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5 of 5 people found the following review helpful
2.0 out of 5 stars What is money?, 21 May 2014
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This review is from: Just Money: How Society Can Break the Despotic Power of Finance (Kindle Edition)
You've probably never asked this but..

What is money?

The author argues that it's not a commodity but a social construct based on trust that obligations will be met fairly and ethically.

Trust needs to be carefully regulated or it's lost.

This is a strange book. Perhaps it's me and and the mood I was in when I read it but I found it didn't flow smoothly from one sentence to another, from one concept to another. I also found myself agreeing with parts of it and disagreeing with other parts, pretty much in equal measure. Again that didn't help me to get into the flow.

Where the author and I agree is that we are in a mess and that's largely because the finance sector is out of control. The problems can be traced back to President Nixon's decision to break the Bretton Woods agreement of the link between the US dollar and gold which anchored the worldwide monetary system.

We also agree that extremely high interest rates are disgusting although I was surprised that the author described payday loans as affordable at one stage. These companies are the worst offenders at gauging the poor of what spare cash they have and spreading misery in their wake. Where we may differ is what interest rates are fair.

I have problems with the idea that there isn't a shortage of money under sound financial policies. In the old days, getting a loan was difficult because lending was responsibility. We can't resort to central banks printing money for governments to spend over the long term. That's the workings of banana republics heading for hyper-inflation.

Our politics don't match as she has been an advisor to Ken Livingstone. She quotes John Maynard Keynes a lot in this book which I don't have a problem with as I feel his ideas have often been twisted and misrepresented in his name. However she is keen on the "euthanasia of the renter" and therefore interest rates should be suppressed. That will stop people who try to live off their money without working.

This doesn't seem to represent modern society where you can think of us living through three stages:
1) the first 20 years when we are financially supported by our parents.
2) the next 40 or 50 years where we work to support ourselves and our children. Early on we borrow but as we get older we increasingly save for our old age.
3) retirement which may go on for another 20 or 30 years where we have to live off our accumulated savings and whatever pension the state can afford to provide. By this stage we have become "renters" to use Keynes' term.

Now we could leave responsibility for pensions to the government but I don't think that's sensible given the demographic trends and the rapid increase in government debt we've seen in the last decade and which will continue to grow at an alarming rate for the foreseeable future.

It's essential that our pension pots offer hope of growth to encourage saving and individual responsibility. Not only do we need savings rates to compensate for inflation but we need it to compound faster.

The author talks about the social contract of money, loans and interest rates but at the same time, I think she's in favour of inflating out of debt. Surely that breaches the trust of people who are lending money.

I fear the problems are much more complicated than the author pretends. After all there has to be a reasonable why nearly all academic economists and central bankers don't see the world as she does. You can understand private sector economists in the pay of the global leeches (and vampire squids) to see things differently and to push for policies that are advantageous to them but there doesn't seem to be a shortage of economists from the progressive side of politics.

I am struggling with this book. As I said earlier, I agree with some of the aims and accept that economics as a discipline is seriously broken. I'm very worried about this accumulation of massive debt, of growing inequalities, of environmental issues for both climate change and the exhaustion of essential commodities. I abhor the way politicians and big business and especially the financial services companies have cosied up.

I expect big changes over the next few decades but I don't think this book moves the debate forward.
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Showing 1-1 of 1 posts in this discussion
Initial post: 19 Mar 2015 14:38:30 GMT
Last edited by the author on 19 Mar 2015 14:40:50 GMT
D. V. S. says:
Paul Simister, your review is most excellent in its questions, simultaneously describing the author's shortcomings in her explanations.

I have developed a very clear understanding, both intellectually and intuitively, what money -
- has become over the last few hundred years (a system of hoarding by those whose greed extends way beyond their needs),
- what it should be (fair in remuneration of labour that creates the wealth),
- what it should not be (fraudulently created by the fractional reserve system, amongst other things),
- and what it should not be used for (by way of its fraudulent creation, steal from others the wealth others have created from their labours), ...

... so I can understand your frustrations with the book. I am also glad you mention her disjointed discourse.

Authors who do not have a clear grasp of the whole picture of their subject tend to have difficulty imparting their knowledge in a coherent way.

I suspect she has a lot of understanding of various details, but has not been able to simplify the complexity without diluting the substance (something that I am continually aware of in my own attempts at understanding and imparting knowledge)

She does, however, impart some gems that are missing from other knowledgeable people's explanations on the matter of money. On one occasion she mentioned, near the end of her interview on Boom Bust (RT TV, March 18, 2015), that the IMF is purely an institution with the purpose of supporting and protecting the interests of the global private banksters (banking plutocracy/corporatocracy), which is why, in their control over governments, they get the banksters' debts paid by the public (via tax and pension funds)
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