Saturday, November 27, 2010

Giving Wealth a Chance

“In a monetary system there is an inherent reason for
corruption and that is to gain a competitive advantage over someone else.” Jacque Fresco

One of money’s great shortcomings is its tendency to accumulate to itself. The rich become richer, the poor poorer. Countering this, capitalism’s most beguiling selling point is the arbitrary way money-flow, as affected by buying and selling, acts as an impartial force for democracy and social good (The Invisible Hand). Vote with your wallet, communicate your desires with your spending power, and keep government out of it. We all know the argument.

But the poor cannot simply 'vote' how they want – many can barely afford food – while the rich get far too much of a say, and do their level best to keep it that way.

In the US, the idea of redistributing income is seen as socialist, and therefore evil. However, capitalism is by definition a distributor and redistributor of wealth via the price mechanism, using so-called rational or enlightened self interest to drive this forward. But, instead of the theoretically predicted 'creative destruction,' humanity has repeatedly endured too much hoarding and accumulation under capitalism's aegis. Today we have Too Big To Fail, but the pattern is the same across the centuries; stubborn social divisions leading to decadence and corruption. This is generally predicted by the quote opening this piece.

Monetary wealth is capitalism’s implicit goal, its sign of success, the carrot to poverty's stick. Poverty is the horror to be avoided at all costs. Inescapably this dynamic will tend to entrenched social divisions, and we have indeed seen this throughout history. Humans, being highly intelligent and social, have 'escaped' the law of the jungle by establishing dynasties and institutions for protection of 'our own' (be that race or class or creed) down through the generations. Now we have immortal legal persons known as Corporations, cheating death, and hoarding power and wealth like there were no tomorrow. Soon there won't be.

Lopsided and therefore unhealthy distributions of money are like stagnation in an ecosystem, when dynamism is suffocated and rot (decadence) sets in. Wide and deep money-flow simply cannot persist over time at sufficient speed and depth unless the system is designed from the ground up to affect this. A guaranteed income, aligned with demurrage (negative interest) and the other suggestions I list below, would not ‘redistribute income’ in the sense of 'theft,' but ensure healthy money-flow, keep democracy working, prevent stagnation and persistently deep income inequality, and promote growth only where it is healthy to do so. This post is a rough and discussion-oriented attempt to list goals and priorities as I see them, and part of an ongoing attempt to redefine wealth.

Core socioeconomic elements:
1. Guaranteed income from birth to death
2. Negative interest of 4% on all money
3. One tax – sales tax, simple, no avoidance possible
4. All money spent into existence by state
5. 100% reserve banking (if banking is at all necessary (see below))
6. (?) One currency worldwide (???)

Full employment, with work to be redefined at the cultural level
Open, optional education geared to maturity and creative problem solving, not rote
Constant or increasing amounts of fertile topsoil (other cultures have managed this)
Clean air
Constant or rising water tables of clean water
Ever falling crime rates
Full automation of grunt labour where this is good for society and the environment
As close to 100% recycling as possible (adherence to cradle-to-cradle design principles)
Goods built to last for as long as possible
Building of ‘intelligent’ eco-cities and new transportation network (ET3)
Speedy transition to renewable energies
Health system focused on prevention, not cure
Decreasing emphasis on ownership, increasing focus on access
Where feasible, goods and services to be given away for free

All of the above under the following directive: demote money, promote wealth.

(Some thoughts on my thoughts: Persistent and deep money flow throughout all parts of economy including return to govt. ‘coffers’ (trash) guaranteed by points 1,2 and 3 – hoarding would be virtually unheard of. Investment in new production could be funded by the 'community' on Internet sites designed to raise interest in new ideas (this would be very democratic and give the term 'purchasing power' real meaning). Otherwise government could enable new production, in which case either ‘normal’ money would be spent into existence, or ‘fixed-life, single-purpose’ money that ‘expires’ after having fulfilled its function. We need only a healthy aversion to risk, not horror of it. (Could banking be entirely automated? It need simply be storing money and tracking its movement, money being mere numbers.) Assumed/expected at the outset is less (I really mean “less”) economic activity. I seek the death of the pursuit of ever increasing monetary profits and Perpetual Growth, and the demise of the very notion of 'money is wealth.' I am not against growth (whatever that is), I am against forced growth.)

Implemented in full, the above suggestions would change economic activity and society beyond all recognition. We have lived for centuries in a culture whose central premise – at least the elite's propaganda tells us this – has been the ‘naturalness’ of the struggle for existence, where ‘civilized’ reward is accumulation of material goods and a subsequent demonstration of one’s societal value via conspicuous consumption (certainly over the last century). Changing course towards a resource-based economy is by necessity a radical departure from the Money-Wealth paradigm, which is, to my mind, far past its sell-by date (it had its uses) and the hidden heart of the battle ground.

Thus I am uninterested in the thinking of those who, either explicitly or implicitly, remain trapped in the dying story. Judged through the grey-tinted spectacles of the current system, the above suggestions can only seem unworkable. And it’s true, they are unworkable ... in the current paradigm. They are valid, however, as parts of the process of hewing a new path forward into the uncertain future. What the above cannot engender, systemically, are the familiar ‘successes’ of the current mode; ostentation, non-stop economic ‘growth,’ differential advantage, and so on. Unlikely therefore are: huge houses; ownership of multiple, expensive cars; exploitation; poverty; crime; cronyism; moral hazard; political corruption; concentrations of wealth and power, and so on. As such, to the untrained eye, all this seems no doubt to be the ravings of a dangerously socialist mind.

And no, such negative socioeconomic phenomena, currently so pervasive and endemic, are not the organic and inevitable consequences of human nature. Homo sapiens sapiens were strictly egalitarian for the vast majority of their existence on earth. It is the current system which goes ‘against the grain,’ to the extent there is a grain. Witness the suicide and depression, the perversity of paedophilia and the sex industry generally, the inhumanity of exploitation, the very existence of the word ‘decadence.’ Watch children’s insatiable curiosity purposefully extinguished by a schooling system designed to dumb us down for the industrial age, for uneasy subservience, for insatiable consumption. Feel your own yearning for honesty and integrity, recognise your despondency and cynicism when you fear they may never come.

Nevertheless, ideals and rhetoric have never been enough on their own. Practical considerations are always paramount. Is the direction I promote workable?

A joyous spending into existence of the negative-interest money a society needs to tick economically is but Stage 1, the key turning in the ignition. The social engine must keep turning over in some kind of dynamic balance, after it has been sparked to life. While money is needed for enabling economic activity, money must continually move from place to place, from person to person – as far as possible without exception – or gangrene will set in, in the form of gross imbalances. Perhaps it is helpful to think of money as society’s blood, which has to reach the very tips of the remotest limbs to keep society healthy. (Cutting off ‘unneeded’ fingers and toes, or Culling the Poor, is not a long term solution; the current paradigm necessitates rich-poor divides by design. It is elitist and must, in the view of the elite, remain so, come what may.)

It is for this reason alone that the unemployed are an economic ‘problem,’ with familiar societal and psychological problems all arising from this economic ‘uselessness.’ With a guaranteed income they would at least have sufficient spending power not to become ‘gangrenous,’ but would monthly need more money from the government, earning none from a paying job. By definition, the unemployed perform no economic activity which keeps non-taxed, existing money circulating, except spending. It would be absurd for a government constantly to spend more and more money into existence, just to pour it directly into the pockets of the unemployed. Some proportion of the money flowing through the economy must be taxed back to the government to prevent inflation, to keep money circulating rather than expanding. The amount of money in circulation should be increased only because of, or to enable, increased production, not otherwise (where the purpose of production is not the pursuit of monetary profit, but to improve society, be it for pleasure, leisure, transport, whatever).

The question is this: Does guaranteed income plus high unemployment plus a large state sector necessarily result in a too powerful and therefore corrupt state? Power corrupts, absolute power corrupts absolutely. Or, more fundamentally: By systemically preventing concentrations of monetary power, do we ensure concentrations of state power?

No. The Market can now be reintroduced as an efficient distributor of goods and services after money's importance has been systemically demoted. We could privatize education totally, health too, and much else besides, as long as wealth is culturally decoupled from money, and deep and persistent money-flow is systemically assured. The 'think global, act local' maxim can find its full voice too.

Guaranteed income flows to adults and children. School is optional so children and parents could choose; there would be healthy competition here. Health would be all about prevention, not cure. Transportation systems would be designed to render accidents impossible. Stress can be removed from the work place as egalitarianism flourishes, carcinogens and other toxins removed from food and other production processes. Cities would be designed for minimal energy use, maximum community, maximum safety and health. Crime would fall dramatically, police and army would become increasingly unnecessary.

In short, concentration of power can be avoided and market principles re-embraced without fear of wealth concentrations, the state's role can be minimized, the private sector expanded, by designing a money system to prevent wealth gaps from arising, and opening society up to true democratic processes.

The underlying premise here is that (non-sociopathic) humans need to feel needed. As a social animal, that urge is perhaps the main element of human nature, to the extent there is such a thing. Perfection is of course impossible, but a healthier blend of competition and cooperation, of 'collective' and 'individual' is surely possible.

The intense competition for unnecessarily scarce money has reached a sickening pitch of avarice that will surely end in blood globally, for, as much as national governments might like to believe otherwise, we live in an interconnected community of business and money, such that we can now safely say, “Nowhere is safe.” The arrival of the Internet has added a social layer to that interconnectivity which is working to undermine the status quo's grip on the hearts and minds of the so-called masses. The jockeying and jostling to stay in power is now totally transparent and will likely soon become war, war which cannot take us anywhere better long term, unless, by chance, a radically new consensus arises from its horrors. As I have echoed elsewhere, the entire ‘Self Against Other’ story is closing (to paraphrase Charles Eisenstein). A new paradigm is being written, but a third global war could well mean its stillbirth, hence the pressing need to do what we can now to prevent that possibility.

The above represents the direction towards post-scarcity economics as I imagine it. The journey is the destination. The means are the ends.

Saturday, November 20, 2010

All We Are Saying, Is Give Wealth a Chance

Foreclosuregate is one of those potential political and socioeconomic watersheds that make a guy like me hope, again, that deep change might well and truly be 'just around the corner.' But, before I stride forward and cry, "The Revolution is Come!" I ought first to confess that my intuition has been oft deceived by my fervent hopes. The mighty sheeple are about to stir from their propaganda-induced slumber! This time it's different! And yet, thus far, no matter what the indicators, no matter how flagrant the decadence and criminality, the expected fireworks have not been seen. Perhaps I'm expecting the wrong type of fireworks.

Observation 1; the revolution will not be televised. A strong argument can be made that Revolution is Now, though deliberately and skillfully ignored by the MSM. The status quo must, for its own protection, direct our gaze elsewhere, by presenting any information that might suggest 'the wheels are coming off' as normal business, humdrum hiccups and bumps along The One True Way. The MSM is The View of the World the status quo needs us to use, it is the window we are led to when we want to know what's going on 'out there.'

Some months ago, Yves Smith posted an article about the failure of the left to make hay while the sun shines, or rather, as capitalism's sun sets. It prompted some good debate, but my favourite comment came from an activist who lambasted the article and commenters for failing to 'get out there and act.' The commenter claimed to be part of a thriving community of people stepping out from the system and building a new one, of course unreported in the media. (I can't find the article, because I can't remember the title.) I wrote a blog on the opting out option, which I believe is an essential precursor of revolution, particularly today. Opting out is fairly bloodless in its initial stages, but should it generate momentum enough to upset the status quo's apple cart, attempts will be made to stamp it out. All systems want to live on and on, no status quo can be an exception to this, yet everything dies.

Observation 2; Foreclosuergate is massive and full of juicy stories of suffering and woe, so has to be in the mainstream to some extent. It furthermore follows an unbroken and ongoing succession of other scandals and robberies (bailouts and bonuses) I'm sure the majority do not want.

Is the great propaganda machine losing its grip? Not on everyone certainly, and where it is slipping, in different ways among different groups. The right is as dissatisfied as the left, each reacts differently, much as I hate to feed into what I see as cosmetic divisions fostered by the very propaganda I try to ignore. There is agitation and deep frustration, a yearning hunger for something else, but no real consensus. 'Divide and conquer' has worked well, though its harvest will be bitter indeed.

And yet, as Charles Eisenstein puts it, a millennia-old story is coming to a close. The heart of that story is 'self against other,' with its younger offspring, 'survival of the fittest,' 'nice guys finish last,' 'the invisible hand,' and Efficient Markets Hypothesis being but the latest iterations of it. The Guardians of this story occupy society's fulcrum as The Finance Industry, and have been in control of cultural definitions of money and wealth for a very long time. Since they possess the keys to the Money Making Machine, they get to shroud it in mystery while telling us, on a need to know basis, what success and wealth are. In short, they get us to want what they have to give; money. Therefore, money must be wealth, and monetary wealth must be success. Money must be the arbiter of all that gets done. 'Let Money; Price; and Hand, The Invisible take care of business, and everything will be just fine. Trust us. We know what we're doing.'

Faith in this tale is wearing thin, and the moles keeping on digging up the garden.

Recently, some US politicians have been getting a clue, and subjecting the Guardians' underlings to some half-way decent questioning. Yves Smith's article quotes a Congressional Oversight Panel paper:

While these documentation irregularities may sound minor, they have the potential to throw the foreclosure system – and possibly the mortgage loan system and housing market itself – into turmoil.

The guts of the Money Making Machine are at risk of prolapse, which means the status quo itself is at death's grim edge staring into the abyss. While they won't debate issues such as money and wealth, they will, and do, squeal about system collapse and the end of civilization, again (echoes of 2007-2008).

Chase Manhattan has been accused of perjury. The Republic of Ireland is facing its High Noon, an epic struggle that goes to the very core of Money Power, and the carrot society uses to propel itself 'forwards.' Regular Naked Capitalism commenter DownSouth posted the following:

Are the wheels starting to come off the corporate states? These are the anti-democratic governments that are underpinned by the ideology of state capitalism that emerged during the 19th century and became dominant in the West during the 20th century. Corporate states now rule over almost all Western peoples, as well as much of the rest of the world.

And let there be no mistake. American banking oligarchs are aware of the stakes, as became evident at Tuesday’s Senate’s Banking, Housing and Urban Affairs Committee hearing “Mortgage Services and Foreclosure Practices.” Senator John “Jack” F. Reed made this explicit in his comments starting at minute 2:15:35:

There’s a real question, I think: Do we have that time? And not just in terms of the individual homeowners but the economy. And if the economy gets worse for reasons not directly related to this—-sovereign debt crises overseas, etc—-then the foreclosure problem we face today, you know the bottom keeps slipping down, down, down, down, down, then this problem becomes really tremendous.

What is at stake here? The financier's will scream 'Life Itself!' or at least, 'The Good Life,' but I think it's our cultural definitions of wealth and money. The more often this putrid game repeats, the more often we borrow money to lend to those up to their eyeballs in debt to 'rescue the system,' the more ridiculous money seems to be. This soiling of money's 'good name' is behind recent attempts to bring gold back to the forefront as a 'store of value.' Solidity is sought as the ground beneath our feet crumbles away. People want something 'real' to hold on to. I don't believe gold can do it. Nothing can which is 'wealth as money or single commodity.' The rot is just too deep, the old story too old.

A new story is being written, people are opting out, the rich are eating themselves, and though mostly at the fringes and desperately ignored and finessed, this squeaks through into the mainstream, from time to time, as Catastrophe. For the mainstream it is a death knell, though allegedly 'fixable' with standard medicine. The old way is indeed dying. The Revolution is indeed Now, but is disjointed, straggly, leaderless and groping. As it grows down and out into society there will be increasing chaos, horror, collapse, and then something unknowable.

As I have come to see it and consequently promote it, real wealth arises spontaneously from healthy networks. A human being is a society of individual cells cooperating as one organism whose health depends on access to the right environmental conditions. Society is likewise a collection of individual cells (and clusters of cells) whose health depends on access to an appropriate environment. Wealth is a complex of relationships, not an 'out there,' detached object we can hold to ourselves like gold or money or property or land. The new emergent story is principally about this; systems interdependently embedded within other systems in a state of perpetual change. This is the counterargument capitalism and liberalism do not want to engage.

Transitioning from that old to this new will be, I believe, an unprecedentedly broad and deep planetary process, and the outcome is uncertain. But make no mistake, it is underway and cannot be stopped. The best we can do is give our energies to those processes we believe will promote societal and environmental health, hoping for a good outcome.

Sunday, November 14, 2010

Grundeinkommen (Basic, or Guaranteed Income)

I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.
Martin Luther King

Almost two years ago Susanne Wiest, a native of Bavaria now working in a Kindergarten somewhere in Mecklenburg-Vorpommern, started a citizen's initiative to introduce in Germany a guaranteed income. It is, to her great surprise, rapidly gathering momentum, to the extent that it is today the most successful such initiative, having collected around 50,000 signatures in the first few weeks of its life, and subsequently 90,000 fans on Facebook. It now has political support from the Green Party (Bündnis 90/Die Grünen), with Susanne Wiest having presented the idea to the Bundestag earlier this week (on 8th November 2010).

In brief, the idea is to give every citizen in Germany an income, regardless of age and gender. Wiest suggests €1,500 for every adult, and €1,000 for every child. The idea, for those smelling the overly controlling hand of socialism, is not to equalize income, but to equalize opportunity. For example, for those earning more than €1,500 monthly, the employer would pay €1,500 less than before. I.e. for someone earning €3,000, the employer would pay €1,500. In this way income differentials would remain while eradicating poverty, but society could still 'objectively value,' via the established price mechanism – while such remains necessary – the various job skills.

Furthermore, the scheme would put no pressure on the employer to compete with the guaranteed income on money terms, rather it would demand more creative and flexible employment contracts and work conditions. It would also almost certainly generate growing equality in the work place. A guaranteed income would be an instrumental element in creating a fairer labour market. Implemented carefully, and conjoined with a revolution in the money creation system, employment itself would be revolutionized for the better, with employer and employee equally dependent upon one another. Only in this way can the best that market processes have to offer operate to the benefit of society generally.

The idea that we today have a 'labour market' is of course a one sided joke where, currently and for centuries, the employer tends to be the one laughing. For example, most people in former East Germany cannot find decent work, and when they do it is for less than €1,500, for which they do 40+ hours a week. These are not market conditions, where people seeking work can pick and choose from the many jobs on offer; the unemployed are powerless, totally at the mercy of employers. A guaranteed income would quickly create a genuine labour market in which a job seeker would actually have some choice in the matter, have real bargaining power. Again, the idea is not to equalize income, it is to equalize the opportunity to live a life of dignity. Current welfare payments stave off starvation, but not much else, and certainly bestow no dignity on those receiving them.

Opponents raise the expected objections, which have been engagingly addressed by Professor Goetz Werner et al in a recent study. The principal objection is that too few would want to work. Werner's detailed survey of over 2,000 people, from the unemployed as well as different income levels, shows in fact a desire among the unemployed to work, among the employed to work less, such that the amount of work offered to employers would be more or less as today. And, because the nature of work, as well as the direction of the economy, would be profoundly changed were the guaranteed income to be introduced, the 'people are lazy' objection has no teeth.

In my case, I would want to work less at my job, say three days a week, or around 25 hours. I would also no longer aggressively save my money as I now do (I was unemployed for over a decade and have a very small pension pot), which means what I earn would not be hoarded. I would also have more time for my family and to fight for those environmental issues which mean so much to me, as well as do more for the elderly perhaps, and other socially worthy causes. I would also, with my increased spending power, buy only environmentally friendly products, many of which I currently cannot afford. This rough decision-set probably applies to many others in my approximate position.

'Freedom' is just a propaganda buzz word until the power and material security to be independent is available to all. The current system has failed miserably to deliver the very freedom it touts as its defining quality and crowning achievement. A guaranteed income, in conjunction with others, can deliver genuine independence, alongside recognition of interdependence, which would be so healing to all.

What concerns me about this idea is possible rampant economic growth and the unreadiness of society for the changes it would affect, if other needed changes are not simultaneously affected. I don't think a guaranteed income can be coldly introduced into the current system and be healthy for society, nor, perhaps, should it be introduced in one country alone. What would happen to immigration policy, for example? I don't fear inflation initially, since we have enormous overcapacity on the production side, but as society adjusted to the scheme, other changes, perhaps deeper and more upsetting to the status quo, would be needed to deal with that possibility. I seek such changes, but feel they would need to be transparently anticipated from the outset, baked into the guaranteed income cake in the form of a road map perhaps, as part of a broad and multi-pronged programme to change radically society's direction worldwide.

My interest remains the pursual of a post-scarcity, resource-based economy, but my focus is on how to get there, since it is a long way from here. I believe the way is growing clearer. Right now it looks likes this: MMT with 100% reserve banking + guaranteed income + revolution in education + the total embracing of technology/automation in the interest of humanity and the environment + revolution in economics. If a resource-based economy is a viable system, these steps, taken pretty much simultaneously or as linked steps in a bold programme for change, would lead us to that discovery.

Monday, November 8, 2010

"Free gold" — Shiny, New and Good?

Respect for Edwardo is why I took his invitation to look into "free gold" seriously, and acted upon it. Over the last few days I have spent much of my free time reading about it, and written many thousands of words in note form, with the plan to write a coherent article and post it here. In terms of being able to put something interesting and flowing together on this idea, I have failed, but it is not for lack of effort.

If I compare my efforts to understand MMT with those I've just expended struggling with free gold, the overriding impression is that the MMT promoters do their best to make a difficult subject accessible to the layman (see my first post on MMT), whereas the free gold promoters do their best to confuse what should be an easy enough concept. Indeed, the main proponent of free gold seems not to have written one article laying out, in introductory form, what free gold is about. I am not alone with this impression:

FOFOA’s blog consists of many extremely long and erudite posts that keep referring — often tangentially — to Freegold theory. This is a brief explanation of Freegold theory as I currently understand it, for those who are flummoxed by the enormous quantity of information on FOFOA’s outstanding blog. Source.

Goldsubject, the author of the above, says, "often tangentially". "Often" is not always. And yet even he fails to refer the interested to any article which explains free gold. I am forced to conclude there is none. My efforts yielded only tangential references, even in FOA's article entitled "Freegold":

the coming revaluation that I call Freegold. [... snip ...] But what is most significant about this ongoing redistribution of gold, the "important element of global monetary reserves", in preparation for the Freegold value reset, is that in countries like India, China and in the Eurozone this redistribution is even inclusive of us little people, not just the central banks, elites and giants! [... snip ...] I read where some of you say I am wrong about Freegold. That it won't or can't happen because country A isn't ready for it, or country B doesn't want it. Or that "the elite" will never allow it. Etc... etc... Blah blah blah... [... snip ...] Well, Freegold, or whatever you want to call it, is kind of like a runaway freight train coming right at us. It is not stoppable and it is not controllable. It has a mind of its own and too much momentum to do anything but prepare for its arrival. It is not for any elite or any country to decide when and if it happens. It is only for them and us to be as prepared as possible when it does. [... snip ...] This striking paradox WILL be corrected, by the way, through Freegold.

Sadly, the one article I found which should have been, as its title suggests, directly about it, mentions free gold five times, claiming it will cure all sorts of ills and even that it is unstoppable, yet it signally fails to explain how it will have these effects. The bold claims smack, to this reader, of salesmanship, an impression bolstered elsewhere:

Some day in the future we will know what that magic number was on October 10th, 2009. And anyone who went double that number, doubled their savings... and so on. Imagine if you put 20% of your savings into gold coins! Or 40%! How about 80%? Or even 90%! Or, God-forbid... 100%. So grab your calculator and have some fun with numbers!

I looked elsewhere for some clue about how free gold would function, what it actually is, and found Goldsubject's article quoted from above. His brief take looks like this:

Money, stocks, bonds etc. represent more wealth than really exists –> massive default inevitable –> paper no longer trusted to store value –> only gold is trusted to store value –> buying power of gold massively increases. Value of gold set by free market; money used for transactions; gold used to store value. The biggest and most dramatic revaluation in history.

Again I get the impression of snake oil and 'no way this can fail' type of thinking. A supporter of the idea trying to set it out for newcomers fails to explain how it would actually work.

But what really stuck in my craw was the anti-collective, anti-socialist slant that comes through very strong on multiple occasions:

If you would like to be an activist for a better world, this may not be the blog for you. But if you are a hard working producer and a saver worried about how to protect your purchasing power from the hungry collective, this blog may be just what you are looking for!

In other words, gold only gets in the way of man's socialist credit expansions.

Gold can still be held as a wealth reserve by the money-diluting collective

"socialist credit expansions"!? The vast majority of money in existence is created by privately owned companies whose profit-maximising business it is to loan money into existence. No collective here, no socialist programme to build schools for the nation, just good old capitalist money-making, in more ways than one. The resultant flavour of all this is very confusing; free gold is for the little guy, to protect him from the collective, a wisdom offered for free by someone working hard to make the world a better place for those who listen to him. Gold is set to increase in 'value' to some figure like $50,000 per ounce — whatever that really means — and then somehow be there for us all as a store of value while we use paper money for the day-to-day. The collective is served by this of course — even though they are greedy and grasping — because it will be the best system ever. It sounds to me like nothing other than the invisible hand, an untestable claim made centuries ago in the context of international trade, by a man who signally failed to explain value in the first and longest volume of his Magnus Opus, "The Wealth of Nations". Read his weird contortions and twists of logic if you don't believe me.

I've come away from my swim in free gold's waters suspicious about its purpose. The author FOA is anonymous, highly intelligent, well read, and fixed of purpose, and yet, to me, he 'smells' like a salesman. For all the interesting insights into many aspects of the global economy and finance and history, his message boils down to this; invest in gold and you'll make a killing, guaranteed. Maybe I've not invested enough time into his work, maybe I've missed something obvious, nevertheless I'll not do as he advises and continue with my own efforts to remove value from money and place it, notionally, where it has always been, in the networks that enable ecosystems and society to operate healthily.

For me, Soddy (and others) have the best idea about money:

Money now is the NOTHING you get for SOMETHING before you can get ANYTHING. "The Role of Money", p24.


Money exists not by nature but by law.

John Locke:

Observe well these rules: It is a very common mistake to say that money is a commodity ... Bullion is valued by its weight ... money is valued by its stamp.

Jerry Kohlberg on value and ethics:

Around us there is a breakdown of ... values in business and government... It is not just the overweening, overpowering greed that pervades our business life. It is the fact that we are not willing to sacrifice for the ethics and values we profess. For an ethic is not an ethic, and a value is not a value, without some sacrifice for it, something given up, something not taken, something not gained. We do it in exchange for a greater good, for something worth more than just money and power and position.

In my notes I wrote the following paragraph, and still think it sums up my feelings on this matter well:

If my father had purchased for me 100 ounces of gold 44 years ago, I would today have access to quite a lot of money. But in that time the quality of food has declined, crime has risen, literacy decreased, water tables have fallen, communities have fragmented, geopolitical tensions have increased, and so on. What then is the good of that increase in monetary wealth? What exactly has been stored?

It may well be that gold increases in monetary value through times of economic uncertainty, but that is not the issue here. The danger I fight, of seeing wealth stored in money while ecosystems and society rot, lies at the heart of the breakdown investing in gold is supposed to protect us from. It no longer can. The breakdown is now too wide and deep, and getting worse.

On that note, and as Bill Mitchell would say, that is enough for today!