Capital by Karl Marx is a 3 part series that outlines the role of money in society. Capital 1 mainly deals with monetary exchange and how it relates to the commoditization of Labor (not exactly what the wiki states but I've lessened to it on online audio so I know what it’s about). Capital 2 deals with the role of borrowing and lending in the capitalist system (this is of spatial interest to me as banking is kind of my pet project).
Capital 3 spells the end of capitalism claiming that this when the required production increases do to growth, the rate of profits tend to fall. Here’s a link to the audio version of Capital 1(http://librivox.org/capital-volume-1-by-karl-marx/)
2. Money and money Reforms by Christ JelsetThis 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’s reading:
The Capter Paper Currency outlines the development of proto bank notes into paper money. In the days before banking gold smiths would store gold as a serves. The gold smiths would issue receipts that where then used as currency. The writer claims that at first the gold smith would charge a serves fee but do to completion the fee lowered until goldsmiths adopted the practice of charging interest instead (I wonder if there’s a difference between a holders fee and interest). The gold smith’s began investing the holding, "as long as the custodian was a prudent business man and successful in his undertaking, he would not only be able to satisfy all claims and thus avoid prosecution for fraud, but he would be building a fortune for himself as well."
The writer presents a couple models of paper currency, the first of which is a convertible paper money backed by a full gold reserve. The writer claims that the "only purpose for convertible money is to keep the precise metals from the wear and tear of circulation. Than he claims that "this method will prevent depreciation of the currency even more than the circulation of gold itself." Then he claims that it lacks elasticity (which I consider to be economist code for inflation). Finally this method is often suspended by governments in times of crisis to keep their gold reserves form depleting. Also some thing that must be noted is that custodians (bankers) where using reserves for their oun gain.
The writer reports the other extreme to be inconvertible paper money, (it seems to me that the other extreme would be pure fiat money and not another form of backed currency but whatever). In spite of the fact that the writer sites 1933 legislation providing the authority to issue paper beyond corresponding reserves he does not mention the Federal Reserve act of 1913 which galvanized the practice of fractional reserve lending.
In the last paragraph of the chapter the writer says that "in 1933 there seemed to be a great shortage of currency. In 1938 the banks were bulging with excess reserves. But the economic security of the masses of the population had not been established". Thus increasing the money supply does not benefit the public.
For more on the use of paper money check out American dream film-full Length on youtube(http://www.youtube.com/watch?v=tGk5ioEXlIM)
This video gives a fast over view of banking from the Austrian school perspective, and I think it would make a great supplement to this and other Marx's readings of money precisely because it comes from the other end of the political spectrum.
3. An Enquiry Concerning Human Understanding by David Hume
Section IV SCEPTICAL DOUBTS CONCERNING THE OPERATIONS OF THE UNDERSTANDING part I says to us "the observation of human blindness and weakness is the result of all philosophy, and meets us at every turn, in spite of our endeavors to elude or avoid it." There for the disruption of prejudges is a primary purpose or effect of philosophy.
This text derails the assumption that facts can be discovered through the operation of thought alone.
It also proclaims that true knowledge can only be gained through the observance of cause and effect together and that we can’t predict effects from the observations of effects nor know the cause from which an effect comes. The text uses the example of light; we would not know from observing the light of a fire that it could burn us unless we experienced the effect of burning on our skin that fire causes when we touch it.
One place in the text states "When I see, for instance, a billiard ball moving in a straight line towards another, even suppose motion in the second ball should by accident be suggested to me, as the result of their contact or impulse, may I not conceive, that a hundred different events might as well follow from that cause?" I have to admit when I read this I imaged the second billiard ball turning into a kangaroo upon impact, then putting on a rene descartes mask and jumping into a lamborghini diablo and speeding off. I'm assuming that the un-likeliness of this actuality accruing will be covered in chapter 6, Of Probability.
4.Incinerate by sonic youth
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