Concept of money: How well does it represent true value in these times?
Thu, 2007-09-13 01:49
#1
Concept of money: How well does it represent true value in these times?
Thu, 2007-09-13 01:49
#2
Does money represent true value? I fully agree with the view that in today's market-dominated world, no country's currency is a good measure of true value. Too many social and environmental costs are "externalized" and ignored.
quote:
[b]...the accounting system used at present to guide the economy grossly distorts values by pricing environmental services practically at zero, by repeatedly counting consumption as if it were income, and by ignoring important cost components: ‘externalities’ such as the impacts of depletion, pollution and waste. This principle calls for the adoption of an appropriate accounting system, fully aligned with the planet’s geological, ecological and societal processes. It means employing a comprehensive concept of wealth involving the simultaneous enhancement of all key forms of capital; incorporating critical externalities in all cost accounting; recognising a measure of wellbeing and human development in economic calculations; ensuring that taxation and regulation policies are designed to accentuate desirable outcomes and optimise for the whole; and finding ways for calibrating market mechanisms to reflect true value of the global commons.[/b]
from [url=http://www.resurgence.org/2007/beneli244.htm]Resurgence Magazine[/url].
How can money be made a more accurate measure of value?
Can money [i]ever[/i] be a highly accurate measure of value?
Or can money only measure material value, necessitating parallel systems (for example, a legal system with a civic conscience) to preserve that which is not reducible to being quantified in money terms?
[ 13 September 2007: Message edited by: gram swaraj ]
Thread title changed to more accurately ask the question I was thinking of. (Old title: Does money represent true value?)
[ 12 October 2007: Message edited by: gram swaraj ]
[ 10 May 2008: Message edited by: gram swaraj ]
Thu, 2007-09-13 05:25
#3
N.Beltov
For starters, be careful not to confuse [i]exchange value[/i] with [i]use value[/i]. Many writers mix the two kinds of value up. Secondly, money is what is called a [i]universal equivalent[/i], so [b]it certainly measures something.[/b] It is not that money has some magical property but that things of value have something in common that they can be compared or measured at all. Have a look at Chapter III of [i]Capital[/i], Volume I, by Karl Marx for a good narrative of the history and riddle of money and an outline of that "something in common".
Even in some distant future human beings will have need of a way to measure their efforts or work. Money will still be useful for a very, very long time.
Thu, 2007-09-13 16:15
#4
quote:
be careful not to confuse exchange value with use value
About the only thing you can conclude from a sale is that
[seller's value at use]<[value at sale]<[buyer's value at use]
You can applie whatever value units you want to these entities [value at sale is probably measured in currency] but the other two include numerous "soft" items such as emotional attachments to the business and so forth.
Sun, 2007-09-23 10:35
#5
And what if you feel cheated afterwards?
Value is a transient thing indeed. Imagine if you had a soccer ball, and someone was drowning in a river beside (and you didn't wish to swim out)
What value the soccer ball? If you start to haggle, the chance to sell at a profit may be lost. And if you throw it before setting a price, you may not even be able to sell it at all!
Where is gordon gecko when you need him.
And use of a soccer ball for 2 minutes! You might not get much more than a cent on the open market.
And when the guy gets his wind back, he might even dispute that!
What a jerk!
quote:
Originally posted by abnormal:
[b]About the only thing you can conclude from a sale is that
[seller's value at use]<[value at sale]<[buyer's value at use]
You can applie whatever value units you want to these entities [value at sale is probably measured in currency] but the other two include numerous "soft" items such as emotional attachments to the business and so forth.[/b]
Sun, 2007-09-23 12:01
#6
quote:
Originally posted by Brian White:
[b]And what if you feel cheated afterwards?
Value is a transient thing indeed. Imagine if you had a soccer ball, and someone was drowning in a river beside (and you didn't wish to swim out)
What value the soccer ball? If you start to haggle, the chance to sell at a profit may be lost. And if you throw it before setting a price, you may not even be able to sell it at all!
Where is gordon gecko when you need him.
And use of a soccer ball for 2 minutes! You might not get much more than a cent on the open market.
And when the guy gets his wind back, he might even dispute that!
What a jerk!
[/b]
Hahaha.
Mon, 2007-09-24 17:07
#7
How bout this then. I asked a guy at work if he ever had flushbacks on the toilet?
He looked a bit confused.
"Well you did acid, didnt you?"
"Yeah, that was years ago"
"You see, Flushbacks, weird shit from years ago coming back at you!!"
Place a monetary value on that, if you can.
Fri, 2007-10-12 03:11
#8
Note: Thread title changed today.
I am not questioning whether we need some form of currency to act as a medium of exchange. Seashells, cigarettes, whatever, have all proved at some point or another to be easier to use than bartering. What I am questioning is, how much is money worth, given *today’s* ways of accounting and deeming something to be of “value.” What proportion of a currency is valuable because it is based on production that borrows from the livelihood of the future, quite possibly in a way that the loan will be defaulted? Case in point: the Alberta tar sands and the unaccounted environmental deficit that is being incurred while the loonie soars, for now.
Duncan Cameron’s article, [url=http://www.rabble.ca/politics.shtml?x=63063] Reflecting on Marx and money gone mad [/url], is relevant to this thread.
quote:
Today, speculative transnational capitalism is just such a fetter, not just on the development of human potential — the forces of production — but on ecological sanity as well. A few thousand financiers acquire riches measured in billions, while the reproduction of material existence is threatened by money lending, and credit creation to produce destructive goods, and over-exploit natural resources…in the capitalist West, instead of the falling rate of profit pushing workers to revolt, huge leaps forward in productive capacity have been turned into waste of every sort imaginable: militarism, environmental destruction, and useless consumption, while basic human needs go unmet in much of the world.
Sat, 2007-10-13 00:49
#9
Another modern thing about money is it has duality. It moves round so quickly it can be in 2 places at once. I think this is bad. It used to move slower.
Mon, 2007-11-05 17:56
#10
The group, [url=http://www.attac.org/spip.php?article2]attac[/url], works on international financial system reform.
quote:
Financial globalization increases economic insecurity and social inequalities. It bypasses and undermines popular decision-making, democratic institutions, and sovereign states responsible for the general interest. In their place, it substitutes a purely speculative logic that expresses nothing more than the interests of multinational corporations and financial markets.In the name of a transformation of the world depicted as a natural law, citizens and their representatives find their decision-making power contested. Such a humiliating proof of impotence encourages the growth of anti-democratic parties. It is urgent to block this process by creating new instruments of regulation and control, at the national, European, and international levels.
Sat, 2008-05-10 19:42
#11
[url=http://www.resurgence.org/magazine/article2453.html]The Naked Banker[/url]:
quote:
Most of the country’s money is unreal. It is debt. Your debt. Your house on the line. The word ‘mortgage’ means, literally, a death-pledge.In the real world everything decays. Your clothes rot. Your house needs maintenance. But debt doesn’t conform to the laws of Nature. Debt doesn’t decay. Your investments may crash but your debt increases. Bankers love debt because it grows and they are owed more money each year. And you, not they, have pledged it. This orgy of unreal money, created as debt, now sloshes around the world among the wealthy to the tune of US$2 trillion a day. It is several times the value of goods and services available for exchange. It is a virtual commodity in a fantasy world.
Sun, 2008-08-03 06:54
#12
Just another case to show how much the value of money in our times is based on financial shell games.
From "Fortune" Magazine, Nov. 26/07
quote:
Two things stand out about the credit crisis cascading through Wall Street: It is both totally shocking and utterly predictable. Shocking, because a pack of the highest-paid executives on the planet, lauded as the best minds in business and backed by cadres of math whizzes and computer geeks, managed to lose tens of billions of dollars on exotic instruments built on the shaky foundation of subprime mortgages. Predictable because whether it's junk bonds or tech stocks or emerging-market debt, Wall Street always rides a wave until it crashes. As the fees roll in, one firm after another abandons itself to the lure of easy money, then hands back, in a sudden, unforeseen spasm, a big chunk of the profits it booked in good times. "The fee engine becomes so huge that these products take on a life of their own, " says Tiger Williams, CEO of Williams Trading, a leading financial services firm for hedge funds. "Everyone rationalizes that it's safe because they're making so much money . But it's far from safe. " In pure destructive power, the subprime mess has become Wall Street's version of Hurricane Katrina.
Sun, 2008-08-03 07:33
#13
[url=http://economics.uwaterloo.ca/needhdata/CapitalismsEssentialsREV4290307.... Economics - Ten Quick Steps towards Reality Economics[/url](pdf)
by W. Robert Needham, University of Waterloo
quote:
[b]Institutions that Drain Income from the Weaker[/b]9. Introduce institutions such as banking, finance, and insurance as devices that assist in the systematic drain of income from the weaker to the more powerful. In this connection deal with slavery, wage slavery, debt slavery. Slavery required abolition (though still incomplete). The “system” ostensibly replaces personal slavery by wage slavery and debt slavery. Upton Sinclair has said: [b][i]“The private control of credit is the modern form of slavery"[/i][/b] . . .
quote:
[b][i]"World-wide capitalism kills more people everyday than Hitler did. And he was crazy."[/i][/b] [url=http://en.thinkexist.com/quotes/ken_livingstone/]Ken Livingston[/url] Mayor of London
Capitalism is a monstrous ideology
[ 03 August 2008: Message edited by: Fidel ]
Sun, 2008-08-03 08:58
#14
When the gold standard was abandoned and the post-WWII Bretton Woods institutions were put in place, the concept of money changed.
The gold standard fixed the Cando on par with the USD at a rate of 420 ? grains of gold per dollar. Countries had to (supposedly) have gold reserves equal to the currency issued to redeem their dollars for gold.
After the gold standard was dropped, countries could print as much money as they could peddle based solely on investor confidence in their economy. The Bretton Woods institutions enabled this situation to the present where there is a disconnect between true value (hard assets) and notional value (booked value of paper financial instruments).
Mark to market valuation is simply the price a financial instrument can sell for compared to its cost. FASB (financial accounting standards board)rules are continually manipulated to allow financial institutions to keep toxic financial instruments off their balance sheets.
Merrill Lynch recently sold multibillions of derivatives at .22 on the dollar AND accepted .06 cash,desperately financing the restin order to sell them. These writedowns will affect the whole of the global system and eventually us all individually.
While the average individual mainly deals in true value,they are indirectly exposed to notional value in their personal savings and expectations of future government services and pensions through the effects of inflation.
What personal choices can the individual enact to protect the true value of their assets and income, minimising the effects of the present financial meltdown?
Sun, 2008-08-03 09:47
#15
The gold standard was international capitalists' dream prior to WW I and the dirty 30's. And industrialists would like nothing better today than to be forced into wage negotiations with organized labour with just the gold standard in their back pockets.
quote:
Originally posted by jester:
[b]After the gold standard was dropped, countries could print as much money as they could peddle based solely on investor confidence in their economy.[/b]
I think floating currencies was first proposed by Canadian economists, and I could be mistaken. But the Bank of Canada did control a quarter of money creation in Canada from 1938 to 1974. The Liberals nationalized the Bank of Canada in 1938, and inflation was not a problem in N. America until the U.S. feds began printing money wildly to fund immoral war in VietNam(today it's Iraq & imperialist adventures in general), as well as the one-time energy crises/shocks of the 1970's.
Conservative economist Pierre Fortin says we can have the kind of prosperous job growth policies as desired by most Canadians actually living in this country without capitulating to dictates of the bond market and marauding foreign capital. Bretton Woods actually gave governments specific tools to pursue sovereign economic policies. Canada's stoogeocrats choose not to use them. And therefore the political impotence in Ottawa is of the self-imposed variety.
[ 03 August 2008: Message edited by: Fidel ]