Truth To Power wrote: The high levels of inequality are an artefact of landowner privilege, as Henry George explained so clearly and irrefutably in "Progress and Poverty." Higher population, technological progress, and accumulation of capital all have the effect of pushing the no-land-rent margin outward, reducing wages while increasing land rents.
quetzalcoatl wrote:I envy those of you who have an overarching explanation of everything.
The Marxists, you mean. Yeah, I hear you.
Of course, the Law of Rent does not explain everything, but it does correctly explain many of the more important things that Marxism, socialism, capitalism, etc. explain incorrectly.
Similarly, pathogenic micro-organisms don't explain every disease, but they do explain most of the most important ones.
You are like a person in the mid-18th century who first hears a scientist say that all the diseases you fear most -- smallpox, pneumonia, cholera, bubonic plague, tooth decay, etc., etc. -- are caused by invisible micro-organisms: you simply refuse to know the relevant facts because they are too much at odds with your incorrect beliefs.
The sense of certainty must seem quite intoxicating. For me the cost of stilling that internal voice of dissent is too high.
Some people are willing to know facts that prove their beliefs are false. I am one of those people. You are not. Simple.
Truth To Power wrote: But that is just an admission that capitalism doesn't produce a desirable outcome, but an unjust and harmful one, which has to be continuously corrected by government intervention.
Not much of a system, if you ask me.
Harmattan wrote:If by system you mean a set of a few theoretical rules that magically work, then no such thing is possible.
<yawn> Magic is not possible. So what?
If by system you mean a complex and tangled set of informal and evolving spaghetti relationships that actually work most of the time despite the formidable chaos that mankind is, then capitalism is certainly the backbone of a system that actually works.
<yawn> So was slavery.
We are discussing humanity, not Peano algebra.
You cannot take for granted that a significantly better outcome is possible, at least with the current technological levels.
Sure I can, because I can show exactly how to achieve it.
Systems' merits can only be evaluated comparatively.
Really? I've never encountered an apologist for capitalism yet who was prepared to see rich, greedy, privileged parasites reduced to a condition commensurate with their net contributions to society.
I thought you were desiring prosperity, liberty and justice, not true equality - whatever that means.
Who mentioned equality, let alone equality of condition? I was talking about justice: a condition commensurate with their net contributions to society. Remember? Does that sound like Procrustean egalitarianism to you? If so, I suggest a remedial reading course.
Of course justice also implies equality of rights and opportunities, but it pretty explicitly rules out equality of income, wealth, or condition.
I am not convinced that an economic system can be found at the present technological levels that can achieve all at the same time.
I can explain exactly how to achieve liberty, justice and prosperity -- and though not equality of outcome, at least a greatly reduced level of unjust inequality of outcome.
Now I admit that I am on the good end of the stick (I not always was) and I refuse to renounce it.
Bingo. Those who profit by injustice are almost always enemies of justice. Or as one tradition so astutely has it, greed (unfortunately mistranslated as "love of money") is the root of all manner of evil.
But what about you? I bet you are a westerner and most of this planet is dirty poor. Are you ready to divide your income by seven, which implies to drastically cut on your life quality and hygiene and security, maybe face starvation sometimes, and accept a greater mortality rate for yourself and your family? No, I am sure that you do not want that. By the way you can do it already, without waiting for a revolution. Are you doing it? No, of course not.
I'm not doing it because Procrustean equality is not justice.
Now in 2015 most of Africa uses capitalism to enjoy a 3% yearly growth, with many countries in the 5% - 10% range. There were and there are times when capitalism was/is a hindrance for Africa, but circumstances changed and both Africans and good-willing westerners derived lessons of the past and learned how to canalize capitalism for Africa's profit.
For Africa's profit?? Don't make me laugh. They are just taking the resources, and that requires some investment in extractive infrastructure. That's all those growth figures mean.
Truth To Power wrote:These days, demand deposits can be moved around so fast -- including into a bank's reserve account
lucky wrote:This makes no sense whatsoever, given that a balance in a client's checking account is the bank's liability, while a balance in the reserve account at the central bank is the bank's asset.
The liability is balanced by an asset, which can be liquidated and converted into demand deposits the bank can then use as reserves.
Consider two banks with two customers, A and B, who both want to take out loans for $1M. The banks both write an additional $1M into the balance in the customers' demand deposit accounts, and write up the loans (which become their assets, balancing the liability of the loan proceeds). They then want to create reserves, so they sell the loans. By coincidence, A buys B's loan, and B buys A's loan, in both cases by writing a check on the demand deposit they have just received as loan proceeds (the numbers won't quite be equal, but they make up the difference out of their own resources). A's bank can then immediately use the money B's bank created as reserves (it is their asset), while B's bank can likewise use the money A's bank created as reserves. In this way, banks can create their own reserves simply by lending. Presto! Increased reserves, with no additional issuance of money by the central bank. They DO NOT rely on customer deposits for reserves, because anybody can buy the loan assets (obviously, it will never be the case that A and B buy each other's loans) with their own demand deposit money. And usually it will be other financial institutions or investors, not depositors.
Truth to Power wrote:And what, exactly, does it have in its central bank account? Could it be demand deposits, which it and other banks have created?
Lexington wrote:No, they can't, any more than I can go to Wells Fargo with a slip of paper saying "$100" and ask them to increase my account by that amount.
You can if the slip of paper is a loan from them to you.
These have to be actual US dollars, either vault cash or electronic (so-called Fed Funds - see here for a description from the New York Fed, or the Wikipedia articles on Fed funds, or just bank reserves).
Almost all are just demand deposits.
This makes sense, since when your depositors want to withdraw money they aren't going to be satisfied with an IOU from your bank or someone else's - they want cash.
They are almost always satisfied with what amounts to an IOU.
Truth To Power wrote:What is the difference between the money on deposit in a demand account that consists of loan proceeds the bank has just created, and money in a demand account that a customer has deposited using loan proceeds from another bank (which created it)? Both can be used as reserves, because there is no difference between them.
Demand deposits are not cash.
Also when you transfer funds between banks, it causes exactly that quantity of reserves (cash, usually electronically, via Fedwire) to be transferred between banks, not an IOU or "loan proceeds".
Wrong. You can easily move loan proceeds to another bank.
When you go to an ATM you don't get an IOU from your bank, you get cash;
Because that's what you go to an ATM for. Geez.
why would a bank get an IOU when it receives a check? No, it will settle in cash - that's its right, just as much as much as you do on your bank account when there's a transfer.
?? What do you even incorrectly imagine you think you might be talking about? Almost no bank transfers are in physical cash, they use electronic account balances.
I've warned you, and warned you not to double post. Now you've quadruple posted.
Congratulations, you have a card.
Keep double posting and see where that lands you.
I don't like having to edit every single thread you go into. Nobody likes the thread getting cluttered up like it does if someone is spamming. I've formatted your quadruple post into the correct format. As I have your previous posts.
Please post correctly from here on out.