James Baird wrote:
>mattress, or a loan, or what have you. When the
>government wants to spend money, it just does it - the
>money doesn't "come from" anywhere.
DH: A government, or its central bank, can create money out of the air. But if it does too much of that - creates money more rapidly than an economy's capacity to deliver goods & services - it creates inflation. Just because right-wingers say this doesn't mean it isn't true.
mbs: The fact that the Gov's money creation capacities are limited doesn't mean they are not real. Just because I can't fill up Lake Erie doesn't mean I can't pee.
> Taxation happens
>after the fact - and it ONLY has to happen in order to
>give value to the money the gov. creates (people
>accept government money because they have to pay
>taxes, and money is the only thing the government
>accepts as payment).
This is the Mosler/Bell religion, but I think it's a load of crap. It completely neglects all the private social relations that make money valuable - the claim over labor time, ultimately. Money arises in societies with minimal government, after all. See if your landlord or mortgage banker will accept anything but money.
mbs: I don't get this part of the faith either. Any agreement on a medium of exchange 'creates' money. It doesn't depend on taxation. I do like the idea of money arising as a way for the State to help landowners squeeze peasants by facilitating the creation of private debt.
>Do corporations dominate the world? To support this claim, Hertz
>cites an analysis which concludes that "51 of the 100 biggest
>economies of the world are now corporations. The sales of GM and
>Ford are greater than the GDP of the whole of sub-Saharan Africa."
>This is gross abuse of statistics. The study measures the size of
>companies by sales. But national economies are measured by GDP.
>Since GDP is a measure of value added, one must compare it with the
mbs: GDP includes capital consumption, which is not value added. NDP is value added. The separation between a corporation and its sub-contractors is arguably thin and mostly legal. So it does not do much violence to the facts to compare the gross output of a corporation and a country. It could be misleading to consider two corps whose output overlapped because one firm produced inputs to the second firm's production.
>value added of companies, which is the difference between the value
>of their sales and the cost of the inputs they purchase from
>suppliers. Last year the sales of GM were $185bn, the same as
>Denmark's GDP. But the value added of GM was only a fifth of its
>sales. So, this company's "economy" is not the world's 23rd largest
>but 55th, after Ukraine.
>
>But the comparison between corporate and national economies is
>intrinsically absurd. They are as different as apples and
>artichokes. A corporation has to attract the labour and capital it
>employs from competitive markets. Its ability to survive depends on
>the returns it offers to those free to go elsewhere. Countries are
>governed by a coercive territorial power. States tax and regulate,
>companies buy and sell.
mbs: Nice model of labor mobility, but not necessarily real. One could imagine firms with strong 'buyer's market' power over workers, and countries with loose territorial power.