Monday, 7 November 2011

Lets make up some new money - it will make us happy

Jim Lacey - professor of strategic studies at the US Marine Corps War College - was recently walking through the Occupy Wall Street camp in New York. He noticed an interesting development in monetary theory.

As luck would have it, though, many of them will not have to worry about money for much longer, as several OWS occupiers had the answer to everyone’s financial problems. This innovative group, all sporting $4-bill badges, claimed to have reimagined money. Intrigued, I asked how such a reimagination worked. In short, it seems that people are to create money as they need it for their own happiness and the happiness of others.

This I liked, as I have a wonderful imagination and a deep need to use my money so as to increase my own happiness. I promptly imagined a page of my notebook into $10,000 and gave it to one of the $4 lapel-badge ladies. 

She looked at the sheet of paper and smiled at me. So far, so good. I then asked for her laptop and told her she could keep the $8,000 change I was due so as to further increase her own happiness. She quickly turned away, taking her laptop with her and leaving me short $10,000 of reimagined money.

I assume the system has some kinks that the revolution will figure out as it goes.

Before we all snicker at the naivety of the $4 demonstrators, isn't this the same idea that the Bank of England is pursuing? Aren't they printing money to try to make us happy?


Budgie said...

No, not really. The fiat money in circulation, including retail loans, should exactly match the productive capacity of the nation for stability. Paper money is merely a model of the real economy. Its prime advantage being that it massively simplifies what would otherwise be barter.

The mistake the OWS protesters are making is the same as Gordon Brown made when he increased money supply by 12% and found in crude terms that GDP rose by about 4% and the other 8% went to create that year's housing bubble. Paper money must be properly controlled to work.

Anonymous said...

Amen to that, budgie

Anonymous said...

Well Budgie may be right in theory.
But the fact is politicians can't be trusted to manage a fiat currency, and it therefore doesn't work.

They intentionally inflate to trick the public into thinking they are wealthier than they really are.
My parents often tell me they could buy a house for £2000 when they first got married.
Same house is £250,000 today... (thats after the crash)
Even though 'really' they know its inflation, and it was in proportion to their earning at the time.
I have noticed the older generation just can't help but 'relate' to prices as they were when they were young.

But no, the BoE is not printing to make 'us' happy, they are printing to loot the value of savings and to reroute that money to the banksters.

Gavin said...

Entirely possible to create your own money. Been done lots of times, very successfully: