I found a newer blog post based on a speech the author gave with some ideas from their book. It's very long because he's talking about multiple related ideas, but I excerpted some quotes here:
> We can find this same principle down through the history of the corporation. When in the beginning of the 20th century we see the generalization of the corporate form, it’s not a process where large-scale investment required raising more funds. The problem that the corporation is solving is that you have large-scale enterprises with long-lived specialized fixed assets, on the one hand, and wealth owners, on the other hand, with claims on those enterprises — often the owners of smaller enterprises that merge into one larger one, or the heirs of the founder — who don’t want an interest in this particular company. They want money. And so the function of the corporate form is to allow the conversion of ownership rights into money — to enable payments that will satisfy these claimants, so that their authority over the production process can be pooled, their smaller interests can be assembled into a larger whole.
> This is not a system for raising funds for investment. It’s a system for consolidating authority. It’s a system for reconciling the need for large-scale, long-lived organizational production, on the one hand, with the desire of the wealthy to hold their wealth in a more money-like form, on the other. As William Lazonick says, the corporation is not a vehicle for raising funds for investment, it’s a vehicle for distributing money to the wealthy. The origin of the corporation as we know it is as a vehicle for moving funds out of productive enterprises to asset-owners.
I would put it differently: sometimes it's about raising funds, but the more important part (he claims) is being able to cash out.
A friend of mine uses the term “coin sickness“ to describe somebody who would rather have money than material wealth. Someone who sees the brand of clothing but couldn’t identify quality fabrics or stitching.
This article is a reminder to all of us programmers that there is a belief that is common among non-programmer intellectuals (especially the above-average-intelligence-but-not-genius types) but completely non-existent among skilled software engineers:
Abstraction is inherently dishonest.
If you're a good software engineer, you quickly build an understanding that abstractions are vital for detailed understanding of complex systems, but can leak or even fail entirely. Less quickly, software engineers build very good instincts at how to tell when an abstraction is leaking/failing (that's what debugging is, after all).
Outside software engineering, this is not a skill that is consistently practiced. As a result, you end up getting takes like this one, in which the authors figure out that "money" is an abstraction over "all productive work and assets" and that this abstraction sometimes leaks.
But because the authors aren't used to dealing with abstractions, they assume that the fact that the abstraction "money" leaks sometimes means that it's worthless and should be removed. In fact, the opposite is true: the abstraction "money" does leak (which can cause real serious problems), but in the cases it doesn't, it's essential to human flourishing in any economy more complex than "exchange bread for pelts"
Excuse me everyone, I have an announcement to make.
*ahem*
Barter is back, Alan Greenspan was the devil, and the government is lying to you about inflation. Thank you, for your time.
It's crazy to me that the period TFA is talking about took place a generation AFTER the Volcker Shock and a decade after the initiation of Japan's Lost Decade(s).
>And yet, in many contexts, money payments are treated as equivalent to the thing they give claim to, both by economic theory and in our day-to-day language.
Huh. Swaps.
>If money quantities do not refer to some underlying physical quantity or value, what do they refer to?
Capacity to coerce (mind control).
>If these payments and values and balance sheet entries don’t describe any of the concrete objects around us, why are our lives organized as if they do?
Real money is a thing, usually made of some mix of metals in fungible tokens with composition set by law. It serves as a flux, to make commerce easier to conduct by serving as a trusted neutral item of barter.
With the loss of this once common resource, and the imposition of a system designed to prevent savings and force investment into stock markets and other ponzi schemes, there are very few honest and reliable ways to save at the personal level.
The collective effects of generations conditioned to accept a gradual erosion of "money" have lead to a well engineered blind-spot that is preyed upon by the top 0.01%.
Real prices should be stable across years, even decades, and there should be negligible inflation, instead of a 2% target rate that is pushed on the public as "natural", "stable" and "safe". When real packages continue to shrink, and actual prices are notably higher than the official numbers, it greatly erodes the collective trust of society.
I'll confess I haven't read the OP but I find the discussion of money interesting and want to share two great books I read recently that might be of interest:
The first one especially. Every night I read a chapter, and every time I'd remark to my wife how entertaining this book was.
The second was very interesting as well. I thought the author took an appropriately critical look without overdoing it, and offers a history of big business in the past ~200 years.
This blog post is founded on the mistaken assumptions that economists care or study money or real economic activity.
>If barter and money produced the same ends, then why do we use one at the almost complete exclusion of the other?
In one breath a neoclassical economist will tell you that the introduction of money is neutral to the economy, in the other breath they will tell you that money acts as a transaction cost saving lubricant.
So which is it? They can't be both true at the same time. In the second scenario money is a labor saving device that enhances the productivity of the economy, which is to say it is not neutral.
The answer is that economists make heavy use of linguistic sleights of hand. In the former "neutrality of money" is defined as the neutrality of a change in the stock of money, which linguistically implicitly includes a change from a stock of zero to a stock of some non zero quantity, but when you look deeper they only study the cases of going from non-zero stocks to non-zero stocks of money.
For neoclassical economists this is good enough. The problem has been dealt with and any further problems are caused by an unwillingness to adopt the sleigh of hand, but for the unfortunate and unenviable ones who cannot simply shut their brain down, those who keep thinking past this point, they notice an impossible to ignore problem here.
If money is a labor saving device that enhances labor productivity, then how is it any different from conventional capital that you can own, like a hammer? If I rent it out, it will net a return merely because of its labor saving properties, independent of the nominal value written on the bills. Given any interest theory that assumes money is neutral, the yield on money will be the neutral interest rate plus the yield from the labor saving device properties.
Similarly, if I buy or sell it, there will be consumer or producer surplus.
Once you understand this, you will start wondering "how high is that surplus/extractable yield?". Let's arbitrarily decide that the holder of money is the "producer" and the income the "producer" gets from the labor saving properties is his producer surplus. The answer to this depends on the difference between the market clearing price and the production cost of the producer. The market clearing price here depends on the most expensive method of human labor organization that is necessary and capable of organizing production.
So yep, the producer surplus for money is the difference between the productivity of the economy with division of labor and the productivity of the economy without division of labor. When you look at how productive the division of labor is, you will notice that essentially 99% of the modern economy wouldn't be possible without it, which in turn means that the interest rate can be set so high that for a borrower there is no difference between the division of labor and no division of labor.
It's no wonder then that usury has been demonized for millennia. For the borrower, charging usury is the same as bringing the economy back to the stone age. It's priced as if there was no economy and you had to build the economy from scratch all by yourself.
So, why is the modern economy different? The reason is that the central bank acts as a middle ground between money and no money. The central bank can set an arbitrary interest rate that all banks can borrow from overnight. The policy range for the central bank has the neutral non labor saving interest rate as the lower bound, below which there will be inflation, this lower bound can be negative and also an upper bound, which is set by the labor saving interest rate above which existing money owners start undercutting the central bank instead. If there is a zero lower bound, the effective lower bound on the interest rate is 0% + liquidity preference.
Within that lower and upper bound, the central bank is free to undercut existing money holders. Banks that refuse to borrow from the central bank w...
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[ 5.6 ms ] story [ 21.8 ms ] threadhttps://jwmason.org/slackwire/against-money/
https://skybrian-links.exe.xyz/post/765
Here's one quote:
> We can find this same principle down through the history of the corporation. When in the beginning of the 20th century we see the generalization of the corporate form, it’s not a process where large-scale investment required raising more funds. The problem that the corporation is solving is that you have large-scale enterprises with long-lived specialized fixed assets, on the one hand, and wealth owners, on the other hand, with claims on those enterprises — often the owners of smaller enterprises that merge into one larger one, or the heirs of the founder — who don’t want an interest in this particular company. They want money. And so the function of the corporate form is to allow the conversion of ownership rights into money — to enable payments that will satisfy these claimants, so that their authority over the production process can be pooled, their smaller interests can be assembled into a larger whole.
> This is not a system for raising funds for investment. It’s a system for consolidating authority. It’s a system for reconciling the need for large-scale, long-lived organizational production, on the one hand, with the desire of the wealthy to hold their wealth in a more money-like form, on the other. As William Lazonick says, the corporation is not a vehicle for raising funds for investment, it’s a vehicle for distributing money to the wealthy. The origin of the corporation as we know it is as a vehicle for moving funds out of productive enterprises to asset-owners.
I would put it differently: sometimes it's about raising funds, but the more important part (he claims) is being able to cash out.
Abstraction is inherently dishonest.
If you're a good software engineer, you quickly build an understanding that abstractions are vital for detailed understanding of complex systems, but can leak or even fail entirely. Less quickly, software engineers build very good instincts at how to tell when an abstraction is leaking/failing (that's what debugging is, after all).
Outside software engineering, this is not a skill that is consistently practiced. As a result, you end up getting takes like this one, in which the authors figure out that "money" is an abstraction over "all productive work and assets" and that this abstraction sometimes leaks.
But because the authors aren't used to dealing with abstractions, they assume that the fact that the abstraction "money" leaks sometimes means that it's worthless and should be removed. In fact, the opposite is true: the abstraction "money" does leak (which can cause real serious problems), but in the cases it doesn't, it's essential to human flourishing in any economy more complex than "exchange bread for pelts"
>And yet, in many contexts, money payments are treated as equivalent to the thing they give claim to, both by economic theory and in our day-to-day language.
Huh. Swaps.
>If money quantities do not refer to some underlying physical quantity or value, what do they refer to?
Capacity to coerce (mind control).
>If these payments and values and balance sheet entries don’t describe any of the concrete objects around us, why are our lives organized as if they do?
Why, indeed.
With the loss of this once common resource, and the imposition of a system designed to prevent savings and force investment into stock markets and other ponzi schemes, there are very few honest and reliable ways to save at the personal level.
The collective effects of generations conditioned to accept a gradual erosion of "money" have lead to a well engineered blind-spot that is preyed upon by the top 0.01%.
Real prices should be stable across years, even decades, and there should be negligible inflation, instead of a 2% target rate that is pushed on the public as "natural", "stable" and "safe". When real packages continue to shrink, and actual prices are notably higher than the official numbers, it greatly erodes the collective trust of society.
Money: a story of humanity https://www.davidmcwilliams.ie/money
The corporation in the 21st century https://yalebooks.yale.edu/book/9780300280197/the-corporatio...
The first one especially. Every night I read a chapter, and every time I'd remark to my wife how entertaining this book was.
The second was very interesting as well. I thought the author took an appropriately critical look without overdoing it, and offers a history of big business in the past ~200 years.
>If barter and money produced the same ends, then why do we use one at the almost complete exclusion of the other?
In one breath a neoclassical economist will tell you that the introduction of money is neutral to the economy, in the other breath they will tell you that money acts as a transaction cost saving lubricant.
So which is it? They can't be both true at the same time. In the second scenario money is a labor saving device that enhances the productivity of the economy, which is to say it is not neutral.
The answer is that economists make heavy use of linguistic sleights of hand. In the former "neutrality of money" is defined as the neutrality of a change in the stock of money, which linguistically implicitly includes a change from a stock of zero to a stock of some non zero quantity, but when you look deeper they only study the cases of going from non-zero stocks to non-zero stocks of money.
For neoclassical economists this is good enough. The problem has been dealt with and any further problems are caused by an unwillingness to adopt the sleigh of hand, but for the unfortunate and unenviable ones who cannot simply shut their brain down, those who keep thinking past this point, they notice an impossible to ignore problem here.
If money is a labor saving device that enhances labor productivity, then how is it any different from conventional capital that you can own, like a hammer? If I rent it out, it will net a return merely because of its labor saving properties, independent of the nominal value written on the bills. Given any interest theory that assumes money is neutral, the yield on money will be the neutral interest rate plus the yield from the labor saving device properties. Similarly, if I buy or sell it, there will be consumer or producer surplus.
Once you understand this, you will start wondering "how high is that surplus/extractable yield?". Let's arbitrarily decide that the holder of money is the "producer" and the income the "producer" gets from the labor saving properties is his producer surplus. The answer to this depends on the difference between the market clearing price and the production cost of the producer. The market clearing price here depends on the most expensive method of human labor organization that is necessary and capable of organizing production.
So yep, the producer surplus for money is the difference between the productivity of the economy with division of labor and the productivity of the economy without division of labor. When you look at how productive the division of labor is, you will notice that essentially 99% of the modern economy wouldn't be possible without it, which in turn means that the interest rate can be set so high that for a borrower there is no difference between the division of labor and no division of labor.
It's no wonder then that usury has been demonized for millennia. For the borrower, charging usury is the same as bringing the economy back to the stone age. It's priced as if there was no economy and you had to build the economy from scratch all by yourself.
So, why is the modern economy different? The reason is that the central bank acts as a middle ground between money and no money. The central bank can set an arbitrary interest rate that all banks can borrow from overnight. The policy range for the central bank has the neutral non labor saving interest rate as the lower bound, below which there will be inflation, this lower bound can be negative and also an upper bound, which is set by the labor saving interest rate above which existing money owners start undercutting the central bank instead. If there is a zero lower bound, the effective lower bound on the interest rate is 0% + liquidity preference.
Within that lower and upper bound, the central bank is free to undercut existing money holders. Banks that refuse to borrow from the central bank w...