Where has all the money in the world gone? • Hacker News Board

Re: Where has all the money in the world gone?

#171

Post by planetguy » Mon, Jun 25, 2012, 12:32 AM UTC

ap22213 wrote: post #108

planetguy wrote: post #81

Earlier quoted context omitted.

I've been reading large chunks of that and it's both good and bad. The good parts are where he sticks to his core strength of anthropology -- it's filled with fascinating descriptions of how commerce and law worked in various societies, ancient and modern, from the Irish monks who sat down and figured out the precise compensation that you need to pay if one of your bee stings another man [the regular price of the sti…

After I read it, I was so intrigued by his bold analysis, that I had to go read up on opposing views. I figured that there would be tons of economists in outrage on the Internet. And, from my point of view, I really like to understand differing views before I believe I can make a judgement. (Also why I'm reading it again) However, surprisingly, I couldn't find any good opposing analysis to his book. Maybe because it'…

Yeah, I also went to Amazon looking for the definitive negative review, but I have yet to find it.

I'd forget the argument-from-authority, though, and just say that Graeber went into this project with some kind of irrational antipathy towards "debt", which despite years of careful research he's been unable to shake. Much like if a KKK member decided to write the definitive history of the US Civil War [substitute less inflammatory example if you feel like it] he might put together a really well-researched, well-footnoted piece of writing but still be just plain missing some fundamental piece of understanding due to the blind spots he had when going in.

The history of debt, in all its glory, is a fascinating subject. There have been debts which turned out mutually beneficial, debts which drove debtors to ruin, debts which drove creditors to ruin. There have been debts imposed under terms unfair to one party or the other, and debts between close friends where the terms are kept extremely lenient both ways. There have been formal debts and informal debts, debts of money and of literal backrubs. But Graeber, for some reason, seems to skip over all those debts which make the concept of "debt" look good and only describe those which make it sound bad.

It's frankly just plain weird. It reminds me of Eric Cartman's class report on Asian culture: "Asian culture has plagued our fragile planet for centuries. It must be destroyed."

Re: Where has all the money in the world gone?

#172

Post by planetguy » Mon, Jun 25, 2012, 12:36 AM UTC

_delirium wrote: post #91

planetguy wrote: post #81

Earlier quoted context omitted.

I've been reading large chunks of that and it's both good and bad. The good parts are where he sticks to his core strength of anthropology -- it's filled with fascinating descriptions of how commerce and law worked in various societies, ancient and modern, from the Irish monks who sat down and figured out the precise compensation that you need to pay if one of your bee stings another man [the regular price of the sti…

> the vast majority of the world's responsible debt arrangements which wind up beneficial to both parties. This is the part where I think he actually is on pretty solid historical ground. Almost every society in history has had significant problems with, and a backlash against, at least certain kinds of debt, where it didn't really seem to be in the interest of both parties. They don't really seem like outlier cases.…

The periodic cancellation of all debts thing was one bit that I found fascinating and wished had been expanded upon. I mean, what actually happened historically after that?

I mean, did the credit market dry up overnight? Once the precedent has been set that the king can cancel everyone else's debts for no reason, what reason would anyone have for lending money? Or did some folks come up with "un-cancellable" debts which are deemed not to be cancelled in jubilees (under penalty of private leg-breaking)?

Re: Where has all the money in the world gone?

#173

Post by avstraliitski » Mon, Jun 25, 2012, 1:02 AM UTC

planetguy wrote: post #169

davidgraeber wrote: post #140

Earlier quoted context omitted.

The point that the morality of debt is based on the fact that it's a promise already appears on page 4. Similarly the very last paragraph, begins "What is a debt, anyway? A debt is just the perversion of a promise. It is a promise corrupted by both math and violence..." And so on. Might want to read more than "chunks" of a book before lecturing the world on what's not in it.

Dave, Dave, don't be so defensive! I mean, I spend time googling for my name too, but I manage to resist the temptation to throw myself into any discussion of my work, it just comes across badly. I mean, I did go and buy a copy of your book, hardback too, and I did just go and give you a semi-positive review in which I heartily recommended large chunks of it. I really did enjoy quite a lot of it. You're right, page 4…

This post is a perfect example of the quintessentially quippy, conceited, young male American perspective that dominates HN.

Re: Where has all the money in the world gone?

#174

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:08 AM UTC

zanny wrote: post #114

tempuser008 wrote: post #60

Earlier quoted context omitted.

Well said. I can't but wonder how the system evolved: The workers build, the scientists study & discover, the engineers design and improve, and everything they produce is sold for X amount of money while they are being paid Y amount of money. X - Y = P (profit) which goes to the capital owners who can spend it on the goods produced by the others without much participation at the production effort. Also I find it amaz…

The fruits of the labors of past generations are being filtered into 3 areas - the lowest common wage earner in the world that can do the grunt work the cheapest (Chinese, or Illegals, etc) the wealthy, who control all investment and funding, and governments that can freely tax and deficit all they want. We don't "need" to work more. The USA produces a substantial excess of food, even past the excessive eating habits…

The system really evolved to combat Communism. The powers that be ran with the propaganda wars of the 60's and turned the USA hyper-consumer with tons of debt to combat Russia's ideology. Everyone jumped on board because socialism and the "other" were irrationally dubbed wrong and thus we must do the opposite.

That's a good cognate to David Graeber's description of neoliberalism: a program of governance designed to bring down Communism and hail the glorious victory of Capitalism, no matter the actual economic consequences of doing so.

Re: Where has all the money in the world gone?

#175

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:15 AM UTC

InclinedPlane wrote: post #23

bokonist wrote: post #2

The fundamental problem is that the monetary systems of the modern world are all designed on the Wile E. Coyote principle. As long as you never look down, the system works. In the U.S. there is ~$14 trillion in government debt. There exists tens of trillion more in private debt. But only $2 trillion exists in bonafide, actual, real honest-to-goodness dollars (I'm including in that count accounts at the federal reserv…

Money is objectively valueless and only subjectively has value depending on circumstance. Inflating away debt or printing your way out of debt are not actually methods of repayment. If creditors thought that the US would just print more money to pay off its debts then they would ask for much, much higher interest rates or just not lend money. Printing your way out of debt is a sure fire way to end up in a hyper-infla…

Which is why it may well be simpler and more effective to declare a debt-jubilee and shift our currency system away from debt-backing than to monetize public debts, which are nowadays often the bail-outs of private debts.

Re: Where has all the money in the world gone?

#176

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:20 AM UTC

mixmax wrote: post #82

jl6 wrote: post #74

Earlier quoted context omitted.

People use the word Socialism when they mean something like "perversion of incentives". We perceive that Socialism incentivizes bad choices, like having more children than you could afford without government benefits, or making investments that appear less risky because you assume a government bailout will protect you. As you point out, the nordic countries show that perverse incentives don't necessarily follow from…

Thanks for the good explanation. However you end your comment by an unfounded claim that more socialism tends to imply perverse incentives. The same could be claimed of capitalism (or probably any other ..ism), see the banking sector and American healthcare for good examples. In the rather socialist Denmark (where I happen to be from) when you break a leg you go to the doctor to get it fixed for free, and then you ca…

When you're out of a job the state will take care of you indefinitely.

Is that the Flexicurity system? How does that work?

Re: Where has all the money in the world gone?

#177

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:22 AM UTC

KaoruAoiShiho wrote: post #90

soc88 wrote: post #75

Earlier quoted context omitted.

This also amazes me too. The US has neither a working, efficient health care nor education system, but blames others for "socialism"?

Not sure about the health care system, but the non-socialist portion of the US education system is the best in the world, and only the socialist portion of it is terrible. I find those to be reasonable grounds to dislike socialism.

Major public universities in the United States, known world-over for their excellence:

* University of California, Berkeley

* University of Washington, Seattle

* University of Massachusetts, Amherst

* Texas A&M

* University of Wisconsin, Madison

Shall I go on?

Re: Where has all the money in the world gone?

#178

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:26 AM UTC

ivankirigin wrote: post #120

bokonist wrote: post #2

The fundamental problem is that the monetary systems of the modern world are all designed on the Wile E. Coyote principle. As long as you never look down, the system works. In the U.S. there is ~$14 trillion in government debt. There exists tens of trillion more in private debt. But only $2 trillion exists in bonafide, actual, real honest-to-goodness dollars (I'm including in that count accounts at the federal reserv…

The debt is backed by real assets not represented in dollars. Those aren't just inherently valuable like gold, but the engines to create more value. There also isn't a fixed pie. A software company can turn $1M in salaries into $10M in revenue. This isn't new debt, but new wealth.

Wealth can be created by anyone. Money can only be created by an authority figure, a Royal Mint or Central Bank.

Re: Where has all the money in the world gone?

#179

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:31 AM UTC

planetguy wrote: post #171

ap22213 wrote: post #108

Earlier quoted context omitted.

After I read it, I was so intrigued by his bold analysis, that I had to go read up on opposing views. I figured that there would be tons of economists in outrage on the Internet. And, from my point of view, I really like to understand differing views before I believe I can make a judgement. (Also why I'm reading it again) However, surprisingly, I couldn't find any good opposing analysis to his book. Maybe because it'…

Yeah, I also went to Amazon looking for the definitive negative review, but I have yet to find it. I'd forget the argument-from-authority, though, and just say that Graeber went into this project with some kind of irrational antipathy towards "debt", which despite years of careful research he's been unable to shake. Much like if a KKK member decided to write the definitive history of the US Civil War [substitute less…

I had thought Graeber was writing that way because he wrote in the middle of one of the most complacently accepted debt crises in world history.

Re: Where has all the money in the world gone?

#180

Post by eli_gottlieb » Mon, Jun 25, 2012, 2:33 AM UTC

planetguy wrote: post #172

_delirium wrote: post #91

Earlier quoted context omitted.

> the vast majority of the world's responsible debt arrangements which wind up beneficial to both parties. This is the part where I think he actually is on pretty solid historical ground. Almost every society in history has had significant problems with, and a backlash against, at least certain kinds of debt, where it didn't really seem to be in the interest of both parties. They don't really seem like outlier cases.…

The periodic cancellation of all debts thing was one bit that I found fascinating and wished had been expanded upon. I mean, what actually happened historically after that? I mean, did the credit market dry up overnight? Once the precedent has been set that the king can cancel everyone else's debts for no reason, what reason would anyone have for lending money? Or did some folks come up with "un-cancellable" debts wh…

What actually happened in Ancient Israel was: the market (and the society) worked around it. Creditors lent less money in the run-up to a Jubilee year, but once that had passed, they also came up with various religious/legal rationalizations/arrangements to allow them to effectively enforce debts.

The part I found interesting, and wanted to read more about, was the Golden Age of Islam, in which a financial and commercial system developed (in fact, developed free-market ideology) entirely without usurious debts of any kind.