2013/02/08 Minutes Economics Working Group
1. Interest and Inflation Free Money –
Japanese zeroed interest rates – post 1989 crash. Compound growth unchecked is bad – typical growth pattern is “f” shaped curved; abolishing interest problematic; time value is investing for the future; investment interest; Islamic banking; we need progressive taxation from the super-rich; what is the system to replace interest? Time value of money discounts the future but is embedded in our psyche; power dynamic between credit/debtor. Interest measuring relative value; inequality would prevail without interest. Binary Economics; money creation (need a session on Fractional Reserve Banking). UK, US loans to Africa – repayment was never the issue as long as debtor nations could pay interest. What it money? – agreement of value for exchange – could use meat, precious metals, tokens or trust (IOUs) as we do today; agree what is money; compound interest – interest is added to debt; defining terms. Interest = price to defer consumption; technicalities of fixed interest market: small interest rate movements result in large capital profits/losses (need a session on fixed income/interest/bond markets). Fez, Morocco – desert sheikh hosted queue of people for credit granted on the basis of sheikh’s assessment of the individual (mosque attendance etc.) – no interest (profit share Sharia’a) – entrepreneurs – contributing to the Morocco economy. Interest is a larger cultural/civilisation issue; time/social location; Is interest a good mechanism? No. Power dynamics – stable? No. The future is imponderable; exchange – Archimedes displacement – have money or you don’t or negative (debt); questionable ability to pay back in the future. Neutrality of terms; money and interest are political and social arrangements; money created to fund wars; mortgages to capture land and money rents – interest; means of power and control. Need agreement on the principle that interest is a malevolent force within our civilisation. Availability of credit is useful; high interest is the problem; if money has no time value – give surplus money away. Alternative definition – payment to advance consumption. Economics text books/academia subverted by vested interests – need to go back to Henry George and the classical economists; mathematical economic models misconstrued/flawed – framed in terms of consumption and investment. International occupy views on interest?; social arrangement (money and interest) is under pressure; Boris Johnson is attacking government on austerity; Bank of England and Treasury models on income and investment; militarised society founded on the banking system. Seeking transparency – resisted by the establishment; models – austerity – class layers; 99% interests subverted.
2. Shout outs: Radio4 – service from St Paul’s last Sunday credited Occupy
What would it be like? (If we got what we want) – Tommas Graves Friday 15th February 2013 at School for Economic Science, Mandaville Place,, W1U 3AJ