

Also as a point of personal interjection
While it seems to be true that an increase in money supply could benefit doubters if they manage to use it to pay off their debt, on the other hand the new money would lose buying power in other regards, and if the debtor defaults in spite of the increase in money supply their compounding debt would then increase by the reverse of the value los of the debt plus penalty fees.

The chapter "An adequate Supply of money" presents the labor theory of value in relation to exchange between commodities, the velocity of use in relation to value, the medium of exchange vs. means of payment, the distribution of money, the inequity of the labor market, and the question of who should control monetary policy.

All the topics covered in this chapter are interesting but I'm only going to pick one for the sack of brevity.
The theme of inequity in the labor market is definitely a defining one for Marx. The writer clams that the labor market came about because hand produced "goods" couldn’t compete with "mass production" so workers unable to sell their products at a market price had to sell the labor instead. The writer calms that in regards to the exiting  of money for labor compared to the exchange of goods that "The one is an exchange of equivalents between social equals. The latter, too, is an exchange of equivalents but between unequal’s." What the writer means is that the laborer is at a saver disadvantage because if the commodity market is unable to support the labor the labor will be laid off, this means that the laborer is made secant to the commodity market.

The writer then clams that most monetary reforms have been instigated by those "most successful in business" and presides to expound on these monetary reforms in the following chapters the first in the series being Paper Currency. (I like how the writer puts quotations around "sound" when referring to Paper money as "sound" money reform.)

There where other things I read tonight but I ran out of time tiping this up, In the future I think I'll make the commets shorter.

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