Today's Elites

Friday, August 26, 2011

Ask Not What Is Debt? Ask What Is the Physical Economy...

While much of Mr Graeber’s work is unobjectionable and his criticism of the IMF, et al. is appreciated, the problem is that the entire field of academic “economics” itself is a fraud. It entirely leaves out of the question that there is a physical economy apart from money. And, it just so happens that that study of the improvements in that physical economy and how populations are sustained at increasing standards of living is the only way out of the current monetary crisis. Yes, debt moratoria are required, but then the question is what sorts of long term investments are necessary to pull the world away from the last 50 years of looting the world’s physical economy?


  1. 1) I’m not an economist and much of the book is a critique of the very most basic assumptions on which “academic economics” is built – for the very reason that it ignores human relations outside the formal “economy.”

    2) when did I say a debt moratorium would solve all problems?

  2. This quote, among others, from the interview implies that you would look favorably on a a moratorium(or perhaps jubilee):

    “When thousands of people begin assembling in squares in Greece and Spain calling for real democracy what they are effectively saying is: “Look, in 2008 you let the cat out of the bag. If money really is just a social construct now, a promise, a set of IOUs and even trillions of debts can be made to vanish if sufficiently powerful players demand it then, if democracy is to mean anything, it means that everyone gets to weigh in on the process of how these promises are made and renegotiated.” I find this extraordinarily hopeful.”

    From this I inferred that you would agree that trillions of worthless derivative “bucket shop” gambling debts created out of thin air by the very financial houses that were lately bailed out ought to be wiped off the slate… I certainly believe that that is a necessary prerequisite to the only way out of the crisis. I didn’t mean to imply that you were an academic economist, but in the interview, that which was left unasked was the most important issue facing us all today. That is, with what do we replace the bankrupt system?

  3. Yes i do think it would be a good idea. But your response seemed to be phrased in such a way (“this is unobjectionable, but…”) as to imply that saying it would be not enough to cure what’s fundamentally wrong with our system was an objection to the piece, which would only make sense if you were assuming I thought it would be enough to cure what’s fundamentally wrong with the system.

    Of course it’s quite possible I misunderstood you.

  4. Well, I was aiming to open the discussion to the larger arena of how to emerge from the current nightmarish monetary disease of unpayable and illegitimate derivatives debt since it was brought up in the piece. Now it is quite curious to me that we can speak of credit systems and Adam Smith and leave out of the conversation Smith’s most prominent adversary: Alexander Hamilton. Hamilton explicitly attacked Smith’s doctrine in his Report to the Congress on Manufactures. Today, our nation is foundering because we have forgotten the principles that Hamilton used to develop our original prosperity. What needs to be done is to throw off monetarism as a rotten ideology and return to generating credit for nation building. For instance, the North American Water and Power Alliance plan and an Alaskan Siberian Aleutian rail connection for starters. We need credit for the development of the next generation of Thorium reactors. We require a NASA manned mission to Mars using fusion propulsion. Thus credit would be used to foster an increased standard of living based not the false belief that money is wealth, but rather that only increased technology in physically productive systems constitutes wealth.

  5. David Graeber4:16 AM

    Sounds good to me! As mentioned above, I am still bitter about the fact we’re not on Mars yet. As a child, they lied to me!


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