The Pivot Point 305

The massive economic shock following the banking collapse of 2007–8 is the direct cause of the crisis of confidence which is affecting almost all the institutions of western representative democracy. The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices which permitted wealth to be generated and hoarded primarily through multiple financial transactions rather than by the actual production and sale of concrete goods, and which then disproportionately funnelled wealth to those engaged in the mechanics of the transactions.

It was a rotten system, bound to collapse. But unfortunately, it was a system in which the political elite were so financially bound that the consequences of collapse threatened their place in the social order. So collapse was prevented, by the use of the systems of government to effect the largest ever single event transfer of wealth from the poor to the rich in the course of human history. Politicians bailed out the bankers by using the bankers’ own systems, and even permitted the bankers to charge the public for administering their own bailout, and charge massive interest on the money they were giving to themselves. This method meant that the ordinary people did not immediately feel all the pain, but they certainly felt it over the following decade of austerity as the massive burden of public debt that had been loaded on the populace and simply handed to the bankers, crippled the public finances.

The mechanisms of state and corporate propaganda kicked in to ensure that the ordinary people were told that rather than having been robbed, they had been saved. In the ensuing decade the wealth disparity between rich and poor has ever widened, to the extent that this week the BBC announced the UK now has 151 billionaires, in a land where working people resort to foodbanks and millions of children are growing up in poverty.

With the mainstream media employed entirely in diverting them from the true causes of their difficult lives, it is hardly surprising that ordinary people do not necessarily understand why a society has arisen where working hard does not enable them to work, eat and stay warm, and why the economic prospects of their children look so bleak. But they know that something has gone very wrong, they witness the vast wealth disparities of our unequal society and the deliberate dismantling of communal and altruistic public provision in favour of privatisation, and they feel contempt for their ruling classes, be they political, media or just wealthy.

The rejection of the political class manifests itself in different ways and has been diverted down a number of entirely blind alleys giving unfulfilled promise of a fresh start – Brexit, Trump, Macron. As the vote share of the established political parties – and public engagement with established political institutions – falls everywhere, the chattering classes deride the political symptoms of status quo rejection by the people as “populism”. It is not populism to make sophisticated arguments that undermine the received political wisdom and take on the entire weight of established media opinion.

Sometimes history appears to be approaching a pivot point, and then the weight swings back and nothing happens. But sometimes it does tip, and times such as these are times of great potential for change. I see hope, for example, in the upsurge of support for Green politics, and the happy convergence of popular political discontent with rising awareness over climate change. Jeremy Corbyn’s rise is in itself an example of the revolution in popular thought – that he is using the mechanism of one of the failed Establishment parties as his vehicle has both positive and negative consequences. In Scotland, of course, I remain anxious the revolutionary moment is being let slip and a new non-radical political class being firmly cemented into power, but retain an underlying confidence in the radicalism and will for self-determination of the Scottish people.

These are stirring times. The popular rebellion against establishment politics is continually portrayed as an unwelcome aberration. It is not – it is a reaction to massive corruption and outrageous inequality. Everybody should fan the flames of change.


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305 thoughts on “The Pivot Point

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  • Gary Weglarz

    One could be forgiven for thinking that the assemblage of psychopaths, madmen and idiots conducting American foreign policy are perhaps doing the world a favor by diverting attention away from our rather dire global economic situation by leading intelligent people everywhere to reach the almost unavoidable conclusion that we Americans won’t truly be happy until we are either economically sanctioning, outright invading, or publicly regime-changing – every nation on the entire planet simultaneously. No need to thank us for this service. It’s just what we do. And, it is completely bi-partisan.

    Outside of Tulsi Gabbard there does not appear to be anyone in the current running for our presidency who possesses even a passing familiarity with “reality.” This is evidenced by the total mainstream media acceptance and normalization of the utter amoral madness that is our U.S. foreign policy. It is now simply “heresy” to mention phrases like “international law” or expect government war-mongering to be supported by any actual “evidence.” I suspect that when the coming global economic and ecological collapses become undeniably apparent to us all, that the majority of my fellow Americans will evidence all the awareness the dinosaurs likely exhibited eons ago when one day they simply heard a loud – “boom” – before things quickly and mysteriously deteriorated and then ended for them.

    For those willing to consider just how dire our collective situation might be and how we might respond:

  • JMF

    I can’t help getting the feeling that as we approach the absolute pivot point, the central banks will start a major war to hide behind.
    Who was it again who recently sold off their extremely valuable furniture antiquities at auction?

  • squirrel

    Our whole monetary system – fractional reserve banking (despite some posting to the contrary) is a total scam, it’s a hustle, got away with because few people understand the bookkeeping trick and a great deal is done to disguise it.

    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” Henry Ford

    “The process by which banks create money is so simple that the mind is repelled.” John Kenneth Galbraith

    • Mr Shigemitsu

      These days, the UK has no fractional reserve requirement for commercial bank lending.

      If you do not agree, please kindly state what the reserve requirement is for UK banks as a percentage of permissible loans, with a link to the evidence.

      I won’t be holding my breath!

      • Beefcake the Mighty

        That is true, but misleading and irrelevant to the point about FRB.

  • Kempe

    If centre ground politics fails or is thought to have failed it’s fairly obvious that people are going to be drawn to political extremes on the far left or far right promising radical solutions. The real problems will arrive when those radical solutions fail; as they inevitably will. Having given the far left a go why not try the far right instead? Even if we are at a tipping point there’s no guarantee we’re going to tip in the right direction.

    As for Corbyn his Labour party is currently under investigation by the EHRC, the first political party to be the subject of an investigation since the BNP. Ex-Labour staffers are said to have submitted over 100,000 e-mails, tens of thousands of which show how the party ignored complaints that supporters were promoting anti-Semitism. Labour Against Antisemitism has sent the EHRC 15,000 screenshots of anti-Semitic and abusive posts from Labour members and candidates plus evidence of how complaints were downplayed or ignored altogether. If the EHRC find against Labour will Corbyn and his apparatchiks be able to hang on to power?

    • Stonky

      Given that the Blairites have now adopted the bendover position that using words like “banker”, “New World Order”, “Bilderberg”, “Soros” and “globalism” all constitute antisemitism, and that anyone who uses such words will be subjected to the relentless lynchmobbery of the spokesdrones at their in-house newspaper, the Guardaliberofascist, I’m very surprised that so far they have only come up with several million emails that constitute anti-semitism and several billions of screenshots.

      I trust that your enthusiasm for hunting down anti-semitism will remain undimmed when the day comes that anti-semitism is deemed a capital offence and posting under the name ‘Kempe’ is deemed to be anti-semitism.

    • Xavi

      There is infinitely more antisemitism – indeed racism of every stripe – in the Tory party. Btw, the reason there is no longer an appetite outside media circles for “centre ground politics” is because people are awake to the long con of neoliberalism and sick of all the pointless wars.

      • Rhys Jaggar

        ‘Centre ground politics’ is defined not by politicians but the mindset of the two thirds of the electorate around the median position.

        This can shift quite significantly from generation to generation or even decade to decade.

        It basically signifies what the average voter thinks is currently of highest priority.

        Centre Ground politics in 1945 was about building loads of houses in bombed-out Britain.

        By 1951, 12 years of collective effort in war and rebuilding brought a shift to peacetime centre ground poiltics of ‘get off our backs a bit please and let us live our lives out in private’. Home owning became higher priority, the car became a status symbol and going to football on Saturday afternoon was something no politician could ignore.

        By 1979, ‘tell that f***wit Red Robbo to take a hike out of industrial relations’ was mainstream, as was cutting taxation.

        That ship has sailed and the middle ground is shifting slowly back toward community building. People do not trust private outsourcers, privatised utility owners and corrupt international organisations. They want a return to Small is Beautiful. I am not sure they yet know how to get it…..

    • Loony

      What is “centre ground politics”? and where can it be found?

      Can it be found in the dismantling of the industrial base and the exporting of all productive jobs to China? Can it be found in starting war after war and then resolutely ignoring the consequences of those wars? Can it be found in endless money printing and the faux enrichment of the wealthy and the very real impoverishment of the many? Can it be found in a sterile obsession with identity politics and the crushing of the freedom of expression?

      Always remember Justin Trudeau is a progressive liberal and Duterte is a vicious thug. Therefore Trudeau has the absolute right to dump as much rotting Canadian rubbish as he wants onto the heads of the impoverished inhabitants of the Philippines. Anyone that questions this policy is naturally a far right bigot spreading hate and division. Crazed climate change activists are completely unconcerned with the dumping of vast amounts of rotting garbage onto the heads of the poor but are obsessively concerned with raising energy prices for a different demographic of poor people living in cold climates.

      Anyone that thinks anything at all in this world is a product of “centre ground politics” needs to ask themselves a few questions regarding the meaning of words.

      • Clark

        “Crazed climate change activists are completely unconcerned with the dumping of vast amounts of rotting garbage onto the heads of the poor but are obsessively concerned with raising energy prices for a different demographic of poor people living in cold climates”

        This is the opposite of the truth. It is also an insult, but insults are standard practice from Loony, it seems.

        • Loony

          Maybe I am wrong but I have been unable to find any evidence of Extinction Rebellion or any similar groups acting to defend the Philippines from being used as a dumping ground for unwanted Canadian rubbish.

          Surely at the very least these people could be seeking legal remedies within Canada in order to force Canadian businesses to comply with the law. There would appear to be some form of ideological association as between Trudeau and environmentalists, so why are environmentalists not publicly disassociating themselves with such rapacious behavior that is only possible because of government indifference.

          Maybe the real insult is to dump tonnes of rotting garbage in the Philippines and then to express outrage not at the action but at the syntax of the communication that highlights the issue.

          • Clark

            If you genuinely object to this particular dumping, you are free to join XR or a similar group (with whom XR is likely to affiliate at some point), and work with others to devise a method of stopping it. It’s like a lot of things; getting involved can help, whereas deriding the efforts of others merely hinders. Slightly.

        • John2o2o

          Clark, Freedom of speech (something I believe in) includes freedom of thought.

          It is for you to convince others … not for them to be convinced. If you see the subtle distinction. Loony is entitled to his or her opinions.

          if your argument is solid enough then enough people will believe it, if you can’t do that then you mist accept that or try harder.

          But you will never win everyone to your side. (I suspect including me).

      • Ian

        I wish you would ask yourself a few questions regarding the meaning of words. Apparently they mean whatever you want them to mean. Splendid, splenetic rant, based on some crazed yoking together of some dubious assertions.

        • Loony

          …and in 3 short sentences you demonstrate precisely how much you care about the environment in general and the citizenry of the Philippines in particular.

          • Ian

            Hah, never short of a ridiculous assertion. Because I don’t slavishly follow your weirdly contorted and obtuse ‘logic’, ergo I am, by your definition, against everybody in the Philippines and against environmental action. Your utterly bizarre reasoning is surely some form of satire. There is no answer in earth or the heavens which would satisfy such contorted demands, and that of course is precisely the perversity of the point. Funny guy.

          • Republicofscotland

            The Philippines, remains the only UN member, The Vatican city state aside, that forbids divorce. The Vatican state also forbids abortions, even if it threatens the would be mothers life.

    • FranzB

      Kempe – “As for Corbyn his Labour party is currently under investigation by the EHRC,”

      As noted in the Guardian:-

      “The regulator’s [EHRC} announcement followed legal complaints made by Campaign Against Antisemitism (CAA) and the Jewish Labour Movement last year, which have argued that the party was not compliant with equalities law.”

      Both the CAA and the JLM are Zionist organisations who fully support all of Israel’s actions against Palestinians.The CAA and the JLM criticise Corbyn and Labour supporters because these Labour supporters are opposed to Zionist racism. See this blog entry by Tony Greenstein who was expelled from the Labour party:-

      In addition, see this blog entry re the Jewish Chronicle contributor Geoffrey Alderman who concludes that ‘the grounds for labelling him [Corbyn] an anti-Semite simply do not exist.’

    • ricardo2000

      Just cause Labour doesn’t support any and all of Israel’s crimes does not mean that they are anti-Semitic. It means they are repelled by Israel’s brutal bigotries and savage human rights abuses. By the way, the Palestinians are a Semitic people, by language and genetics. From Wikipedia: “In a study of Israeli Jews and Palestinian Muslim Arabs, more than 70% of the Jewish men and 82% of the Arab men whose DNA was studied, had inherited their Y chromosomes from the same paternal ancestors, who lived in the region within the last few thousand years.”

      The so-called ‘anti-Semetic’ charge is merely another ignorant smear along the lines of Hunter Thompson’s famous anecdote about LBJ.
      LBJ was in a tight race for Senator when he approached his campaign manager with the idea that they spread a rumour that his opponent enjoyed carnal relations with his barnyard sows. His campaign manager exploded, ‘We can’t get away with calling the man a pig fucker.’ ‘I know’, said LBJ, ‘but let’s make him deny it.’

  • Shatnersrug

    You don’t need anything to back currency, the value of gold or whatever precious reserve substance is as illusory as money itself. The current system is based on JM Keynes modern monetary theory and it’s an exceptionally good one – as far as the concept of money can go – which isn’t very far.

    Money only exists to promote trust and everyone of us has to agree to accept the value of money in return for a sense on stability.

    MMT has never sat easily with conservatives because most don’t have the capacity to understand it and those that do fear that it would be giving the game away to reveal the process behind the creation of money and the real nature of taxation – that of social control.

    • squirrel

      It’s true that nothing is needed to back currency, but that really has little do with objections to fractional reserve banking, and the current system dates back much further than Keynes.

      We really don’t need a system by which private debt to the banks is quite literally mathematically hardwired to always be greater than the amount of money we have to pay it off. Somehow this extraordinary truism escapes front page attention and people wonder why so many people have more debt than money.

      Get rid of fractional reserve lending, and this all changes: the banks cease to own everything, they will become a much smaller administrative business, and we generally wouldn’t need their loans because we would already have the money.

      • Shatnersrug

        Well now, if you’re talking about private banks that’s a whole nother thang. Private banks are the enslavers of the people. They cannot be reformed. Abolition and imprisonment is about the best you could hope for that

      • Mr Shigemitsu

        I’ve replied to you up thread that the UK has no fractional reserve requirement for commercial bank lending.

        Regarding your point on repaying loans, you are making two fundamental errors insofar as a) you ignore govt spending as essential creation of currency (and net financial assets) into the economy , and b) assume money is a stock as opposed to a flow.

        Best to ignore the Positive Money message, and read up on MMT instead – it will provide a far more effective lens with which to understand the function and creation of money, and provide the tools to escape neoliberal Thatcherite “govt as household” narratives.

        • squirrel

          I’ve just seen your reply up thread, and it shows that you do not understand fractional reserve banking. You are far from alone.

          Yes, there is no reserve requirement anymore – this means we have fractional reserve banking on steroids.

          Full reserve banking would mean, trivially, a reserve requirement of 100% – you must have central banks funds to cover 100% of your liabilities.

          These days private banks don’t even have to hit 3%.

        • squirrel

          I am also seeing nothing in your statement to counter my assertion that the total debt to private banks is always greater than the money we have.

          Yes, money may flow the other way, and it may be possible to keep up repayments but that is another point.

          As things currently are, every man, woman, and child could work 100 hour weeks, for ever, and as a whole would still be in the same debt – because we may only pay off the debt with more money loaned to us!

          • Mr Shigemitsu


            Commercial bank lending does *not* represent 97% of UK currency creation, no matter how many times Positive Money repeats it. It simply issues credit, which must be repaid, plus interest, as you indicate. Keynes called it “Horizontal” money.

            However, as monopoly creator of Sterling, the UK Govt, via direct public spending, injects interest free, net financial assets into the economy each and every day. Keynes referred to this as “Vertical” money.

            PM ignores govt’s role in currency creation, and whilst reckless lending by commercial banks is indeed problematic, it’s nothing that can’t be dealt with by stronger regulation, outlawing certain practices, and making banking “bowler-hat boring” again.

            Relying on an unelected committee of so-called financial experts, as PM proposes, to dictate UK money supply, plus the credit squeeze that full-reserve banking would create, will lead to austerity on steroids – and, I can assure you, you’ll like that even less than the status quo.

      • John2o2o

        I am not a banker or economist Squirrel. So as far as I am concerned you may or may not be correct in your analysis.

        But (supposing you are correct) how do you achieve this? How do you convince governments to “get rid of fractional reserve lending”?

        • squirrel

          I wish I knew. The banks need the current game to continue, they are rightly threatened by the idea that we can simply take our money supply into public ownership and do without all their debt. They are very powerful as a result of being fantastically wealthy and everyone needing more of their toxic loans.

          There is an academic paper, “The Chicago Plan Revisited” which projects the effect of introducing full-reserve banking, with fantastic results.

          I must say, the details of that paper are over my head academically, but I do understand that the current system is a scam.

          It is not the case that bankers or economists will necessarily understand this. Ben Dyson of Positive Money reported that a head of a major bank told him that he didn’t understand that his bank was creating money when it made a loan until he heard it from Ben.

          I think it will only be public pressure for monetary reform which will win the day.

    • Loony

      You can look back through history and you can find a trend that provides a 100% guaranteed outcome. Namely that all fiat currencies collapse. Those in existence today will go the same way as all of their predecessors.

      They are currently being prevented from collapsing by the US$. The US$ is prevented from collapsing as a consequence of US military power and its consequent control of global oil supplies.

      MMT is just another way of increasing the supply of money. Money can be best understood as representing a claim on resources. If you increase the supply of money – but do not increase the supply of resources then what have you got for entertainment beyond a hyper inflationary collapse? If it is even possible to increase the supply of resources commensurate with the increase in the supply of money then what have you got for entertainment beyond a global environmental catastrophe?

      So just to fix your last point “MMT has never sat easily with sane people…”

      • Mr Shigemitsu

        “If you increase the supply of money – but do not increase the supply of resources then what have you got for entertainment beyond a hyper inflationary collapse? ”


        And MMT fully recognizes *exactly* that: that government spending is limited *precisely* by the availability of *real* resources in the economy, and not the amount of “pounds” or “dollars” at its disposal – the amount of which is infinite.

        Neoliberal economists and govts pretend that the money is what’s limited; MMT says no, it’s the real resources, and that govts therefore have a duty to fully employ these resources for the greater wellbeing of the nation, and not hamper the greater good by resorting to a devious myth that govts that create their own fiat ever need to depend on the private sector to supply that currency via taxes, before that govt can spend.

        It’s best to read *directly* from the core literature of MMT (eg. Prof. Bill Mitchell, Warren Mosler, Prof. L. Randall Wray and Prof. Stephanie Kelton) and less by its neo-liberal uninformed, inaccurate, and unthinking detractors – and then make up your mind.

        • David

          “And MMT fully recognizes *exactly* that: that government spending is limited *precisely* by the availability of *real* resources in the economy, and not the amount of “pounds” or “dollars” at its disposal – the amount of which is infinite.”

          I don’t believe this. Oh it may be theoretically true – but it won’t hold up in practice. If it would hold up in practice then it would not be necessary in the first place.

          Under our mixed economy government manages some amount of resources and the private sector manages some amount of resources. In general the private sector, to the extent that a free market is allowed to operate, creates wealth. Government activity is more questionable. To some extent it may help the private sector and also create wealth, but, as it is not subject to free market forces, it is perfectly possible for it to destroy wealth also. In general, once a government consumes too large a portion of a societies’ resources, that society becomes poorer as a whole although a small handful typically become hugely wealthy through corruption.

          Under the gold standard, there was a natural brake on the government growing too big. Creditors would demand their gold and governments would find themselves running out of money.

          Under our current syustem, while there is not hard brake as there was under a gold standard, nevertheless when government starts to destroy wealth at a greater rate than the the private sector is able to create it, this shows up as deficits. While many people do not quite understand what these deficits are evidence of, they are somewhat alarming and voters get upset even if they could not explain exactly why.

          MMT is popular with people who would like to see even more resources devoted to government because these deficits would disappear so the propogandists’ job is made easier. That is the only reason to prefer MMT to the current system.

          Makle no mistake – the end game will be hyperinflation. Because the “theory” that says that MMT doesn;t have to cause hypeinflation is an assinine theory that takes no account of the nature of power and corruption. Yes if our politicians were angels then MMT might be as good a system as any other. But they are manifestly not angels.

    • JMF

      @Shatnersrug “The current system is based on JM Keynes modern monetary theory and it’s an exceptionally good one”

      You are having a laugh surely! Keynes himself admitted how bad it will eventually get, but precious few understand his words:

      J.M.Keynes: “For a little reflection will show what enormous social changes would result from a gradual disappearance of a rate of return on accumulated wealth.”

      If you are interested in economics or the path forward for the global economy, the above statement by Keynes is the most critically important statement to understand.

    • Rhys Jaggar

      No maybe not, but inflation and deflation destabilise lives of large numbers and both can appear easily if a lack of fiscal probity and monetary discipline emerge.

      Gold had the qualities of scarcity, transportability, difficulty of forgery and material stability. Those traits are good for stable money climates.

      Understanding how money works and is perceived to work is imperative for those wanting to make money from money itself.

      Cowshit is money if a dairy farmer trades winter cow byre waste for a weekly vegetable box from his horticultural neighbour.

      His neighbour reckons that as long as the dairy farmer has cows, they are going to crap every day in winter in the byre. He has a reliable medium of exchange to receive for his produce. He values the exchange as it supports continued fertility of his land and continued productivity of his business.

      Until of course the EU banned transporting cow shit without alicense to favour chemical fertilisers and until large composting companies stopped allotment growers sourcing cow shit from their local farmer by buying everything up…….

  • Brian Davey

    Craig, your understanding of how government really works, of elite brutality and injustice is second to none. However, your understanding of economics is superficial in the extreme. Yes there is indeed grave injustice and inequality at the heart of the economic system but there is more going on than that. If you want to find a guiding thread in all current events it is that humanity has reached the limits of economic growth. The global economy has overshot the carrying capacity of planet earth – both in regards to pollution (eg by green house gases) and in regard to resource depletion (including of energy minerals). Please remember that the other thing that was occuring at the time of the Global economic crisis was that oil was $140 a barrel. In a mechanised society based on powered infrastrure people could not afford to pay their enery bills and service their debts.

    Or take the Syrian crisis – behind the great power rivalry an unprecedented climate change related drought had a devastating effect on Syrian agriculture leading to village abandonment and internal migration before the conflict broke out. Paradoxically Syria’s oil production peaked in 1996 which meant a severe decline in Syrian state revenues to ameliorate the crisis. In the discontent external powers interfered and the rest is history. You can say similar things about the Yemen, Nigeria (Boko Harum etc.). The refugee crisis spilling over into Europe exacerbated exonophobia and brought us Brexit with a population that is not just suffering from inequality but s suffering from a crisis of prosperity…

    Here’s why: when depletion of oil and gas occurs it means less favourable sources have to be turned to. It is happening off the coast of Scotland. Extraction of oil and gas is turned to that is more expensive and more ecologically destructive – think fracking. That also means that the energy cost of extractiing energy rises. More energy has to be used just to get the oil and gas out of the ground. But the rest of the economy is based on the premise of cheap energy. So the oil and gas industry are on borrowed time, heading to bankruptcy. The attempt to solve that with renewables like wind and solar is also a more expensive form of energy when you take into account whole system costs…

    All these dimensions are barely present in your thinking…

    • mog

      They are barely present in almost all political and economic thinking (including that of many Greens !).
      If people want to understand the wider perspective of the pivot point, then they have to pan out from the strictly human centred viewpoint and consider the relationship with the physical world in total. People need to read Heinberg, Charles Hall, Greer, Foss.

      Why do so few even respond to this argument ? I think it is a denail tied to a kind of inevitability about the situation which undermines our common sense of democratic choice. Elective representation is contingent upon candidates and parties being able to offer ‘a better life’ for the electorate (and this most obviously means a longer life, with more free time, more material stuff and better health, i.e. more wealth). If we inevitably face a future of austerity, with less energy, less resources, harder work, lower complexity, and probably a shorter life expectancy, then the promises of leaders start, at some point to sound hollow as this reality starts to manifest.

      Whether one cheers for a nationalist revival, a socialist release from neoliberalism, a networked capitalist utopia or a green ‘sustainability’ : all are false promises. The future in most terms of ‘progress’ today, -unless someone can re-write the laws of thermodynamics, is bleak. De-growth is going to happen, and quite dramatically I would say.

      • mog

        There is barely any mention of the issue here either.
        MMT and public debt expansion will not alter the fundamental situation. The finance dynamics might make the changes coming as a result of energy decline more or less equitable, but they cannot change the fact of the matter.

        • David


          I think you are unnecessarily pessimistic.

          The laws of thermodynamics have been unchanged since the beginning of the universe. And while they do imply (assuming they don’t turn out to be incorrect like so many other laws we once believed were immutable) that our planet will one day be cold and lifeless – that day is impossibly distant.

          They have not stopped our progress to date, and nor will they inevitably be the cause of any meaningful change in the next year, decade, century, millenium or even the next billion years. While the entropy of our entire universe must continually increase, our planet continues to receive enthalpy from the sun at pretty much the same rate we have throughout the entirety of human existence and we will continue to be able to manipulate that energy to buck the macro trend here on earth just as we have for the last few thousand years.

          Our predicament – at least with respect to the second law of thermodynamics – has not changed in any significant particular in the last ten thousand years. Put another way – we are no more screwed by entropy now than we were then – and it doesn;t seem to have mattered much for the last ten thousand years.

          In my view the danger in the short term lies in social, spiritual and economic collapse, together with the associated corruption, tyranny, war, pestilence, plague and famine. Entropy is not big on my list :-).

      • David

        Watched that clip. Whatever else Craig may be, his views as expressed in that clip bear little resemblance whatsoever to those of the Scottish Enlightenment Thinkers, upon whose thinking (and their counterparts in England and in Europe) the American dream was founded.

        Of course they would not have described that dream using the strawman that Craig chose (although to be fair it may be that Craig simply took his defintion out of the mouth of one of his anatgonists – in which case that’s fair play in a debate) . I believe they might have been more likely to describe it as “all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness”. That’s the American dream. The fact that America is no longer what it once was or at least should have been doesn’t in and of itself invalidate the dream.

        Craig’s own words however do invalidate your opinion that he is similar to a Scottish Enlightenment Thinker.

    • Hatuey

      Brian, you accuse Craig Murray of not understanding economics then you say “humanity has reached the limits of economic growth” based on some flimsy junk about resources and energy costs.
      Not all economic production requires resources as you describe them. And you forget we are in the digital age. Huge areas of the economy are virtual, with nothing tangible changing hands, even currencies are virtual, and all of that stuff is set to grow massively in future.

  • Mr Shigemitsu

    “…the ordinary people did not immediately feel all the pain, but they certainly felt it over the following decade of austerity as the massive burden of public debt that had been loaded on the populace

    Sorry Craig, but that last bit is just wrong. The budget deficit, and its accumulation in the form of the National Debt, is not a burden on the populace.

    It represents the *savings* of the non-government (ie private sector). Ask yourself who holds Gilts, Premium Bonds, Granny Bonds etc. Mostly pension funds, insurance companies, foreign exporters’ sterling assets…

    If those holders of Gov “Debt” (=Private sector Assets) preferred to hold cash deposits instead then a) they wouldn’t have purchased those govt savings products in the first place, and b) their cash holdings, should the govt ever “pay off the debt”, would be expressed as reserves at the Bank of England instead – which, as any fule kno – are also govt liabilities, as the govt owns the BoE. So “paying off the debt” would simply be an asset swap of a liability at the Treasury for a liability at the BoE.

    Seeing govt deficits as necessarily a bad thing is falling for the neoliberal Thatcherite narrative – that the gov has no money of its own, and only what it can get from the private sector in taxes. This is false; the govt is the sole issuer of currency (banks just create credit, which has to be repaid, so creates no new net currency).

    Please learn MMT; this is the change you are looking for. As an accurate lens for understanding fiat currency creation, it liberates govts from the deceptive and damaging “give as household” narrative.

    We will need, rather surprisingly, to look to the US for progress in this regard; in particular the work of Stephanie Kelton (Sanders’ financial adviser) and AOC, who seems to get it. They are expounding in the work of the core MMT group of Professors Bill Mitchell and L. Randall Wray, as well as Warren Mosler, and, historically, Wynne Godley and Abba Lerner.

    MP Chris Williamson attended the latest MMT gathering in Birmingham, met Bill Mitchell, and has declared his support for MMT, which is a very positive sign, although of course, he has been suspended as part of the fake AS witch-hunt – hopefully temporarily.

    If you are really interested in a progressive economics, then MMT offers you the vision to be able to understand how that can be achieved, as it describes how our money (as a nation, unlike e.g. those in the Euro-zone, which issues its own sovereign fiat currency) really functions, post-Bretton Woods.

    It’s truly an idea whose time has come.

    • Clark

      MMT is Modern Monetary Theory, and it has a Wikipedia page:

      Mr Shigemitsu, I would appreciate your comments about the Wikipedia article.

      I suspect that I am not alone in finding the technical terms of economics and finance rather confusing; many of them seem to be defined (1) in terms of each other rather than things in the physical world, making comprehension dependent upon already understanding the underlying theory in advance, and (2) vaguely defined, or defined somewhat differently by writers of varying political persuasions. I know it’s a big ask, but please try to clarify technical terms as you proceed.

      I’d be particularly interested in ways in which government policies could use money to motivate behaviour, internationally, to address the climate and ecological crisis.

    • Dungroanin

      “There is something elegantly simple and radical about what is called modern monetary theory, even if nothing it has to say is modern, theoretical or in some ways much to do with money. What MMT says, as far as I am concerned, is as follows.”…

      Proff Murphy is in my opinion the best source on the subject – and he attempts to keep it party political free.

      Anyone who still doesn’t know what and where money originates and how Governments spend first THEN tax what they created, better wake up from that Thatcherite LIE.

      Here is a cartoon version of it for an easy start for these who may think it is too complicated or indeed too simplistic.

      • Mr Shigemitsu


        Appreciate your comments, but TBH, R Murphy is definitely not the authority on MMT. He promotes to an extent a very truncated version, and moulds it to his own flavour of economic view – some of which complies with MMT, and some which doesn’t.

        If you are truly interested, you will do far, far better to read the core MMT literature, by Bill Mitchell, L Randall Wray, and the other names I posted in my comment to Craig above.

        Same advice to Clark, with the addition of the observation that MMT is a description of the fiat monetary system, and not a prescription. What govts do with the information that MMT affords is a political decision; MMT itself is ideologically agnostic. In other words, govts can choose, like Tories do, to ignore the facts and spend too little into the economy so that the full potential of the nation’s real resources remains untapped, or, a more activist govt could instead choose to maximize the currency creating power of the govt via its central bank, to improve the lives of the greatest number of its citizens, via climate change mitigation for example, or any other beneficial purpose, eg benefit increases, greater health, housing, or education spending, etc…

        But that’s a *political* choice to be left up to voters – but hopefully one made in the knowledge that never again can a govt pretend it doesn’t have enough *money* to do as much as possible for the public good, within the constraints of its *real* resources.

        • Dungroanin

          I have read some of the exchanges between Richard Murphy and the theorists. A lively debate.
          RM says exactly as you do re political choice.
          RM is more practical and has clearer objectives of targetted fiscal policies.
          I don’t necessarily agree with him on all things.
          Good chat.

          • Mr Shigemitsu

            Targeted fiscal policy is where politics comes in – Tories would spent it on eg defense, Labour on eg health.

            MMT says you can spend up to the capacity of the real economy, and not how much is removed from the economy in taxes, but leaves it up to voters to decide exactly how.

            I have little time for RM, and his cherry picking of what bits of MMT to support is unhelpful. Eg he fails to understand the nature of the Job Guarantee as an inflation buffer – seemingly quite happy to accept to status quo whereby a million plus people are left to suffer under- or unemployment in order to subdue inflationary pressure.

            This is cruel to those affected let alone damaging to the well being of the community who would otherwise benefit from the JG, and as a self-declared person of high morals (and I believe a Quaker) I’m surprised at RM’s refusal to accept the JG as an alternative to the NAIRU as an inflation buffer.

        • David

          “MMT itself is ideologically agnostic”

          That is a disingenuous statement. MMT is a tyrannical, statist, monetary system which is antithetical to the concept of liberty and of the people as sovereigns. That is not ideologically agnostic at all.

          In addition it does not provide government with any additional power over and above the current system. They can run unlimited deficits under the current system and seem to be happily doing so. However they find that their propaganda doesn’t work as well when the debt keeps on increasing. Voters instinctively know that that something is rotten even if they cannot clearly explain why.

          MMT conveniently removes the rotten smell from the air without removing the rot itself.

          That is not at all

    • John Goss

      Well you must believe in national debt being a good thing Mr Shigemitsu, since it is not the first time you have enthused about it. I still liken it to the dishonesty it really is. Last time you glorified this I posted a link to the US National Debt Clock. As you can see the GNP (all the wealth in the US) is less than the debt so whoever holds these “investments” (insurance companies, pension funds, foreign holdings in the form of treasury bonds, bills and notes) are not penetrating the national debt which while fluctuating can never be paid. There is simply not enough money in the economy. It is a big myth.

      All the countries in the world have a national debt. The UK’s is above 80% of GDP. With foreign investments it would be greater. It already grows by more than £5,000 per second. It has more than doubled since the turn of the century.

      Romania got rid of its national debt under Ceausescu, so the CIA did him in, with the help of Romanian nationals. At that time Romania could not be held to ransom by any foreign power but this honest economy, which was not subject to ransom, died along with him.

      What your mythological economics does not take into account is that all the countries of the world cannot pay off their debts. Investors in bonds, notes, bills get their profits and add to the debt. It is dishonest. One day there will be a collapse. And it will not be pretty.

      • Dungroanin

        Public debt is private savings.

        In perpetuity if an individual in debt couldn’t repay on demand – they were deemed bankrupt, all their assets were seized and they were down Carey Street and debtors Gaol – after which punishment they were released debt free.

        • John2o2o

          Dungroanin: I think you may be saying that public debt is private lending? You can save money anywhere – under your bed if you want! Therefore saving has nothing to do with debt.

          • Dungroanin

            J2, Mr S is posting some great stuff here on this too.

            To make it clearer check the following link.

            “If we aggregate all the sectors into only just two, public and private, then it follows summing to zero means that when we plot their respective surpluses or deficits they will be a mirror image of one another. In words, the public sectors deficit is the private sectors surplus or as vice versa..”

          • Mr Shigemitsu

            When you save £100 in a bank or building society, it’s your asset, and the bank’s liability (ie its debt).

            Same with the govt. It doesn’t even matter if you save in cash under the bed: the UK govt. spends eg £1000bn into the economy per year, but the private sector (ie, you, me, Craig… Phillip Green, Marks and Spencer…) saves say £100bn.

            At the end of that year the Gov will have a deficit of £100bn because no taxes will have accrued in that lost spending, but the private sector will have savings of £100bn.

            If the same thing happens over ten years the deficit will be £1000bn – but you, me Craig etc will have the same amount in savings.

            What’s the problem? If we ever prefer to spend it, those initial and all subsequent transactions will be taxed in the normal way, and the debt will reduce – by as much or as little as we the private sector decide in aggregate to spend.

            But because got a have very little control over the net savings desires of the non-govt (private) sector, it really has very little ability to control annual budget deficits or the accumulated national debt. MMT says it should even try – just spend whatever needs to be spent…but only up to the limit of the real economy to absorb that spending, and not overheat and cause inflation.

            You also need to realize that any money saved even in cash deposit accounts at a bank or building society is reflected as a *liability* on the BoE’s reserve balance sheet – so once again, your savings are….dah, dah… the govt’s debt, even if you don’t hold a single Gilt or granny bond! And lastly, even the tenner in your pocket is govt debt: “I Promise to Pay the Bearer…etc”

            All money is debt of course, but better the govt’s debt than yours or mine – because we are only currency users, not currency issuers like the govt – and that makes a world of difference, even though Thatcher lies to us once upon a time that they were one and the same. They’re really and absolutely not!

          • Mr Shigemitsu

            Sorry, fat fingers. That should have read:

            “But because govt has very little control over the net savings desires of the non-govt (private) sector, it really has very little ability to control annual budget deficits or the accumulated national debt. MMT says it shouldn’t even try – just spend whatever needs to be spent…but only up to the limit of the real economy to absorb that spending, and not overheat and cause inflation.”

      • squirrel

        John Goss I think it is pertinent to point out that there is a continual flow of interest from taxpayers to the holders of treasury securities. yes, the two may overlap, but generally it is a flow from the poor to the rich.

        It would be perfectly possible for the national debt to be created without this interest burden.

        On both the central bank level, and the private level, the effect is that we are renting our money supply and trying to pay it back with the thing we are renting, which is close to insanity. It should really be little wonder that economies are so unstable and unequal.

        • Ascot2

          Canada’s finances, until the 1970s, were covered by government financing the debt through money creation by the Bank of Canada.
          This arrangement worked exceedingly well, covering implementation of the national health scheme, the St Lawrence seaway and building the network of high quality national highways. All with no major national debt being created.
          In 1974, with no national debate, the Liberals quietly turned money creation over to the private banks. Almost immediately the national debt ballooned, and it has stayed high ever since.
          There have been court cases and activist demands now going on for over 40 years, to have the Bank of Canada go back to creating its own government funds, rather than making it a loan to the private banks, but the monied interests have always thwarted these efforts.
          So the rich get richer, and the poor are told to pull in their belts.

          • David

            These are red herring arguments.

            What really matters to living standards is how much wealth a nation creates (and note that while there is clearly a relationship between GDP and wealth the two are not the same thing). In general, as Adam Smith described, free markets produce wealth in an extremely elegant and efficient fashion. Government activity has a much spottier track record. In many cases government activity reduces wealth.

            Whether governments tax, borrow or print money doesn’t really matter – what matters is how much of it they spend as that is a reflection of how much of a society’s resources they are controlling as opposed to the private sector.

            The key and only significant difference between taxing, borrowing and spending lies in how easy it is to fool voters about what is going on. Taxation is typically highly unpopular. Borrowing is much less unpopular but as deficits spiral into the trillions, voters become nervous. Direct printing, on the other hand, makes everyone happy until inflation hits.

            And don’t make any mistake – there’s nothing new about MMT. Governments printing money has been tried many, many times. And it has always ended the same way – in destruction of the currency, ruinous collapse of the economy, and human suffering.

      • Kempe

        Ceausescu got rid of Romania’s public debt by exporting most of it’s production which resulted in severe shortages and rationing at home. All local radio stations were closed and TV restricted to one state-controlled channel broadcasting two hours a day. The Ceausescus were of course not affected by the hardships they inflicted on their people in what was the most oppressive regime in Europe.

        An honest economy? I think not.

        • John Goss

          It was just about to become an honest economy. It had been hard for Romanians but they were all in employment. It is harder still now in the villages. Yes, sometimes it is hard to be honest. But at least it’s honest.

          • Kempe

            ABOUT to become an honest economy… Yes promises of jam tomorrow, a common way for tyrants to keep their subjects’ noses to the grind-wheel. East European communist states never released reliable employment data but unemployment in Romania today is quite low at 3.4%.

            Nothing honest about subjecting everyone else to grinding poverty whilst living in the lap of luxury yourself.

          • John Goss

            You don’t understand. Romania, through hardship admittedly, had got to a stage (at the time Ceausescu was murdered in Targoviste) whereby it did not need to borrow from any country or countries offering loans with ties (usually the US-based IMF). I haven’t time to explain this to you. Look it up.

      • Mr Shigemitsu

        Look, National Debt is neither a good or a bad thing – it just is. And it’s a function of the savings desires of the private sector in aggregate.

        If the private sector in aggregate decided to net spend rather than net save, the debt would gradually reduce, as new gilt issues were left unpurchased, premium and granny bonds sold off for cash, deposit accounts emptied – and all the money got spent instead… in which case VAT, income tax, NI, Corp tax, and various flavours of duties would all be imposed on those initial and subsequent transactions, until eventually, if all private sector savings were spend, there would be no public debt left at all.

        But equally, no one would have any savings!

        The Treasury has no need to issue Gilts – they do so as a hangover from the gold standard, and later from Bretton Woods, as a way to reduce a glut of central bank reserves from excess deposits, which would otherwise tend to reduce interest rates to zero.

        But the central bank could offer deposit accounts instead, eliminating the need for Gilt issuance.

        Similarly, the govt, ex-EU, could re-open the mothballed Ways and Means Account at the BoE, and let the Treasury run a nominal “overdraft” (effectively with itself, as the Treasury Solicitor owns the BoE anyway).

          • Mr Shigemitsu

            You’re welcome, Clark.

            To all the bright and curious posters here, who, like Neo in The Matrix, can sense there’s something wrong about the (in this case macro-economic) narrative they’ve been fed for years but cannot quite put their finger on it, I cannot recommend time spent on a thorough and persistent reading and researching of MMT highly enough – but, crucially, because there is an increasing amount of misinformation and half-truth abounding at present, the core MMT group whose names I mention above.

        • David

          “Look, National Debt is neither a good or a bad thing – it just is. And it’s a function of the savings desires of the private sector in aggregate.”

          Neither of those things is true.

          1. Clearly National Debt in and of itself is a bad thing. Any nation in the world which had it’s national debt wiped out tomorrow – all other things being equal – would simpy be that much wealthier.

          It is possible that the net of national debt and whatever assets it was invested in (to the extent it was invested in productive assets like roads or industry as opposed to simply spent, stolen or wasted) might be a net positive. But in general government does not invest well, so this money would typically have been better invested by the private sector.

          2. The private sector saves in private and public debt and also often chooses to invest its savings.

          Firstly government borrowing directly soaks up private savings that would otherwise have been invested in more productive wealth-creating private debt.

          Secondly government borrowing allows the government to pull resources away from the private sector. This directly reduces the number of investment opportunities the private sector can create and therefore restricts the investments available to people.

  • James Charles

    ” . . . then disproportionately funnelled wealth to those engaged in the mechanics of the transactions.”

    Not very well?

    “As Axel Weber remarked, afterwards:
    I asked the typical macro question: who are the twenty biggest suppliers of securitization products, and who are the twenty biggest buyers. I got a paper, and they were both the same set of institutions…. The industry was not aware at the time that while its treasury department was reporting that it bought all these products its credit department was reporting that it had sold off all the risk because they had securitized them…”

    “The root problem of 2008 was a failure to recognize that the highly leveraged money center banks had used derivatives not to distribute subprime mortgage risk to the broad risk bearing capacity of the market as a whole but, rather, to concentrate it in themselves.”

  • nevermind

    The trust in the system and its political leaders has been lost to such an extent that they are using force to perpetuate the status quo, far more than ever.
    Insecurity reigns and those who hope to get elected will be put in power by a minority. Whoever has a message of providing income a sustainable future and or safe working environments and safety of employment, the only guarantee that we can bail out the banks again, soon, will win the coming toss ups.

    What is really galling is that 100.000 members of the Tory party, even after two years of failure , chaos, ignorance of real issues, increasing poverty, bipartisan economics as pointed out by Craig, will choose the next PM. This after hot air statements galore on how we all like to see democracy being served. We need a GE now, not another shimmy around the greasy pole of self service/importance.

    • Dungroanin

      100,000? No chance.
      And they don’t elect their leaders or candidates – its done by a nod and wink of their constituency chairmen.
      The trick is to minimise turnout and truck in the addled geriatric votes – as always they buy their seats.

      The next GE like the last will depend on the turnout – that is the primary challenge to get a 72%+ to vote. The establishment having released the genie or gollum(?) of mass turnout to steal brexit are trying to rebottle it.

      They haven’t yet won their brexit and they have lost their political partners in crime (thanks to the hubris of the Blairites) – only an ever more desperate escalation of rhetoric and public violence is left to them.

      Nationalism ( more correctly Localism) is not to be confused with populist jingoistic Patriotism. It won’t work either – there are now two clear generations who have not been indoctrinated by militarism – aside from Hollywood, Computer games and the turgid princelings led ‘heroes’ worship.

      • ian r

        You make fine points re scotia but Im troubled that you label ‘geriatrics’ as a problem.

        If you mean life studies suggest conservativism correlates with age then perhaps explain why thats troubling you.
        If you mean disabled voters are wheeled out exclusively for Tories then perhaps thats a matter of concern, for other parties

        I for one have found identity politics a ploy to divide and rule and yet you are very interesting re the whole he haw of Sturgeons EU dependent independence.

  • Brian Davey

    Here’s another article covering approximately the same ground as Craig – but which is written by an economist who understands the energy dynamics of our civilisation and how these dynamics have translated into financial crisis as well as increasing poverty and inequality
    And another – again by an economist who understands the economy as a collection of powered machines that run on net energy (the energy left over after the energy sector has used energy to explore for, drill for, refine, transport and process energy from the ground – which is not the basis of mainstream economics thinking:

    • mog

      Both these articles are excellent.
      No respnse though. Let’s talk about the symptoms instead of the cause, let’s print money instead.

  • Mighty Drunken

    The best book I have read on the subject is Debunking Economics: The Naked Emperor Dethroned? by Steve Keen. The book is not really about the Credit Crunch but a critical look at neoclassical economics. The standard version of economics which is taught to our politicians and business people. Used to determine policy in Government and business. The book is fairly technical but eye opening.

    IIRC the main cause of the Credit Crunch is too much private debt, no surprise really. His suggestion is to limit the amount of debt far more than we do now.

    Maybe the most interesting thing about the Credit Crunch was who was blamed. In the UK it became common to blame Labour spending too much money. Even though their spending was nothing unusual until after the recession began. In the US the poor were blamed for taking out mortgages they could not pay back. Laughable victim blaming and ignoring the loosening of banking regulation, regulations which would have helped alleviate the worse of the Credit Crunch.
    The other enlightening thing was how the Credit Crunch was tackled. With interest rate low and not doing enough, many countries practised qualitative easing which generally results in giving money to investors, especially banks. The theory was there would be a multiplier effect and the extra leverage the banks had would allow them to give out more loans resulting in a positive feedback effect. Well that did not happen, the banks were more willing to fix their balance sheet then over leverage themselves again.

    The obvious policy to help with the recession would have been hair cuts to loans and helicopter money. This would have worked but would have been too socialist. So lets instead use austerity to kick the poorest while they are down. It won’t even fix the economy, but yeah!

    • N_

      “Credit crunch” is a bankers’ propaganda term, as if the problem wasn’t massive debt but the difficulties of large numbers of people not being able to get into even more debt. It is an absolute classic case of how buzzphrases spread about through the media determine the lines on which people think about and discuss what is going on. It is right up there with terms such as “asylum seeker”, “online”, and “smartphone”. See Edward Bernays on buzzphrases.

      “Credit” or more generally money capital is not like some kind of fuel. It is not a factor of production – that’s an old bourgeois lie of the “dismal science”. Capitalists and moneylenders produce eff all. They are parasites, anti-social scum.

      The old woman whom Raskolnikov kills in Dostoyevsky’s Crime and Punishment deserved it.

      My preferred solution, given that worldwide communist revolution unfortunately isn’t yet on the horizon, is for the nationalisation of the banks and for the state to exercise the mortgages it will then own, namely to take ownership of all mortgaged properties, and then to give former “owner” occupiers permanent tenancies at very low rents (which will for almost everybody be much lower than what used to be their mortgage repayments). Offer to buy unmortgaged owner occupied properties for a few years’ worth of such rents. Soon even most of the village idiots will realise that they won’t be able to sell their house for 500K any more, and they will come into the state sector.

      • Stonky

        Given that you seem to take every possible opportunity to rail against it on these blogs, I thought you might want to take a minute or two to explain clearly and specifically what you define as nationalism, and why you detest it so much, and exactly how it differs from the “self-determination” that is portrayed as a fundamental right in Article 1 of the UN Charter, and whether you’re in favour of that self-determination or opposed to it.

        But i’m sure you’re a busy chap, and I’m more than happy to wait and discuss these matters following your next outburst against the nationalistic fervour of those Scots who have the temerity to want a bit of self-determination for themselves.

        • N_

          Nationalism is an alliance of people in different classes who feel a loyalty to a specific brand of false identity based on “country”, against those in whatever class who don’t feel that specific identity or aren’t welcome to. It is always xenophobic.

          As capitalism moves forward in the existing epoch, there are known lines along which its ideology will develop. Nationalism is certainly one of them. Others include schizophrenia and the growing instrumentalisation of other people. (Hello “social” media.) For specifics regarding Britain, or to put it another way the management of the British brand – and the Scottish one – next week’s election seems important, and IMO this is very on-topic for a thread about a “pivot point”. The election is to choose MEPs to represent EP constituencies which within a matter of weeks or months won’t exist. “Who cares who gets elected?” is a reasonable question. But that’s not at all how it’s being played. Those who control the Electoral Commission and the BBC know exactly what they are doing. The combination of the arrow on the ballot paper and the effect of Years and Years, and probably stuff yet to happen, will be powerful.

      • Tatyana

        You seem to not understand Dostoevsky’s idea in the whole.
        Certainly you are free to have any of your own, but really it is strange to illustrate them with the ‘crime and punishment’.

        • N_

          Well at least I expressed my own idea about something in the novel, which is that the old woman deserved it. And Raskolnikov wimped out afterwards. I don’t support the character’s initial notion of “greatness”, so I’m not saying he should have kept to that – just that he wimped out. I haven’t read any of your ideas about the book, so I can’t judge how much they differ from accepted school-taught interpretation.

          • Tatyana

            Fyodor Mikhailovich would roll over in his grave.
            so, briefly:
            Raskolnikov’s heartache were poverty, oppression, ignorance and his dream was to change the world.
            He decided to rid the world of ‘unworthy creatures’ (and at the same time to solve his personal financial difficulties).
            After all he realised that he just killed an old woman (and her pregnant sister too) and absolutely nothing has changed in the system.
            What you call ‘wimped out’, it is conscience and remorse.
            In general, the novel tell us about the choice – “am I a trembling thing or do I have the right (*to kill)” – and its consequence.

            You don’t support his idea of ‘grateness’. But in your comment above you say “she deserved it”. I’m sorry to say, it is the contradiction. It is the idea of ‘grateness’ implies that there are untermenshen unworthy creatures deserving to be killed.

      • Kempe

        ” Offer to buy unmortgaged owner occupied properties for a few years’ worth of such rents. ”

        Why would anyone want to do that? In many cases they’d be selling at a loss.

        • N_

          @Kempe – Because that would be more than they could get on the open market, because there would be far less demand.

          • Kempe

            How would there be less demand? People would still have to move for jobs, upsize, downsize, find somewhere quiet to retire.

            I’ve paid off my mortgage, why would I sell the roof over my head for the privilege of paying rent? I’ve no intention of selling the place at all.

      • Mighty Drunken

        Shrug. Call it what you like.

        If the recession of 2008 was caused by too much private debt than “Credit Crunch” is a fair term of description. It doesn’t matter how important credit is to other forms of economy, to a Capitalist system like our own it is very useful. How else does a company build a £1billion factory if they don’t have the money currently available?
        Imagine N_, if you could convince some bankers to loan you £1billion. You could possibly build a new business empire and be worth far more. With R&D you could creat new types of industry and products. I feel a communist system could work, I don’t really know. But that isn’t our current system.

        I do agree that finance is too important and over emphasised in our economy. An investor does have a useful function, short sellers, not so much. While a worker is limited by the number of hours in the day, an investor can always get their money working, no matter how much they have. Leading to a runaway increase in wealth for a lucky few.

        • N_

          Money is a permission system. I like the line from Toni Negri: “Money has only one face – the face of the boss.” Moneylending at interest is not productive. I prefer the term “moneylender” to “banker”, because banks are not essentially places where clients are allowed to store their money, to “bank” it. They are not run to look after clients’ money for them. That’s a major service they sell, of course, but they only offer it if they make a profit out of it, and they only make a profit out of it by lending money at interest.

          A moneylender contributes nothing physical to a project, even in a broad sense of “physical” which includes mental labour. Someone who works designing a house is making a real contribution. So is someone who digs up the clay for the bricks, and someone who lays the bricks, and someone who makes a cup of tea for the architect. A person who has an enormous amount of this strange permission stuff called money and who “allows” it to be “invested” in building the house so long as he increases his pile of it contributes nothing.

          A communist revolution would abolish money and wage-labour, but that is not on the horizon and in the meantime moneylending at interest should be viewed the same way as slavery. I support social-democratic reform that would throw moneylending at interest into the dustbin of history, including in one of its most important forms in Britain at the moment, which is where moneylenders put their mark on the house that you live in and can take it off you and kick you out onto the street if you don’t keep paying them back the money (which incidentally you probably never actually see) at interest. That is filthy and dirty and vile.

      • pete

        Re “The old woman whom Raskolnikov kills in Dostoyevsky’s Crime and Punishment deserved it.”
        Well that’s a sentence I never expected to read in any discussion about critical moments in history. Tatyana is right you have not understood the point of Dostoyevsky’s Novel.
        I am not sure that even the Classics Illustrated version of the work could be capable of the interpretation you have given it. Have you always had a hatred of pawnbrokers? It’s a pity as, up to that point in your argument, I had no major qualms .

        • N_

          @Pete – Seriously what is the point of telling me that you disagree with something I wrote and that my opinion comes from a lack of understanding when you do not post your own opinion? Who cares who the publisher is? It’s irrelevant. Next you’ll be telling me I probably read it in paperback – and you’d be right, because I did. There were no illustrations in it, though. The translation is what I care about. The words, man, the words. I read the translation by Richard Pevear and Larissa Volokhonsky. I doubt that you know of a better English translation. Don’t worry – it gets Raskolnikov’s inner torment across, so is suitable for readers whose interest in the novel stays at that level. I researched reviews for translations before I bought that edition. Unfortunately I haven’t read it in Russian.

          In answer to your question, when I was born I didn’t know what a pawnbroker was. That remained the case for several years after I came out of nappies. Your sarcasm is very unskilled, kneejerky, and distracty. Do you know that? It’s idiotic when someone has a thought-out social criticism of something to ask whether they have had an irrational aversion to it since they were a baby. One of us looks as though we’re not thinking very deeply and is armoured against doing so.

          Have you never thought about the social effect of moneylending at interest? See above on this.

        • N_

          I wonder why people bother reading novels if their interpretations don’t differ one iota from an accepted mainstream one put out by superficial bozos in the universities and media. Why not only read a mainstream interpretation and then zip through a 24-page comic version of the text itself? Or is there some fun in chewing gum “reading” a text while telling oneself one is making a thoroughly independent effort to interpret it before reconstructing what is exactly a mainstream interpretation, not just in terms of what is thought about what aspects of it, but in terms of what aspects of it are considered worthy of having a view about in the first place? “Money-lending is not an issue. The point is about inner torment. I must not notice the adverts for payday loans at the post office. Those who say money-lending is an issue are stupid. I am a good Stepford Wife. I am a good Stepford Wife…”

          • Tatyana

            Have you ever wondered why some books become classic?

            my point is – it is very stupid idea to kill the old woman, because another will take her place. She doesn’t deserve killing, she is a product of current state of affairs, playing by agreed rules, aka acting according to the law.

            There must be a change in the whole system, and this may mean a revolution, but it also may mean a reform. The implementation of either of these options needs support of the population. If you’ve got no enough support from your countrymen, so maybe consider migration to the country of your dream, if you find any.

            If you choose a revolution, just remember the russian proverb “на своих ошибках учатся дураки, а умные учатся на чужих ошибках”. *Don’t repeat known mistakes*. And be prepared to much violence and possible devastation in the country.

            Reforms are likely the less painful way, but it only works in truly democratic societies.

            These are known and fair ways to make changes in a country.

            Murder of unpleasant people changes nothing, whatever the big idea behind it. Just makes you a criminal. History knows many examples of self-appointed Сleaners.

          • Tatyana

            If ever translated books by Sergei Lukyanenko, I would be glad to know your opinion about them. Night Watch, Day Watch, Twilight Watch (further are already obviously written for money sake, the movies took only action line).
            The background is a magnificent adventure fantasy. Lukyanenko raises very interesting and deep questions about Good and Evil, about Balance and Choice.

      • David

        “Credit” or more generally money capital is not like some kind of fuel. It is not a factor of production – that’s an old bourgeois lie of the “dismal science”. Capitalists and moneylenders produce eff all. They are parasites, anti-social scum.

        Hmmm. While I have some sympathy for your point of view in our current monetary system where money is created out of thin air and therefore the moneylenders did not have to earn the money in the first place, I suspect you would happily apply your perspective even to the case where our moneylender has come by his money honestly.

        And in that case I struggle to see why a man should not save the product of his labour in the form of money. And I do not see why he should not choose to forgo spending that money for a time in order to instead allow another to spend the money for whatever rate of interest they mutually agree.

        I also disagree with you that capitalists produce eff all. At least in a free market (and I would agree if you wanted to argue that our markets are not currently free at all) a capitalist can only accumulate capital by creating value for others. If a capitalist buys wood and carves it into statues with his carving knife, he deserves the profit he will make when he sells his statues for more than the amount for which he purchased the wood. Unless of course he make astonishingly ugly statues when he may instead show a loss, in which case he will find that his capital declines.

        I do have significant concerns with the way that our western societies currently grant ownership of land and resources by the way – so we might find something to agree on :-).

  • nevermind

    O/T question., sorry.
    If someone wanted to dump facebook, will he loose the use of messenger? or is there a stand alone options to carry on using it?

    • Kempe

      Facebook can and does read its members’ private messages so why would you want to?

    • Northern

      It’s possible to un-install the facebook app and continue to use the messenger app, yes. Be aware all of your data would still be retained either way though.

  • Vronsky

    One one of the final days of street campaigning in the 2014 Scottish independence campaign, I was suddenly forcibly struck by the realisation that setting up at one end of the street were ordinary people (us), while gathered at the other, supporting the Union, were career politicians and their staffers. Oh, and a few knuckle-draggers from the Orange Order. It was suddenly clear that the referendum was a confrontation between people and politicians, and Scottish independence but a skirmish in a very much larger war. I knew then we wouldn’t win.

  • giyane

    After WW2 this country resolvedto stop abusing working people and stop abusing foreigners.
    Mrs Thatcher decided to re-start the abuse by means of mortgage interest, which reached nearly 25%. Her successors resumed striking abroad and 30 years of destruction of Muslim countries is the result.

    2007 was the blowback for Thatcherism.
    Russian and Chinese power in Syria is blowback for Blair.
    Should the people of the UK ever decide to get some good blow back, the method is also obvious – to treat their own citizens and foreigners alike with justice and respect.

    • Loony

      In 1999 China had $900 billion of public debt. Today it has $40 trillion.

      Do you think that this explosion of Chinese debt is connected to British abuse of working people and foreigners. Alternatively maybe the quantum change in Chinese debt is in someway connected to Thatcher or Blair.

      My own theory is that the British are important only in their own minds. Aint it strange how the great liberals and globalists turn out to be the most inward looking and narcissistic of the whole debt laden bunch. Onward, ever onward to the abyss and fear not for the abyss is surely a social construct.

      • Stonky

        In 1999 China had $900 billion of public debt. Today it has $40 trillion…

        I hate to contradict you Loony, but China has 40 trillion Yuan of public debt, not 40 trillion dollars. It’s less than 50% of GDP.

    • David

      I agree with your fundamental points that
      (a) we should treat everyone with justice and respect
      (b) we have not done so
      (c) there have been consequences for not doing so.

      However I do not think you are being fair to Mrs. Thatcher in assigning her blame for mortgage interest rates rising through the roof. That was a direct and inevitable consequence of the global monetary system, Nixon abandoning the gold standard, the deficits she inherited from previous governments (both Labour and Tory), and Volcker’s actions wrt to US interest rates at the time. She could no more have avoided raising interest rates than Cnut could stay the tide ten centuries earlier.

  • CanSpeccy

    I don’t know how to save the world. but I think it would be a good thing if the rich paid some tax, which for the most part, they do not since they benefit chiefly from asset appreciation, not taxable income.

    The means to tax the rich is simple: a capital tax. This should not, however, be confused with capital confiscation. No doubt many would like to see Warren Buffet, Mark Zuckerberg and the rest held upside down and their pockets shaken out. But that approach will be vehemently, and if necessary, violently resisted by the Money Power.

    There is nothing, however, to provoke violent reaction to a reasonable capital tax of one, or at the absolute outside, one and a half percent. This does not destroy wealth which accumulates at the rate of about 3% in real terms (according to Thomas Pickety), but it would provide the basis for eliminating the income tax.

    In addition, there should be a refund of VAT to low income earners, as in Canada. There is, after all, little harm in the ownership of wealth if it is employed usefully, creating jobs and providing goods and services. It is extravagant consumption that should be taxed.

    • Loony

      In order to tax assets you need to be very certain that the notional value of an asset equates to its actual value.

      No doubt this rabbit is considered an asset

      However absolutely no-one needs to buy this rabbit and so determining its actual value is not straightforward. If you tax the owner of this rabbit at 1.5% per year then what effect does that have on the value of the rabbit? If you look at potential tax rate scenarios then it is not difficult to come up with a scenario whereby the real value of the rabbit declines to close to zero.

      The same principals apply to pretty much all hyper inflated assets. What extra utility do you get from a £40 million house in Mayfair than from a £5 million house in Chiswick?

        • Loony

          You had better hope that in your world the tax authorities agree with you. If they were to determine valuation by reference to asking prices then you might find yourself with something of a cash flow problem!!

          • David

            Why not just tax resources at the point they are used?

            Two things are certainly true. Whatever you tax, you get less of. And whatever you subsidize, you get more of. In our world today, most societies tax productive work and in many cases subsidize the owners and exploiters of land and resources.

            It seems to me we should eliminate the income tax entirely. Nor do I see why, in a just society, capital should be taxed. I accept that much capital is acquired through theft and corruption today – but let’s for now imagine that we are trying to envisage a just society where that does not happen.

            But people should pay a tax for the right to use land, and the right to extract oil, gas and metals from the earth. Because they are denying the rest of us the right to a part of the planet.

            What is the current basis for ownership of these resources? That they got their first, or that they bought it from (or worse killed) whoever did get their first? These don’t seem like the basis for good claims to me. Nor am I even convinced that the time they spent clearing trees and building fences or digging tunnels gives them the right of ownership although clearly it is a better basis for a claim than the first two.

            And note that this tax would differ considerable from our current council tax or real estate taxes in the US. It would not be based on the value of any dwelling or building sitting on the land, nor the number of people living there – simply on the value of the resource itself determined in some entirely mechanistic fashion and paid directly to everyone else (much as Alaska’s oil dividend works), so the grubby fingers of corrupt politicians have no role in assessing the amount of the tax or directing to whom it should flow.

  • Tatyana

    Sorry for the off-topic
    Mr.Murray was right about the alleged chemical attack in Douma Syria. Ian Henderson, the head of OPCW engineering team says the gas cylinders could not be dropped by helicopter. Russian news agency say they have the text of this report. Source in russian

    • Kempe

      The OPCW have denied that Henderson was part of their fact finding mission to Syria. In other words he couldn’t have visited the impact sites and made a proper examination of the cylinders.

      • Tatyana

        Do they deny the report itself?
        Mr. Hehderson is said to be the head of the team, perhaps this is the reason why he haven’t visited the sites but his name stands under the report. I suppose there are people on the ground and people to analyze data in the team.
        Bellingcat is good at interpreting data never visiting places, so what?

      • Stonky

        The OPCW have denied that Henderson was part of their fact finding mission to Syria. In other words he couldn’t have visited the impact sites and made a proper examination of the cylinders…

        Sorry Kempe but you’re behind the times on this one. The OPCW did indeed issue a carefully-worded statement that Henderson was not part of the FFM team. And that is all they said. They didn’t say he wasn’t in Syria working for them in some other capacity, or that he never visited the impact sites.

        And now guess what. They’ve told Peter Hitchens that they’re not going to give him any more information on the matter because “Pursuant to its established policies and practices, the OPCW Technical Secretariat is conducting an internal investigation about the unauthorised release of the document in question…”

        So the questions whether Henderson was ever in Syria, whether he was part of the FFM, and whether he authored the report, are now irrelevant. The only thing that matters is the document in question itself. Because it says exactly the opposite of what the OPCW Final Report claimed. The OPCW Final Report claimed that their investigation team concluded that the cylinders had been dropped from aircraft; the investigators concluded that the cylinders had been placed by hand.

        So the Douma chemical attack was a fake. The Western missile attacks that followed were (further) illegal acts of war. And the OPCW leadership lied to cover this up. Isn’t that just fantastic.

        Additionally, there appears to be strong evidence that the ‘victims’ of the attack were in fact dead, and that they were in fact killed with chlorine. Which leaves us with the questions: Who killed them with chlorine, and where and when?

        I wonder about people like you Kempe. Is there anything – literally anything at all – that could cause you to question your allegiance to the neocon scum who have been laying waste to MENA for sixteen years now, and slaughtering its peoples? Or is it, like, your football team?

        • Tatyana

          excerpts form the russian article:
          ” … an engineering assessment, the text of which is available to RIA Novosti … In one case… the traces of the alleged impact on the container … did not coincide with the damage to the concrete roof … In the second case … the cylinder valve remained intact, and this is impossible if the container flew through the ceiling. “

          • Stonky

            Tatyana, this OffGuardian article contains a lot of useful information, and links to the critical pieces of information – the Working Group on Syria, Propaganda and Media reports (the actual Investigation Report that was suppressed by the OPCW was leaked to them), the Investigation Report Executive Summary, the Hitchens article in the Daily Mail, and the OPCW’s official responses etc… (Kempe, best you steer clear – this is red pill stuff)

            To be honest, I’m disappointed it’s not getting more discussion here, now we’re onto page 3 and off-topic is now allowed. It’s bombshell information.

          • Kempe

            Yes the “report” is an odd thing. At 15 pages too long to be an Executive Summary but lacking the detail to be a real engineering assessment. Sweeping claims are made without any supporting evidence in the way of previous examples, experiments or calculations and those scrappy sketches. Did he really travel all the way to Douma and not take any photos?

            If anything smells fishy it’s this report.

          • Stonky

            “The Report is a fake…”

            A powerful and compelling argument Kempe, lent even more credibility by the OPCW response. Confronted by a fake report, who wouldn’t announce “an investigation into the unauthorized leak of this document”, rather than simply stating “This document is a fake”?

            It all makes perfect sense.

          • Stonky

            Seriously Kempe, you need to be down on your knees praying that this turns out to be some elaborate double bluff cooked up by the CIA and the OPCW to lead people like me down the garden path and make us look stupid.

            Otherwise you’re going to have to do some serious fingers in the ears and yah yah yah I’M NOT LISTENING to justify your ongoing support for Neocon murder.

          • Kempe

            For the this report’s conclusions to be correct it would mean the OPCW deliberately falsified its official report into the matter. It’s that I find unlikely.

          • Stonky

            Why would you find it unlikely?

            With the exception of one journalist, the Western MSM are operating a 100% total news blackout on the story. And if the media don’t report an incident like this, then to all intents and purposes it simply didn’t happen.

            In those circumstances, if you were the leadership of the OPCW and you wanted to completely falsify the findings of your Fact Finding Mission experts (for whatever reason – bribery, blackmail, threats, because that was the deal when you were given the job in the first place…) why wouldn’t you simply go ahead and do it, knowing you could do so with complete impunity?

  • Dave

    If we put the bankers swindle aka fractional reserve banking to one side, the fact is debt financing is the way our economy works and so we shouldn’t fear public debt, because we’ve had a growing national debt ever since the Bank of England was formed and yet we have never been richer.

    The secret of money is we need lots of it but it isn’t real, unless we are confident its real, but once we lose confidence it disappears. Put another way the banks lend far more money than they actually posses, and everything’s fine until everyone wants their money at the same time, the run on the banks, which the banks don’t have.

    New Labour’s deregulation of banks led to a run on the banks and this led to a general collapse in confidence and a recession as people have little confidence in credit (the unreal/real money) which normally drives the economy.

    The State can respond by borrowing money to spend into the economy (they can spend without borrowing, but that’s back to bankers swindle) to boost the economy, but instead austerity was chosen as the solution, but this wasn’t done as claimed to balance the books, but to save the Euro.

    • squirrel

      Dave why ‘put fractional reserve lending to one side’? You very accurately identify the issue as ‘banks lend far more money than they actually possess’ which is precisely a description of fractional reserve lending. This is the ‘unreality’ of their money, the money one has in bank accounts is an IOU of the bank to the depositor, and the cash as in Bank of England money isn’t there to cover even 10% of depositors all rushing to swap it.

      If we have full-reserve lending, there would be no such thing as a run on the bank, as all deposits would be backed up 100% and exchanging deposits for cash or transfers to another bank would be simply be changing apples for apples. There would be no fear that should a bank go bankrupt all the money it created would disappear, because it wouldn’t be creating any new money, and it would always have the cash to redeem depositors.

      From the paper I referred to earlier:
      “The second advantage of the Chicago Plan is that having fully reserve-backed bank deposits would completely eliminate bank runs, thereby increasing financial stability, and allowing banks to concentrate on their core lending function without worrying about instabilities originating on the liabilities side of their balance sheet.” page 5,

  • John2o2o

    Putting it simply my understanding was that the crash was caused by the Clinton repeal of Glass Steagal in the USA, which led to profligate lending.

    And while I sympathise with complaints about bailing out the banks I have to say that as someone whose bank is the Royal Bank of Scotland that I feel very uncomfortable about the notion that it should be allowed to fail. Would that not also ruin my life and the lives of others who use it as their bank?

    • Loony

      I think you are confusing Bretton Woods with the Clinton repeal of the Glass-Steagall Act.

      With regard to RBS it is important to note that the government had the option of nationalization. It did not take that option and instead injected £45 billion into the bank without taking control of the bank. With one or two notable exceptions this option provided for existing management and existing management pay scales to remain in place.

      In 2008 RBS raised £12 billion by way of a rights issue. Months later the bank collapsed and was rescued by the £45 billion taxpayer funded capital injection. Investors in the £12 billion rights issue subsequently launched a legal challenge alleging that RBS omitted crucial financial information from its rights issue prospectus. Given the subsequent collapse of the bank then this contention would seem obvious – although it was never obvious to the British government, the SFO or the Bank of England and hence no criminal proceedings were successful.

      In the 10 year period following the collapse of RBS the bank agreed to pay aggregate fines of $27 billion for engaging in a range of criminal activities in a range of jurisdictions. These fines were in lieu of criminal proceedings being initiated against the bank. To date no-one from RBS has been brought to trial for any of the crimes committed by the bank.

      Very few people would regard the route chosen by the government as being preferable to a full nationalization of the bank and the use of the law to investigate and prosecute criminal activities.

      Even after the labyrinthine bail out process undertaken RBS (along with the entire banking sector) remains systemically insolvent. It is being propped up through the government authorized abandonment of normal accounting practices and an unyielding policy to inflate the real estate sector at all costs. Should real estate prices ever fall then RBS and many other banks will collapse. If real estate prices do not fall then those that do not own property can forget about ever owning property.

      In a country that obsesses about all manner of discrimination it has enacted policies that create massive economic discrimination with there being very little prospect that those in the losing class can ever move into the winning class. For most people it no longer matters what kind of job you do, and how much money you earn through work. All that matters is whether you own property,

      I guess the hope is that the losers just suck it all up for ever. If this comes to pass then it will allow the winners to enjoy their wealth in peace and no doubt provide them some moral justification as to why they are rich and everyone else is poor. “The poor are too stupid to realize that it is a rigged game and so deserve poverty as a consequence of their stupidity”

    • Sharp Ears

      A commenter ‘Joe’ on this account from February 2008 agrees with you about Clinton.

      Deregulation and the Financial Crisis
      by Robert Weissman / February 1st, 2008

      The bank crash in the UK happened later that year in October, and we, the taxpayers, bailed out the bankers with £500billion, an unimaginable sum. We have never recovered from the bailout and many UK citizens still suffer under the resulting austerity.

      Where are Brown and Darling now? Brown is scribbling away no doubt and Darling is on the red benches now. He speaks there rarely and is otherwise occupied. See Register of Interests. Lord Darling of Roulanish

  • Glasshopper

    So Brexit is a “Blind alley”. But “Independent” Scotland grovelling to Brussels is a step forwards?

    Dearie me. What a joke.

    • Stonky

      So Brexit is a “Blind alley”. But “Independent” Scotland grovelling to Brussels is a step forwards?

      Why would Scotland have to ‘grovel’ to Brussels? If I want to know what ordinary English people (have been trained to) think about the Scots, I just have to read the comments under any article on Scottish independence in the Guardian, The Telegraph, The Daily Mail etc… Or read the posters on here spouting their bigoted tripe about ‘nationalism’ and ‘xenophobia’, I’ve spent most of my adult life living and working in Western Europe, and I don’t know any Europeans who regard us with that degree of contempt.

      And the EU won’t control every single significant lever over our economic and foreign policy.

      So again, why would we have to ‘grovel’ to Brussels?

      • N_

        I’m sure you’re right that anti-Scottish bigotry is rife in the big British newspapers’ comments sections. But Marx’s idea that the working class have no country is not a case of it, and to think it is would be a sad example of chip on the shoulder xenophobic parochialism that I doubt you’ll have encountered among say Bretons in Brittany.

        Regarding trained identities, as far as I know Tesco branches in England don’t sell milk using the line “English milk from English cows”. Why not? Many people “think” whatever’s rammed into their consciousness.

        • Stonky

          You’re demented N. Cows are cows, They cannot be victims of xenophobia. Preferring your own milk from your own cows to inferior quality milk from somebody else’s inferior quality cows isn’t xenophobia.

  • John2o2o

    Well I have already embarrassed myself this evening with a comment regarding the American banking system, so I readily admit that I know very little of economics and capital.

    However, I was at one time an accountant and I do understand a little of money. And I apologise to those who know more than I do. I will have my say. Feel free to ignore me, disagree with me or educate me.

    I think a lot of people think that debt is a bad thing. It is a very normal thing in business as new companies of any size need to attract capital in order to function, and that means attracting debt. You often have to borrow in order to finance projects that have not yet made any money.

    Perhaps the anarchists here can think of a better system.

    I think the problem is perhaps not so much debt, but exploitative debt. The sort of debt that can arise when lenders allow excessive limits on credit cards, which can be a trap when vulnerable persons lose their job and then start to rely on their cards and end up being unable to repay them.

    Lending used to have a very bad name. Usury. But how do you know when lending becomes usury?

    Businesses very frequently write debt off. Accountants reserve for this as “bad and doubtful debts”. Yes, debt is often not paid. Companies liquidate, people are bankrupted (have their debts written off).

    I often sometimes muse that it might not be best just to write off all debt globally and start again from scratch. Of course, a suitable system of financial regulation would be required or the whole thing would just repeat itself. And I’m sure that such an action would have seen and unseen consequences and not all of those would benefit the public at large.

    • Dave

      An old expression is who controls the money controls the country, but equally who controls the debt controls the country, through debt enslavement. It true debt is mostly an un-repayable phantom and could simply be written off with no one in the real economy noticing, which a representative government could do, but not a government controlled by the bankers.

      I don’t think its just a coincidence the 7/7 London tube bombings allowed Blair to cancel the world debt cancellation summit taking place at exactly the same time!

      • David

        “debt is mostly an un-repayable phantom and could simply be written off with no one in the real economy noticing”

        Really? How would you do this exactly? For a start our money is debt, so if you wrote off all debt we wouldn’t have any money. How would our economy function without money? Barter? Secondly you would impoverish an entire generation of the elderly. Is that what you want to achieve?

        I have a great deal of sympathy for the viewpoint that our monetary system and its attendant ever increasing flood of debt is a terrible thing for our society and leads to a great many ills. But sadly it cannot be easily fixed by simply eliminating debt in one fell swoop.

        • Dave

          I did say mostly, but I concede eliminating all debt at once would be a terrible shock to system and not a good idea.

          There are different types of debt, such as those associated with usury, but the point about a lot of debt is its created out of thin air and can disappear as easily through a legal process. Hence the calls for the cancellation of Third World debt, but equally applicable to all nations.

          Its a bit like me saying you owe me a million and you agree, but I then say forget it, we’re even! Its a phantom.

          • David

            Yes the debt could disappear, but I don’t agree that it would be like you saying “you owe me a million” and then forgiving me the debt.

            It would instead be like you agreeing to pay me a million in return COD for me building you a mansion by hand, me laboring in the cold and wet for a decade to build you the finest mansion in Scotland using only hand tools and the sweat of my brow, and then you taking possession of the mansion and saying “forget it, we’re even!” leaving me, cold, poor and bloody angry on your doorstep. It is possible that I would starve and turn into a phantom – but I don’t think that’s quite what you meant….

  • Dave

    Craig, you are a grand fellow & I very much admire what you are doing but I am concerned about nationalism – wherever it rears its head. It seems nationalism has always been a major driver for fascism & racial/ethnic intolerance. Political national boundaries are man made artificial constructs that allow the few to keep the many fighting amongst themselves!

    • Stonky

      Craig, you are a grand fellow & I very much admire what you are doing but I am concerned about nationalism – wherever it rears its head…

      Well there’s a very simple solution to that, Dave. Instead of thinking of Scottish aspirations for independence as nationalism, think of them as a desire for self-determination, as enshrined in Article 1 of the United Nations Charter, and then ask yourself why you don’t go around arguing that all the countries that gained independence after WWII should be dragged back into the British Empire because fascism and racial/ethnic intolerance…

      • Dave

        Its just a fashion that ebbs and flows as is the way of the world. The 1848 revolutionary period in Europe was about the self-determination of nations and republican democracy against the prevailing Monarch ruled Empires, but which was followed, due to WWI, to nationalism and popular dictatorship, which then reverted back to Empires and occupation democracy after WWII as the world was divided into two and throughout there were small nations yearning to be free, now offered an opportunity by the EU as a way to break their existing chains, but ‘independence in Europe’ can be fools gold as Greece proved.

      • Tatyana

        Nationalism is often associated with radical views and action, and self-determination – with humane and legitimate action. Above we discussed Dostoevsky. The eternal question is whether the goal justifies the means. I think that all the difference is in the methods we choose to achieve it.
        The trick of reasonable management of any group of people is to make sure that the wolves are fed, and the sheep are safe.

  • N_

    Relevant to pivot points: how well will the Brexit Party perform next Thursday in Scotland? They have a much clearer message than either the Tories or Labour and they will win votes from both. North of the border, will they pick up from the SNP too? On one hand (to the SNP’s market) they are saying that Scotland wouldn’t be independent if it were to join the EU and that Scottish independence would only be possible after Brexit (the latter point doesn’t hold together logically, but this is politics); on the other (to the Tories’ market, not specifically in Scotland but the message will be heard in that country) they are saying that Theresa May doesn’t truly “believe” in the UK.

    It’s a fight between the xenophobia of “we support whoever’s playing against England” and the xenophobia towards those who don’t come from Britain at all. (Phrasing of those last words chosen on legal advice.)

  • Peter

    Two fine pieces Craig (this and the next on American imperialism), thank you once again.

    “The rejection of the political class manifests itself in different ways and has been diverted down a number of entirely blind alleys giving unfulfilled promise of a fresh start – Brexit …”

    Reluctantly and sadly I voted for Brexit and would do so again tomorrow if a second referendum arose, because I believe that the EU is fully embedded in and bound by the neoliberal project (of which the financial catastrophe is a part) and has no democratic accountability or counterweight to stand against it. The, in my view criminal, rape and pillage of Greece is sufficient evidence of that, though there is plenty more if you look for it.

    In essence, the anti-democratic EU is part and parcel of the economic and political policies that have lead to the above profoundly damaging outcomes.

    Further, I have waited a long time for, and very much want to see, a Corbyn-led government and also believe that much of the Corbyn programme would be illegal under neoliberal EU law and would be met by severe opposition from the EU were he to become PM whilst we were still a member. There have already been signs that the EU has been seeking to undermine a future Corbyn government in its ‘negotiations’ with May.

    Some would say that the proper response to that is to call for EU reform, but I see no sign that that is remotely possible and every sign that the EU would stand very strongly against such reform. What that appropriate reform might be is a very, very large topic for discussion indeed.

    Ironically, us leaving the EU might make that reform more possible as some within it reflect on our reasons for leaving, but, as I see it, the EU is far too wedded to the interests of the banking and financial sectors along with global corporate interests for there to be any chance of meaningful reform in the foreseeable future.

    In the meantime the election of a Corbyn government could reflect the “pivot/tipping/turning point” of which you speak, and hopefully it will not be too much longer before we see him walking through the door of Number 10 – though clearly there is still much work to be done before that happens.

    • Ken Kenn


      I would agree withe vast majority of what you say.

      The thing is similar though to the fight against Climate Change.

      True, that we set the example of fighting austerity but it is not a war we can win just in the UK – we have to make it a worldwide phenomenon. starting – hopefully? within Europe.

      The truth is ( in my opinion of course ) that the Financial Sector owns all of the Corporate companies of which we speak.

      They lend them the money and thereby as lenders like the IMF – World bank etc they dictate terms for repayment.

      Because they are the lenders – they own the borrowers.

      Yes we can have theories about Soros – The Illuminati etc etc but the lenders dictate terms.

      The Jewish Conspiracy is nonsense, they ( the Bankers ) have no religion other than the religion of money.

      We need to start somewhere and Corbyn is saying that we need to be at least close to the EU to influence a reversal of austerity
      within the UK ( soft Brexit or not ) and as an example to the other ‘ progressives ‘ in the EU.

      Personally I would rather Remain but we are where we are and a less harsh Brexit is better than a Johnson/May Brexit.

      I hear the siren calls from the Guardian et al that the Lib Dems are taking over from Labour vis the Remainers but Corbyn and Labour are walking a tightrope and the ultimate proof of the Remain pudding will be in a General election where the turnout will be greater and minds will be focussed on many policies ( economic social and so on ) and not just the narrow Remain/Leave problem.

      Labour and other parties in a GE would get the chance to put forward their policies ( excluding Remain/Leave ) as to how they would like to mould the UK’s future as the world progresses.

      The Brexit debate muffles that and the PTB want it that way.

      It parametises any debate on policy.

      In fact the BBC’ s job on Thursday (as it was in the locals ) is to manage in PR terms the downfall of the Tory Party.

      It’s a s simple as that by putting an equals sign of defeat between the Tories and Labour then it gives the view that they have both been defeated equally by the Brexit Party when in actuality the Brexit Party will have taken many more seats of the Tories than Labour.

      The Brexit Party should do well but I think the Remain camp will generally counteract that surge – we shall see.

      Make no bones about it – the Tories are on their way to being finished in their current form and the question is as to who will benefit from the remnants.

      My money is on the Lib dems but in a First Past the Post System their share of the vote will not be enough to get them many seatsin a GE.

      I do believe that Labour may form a government in Coalitionwith the SNP and this is why the SNP need to stop attacking Corbyn and start attacking the Tories good and proper.

      Neither party ( Independence not withstanding ) has any overlap politically with a party of Neo liberals.

      Not an ounce.

  • squirrel

    Mr Shigemitsu you say upthread “Commercial bank lending does *not* represent 97% of UK currency creation, no matter how many times Positive Money repeats it. It simply issues credit, which must be repaid, plus interest, as you indicate. Keynes called it “Horizontal” money.”

    Keynes called it ‘money’, and that is what it is. Calling it ‘credit’ as if that is something else is either a semantic trick or misunderstanding. The ‘credit crunch’ was a contraction of bank lending, of bank credit, of bank money. So, it was a contraction of the money supply itself.

    This didn’t cause a collapse of our economy because it was something superfluous.

    I don’t mean to sound impolite but there is something fundamental which you do not understand here, and you do not know that you do not understand it.

    • squirrel

      Mr Shigemitsu this is a quote direct from the Bank of England’s page, ‘How is money created?’

      “Why can banks create money?
      This system is called fractional reserve banking – and it’s been common for centuries. The idea is that most people aren’t going to need their money in the form of cash at the same time. Therefore, a bank only needs to have a fraction of the money it’s lending to people available in cash.”

  • Dave

    The old alchemists tried to turn lead into gold to become rich, but failed. The new alchemy is fractional reserve banking and works. The reason up-thread I said put aside the bankers swindle to one side was simply to point out the new alchemy, creating money out of almost nothing, works whether private or government controlled.

    People fear debt, except they shouldn’t because it drives the economy, hence why its often called credit, which people like. There is a difference between private/household debt and government/public debt, (because people can’t just print money, but governments can) but public debt has never been higher and we’ve never been richer.

    However when a government controls its own money creation it can “balance the books” over a long or short period depending on priorities. If you balance the books over a long period you get the “money tree”, but if over a short period you get “austerity”.

    Successive governments have been promoting “austerity” to keep within the rules for joining the Euro-currency (which I think was the aim behind holding the referendum, hence Lib Dem support for holding it), but now the prospect of joining the Euro, any time soon has been removed, the Chancellor suddenly announces “an end to austerity” and finds the “money tree”.

    • N_

      The credit system works until one day it doesn’t, and what determines when it does or doesn’t is the real materially productive economy. It works as a form of permission system, giving the go-ahead for investment of capital in means of production and labour, allowing the counting up of profits, selling to the working class what is needed for their reproduction (what Marx called “small-scale circulation” in a physiological analogy), mediating purchases on super-yachts and houses in Eaton Square and the payment of hedge fund managers’ bonuses too. Try to pull yourself up by your bootstraps and you probably will leave the ground for a bit. “In the long run we are all dead”, said Keynes.

      Bonus question: anybody know what Keynes’s “day job” was for decades?

    • squirrel

      Dave fractional reserve banking certainly ‘works’, in the same way that the more old-fashioned methods of enslavement ‘work’, like chains and whips, but we live in far more sophisticated times.

      I don’t know why you think ‘people have never been richer’… that is just nonsense. A few decades ago, a manual labourer could support a family with his wife not having to work and buy a house too, good luck with that nowadays.

      Saying debt is good because it drives the economy is only true if you accept that we must create our money as debt with interest payable. We can create it as a public resource instead – look at bitcoin, for example, that is a currency which doesn’t use the banks at all and which is not created by fractional reserve lending. There is no huge banking industry taking a perpetual skim of all the bitcoins in existence, like they continually are with sterling, or dollars, or any of the currencies they have corrupted which is just about all of them. All we need to do is introduce full reserve banking, helicopter the money in to the public to top up the money supply (instead of giving it to the banks) in the transition period, and then it will be like ridding oneself of a massive parasite.

      I really have no idea how they have got away with this. Actually I do have some idea, they became so wealthy that they bought off all the key people and organised society so it was continually distracted and arguing over other matters.

      • Dave

        There has been a long history of campaigning for honest money including Social Credit. Keynes theory is similar to Social Credit but to progress he agreed a compromise to promote public spending as long as it was controlled by private banks rather than the government. That is borrowed rather than spent into circulation.

        The reason it persists is the banking cartels have bought off careerist politicians and wage war to defend their control against nations that seek to control their own money and to denounce critics as “anti-Semitic”.

        This is why genuine green radicals and faith groups who talk about money reform at conference are warned off the subject and instead are suborned to promote the corporate climate change scam which strengthens rather than weakens the rule of the 1%.

  • N_

    Relevant to coming “pivot point” in Britain:

    it seems that Theresa May has “done a deal” with Labour. The reason why they’re putting it out that she hasn’t is because it wouldn’t look good for Britain’s two main political parties to fight an election next Thursday with a message saying they agree with each other.

    Whether she will actually manage to get to the dispatch box to announce it (either before or after a vote on a Bill or an indicative vote, and even then not necessarily in such crude terms) is another matter. Insert reference to Italy’s “historic compromise” and Aldo Moro here.

    Does anybody think if there’s another referendum Remain will win? If one is to be held Dominic Cummings may go even crazier than he is. He will probably take the line that “SW1” are all so stupid that they think Remain will win and will be surprised when it scores a lot lower than 48%. But the command over “SW1” and public opinion and what questions are allowed to be asked isn’t that stupid at all.

    • N_

      And on Tuesday the BBC will publish the second episode of “Years and Years”, featuring the rise in Britain of “new party” politician Vivienne Rook, leader of the “Four Star Party”. I will leave readers to decode the reference to Israel and the Palestinians in the character’s iconic act of saying the word “f***” on Question Time which gave rise to the party’s name.

      Meanwhile, listen to the stress pattern in the name “Vivienne Rook”. It goes

      — ∪ ∪ — where the first syllable carries a subsidiary stress, weaker than the stress on the final syllable.

      In Otto Jespersen’s more detailed notation it goes

      3 2 1 4

      with 4 being the highest level of stress.

      That’s exactly the same pattern as for “Nigel Farage”.

      • N_

        Relevant to pivot point…

        I wonder whether Vivienne Rook will get a milkshake thrown over her in tomorrow’s episode of “Years and Years”. If she does, you read it here first!

        Nigel Farage had one thrown at him today.

        A milkshake was also thrown at Tommy Robinson recently. I doubt he paid somebody to throw it at him (cf. François Mitterand’s Observatoire affair of 1959), but he might as well have done. If milkshake attacks continue then the “victims” will be in seventh heaven. It’s highly useful for publicity. It’s telling voters that the person is being attacked because they are white. Robinson is certainly bright enough to understand this. So is Farage.

        Tomorrow will also be the day that the Electoral Commission “pay a visit” to the Brexit Party’s offices. Gordon Brown has raised the matter of where the party’s money is coming from. I have no doubt that Gordon Brown is no fool and that those who tell him what to do are acquainted with the laws of psychological warfare, among which is that you shouldn’t let your opponent be perceived to be making the running. The BBC, Gordon Brown and the pollsters are all helping the Brexit Party operation like nobody’s business.

        I will pay close attention to the Sun’s front page tomorrow and on Wednesday. (In my experience of previous votes, Thursday’s front page will be less important.)

        No “funding question” is going to hurt the BP’s voteshare on Thursday now.

        A stern declaration by an Electoral Commission bureaucrat to the cameras – perhaps by a person of minority ethnicity, or someone who sounds as though he’s only a few years out of private school – will do the party a big favour. It will be worth a party political broadcast, easily.

  • mike

    After last week’s Question Time farce in Elgin, guys like Neil Mackay need to wise up about what the Yes movement is up against.

  • Dave

    We are unquestionably richer and healthier than we have ever been. To argue we are poorer is semantics and no need to do so to argue why fractional reserve banking in private hands is iniquitous and dangerous, because those who control the modern alchemy of turning lead into gold, promote war to defend and grow this privilege, which should be controlled by the people through Parliament.

    • Bill Thomson

      ” We are unquestionably richer and healthier than we have ever been.” That depends on who we are.

      Gogo killed a goat in honour of our visit. We had been lucky to find a black market source of fuel which had enabled us to get there and be sure of getting back, that and the low ratio box in the 4×4.

      Squatting on the floor, over dinner I explained to Gogo why she shouldn’t cook on an open fire. The settled science-tists wanted to send her a wood-gas burner which could heat a pot one tenth of the size she was using and produce only half the CO2 and make them feel good all at the same time. But you can’t feed ten people from a one litre pot Gogo argued and she might have four or five pots over her fire at any one time.

      In exchange for a stove she would have to sign a solemn undertaking not to allow any child to use it nor to use it to prepare food for anyone who allowed children to work in the fields, collect twigs, carry water or learn to survive in the bush without cash or an app. Isn’t ten times a half, five times as much, asked Tete Myflo. Tete had been mission educated.

      I explained that Manhattan Island would soon be under water, the sea level was rising at 2.7mm per annum. At 200km from the coast and 710 metres up it would be 262,962 years before there would be a beach anywhere nearby. Tete Myflo was of the opinion Manhattan could stick Gogo’s burning embers where they would have the best effect.

      But food miles is a real issue I pontificated, changing the thrust. Uncle Arron pointed out, the oranges, lemons, lychees, guavas, mangoes, avocados, and passion fruit travelled 15 metres on average. Less if you ate them in the shade of the tree. The cultivated crops, sweet potatoes, sugar cane, pinto beans, ground nuts, round nuts (look it up,) maize and bananas, anything up to 150m while the rice travelled furthest from the paddy by the river at 175m. If you wanted loofahs, there was a tree for that too, a toothbrush bush, a few chilli bushes and a couple of coffee bushes. The fire wood was mostly wind fall, all grown within carrying distance. The chickens came to the yard of their own accord, especially if there was a marauding dog about. The turkeys made a nuisance of themselves chasing the children and the goat had lived its whole life within a 200 metre radius of the round hut that is the kitchen. Fair enough they did barter for tomatoes and apples sometimes. They should grow their own in Manhattan if they are concerned about the sea level.

      Gogo grumbled the water had to be carried 50m up the hill from the well and at seventy-nine she wasn’t getting any younger. They had waited thirty years for a piped supply, the villagers had dug the trenches but there was still no sign of a pipe and no plans for a settling tank. So much for NGOs, especially the ones who wouldn’t allow the children to help.

      Uncle Arron was an astute man. When the bush war ended forty years ago and the local demand for child soldiers levelled off he had sold his only skills on the world market and had travelled the globe. Latterly he cleared mines for a living, there was a big demand for that, the Lady Di effect, but now he was comfortable in his retirement. His astuteness could be measured by the fact that he was alive, still had all his limbs, digits, eyesight, hearing and his wits. He may like us Scots but he loves our Whisky.

      Arron pondered the problem of their CO2 production and offered a solution;
      Perhaps Save the Children could send us some carbon credits.
      Could I trade them for banana fertilizer, asked Gogo, they will only accept US Dollars down at the road and there aren’t many USD around here. Do they have malaria in Manhattan, don’t suppose it matters, you get used to it.

      Patrick the labourer is HIV positive. He had spent the day crouching 14m down at the bottom of the well with a hammer, a chisel and a bucket. He was being paid a pretty good rate to deepen the well. $12.50 a metre. Even with two of them working they could get by on half a metre a day. Good work if you can get it. $3.12 would buy a fair amount of beer and Gogo fed him and his assistant so long as they worked. Alcohol and retrovirals don’t mix but there weren’t any retrovirals.
      Despite the seven mile walk each way, Patrick didn’t wear them to work but he does own a pair of shoes.
      Try walking a mile in them someday.

      [Names have been misspelt to confound the curious.]

    • N_

      @Dave – “We are unquestionably richer and healthier than we have ever been.

      Who’s this “we”? And who says your statement can’t be questioned? Well-off assumed rentiers shopping in Waitrose and John Lewis have been mentioned in these columns. Right. I’ve got to admit that I don’t much like most Waitrose customers myself. But never mind them. In many British town centres, even in counties that some people who don’t get out much would think of as well-to-do from edge to edge, such as Cambridgeshire, there are shops selling a loaf of white bread, six eggs, and a block of margarine for £1. And there are foodbanks from one end of the country to another.

      Also in many towns, if you go to a bank branch you may observe working class people who are on the edge of no longer being able to make ends meet asking to draw out £10 from their account and being told they can’t have it. You may also observe them getting deceived and ripped off by businesses such as utilities that have conned them into granting direct debit authority such that payments often seem to go out of their account and come into their account at exactly the combination of times that rips them off most badly.

      Many are almost living hand to mouth. And opioid prescription rates are sky high. Screw the FTSE-100. For many the Depression is already here.

      • Dave

        To assist aggregate material wealth, health and longevity has gone up around the world for various reasons , but unquestionably some people are richer, healthier and live longer lives than others, as ever was.

        • squirrel

          Dave there are vast numbers of people who are in our modern-day version of slavery in that they barely only earn enough money to cover the means of existence, rent and food. If you travel to London you will find many people living on the streets and begging, I daresay elsewhere too, where life expectancy drops to a matter of a few years. Look at the the impact of ‘austerity’ and those on disability benefit being declared ‘fit for work’ after which many of them die. I don’t know where you are living but I think there is another world you are not seeing which is the subject of the article.

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