[ALB]

There's nothing to argue about in this case. Everybody here accepts that the human mind is entirely determined by the surrounding world.Historically there is an argument about how: is it a simple reflection (as Lenin held) or does the human mind play an active role (as you and us hold) ?There are of course other more or less interesting things we argue about (see the thread on Pannekoek) but not about human knowledge being the result of the interaction of the human mind with the ever-changing external world of observable phenomena (or rather, as Morgenstern, reminds us, perhaps the word "external" is not entirely accurate as we and our minds are also parts of the world of observable phenomena, even mental constructs out of it too).

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LBird wrote:

'all our knowledge is derived from the interaction of humans with the ever-changing world of experience'.

That's just nit-picking since this statement doesn't exclude, in fact is premissed on, the statement that all our [i.e. us h umans] knowledge is derived from the ever-changing world of experience; that  the human mind is entirely determined by the surrounding real world.Adding "from the interaction of humans" merely qualifies it and doesn't make you or anyone else (e.g me) an idealist. In fact, it is so obvious that it doesn't need stating since by "knowledge" we mean "human knowledge", so obviously humans are involved. That's what we're talking about: human knowledge.I don't understand why you always seem to want to pick an argument when there's nothing to argue about.

[ALB]

Here's the article he wrote as guest editor of the New Statesman. Rather long and not so good but he does make some good points in passing. He seems to be into "spirituality" too much. A latter-day George Harrison who even looks like someone ftom that era !http://www.newstatesman.com/politics/2013/10/russell-brand-on-revolution

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I understood Morgernstern to be making the basic point that all our knowledge is derived from the ever-changing world of experience and that anyone who claimed otherwise was an idealist, whether religious (more likely) or not.Anyway, does this (the quotes not the accompanying text and the silly idea that you can get something done about global warming by signing a petition) help restore Engels's reputation and show he wasn't completely out of his depth on scientific matters:http://links.org.au/node/3554

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simondv wrote:

" but from a capitalist point of view is unnecessary as bank lending depends on the state of the economy and it is this that governs the demand for bank loans."  I disagree, the state of the economy depends on bank lending

simondv wrote:

All new money should be created by the central bank, free from debt and interest, and free from political influence, to be spent into the economy. The present system is manic depressive, more lending encouraging a boom, a bust occurring when banks lend less and people try to pay down debt because there is less money.

Since we agree that the claim that a single bank can create the money it lends out of thin air is nonsense and also that the textbook model of multiple loans is unrealistic (see this article from 1971), this is the crux of the matter, as Alan has just pointed out. Does the state of the economy depend on bank lending or does bank lending depend on the state of the economy?Your theory offers a purely monetary explanation for the boom/slump cycle — and a purely monetary way of avoiding it. No attention is paid to what happens in the "real economy" where wealth is actually produced, for profit. No notice is taken of the competitive struggle for profits leading to overproduction.A boom is a situation in which markets are expanding. Businesses assume that this will go on for ever and plan to expand their productive capacity to meet this. They are eager to get finance to do this and turn to the banks to borrow money to invest in increasing production. Bank lending increases. The demand for finance drives up the rate of interest. This is one of the factors bringing the boom to an end, but the main one is overproduction (in relation to the market) in a key sector which results when all the planned-for increased productive capacity comes on stream.In the ensuing slump, the demand for bank loans falls off and interest rates fall. As long as it remains unprofitable to invest as much as before, the government can encourage banks to make loans as much as it likes but this won't have any effect. Nor is there any way that the banks can force businesses to take out loans they don't want. The initiative for a recovery has to come from profitability being restored by events in the real economy (such as the clearance of unsold stocks, the decline in real wages due to increased unemployment, the weeding-out of unprofitable firms which their assets passing cheaply to their rivals).We are seeing this right now. The government has offered all sorts of incentives for the banks to lend, but they are not doing so. The fact is that the government can no more force banks to lend in a slump than it can stop them lending in a boom. How much banks lend depends on the state of the economy, on whether it is in the boom or the slump stage of the business cycle.There is no monetary policy or monetary or banking reform way of avoiding the boom/slump cycle. This cycle is built-in to capitalism and is caused by events in the real production-for-profit economy. The only way to avoid it is to end capitalism by converting the means of production into common ownership under democratic contro,l so that they can be used to produce to satisfy people's needs instead of for sale on a market with a view to profit. Then there will be no need for money or banks.

[ALB]

You've missed the question mark and the subtitle "The cases for and against the revolutionary use of parliament" !

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Why didn't you tell us he was talking about revolution? I didn't bother to look at it until now because Brand has always struck me as a self-publicist and a clown, but actually he's not too bad here. He even commits himself to seeing the outcome of the revolution he thinks is coming as some sort of "socialist egalitarian system". Listen to it. It's only 8 minutes.

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I think you are being too harsh on Engels. His writings on history such as The Peasant War in Germany and The Origin of the Family don't betray any influence of the dreaded "positivism".  In fact, we quote from them all the time.And his The Part Played by Labour in the Transition from Ape to Man is not bad for its time.I'm not convinced either that Marx had a different understanding of the scientific developments of his day than Engels.  They frequently discussed these in their correspondence and I don't think there is any evidence of Marx telling Engels that his approach was wrong (even if it was).As to what Ricky Tomlinson (of the Scargill Labour Party) should have said, it was "Dialectics of Nature? My Arse!" rather than all dialectics.

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Of course we have always said that socialism cannot be established without majority support and participation and that, being a society without a coercive state, could not work without it. Maybe this resolution passed at our conference in 1991, with its reference to socialist society's "socialisation process", has some relevance here:

Quote:

That this Conference recognises that rules and regulations, and democratic procedures for making and changing them and for deciding if they have been infringed, will exist in socialist society. Whereas a ruling class depends on the maintenance of laws to ensure control of class society, a classless society obtains social cohesion through its socialisation process without resorting to a coercive machinery. However, in view of the fact that in socialist theory the word "law" means a social rule made and enforced by the state, and in view of the fact that the coercive machinery that is the state will be abolished in socialist society, this Conference decides that it is inappropriate to talk about laws, law courts, a police force and prisons existing in a socialist society.

[ALB]

I wasn't necessarily agreeing with E.W. — Ted Willmott who, sad to say, ended up in the Labour Party. He also wrote a series of articles in the Socialist Standard in the 1950s on economic and philosophical matters (crises, Popper, Stratchey, etc) that can be found on this site under Publications/Socialist Standard/Archive). I was merely drawing attention to this views.This said, I do agree with his basic criticism of Engels on this point:

Quote:

The fundamental error of Engels was to take the contradictions involved in the thinking process and transfer them to physical processes.

This is not a rejection of "the dialectic" but of the attempt to see it as some sort of "law of nature". It is still valid as part of the thinking process (eg treating the world of phenomena as a whole, naming parts of it to understand it, etc).I don't think Engels can be blamed for having a go, even if he failed. He did follow very closely the scientific developments of his days and the Dialectics of Nature were notes he didn't publish himself. I don't think he advanced the same theory in Anti-Dühring, did he? I wouldn't criticise this work of his, especially not the part which was later published as Socialism, Utopian and Scientific, still a good introduction to "Marxism".Actually, I'm quite an Engels fan as he wrote simply and is easier to follow than Marx. He just made a mistake here in trying to discover "the laws of dialectics" in nature.

[ALB]

Brilliant quotes, Alan.This is another bit you could have put in bold:

Quote:

Some interpretations of the ‘loans create deposits’ meme overreach in their desired meaning. The contention arises occasionally that ‘loans create deposits’ means banks don’t need deposits to fund loans. This is entirely false.

I would think that will be more in line with how Sir Mervyn sees things too. Certainly, it's what practical bankers will know. These days banks don't just depend on deposits for obtaining money to lend but also on themselves borrowing money from the money markets to relend — at a higher rate of interest. Northern Rock got into trouble because it relied too much on this and got caught out when money market rates rose and squeezed the margin between the rate at which they borrowed and the rate at which they re-lent.

simondv wrote:

You have not adequately explained how the money supply increased by 3X in the ten years from 1997, it was not increased by an army of grannies finding extra money at the back of the sofa, or by the Bank of England printing it. The banks became much easier with their lending in this period, lending much greater multiples of income for mortgages for example, so increasing the money supply. It could well be that deposits end up in total quantity the same as loans (M4 lending), and the balance sheet of RBS a few years ago at the start of the financial crisis showed it's loans to be around £1700 billion and deposits to be a little less than this.

M4 is a more a measure of bank (and other) lending than of the "money supply"  It only merits this description if you define bank loans as part of the money supply; in which case it is true by definition. What you have overlooked is the other source of the money banks lend: what they themselves borrow to re-lend. The claim is not that banks cannot lend more than their deposits but that they cannot lend more than they have, whether deposits, what they've borrowed or their own capital.Alan's quotes explains how banks manage their daily cash flow and balance their books at the end of the day (literally), which doesn't really have all that much to do with the point at issue since not all payments in are deposits or bank borrowings and not all payments out are loans.

simondv wrote:

We are not "currency cranks" as you describe it, merely describing how the system works now, and not based on wrong or out of date economics text books.

Actually, I don't think Positive Money are currency cranks as you don't think that a single bank can create what they lend out of thin air. The reform to the banking system you propose could work to give the government and central bank more control over bank lending (if that's what you want), but from a capitalist point of view is unnecessary as bank lending depends on the state of the economy and it is this that governs the demand for bank loans. Your scheme could also risk increasing inflation.

simondv wrote:

The description of one bank on its own creating money by the act of lending is a bit simplistic,

I'm not sure that "simplistic" is the right word. I'd say "cranky" but at least we agree that a single bank on its own cannot create money to lend out of nothing, a widespread belief in currency crank circles..

[ALB]

We've actually got a pamphlet that deals specifically with the questions you raise of possible military coups, delegates selling out, etc, What's Wrong with Using Parliament? It's on this site here:http://www.worldsocialism.org/spgb/pamphlets/whats-wrong-using-parliament

[ALB]

I don't understand. If you agree that a single bank cannot create credit "out of nothing" (as some claim) why do you rush to their defence? Why not join me (and us) in condemning such currency cranks for spouting nonsense?There has long existed a textbook model which shows how the banking system (as opposed to a single bank on its own) can use a sum of money deposited in one bank to lend out many more times than this (through most of this sum being redeposited again and again in other banks). But this is still not "creating money out of nothing" since if a bank doesn't receive one of these re-deposits it can't lend more. In fact, the expanding bank loans depend on deposits expanding. Both expand together. So, in this model total loans are not, and cannot be, greater than total deposits.The system you describe involves the central bank (in this country the Bank of England) and  wouldn't work without it. Also, it concerns all payments in and all payments out and not all payments out are loans. But nobody denies that a central bank can create money by a keyboard stroke. But this doesn't increase the amount of wealth in existence, merely more claims on that wealth. The danger here is that if too many such claims are created then this will lead to inflation (depreciation of the currency's purchasing power).In any event, it takes two to make a bank loan and at the moment, with the capitalist economy in the middle of a slump, there isn't so much demand for bank loans as before, no matter how much money banks might have or be able to obtain from the money market or the Bank of England.In passing, I don't think Mervyn King would agree with your interpretation of what "quantitive easing" is or its purpose. But there's a separate thread on this here:http://www.worldsocialism.org/spgb/forum/general-discussion/why-hasnt-quantitative-easing-caused-inflation

[ALB]

Good point. I think what is meant is that the way capitalism works (accumulating capital through the reinvestment of profits) has had as a consequence the development of the productive powers of society as most reinvested profits are invested in new, more productive equipment and ways of organising production, to the extent that plenty for all is now technologically possible.Of course since all this more productive equipment has been produced by the working, they, not abstract capitalism, brought it into being even though within the context of capitalism and its economic laws.Mind you, like Marx, we have always seen that capitalism has played a progressive role in human history but that now this is no longer the case. It's obsolete, passed its sell-by date, or however you want to express it.

[ALB]

I don't know why you assume that the Party is committed to Hegelianism. As far as I'm concerned, he just wrote incomprehensible quasi-religious mumbo-jumbo. But then different members have different views. But what has this got to do with issue under discussion?

[Author]

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