Re: Creditary Economics (CE)

[Warren Mosler <mosler@xxxxxxxx>]

Don't you need to work into your model the fact that lending/borrowing is
driven by the desire to purchase something from a seller who would rather
have a bank deposit
than the thing he is selling at that price?  And, in doing so, you will
eventually come around to my 'General Framework for the Analysis of
Currencies
and Other Commodities' at www.mosler.org .

w

kevin donnelly wrote:

> In message <F78V6uPDVniSnRMWuLn0000768b@xxxxxxxxxxx>, William B. Ryan
> <w_b_ryan@xxxxxxxxxxx> writes
> >
> >    Kevin, Geoffrey objects to your observation:
> >
> >>       DID YOU HEAR Radio 4 Money Box recently? Tim Sweeney of the
> >>       British
> >>       Bankers Association said "But banks you have to understand -
> >>       banks are
> >>       not depositories of isolated money.  They only have two forms of
> >>       money their shareholders' money and their depositor's money and
> >>       they must use
> >>       those responsibly and carefully."  Such modesty!  There's a
> >>       third form;
> >>       bank created money, which he managed not to mention.  Your
> >>       chairman and I have drawn the BBC's attention to this
> >>       discrepancy, seeking full
> >>       public disclosure.
> >
> >    In reply to similar comments of mine he recently posted to the Post
> >    Keynesian list:
> >
> >>       Two you are ignoring the fact that the owner of ANY store of
> >>       value is such because he has provided unrequited services to
> >>       others in the community. Morally he is therefore a creditor of
> >>       the community.
> >
> >    What he can't seem to comprehend is that the differential between
> >    the rate of loan creation and repayment in an expanding economy is
> >    new money that is purchasing power in the hands of the borrower
> >    that does not represent "unrequited" services that the borrower or
> >    the banker have previously supplied to others in the community.  It
> >    is a liability of the banker and a debt of the borrower to the
> >    banker, but it also derives from a private contract between the
> >    borrower and the banker that has created a generalized claim
> >    against the community without the community being a conscious party
> >    to the transaction.  It is what Soddy would have called "virtual
> >    wealth" in contrast to debt.  Bank credit is in my view an
> >    essential feature of the market economy because it funds the
> >    entrepreneur.  A market economy can't function without it.  It is
> >    also a very public function that has been licensed to the private
> >    banker.  The banker has therefore assumed a respo sibility to act
> >    reasonably in the public interest rather than his own, although he
> >    may not be aware of it and may deny it.
> >
> >    Geoffrey is very much caught up in peculiar definitions of his own
> >    making.  What he calls "creditary economics" is little more than an
> >    innocuous collection of vapid aphorisms, not a coherent theory.  He
> >    is a very good writer and I do enjoy reading everything he writes.
> >    Sometimes he puts on the blinders when it comes to the opinions of
> >    others.
> >
> >    I've also noticed that he continually puts you down as if you were
> >    some kind of country bumpkin.
> >
> >
> >    Get your FREE download of MSN Explorer at http://explorer.msn.com
> >
> >
> Bill,
>         Many thanks for this helpful clarification.  So far as the put
> downs are concerned, some weeks ago I did start to correct some of the
> mistaken assumptions made about me.  I got a long way into a point by
> point rebuttal, about page 7, I think, then filed it without sending it.
> I retired from teaching three years ago: no more pedagogy for me!
>         My central criticism of elitism of any kind is that we simply do
> not know what people are capable of doing, and never will as long as we
> make false assumptions about them.  A few years ago I discovered that my
> family's ancient Irish ancestors adopted the Latin motto as their own:
> spectamur agendo - by our deeds you will know us.  Let's leave it at
> that!
>         Kevin
> --
> kevin donnelly