Thursday, March 29, 2012

Mixed review 3-29-12


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(

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(
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

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.

Tuesday, March 27, 2012

If history perceived its organs... The body of memory

"The facts which our senses present to us are socially performed in two ways: through the historical character of the object perceived and through the historical character of the perceiving organ. Both are not simply natural; they are shaped by human activity, and yet the individual perceives himself as receptive and passive in the act of perception."

I found these words on the frankfurd school Wikipedia page. They originally came from the fingers of frankfurt school theorist Max Horkheimer. This truly is a remarkable paragraph, it presents to us two ways that the facts are socially performed. First facts are preformed as the historical character of objects perceived and second their preformed as the historical character of perceiving organs. Both objects and perceiving organs have history. Wait!!?! Perceiving organs have history... Is there really a history of eyes, ears, mouths, noses?

Well yes. Of cures! And, in a sense all history is the history of these organs because there would be no history with out the recording of events preserved through these organs, but what is special about the history of perceiving organs if all history is the history of perceiving organs? I suppose that the history of the perceiving organs would differ from other history in that it would stress the changes made in the perceiving organs over time, where as other histories would stress events as they pass over time. But what changes have been made to the perceiving organs? Well! the first thing that comes to mind is evolutionary changes, but I think that there also must be other changes to the perception organs that are not properly speaking evolutionary changes. These changes would be like the way eyes adjust to light.

The "perceiving organs" are shaped by "human activity." There is a history of perceiving organs and that history is history it’s self. How do we access this history of the perceiving organs? Through the artifacts and documents perceiving organs that is art. Art; poetry, architecture, painting, music, and all other forms of history are in actuality the artifacts and past events of the perceiving orgens.

Horkheimer’s paragraph here also identifies the history of the perception of objects and perceiving organs as natural, and that these histories shaped by human action are also shapers of human action. We humans shape our perceiving organs (squinting at the sun) and our perceiving organs are shaped by the objects of the world(pupils dilated).

Imagine a history of perceiving organs. Imagine a civilization who saw their history as the history of their perceiving organs! Max Horkheimer, lets rewrite the history books with sights and smells.