ALB
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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are not "currency cranks" as you describe it, merely describing how the system works now, and not based on wrong or out of date economics text books.Actually, I don't think Positive Money are currency cranks as you don't think that a single bank can create what they lend out of thin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..
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
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
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.
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?
Another item, from today's Times, to file under "Banks can't lend more than they have":
Quote:Metro [Bank} has customer deposits of more than £1 billion, which swelled by £205 million in the last three months to the end of September. It has 238,000 personal and commercial accounts and lent individuals and businesses just under £200 million in the quarter, taking its total loan book to £565 million, it said yesterday.Those who think banks create the money they lend out of thin air are invited to do the maths and/or to ponder on why this bank didn't do this.
LBird wrote:ALB wrote:Do you really think that democratic control should extend to what people should think?What's the alternative? Leave it in the hands of a minority, as it is now?What? You actually believe the ruling class myth that 'we are all individuals'? That we all now think as 'individuals', and that future democratic control of our socialisation processes would be a retrograde step? That we shouldn't have a collective say in how we reproduce our society?
No. I was just giving you a chance to clarify your view. Actually, I think it reasonable that education and even child-rearing should be subject to democratic decision-making. These are matters of collective concern and today are imposed by a minority in their interest.Obviously, as you've pointed out, socialist society will "socialise" its members to fit in with it (just as all societies do). If that's all you are saying and that this should be decided and implemented democratically, fair enough. The trouble is that the way you express it can be interpreted as suggesting more than this, e.g that we are all going to have think alike, though I'd imagine that education in a socialist society will encourage people to think critically. Remember this all started with an off-hand remark of yours about "the democratic control of ideology (including religion". Maybe it's just a semantic thing about the meaning of "ideology"?
Interesting article, especially in relation to demolishing the concept of "unlimited wants". But it still seems to accept the concept of "absolute scarcity" or, as Fanning puts it, that "we live in a full world where the global economy is bumping against ecosystem limits." Obviously resources are not "absolutely abundant" but there are abundant enough in relation to likely human needs, i.e. there is "relative abundance", even though resources won't be able to be rationally used to meet needs until we've got rid of capitalism and its artificial scarcity and organised waste.
alanjjohnstone wrote:IMHO, the failure of Occupy was the lack of participation of organised wage-workers in the unions and despite Mayday attempts to involve them, they didn't succeed.But how to judge whether Occupy was a success or a failure?At the start Occupy deliberately didn't have any practical reform demands (one of its attractions), but saw itself to be a consciousness-raising exercise. Insofar as it did popularise the use of the word "capitalism" in a derogatory sense they achieved this. It was a "success". Eventually of course those most behind it couldn't resist the temptation to put forward demands, mainly for the reform of the banking and monetary system and Occupy lapsed into common or garden reformism. Insofar as they failed to achieve these they were a "failure". But these reforms were irrelevant anyway from a wage-worker point of view. So, a good thing that the trade unions were not ensared in them, though of course, if they had been involved in formulating demands, no doubt they would have brought other futile ones such as Keynesian attempts to reflate the economy.Occupy has been and gone and its positive legacy has been to help make "capitalism" a dirty word again. For us to build on.
twc wrote:You came here on a crusade to educate the Party into adopting democratic control of scientific thought. Since, for you, cognition is scientific thought, you sought the Party to endorse monitoring and controlling human cognition per se.It looks, LBird, as if this issue of the limits of democratic control will have to be settled first, i.e. what do you mean by "democratic control of ideology"? Do you really think that democratic control should extend to what people should think?On the thread about what would real democracy look like (the appropriate thread, I suggest, to discuss this) you replied that in a socialist/communist society this would apply to education, including what today is called "civics" and perhaps to child-rearing. That education policy should be subject to democratic control seems reasonable enough (these are already subject to social control today, even if not democratic), but the term "democratic control of ideology" can be understood or misunderstood in a more sinister sense. As I said,what exactly you mean by this seems to needs clearing up, best on the other thread.http://www.worldsocialism.org/spgb/forum/general-discussion/what-would-real-democracy-look
Here's an SWP article from last year supporting Islamists (against secularists). The idiots.http://socialistworker.co.uk/art/27973/Egypt%3A+Faith+in+the+revolt
Quote:The crowd around us got bigger, comrades very much on our side and the others, men who seemed utterly heartbroken (pissed off) that we were chanting “kill all men”. One well-meaning chap explained how his mum was a feminist and how he had support for women but he felt alienated by phrases such as the one we were using.I bet he was and the rest of the male working class too.On my way to the fair I passed a woman in a burqa. I would have thought that the energies of these people would be better directed at those who force "their" women to do this. Wouldn't like to see what happens, though, when they shout "Kill All Men" in this context.
At the Anarchist Bookfair on Saturday I was given a free copy of the latest issue of Kittens put out by the Wine & Cheese Association (section in England of the group from Germany Gegen Kapital und Nation). In one of the articles there are a couple of paragraphs refuting the idea, embraced by trade unions and the Left and propagated by groups like Militant (even if they don't believe it or at least their leaders don't), that increasing workers' consumption is a way out of the slump and in fact good for capitalism:
Quote:Some Left parties and the TUC claim that companies are being irrational when they suppress wages, and they do not mean the simple fact that workers are having a hard time to make ends meet. They point out that somebody has to buy the commodities with which capital makes its profits. Their proposal is: wage increases create more effective demand and this benefits everyone – workers have more wages and capital more profit. Capitalism could be a nice symbiosis if companies were not so short-sighted.What is remarkable about this theory is that it is only ever proposed to support rather limited wage demands: a minimum wage, a wage increase of 3% or even an unconditional basic income of a few hundred pounds. Why are the proponents of this theory so humble? Why not an hourly wage of £50, a wage increase of 100% and an unconditional basic income of £5000? If the theory was right, then this would make the economy go pop. Their humbleness shows that they themselves do not really believe their own theory. Rather, these advocates are looking for a reason to have their interest in higher wages recognised in the national discourse.The theory is also simply wrong. For one, a single company has no advantage if it increases the wage. Even the workers of Nestlé spend only a small part of their wage on Nestlé products. Of course, if other companies pay their workers higher wages, then Nestlé might make more sales. However, it is not the logic of a single capital to pay its workers more for this effect.Yet, sometimes competitors must be obliged for their own benefit. This is why the Left looks to the state which ought to enforce such wage increases. Workers get more money because the state mandates it. All companies sell more commodities to workers and, hence, attract more money from them. However, the imagined advantage for everyone is not realised: what companies pay more to their workers, they get back through their sales. Though these proponents of higher wages in the interest of capitalist success would not admit it, from the standpoint of the rate of profit, the ratio of advance and surplus becomes worse.And of course, as it's the pursuit of maximum profit that drives the capitalist economy, reducing the rate of profit will have negative consequences. Which is why this won't work or even be tried. So what's the point of campaigning for it (instead of for socialism)?It's online here: http://antinational.org/en/wage-and-profit-rate
The Unity Trust Bank seems better, but it has close links with the Co-op Bank which provided the initial capital and still has a 26.66% share in it. We used to bank with the old Girobank, as a state as opposed to a private bank, but this got privatised in 1989 and is now owned by Santander. Maybe the new Post Office Bank to be set up next year (it's only Royal Mail not the Post Office that has been privatised), which is a sort of attempt to revive the Girobank, could also be suitable.
I knew he had gone off the rails (relatively speaking since he was only in the Trotskyist IMG at one time) but hadn't realised that he had gone that far, but weren't there a couple of other ex-IMGers in Blair's cabinet? Still, he can't have been all bad as we recommend his book Marx and Human Nature on this site here (under H).
