/lit/ - Literature

>>16462749
Engels - Origins of Family, Private Property and the State
Anything by Marcel Mauss
Anything by Marshall Sahlins

>>16462749
Debt is a meme created by the government to scare right wingers and tea party crowd. Government debt is private surplus (if we use money within our own borders, without corruption).

>>16462924
It's even further than that. Debt simply does not exist. If I file for chapter 7 bankruptcy, all my unsecured debt will be discharged with the stroke of a pen upon completion. The left is also very spooked when it comes to debt. See the student loan forgiveness proposals. They unironically are suggesting paying them off with billions of dollars instead of simply nullifying them. Debt only exists if you see it as an iron law as most people do.

>>16462979
>They unironically are suggesting paying them off with billions of dollars
But what about our rich banker overlords? How will they survive we just nullify all debt? Surely we must pay more in taxes to pay off our debt

>>16462979

Discharge too many debts and people won't want to lend money anymore. There are consequences to these things.

>>16463007
good.
usury is evil every major religion knew that

>>16463007
Hopefully all the bankers and finance bros get a bullet to their temple

>>16463007
That's actually great

Such a good book. I tried and failed to get my family to give it a go.

Year of Jubilee when?

>>16463030
It limits your spending capacity to the cash you have at hand.

With a mortgage, for example, someone who has wealth in the form of property can spend that wealth without having to give up that property. Eventually the cash will be paid back but you will have had opportuinities to make that money back (or more) by then. Credit helps you not miss out on investment opportunities.

>>16462749
Did you look at the bibliography?
Michael Hudson obviously
https://michael-hudson.com/tag/ancient-near-east/

>>16462924
Debt literally can be created by anyone. You can theoretically lend anything to anyone under made up rules but enforcing it might be more costly than it's worth. You can create tokens by pure fiat and try to get people to borrow them in exchange for whatever (dollars, grain, whatever) today. I think you're getting at MMT which is the idea the government spends money into existence and taxes it out of the system since government can impose liabilities on people in a way private institutions can't since voluntary taxation won't work. That's why debt markets in ancapistan would never be mature or work since you really need to socialize the costs in making it work.
Retards like Rothbard wanted to get rid of government and somehow enforce everyone to use gold bars (or notes "backed" by them) to pay for everything and not be allowed to use anything else for money and make it so risky no one would ever borrow money for anything. Crypto is awesome in one sense because now libertarian economics doesn't make any sense since most libertarians want a private market in money today but if you allow that gold is doomed to be permanently monetarily irrelevant from now on and you have to advance more sophisticated monetary matters head on.

>>16462979
>They unironically are suggesting paying them off with billions of dollars instead of simply nullifying them
That's kinda what happens under dictatorships, if the government can just destroy your wealth without compensation by fiat that's going down a dangerous road.

>Debt only exists if you see it as an iron law as most people do.
No it really exists because it's enforced. It's wealth. If you own it you can sell it for quick cash and go and buy real stuff.

>>16462749
Graeber is fucking retarded, he admitted to making shit up
dont bother with economics anyway

>>16463007
Student loans are all guaranteed by the government (taxpayer) anyway, so the banks simply collect interest for taking zero risk.

>>16462749
weren't most of his claims debunked by actual economists and even left wing economists at that?

>>16463091
>actual economists
Lmao.

>>16463091
actual economists are retards who got us into the mess we are in the 1st place

>>16463030

Compare Medieval Europe to Medieval Arabia with an eye towards financing and you will understand why the Industrial Revolution took hold in London, and not in Baghdad.

>>16462979
>See the student loan forgiveness proposals.
It's a tax because the debt is owned by (and thus owed to) the government.

>>16463087
Insurance doesn't mean you eliminate all risk but ya it's practically a free lunch how it works in reality.

>>16463091
The termed "debunked" as generally used means it doesn't fit my model so it's ipso facto wrong. Not particularly impressive.

>>16463106
medieval Baghdad was devastated by the mongols, and the europeans discovered the new world so they had massive amounts of cheap raw materials to feed the industrial machine.

>>16463083
Source?

>>16463087
That was before. The government acquired almost all the debt (and the interest thereof).

>>16463099
>>16463094
I suppose I shoud clarify. From what I've read the chapters that truly shine are the early ones but as the book progresses it becomes packed with half truths and resort to distorting information to fit his own narrative
>>16463118
You're right, I suppose I should have used a different term since debunked is overused nowadays

>>16463091
He demystified what's actually going on and ofc actual economists desperately tried to cover it up with pretentious word salad

>>16463106
You are simplifying historical conditions too much

>>16463126

The structure of capital is a lot more important than access to metal. Launching speculative endeavours requires investment. Investment requires loans. The Christians tolerated money-lending. The Muslims did not.

>>16463134
>The government acquired almost all the debt
Notice that, unlike private banks, the government can't simply create the debt out of nothing. It has to use actual taxpayer funds to acquire the debt.

>>16463007
Then the state should have them executed for treason.

>>16463109
>It's a tax because the debt is owned by (and thus owed to) the government.
Translation, error does not compute.

>>16463151
I wasn't talking about metal.
a staple of the industrial revolution was cotton, which was produced mostly in the americas

>>16463106
Yes, and the industrial revolution and its consequences have been a disaster for the human race

>>16463237
based

>>16463109
A tax is when the government makes someone nominally poorer by taking their money. A government just buying private debt doesn't do that ipso facto if they don't also "pay" for it by raising taxes instead of just running a larger public deficit. The assumption I suppose is that larger public debt translates into inflation making people really poorer. Recent history should make you think skeptically about that though. Obviously resources get allocated differently, instead of working at McDonalds to pay down private debt people might be freed to do something else. McDonalds labour costs may increase but maybe they invest more in automating things and can keep prices stable. You don't know the effects till post-facto. A bunch of new spending might be used to invest in meeting the new nominal demand.

>>16463156
>the government can't simply create the debt out of nothing
Where do you think money comes from? All money comes from spending it into existence. If congress spends a billion dollars the Fed can't bounce their cheque, that's literally impossible.

>It has to use actual taxpayer funds to acquire the debt.
The government issuing bonds really has noting to do with taxation. People would only buy bonds because of future spending not past.

>>16463156
Sure it can. The government can create money out of nothing. When it lends out this money it comes to own debt.

The money the central bank, the entity the government created to handle monetary policy, creates is loaned out to other entities that will themselves loan it out to more entities and new money comes into circulation by this branching proccess.

The money that the central bank lends has to be paid back with interest* like the loan of every other bank, and the profit in this scheme goes to the government.

Private banks even create "broad money" in that the total amount of money being traded by banks exceeds the amount of money that banks actually hold. They only need to hold enough enough to pay what they owe at particular points in time (plus whatever the government tells them they should keep in reserve).

*Because of deflationary risks even with low interest rates, some central banks have experimented with 0 or even negative interests rates to get as much money into circulation as possible.

>>16463176
>>16463256
>A tax is when the government makes someone nominally poorer by taking their money.
Essentially.

Because 92,29% of student debt is owed TO the government (as federal loans), the government is effectivelly taxing students.

>>16463302
>Sure it can. The government can create money out of nothing. When it lends out this money it comes to own debt.
The government "owns" debt by buying bonds... that's the only way it can do that. It "borrows" by issuing bonds to domestic/foreign investors to buy. The government "creates" money just by increasing spending. When the government increases spending on say the military they just through some hoops are increasing the $ number in the bank account of soldiers/contractors/etc. I don't know exactly how the government is in the business of "loaning out" money but the mechanisms are probably similar to private actors.

>The money the central bank, the entity the government created to handle monetary policy, creates is loaned out to other entities that will themselves loan it out to more entities and new money comes into circulation by this branching proccess.
Most of the money in the system comes from private banks assessing risk and extending loans and borrowing to cover it. Banks aren't worrying about having the "reserves" to back loans but finding people who'll pay back and extending loans. The Fed has to make sure everything cancels out.

>*Because of deflationary risks even with low interest rates, some central banks have experimented with 0 or even negative interests rates to get as much money into circulation as possible.
Low rates "should" make people borrow more to spend but the effects are actually negligible. It should be obvious by now the only way to get people to increase spending is to directly hand out cash instead of trying to nudge them. All that actually happens with low rates is less money is going to wealthy savers and drives people into more risky bets outside the system (for better or worse).

>>16463392
I'm not American and don't really know about how student loans work... don't they work through some third party corporate entity so middle men can get some income?

>>16463106
Baghdad isn't arabia lol

>>16463487
>The government "owns" debt by buying bonds
No, government bonds aren't debt owned to the government, they are debt owed by the government. Selling bonds is how the government borrows money for deficit spending.

The government issues bonds (selling them) and the buyers become the owners of public debt.

Government-owned debt is debt owed TO the government.

>I don't know exactly how the government is in the business of "loaning out" money but the mechanisms are probably similar to private actors.
Sure, the government can loan money it gets back from taxes, but the central bank loans to private banks money it creates from nothing.

>Banks aren't worrying about having the "reserves" to back loans but finding people who'll pay back and extending loans.
They are actually mandated to have reserves by the government. These minimums serve to prevent bank runs.

>>16462749
I'd recommend The Gift by Marcel Mauss and most of Timothy Earle's work. The Gift is really short. Most of Earle's books aren't too long. Stone Age Economics by Sahlins is also short and dope. Based anthro thread OP

David Graeber was a pseud who had a superficial (and false) understanding of economics. Do NOT read him. Read something by an actual economist

>>16462763
>Engels - Origins of Family, Private Property and the State
Engels and marx reduce all life to production of goods.

THis is why 100 years later, all people are alienated by production and money

The materialist conception of history starts from the proposition that the production of the means to support human life and, next to production, the exchange of things produced, is the basis of all social structure; that in every society that has appeared in history, the manner in which wealth is distributed and society divided into classes or orders is dependent upon what is produced, how it is produced, and how the products are exchanged. From this point of view, the final causes of all social changes and political revolutions are to be sought, not in men's brains, not in men's better insights into eternal truth and justice, but in changes in the modes of production and exchange. They are to be sought, not in the philosophy, but in the economics of each particular epoch.
—Friedrich Engels, Socialism: Scientific and Utopian (1880)

yes it reduces people 'life to producing and trading goods
Marxists do not know maths at all too.

The Economics of Money & Banking

The last three or four decades have seen a remarkable evolution in the institutions that comprise the modern monetary system. The financial crisis of 2007-2009 is a wakeup call that we need a similar evolution in the analytical apparatus and theories that we use to understand that system. Produced and sponsored by the Institute for New Economic Thinking, this course is an attempt to begin the process of new economic thinking by reviving and updating some forgotten traditions in monetary thought that have become newly relevant.

Three features of the new system are central.

Most important, the intertwining of previously separate capital markets and money markets has produced a system with new dynamics as well as new vulnerabilities. The financial crisis revealed those vulnerabilities for all to see. The result was two years of desperate innovation by central banking authorities as they tried first this, and then that, in an effort to stem the collapse.

Second, the global character of the crisis has revealed the global character of the system, which is something new in postwar history but not at all new from a longer time perspective. Central bank cooperation was key to stemming the collapse, and the details of that cooperation hint at the outlines of an emerging new international monetary order.

Third, absolutely central to the crisis was the operation of key derivative contracts, most importantly credit default swaps and foreign exchange swaps. Modern money cannot be understood separately from modern finance, nor can modern monetary theory be constructed separately from modern financial theory. That's the reason this course places dealers, in both capital markets and money markets, at the very center of the picture, as profit-seeking suppliers of market liquidity to the new system of market-based credit.
Perry G. Mehrling

Academic Council
Professor of Economics, Barnard College

https://www.ineteconomics.org/education/courses/the-economics-of-money-banking

>>16464079

https://www.youtube.com/playlist?list=PLmtuEaMvhDZbmfO7rtVLBGJ4Eu_iFBtSU">1: The Four Prices of Money

https://www.youtube.com/playlist?list=PLmtuEaMvhDZbVJfl0Se-1eQncA_2ZB4bs">2: The Natural Hierarchy of Money

https://www.youtube.com/playlist?list=PLmtuEaMvhDZZyyAkEniNUMTTnlJj6qiKW">3: Money and the State: Domestic

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYfVv95KDQWd8-7UrJCJ9Pm">4: The Money View, Macro and Micro

"https://www.youtube.com/playlist?list=PLmtuEaMvhDZZh6zLsntFVt3UIgQ3VqvVv">5: The Central Bank as a Clearinghouse

https://www.youtube.com/playlist?list=PLmtuEaMvhDZapRsqgacn0gLLO-5zQkcwU">6: Federal Funds, Final Settlement

https://www.youtube.com/playlist?list=PLmtuEaMvhDZZJrTj6tyB41ollE3V9ICDZ">7: Repos, Postponing Settlement

https://www.youtube.com/playlist?list=PLmtuEaMvhDZZ0iHoJmCN30Qm0PgyiD4c9">8: Eurodollars, Parallel Settlement

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYdsq2xV-XMH_BktZzORjM2">9: The World that Bagehot Knew

https://www.youtube.com/playlist?list=PLmtuEaMvhDZa6t0f1aooC1QzPJmupu1Lg">10: Dealers and Liquid Security Markets

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYlJeLypSZ5px_JnVHgFmOq">11: Banks and the Market for Liquidity

https://www.youtube.com/playlist?list=PLmtuEaMvhDZaBnW0RhzOOk6FO91MdsSEc">12: Lender/Dealer of Last Resort

https://www.youtube.com/playlist?list=PLmtuEaMvhDZa7lHhyQgkwSIhFy9VRF3my">13: Chartalism, Metallism and Key Currencies

https://www.youtube.com/playlist?list=PLmtuEaMvhDZZT848wo0fKzpjMm0FcOTv2">14: Money and the State: International

https://www.youtube.com/playlist?list=PLmtuEaMvhDZZfzK2aL4YHCgJDHIvicnkZ">15: Banks and Global Liquidity

https://www.youtube.com/playlist?list=PLmtuEaMvhDZaxgF-8EmoGUox54zLH6PC6">16: Foreign Exchange

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYoo6ou5q3LQBC34hqw1A_G">17: Direct and Indirect Finance

https://www.youtube.com/playlist?list=PLmtuEaMvhDZZk--VcZIQCbki7JiVt4-hF">18: Forwards and Futures

https://www.youtube.com/playlist?list=PLmtuEaMvhDZb_WqDkpWLvzOmROPXf8bzL">19: Interest Rate Swaps<

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYv1g1Yp_AE5gFqJ7Ny80Hc">20: Credit Default Swaps

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYl_kIW7KgBDCBNoUraW8zU">21: Central Banking for Shadow Banking

https://www.youtube.com/playlist?list=PLmtuEaMvhDZYAHtKBvxC7dL-eL8apCOGD">22: Touching the Elephant: Three Views

>>16463789
I think you're confused. Some governments actually have "surpluses" which means they own more IOU's than they have issued. If the American government were to go into a surplus they can buy foreign government bonds to hold or private corporate ones (practically socialize the economy) or buy a bunch of gold and dig a big hole and put it all in it and pay people to guard it. The typical story is that foreign countries like China buy American bonds to "fund" America's deficit. China would probably be just as cool with buying all of Wall Street or all land in America but the American government won't let them. If America didn't offer bonds to buy all that "saving" would have to go after something else just as liquid. Before 2008 the Clinton era retards were freaking out because Bush built up so much debt that they thought China was going to "attack the dollar"... which turned out to be totally delusional.

>Selling bonds is how the government borrows money for deficit spending.
Selling bonds creates the deficit and an asset someone owns.

>Sure, the government can loan money it gets back from taxes, but the central bank loans to private banks money it creates from nothing.
Operationally explain how. Do you think the government is fiscally constrained on how much they can loan? Do they ever extend the loan before the tax money comes in or after?
Also private banks do most definitely create money by fiat by extending loans, the Fed isn't in the drivers seat and isn't in charge of making individuals less credit worthy to be borrowers.

>They are actually mandated to have reserves by the government. These minimums serve to prevent bank runs.
When someone at a bank makes a loan do you think they have to make sure they have the "reserves" before the loan gets extended or do they just go threw regardless?

>>16464008
He's not wrong tho

>>16464000
trips of truth

uppo

>>16464000
Actual economists are fucking retards who separate social from the economic

>>16464079
>>16464089
Good shit, anon.

>>16464282
Surpluses mean the governments ends up with more money than it has spent. They always come from tax revenues exceeding expenditures.

Most governments don't use their surpluses to buy other countries' bonds but to abate their own debts, which lowers future borrowing rates for the government, or put that cash into the next year's budget.

Dunno why we'd be talking about surpluses here.

>When someone at a bank makes a loan do you think they have to make sure they have the "reserves" before the loan gets extended or do they just go threw regardless?
Not before every loan naturally, but the Federal Reserve requires each bank to hold a reserve ratio. If actual reserves fall below the requirement, the banks borrow from the Fed until they get to that level. These mandatory reserves aren't made up of the money that private banks can create themselves, ofc. Setting this reserve ratio is one of the tools a central bank has to reign in monetary expansion (and private debt).

The US government doesn't issue bonds to "buy" savings, it just wants to spend more (which earns votes) than it taxes (which costs votes) so it needs to borrow the money it isn't willing to create (voters accept stable prices but hate fast rising prices so inflation also costs votes).

>Selling bonds creates the deficit and an asset someone owns.
It funds the deficit. The government can issue bonds and still come up with a surplus as long as spending is low enough and taxation is high enough.

>You think the government is fiscally constrained on how much they can loan?
No, as long as you consider the central bank, even if somewhat independent, a part of the government, which I do. I don't think we disagree here.

>extend the loan
>extending loans
Never heard that expression except in response to the term of loans. Is that what you mean? As in, do governments ever ask to extend the due dates?

This discussion is sprawling out. I think it's important to say my main issue with >>16463487 was that government only comes to own debt by buying bonds. Rather, anyone can come to own government debt by buying government bonds and the government can loan money in a number of ways including lending money it creates to private entities (the Fed can even collect interest on this money it creates from thin air) which contradicts >>16463156 ("the government can't simply create the debt out of nothing" - the Fed does it all the time whenever it lends to private banks).

As for student debt, the federal government owns it in the same way it owns federal parks and the way it owned AIG stocks before it sold those for a profit. Debt you own is an asset of yours, and US student debt is a huge US government asset. Less than 8% of student debt is owed to privates. All that is why I say student debt is essentially a tax: it's an finnancial obligation to (NOT BY) the government.

>>16465300
he's trying to get you away from the fact that the gov/fed can print money out of thin air