But maybe I'm misunderstanding. Is it your position that all credit-worthy people have access to all the capital and credit they need? Doesn't the failure to reproduce actual wealth-distribution data of many models based on standard assumptions suggest that easier access to credit is a pretty serious advantage for rich people?
I understand the desire to undermine the bogus argument that somehow money men MAKE the economy happen. That's goofy. But still, at least some developments of the money system have had the effect of extending credit to more people.
And I still don't understand your argument about "real money". If I can buy things or pay workers (who then buy things) with credit - how much more real do you want it to be?
On 11/19/06, Doug Henwood <dhenwood at panix.com> wrote:
>
> On Nov 18, 2006, at 11:35 PM, boddi satva wrote:
>
> > On 11/18/06, Doug Henwood <dhenwood at panix.com> wrote:
> >>
> >> On Nov 18, 2006, at 6:20 PM, boddi satva wrote:
> >>
> >> > And what do we mean by "GDP" when so much of our stuff is produced
> >> > overseas?
> >>
> >> That appears as imports, a subtraction from GDP.
> >
> > And the stuff that the foregn workers buy with their wages?
>
> Depends on the origin of the goods.
>
> > The point is that every economic metric is an estimate. And money is
> > the least definable of all the metrics. Every day people accept
> > payment on different terms.
>
> Sure GDP is an estimate, limited by definition and measurement
> problems. But it's one measure that's consistent over time that
> correlates well with other real-world economic variables (industrial
> production, employment, even public attitudes). But the monetary
> aggregates all tell completely different stories.
>
> >> Yes, but don't ever underestimate the capacity of the credit system
> >> to pump out loans, even in the old days. You think the Dutch bought
> >> tulip bulbs with real money?
> >
> > Well, first of all, what is "real money? What are you - a goldbug
> > now?
>
> In this context, "real money" = money earned in production (wages or
> profits - yeah, I know I'm being momentarily bourgeois in describing
> profit as earned income). That's different from credit money, which
> is created by thin air. I could sell you a tulip bulb on the promise
> that you'll pay tomorrow, because you think you'll be able to sell it
> at a profit. You don't even need a banker to create credit, though of
> course it helps.
>
> > You can hardly compare the credit instruments of the 1600s
> > Holland to modern America. Seriously, Doug.
>
> Don't disparage the ingenuity of those old Dutch! They were trading
> options and futures in Amsterdam 400 years ago.
>
> >> That's a distributional issue, not an issue of the aggregate quantity
> >> of money.
> >
> > A "distributional issue" - well, isn't increasing the money supply
> > about increasing the probability that it will be distributed?
>
> Nothing changes if the distributions remain proportional; a pure
> monetary injection could just raise the price level. Tight money can
> create unemployment and recessions, which have distributional
> effects, but loose money doesn't necessarily change anything.
>
> Doug
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