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money notes and ponderings

I'm trying to learn about how money works. Coming at it from a "morality of money" angle (to start with).

My starting point is an intuitive feeling that making money from money could be immoral. It's something I'm not interested in doing as it feels like I should do some work for money. It is often possible for people to get money through no effort or merit of their own, so being able to earn money from that money doesn't seem quite right.

It also seems strange to me that I would partake in something I have very little understanding of. I don't think many people really understand how money works at a deep level, yet are happy to partake in the system not just casually but as a major part of their life. I would like to have at least some idea of the impacts of my actions for the wider society I live in and this is hard to evaluate without even knowing what those impacts are.

I'm just at the beginning of trying to base my thoughts in a deeper knowledge and understanding of this topic though. Whilst I have an opinionated/idealogical starting point I want to try and minimise the impact of this on my research (but not my judgement).

This repository is intended to be a working brain dump of my progress on the topic (as I'm trying to be more open in life). I would welcome constructive and unbiased contributions on this topic :)

Michael Sandel

https://www.youtube.com/watch?v=GvDpYHyBlgc&spfreload=10

concept of market goods vs "higher level" goods

putting some things into a market, it can change the character of the activity, putting financial incentives on things changes the thing

examples - swiss story of residents people less likely to accept a nuclear waste facility in their area if they are offered money as they don't want to feel like they are being bribed whereas before they felt they were doing civic good, another one something about charity people being better performing without a commission.

marketization leading to more social segregation

my thoughts: there are powerful forces inside humans we can harness to do good. people work hard for common good, for civic responsiblity, for a moral feel good feeling (terrible sentence!). people also like nice relaxing and easy lives, harmonious working environments, flexible hours (to go to the doctor, pick up kids, etc), not too much pressure. perhaps if all those forces are not enough THEN the market is useful. maybe.

random video/rant found on youtube "Why one SHOULD strive to acquire wealth/money (from ALL perspectives...self-serving...serving others)"

https://www.youtube.com/watch?v=v7C7Q0yBiMA

stupid video, couldn't watch it all. but I'd like to understand his arguments in more depth.

he quotes somebody saying money is time and energy and nothing else. which is absurd. time and energy can't be stored in a bank account. or transferred. or invested (directly). and you can spend time and energy without it being related to money.

Anthony Migchels

(has his own micro/local/alternative currency, ex "corporate" man)

too radical sounding for my liking. full of emotional language and asserted truths. but I think he likely has some very good points to consider. just gotta extract them....

says 40% of our prices is made up of usary passed down the chain

a key part of the video: https://www.youtube.com/watch?feature=player_detailpage&v=luIvylMyMOE#t=1928

  • he says it is bad because the people with the money are not working when they get the money (kind of)
  • he differentiated earned vs unearned income
  • QUESTION: what is "earned" income
  • argues ending redistribution, in any direction
  • issue of passing wealth down through family
  • money creation? creates money when you get it, disppears once get repaid? huh?
  • compound interest. has a compounding period, then the income earned goes back into the main fund.
  • fractional reserve lending? what is this? (start with http://en.wikipedia.org/wiki/Fractional-reserve_banking)

related:

bank of england reports:

  • http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneyintro.pdf
    • https://www.youtube.com/watch?v=ziTE32hiWdk video linked from article
    • opening concept seems fine to me. money as a universal exchange of value. fisherman sells fish for money. uses money to buy berries at some other point. seems an uncontroversial and useful thing.
    • means don't need n^2 trust arrangements, just n
    • "fiat" (paper money) vs gold backed
      • allows more control of money in economy as not linked to physical resource
      • UK abandoned gold standard in 1931
    • 3 types of money
      1. currency (notes and coins 3%) IOU central bank <-> you
      2. bank reserves (money in peoples bank accounts) IOU your bank <-> you
      3. central bank reserves IOU central bank <-> your bank
    • "broad money" - the money available to consumers (type 1 and 2 above)
    • "base money" - IOUs from central bacnk (type 1 and 3 above)
    • currency seems to be both broad money and base money? correct?
  • http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
    • banks aren't just storing peoples money and lending it out
    • they don't "multiply" central bank money to create loans/deposits
    • "Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money." - sounds crazy!
    • paying back debt "destroys" money (less money is floating around in the system afterwards)
    • setting interest rates and quantitative easing are the "levers" the central
    • qe:
      • quantative easing is for "exceptional" circumstances
      • don't really get what it is. some people call it "printing money" document says "purchasing assets, mainly from non-bank financial companies"
        • what is a non-bank financial company?
      • "As a by-product of QE, new central bank reserves are created. ... these reserves do not represent ‘free money’ for banks."
    • "Saving does not by itself increase the deposits or ‘funds available’ for banks to lend."

positivemoney "We’re a movement for a money and banking system that works for society and not against it." haven't read it yet:

moneyless

I'm intrigued by the "moneyless" movement. First thoughts (mostly off the top of my head - i.e. "things I don't yet understand"):

  • it's full of glaring contradictions e.g. "click here to buy the moneyless manifesto" (http://www.moneylessmanifesto.org/get-a-copy/) - I am sure the manifesto has a position on this, I don't think they didn't notice this!
    • "If you do buy a normal paperback copy of this book, your money is going towards two things – the cost of printing a book in a money-based economy, which is a reality of our Age" - sounds pessimistic about the reality of change before I've even "opened" the book!
      • Kasper: "another contradiction: I never made any money with working on projects like Hitchwiki, BeWelcome, Couchsurfing, Trashwiki, and more, but now I do make money with https://moneyless.org/"
  • does this mean we have to go back to barter? (I'd have to find a baker that needs some programming work done to get some bread)
    • apparently (I haven't read it yet) the David Graeber book mentioned on https://github.com/nicksellen/ponderings/blob/master/recommendations.md outlines the myth of the barter system being the predecessor, that really there is a more informal way of exchanging that actually works very well (and people do it by default, and still do now). the term is "social debt".
  • does it really need to be totally moneyless, can't the role of money just be reduced. why be so binary about it?
  • isn't it just going to end up using someone elses money?
  • is it meant to be a way of living everybody could/should do (if so, there is a much higher burden of evidence that it would work en masse, as opposed to an individual life choice)
  • if the chance of mass adoption is low (<1%? <0.1%?) is it worth persuing? how many people need to adopt it for it to be worthwhile? (1? 1000? 1m? 1b?)
  • if it's not a way of life for all, can it exist and accept itself as "one of many" ways of life, what should the interaction with non-moneyless cultures be

Much of this might be answered if I can get around to actually reading http://www.moneylessmanifesto.org/book/foreword-by-charles-eisenstein/

local or community currencies

You do something. And get some pretend currency you can use within the (normally local I guess) community.

How to structure it?

  • should all time be valued the same? (3 hours of dog walking for 3 hours of massage!)
  • how to prevent gaming the system or fraud
  • are there enough useful skills in the pool?

how banking works

  • some banking modelling thing I didn't read yet - http://rsif.royalsocietypublishing.org/content/7/46/823
  • Banking Explained – Money and Credit https://www.youtube.com/watch?v=fTTGALaRZoc
    • simple video with slightly patronising tone of voice
    • origin of word bank, "banco", italian for bench, where italians would exchange coins in lots of different currencies (in 11th century or something? perhaps)
    • makes "common error" of describing banking as "holding peoples money and lending it out to others" (see bank of england stuff for other model)
    • points out problem of banks going beyond their traditional role into generating profit from risk investments, leading to banking crisis
    • describes alternative systems that try and make it so the motivation is just to help the members (e.g. credit union) or more direct/peer-to-peer systems of finance (crowd funding, micro loans)
  • film: Money for nothing, inside the federal reserve - http://www.imdb.com/title/tt2752724/
  • balance sheets