2008-3-1 01:42:00
Larry wrote:
"If there is a spiritual law that prevents John from materializing money out of thin air to support his needs, then why is it ok for governments to materialize wealth (money) almost literally out of thin air?"
JJ:
Materializing gold out of thin air would immediately diminish (however slight) the value of gold with out yourself contributing any labor to its acquisition. He would not be following the rules that apply to those who earn and use money. In a more advanced society this practice may be perfectly acceptable.
Under my philosophy money is issued which is only acquired when there will be an equivalent value in production.
The issuing of inflationary money not backed by either commodities or labor for the enrichment of the issuer is indeed stealing and has NEVER been a part of my teaching.
Larry quoting JJ:
"If you can see the principle behind why something works, or is true, then your argument will have more truth in it than all the experts in the world who may go against you."
In response to the quote above, Larry responds with:
"This is absolutely true, but there is no serious field of study where one is likely to derive the truly important principles without a very serious and time consuming commitment to discovering the basic facts. The belief that one can with a little cursory study derive the fundamental principles is an obvious illusion."
JJ:
If you think I have a cursory then this must also apply to you. You have written many things lately about money, banking and the economy, all of which I consider very elementary and nothing I already did not know. I guess by your standards we have one guy with cursory knowledge debating another one.
One who understands principles and can recognize them only has to study a subject until the underlying principles become clear to see a clear picture. This can sometimes take an intensive study and other times may only take a few minutes. The idea is to understand the principles rather than fill your mind with millions of pieces of data which often seems to conflict with each other.
For instance, I did not pay much attention to the global warming debate until I became aware that many believers wanted to use it for a global tax through the U.N. I then spent a few hours looking into it and saw the underlying principles behind the cause of global warming and cooling as well as the principles motivating the prime promoters of it. I think I could debate any one of the 3000 U.N. scientists that are immersed in data and win. I also think I could make more accurate predictions than these 3000 came up with in the IPCC report. Because these guys are concentrating on data rather than principles they vary in their conclusions as much as 300% or more.
Larry:
"It is true that money is a store of value and that many human values are produced by labor. However the amount of labor varies disproportionately. It takes a lot of labor to produce enough wheat to provide a 1,000 calories of food and very little labor to pick wild fruit that produces the same amount of calories. It takes a lot of labor to extract an ounce of gold from hard rock blasted from the inside of a mountain versus picking up a nugget in a stream."
JJ:
This is true, but it has no bearing on anything I have said. Of course different types of labor has differing values. That has never been a part of the argument.
Larry:
"Labor is the principle of creating value. The values that sustain human life must be produced by labor and labor is the principle behind all of these kind of values. Before money can be used to store value the values themselves must first be created by labor."
JJ:
This isn't the way it plays out in real life. If I were broke I could go to a friend and tell him that I needed $100 and if he were to loan it to me I would give him an IOU. After 30 days he can redeem it any time he wants. At that time I can either give him cash or my labor.
Now that piece of paper is in principle fiat money which you and Blayne keep saying is "created out if thin air." Whatever you call it I have created a type of money with real value that is backed by no commodity, but only my promise to labor and make the extra $100. To my friends who know I am good to my word that piece of paper is worth $100 in value and they could even trade it among themselves just as they could $100 of government money.
Larry:
"The fundamental, primary, and general law or truth behind the value of all commodities and values required for human life is that they must be produced by labor. This principle is stated in Genesis 3:19."
JJ:
Agreed.
Larry then gives us a cursory lesson on the history of money and says:
"(The banker) discovers the concept of partial deposit banking where he doesn't have to keep all of his customer's assets stored safely but can lend some of their assets to new producers and collect interest on those loans.
"There is no chicanery in this process."
JJ:
I think Blayne would disagree with you and call fractional money beyond the value of the deposit fiat money. Yes, I agree the guy is in a legitimate business as long as his customers are aware of the risk.
Larry continues his cursory comments on money and then says:
"To summarize there are at least three important principles behind money as it evolves to this sophisticated form.
"1. The principle of stored value of successful labor.
"2. The principle of a universally barterable commodity.
"3. The principle of creating new wealth through investment.
"The last principle is probably the hardest to see, but it is exactly the principle that made the Industrial Revolution possible, it is at the very basis of the wealth and lifestyle we enjoy today. These are principles from which all of the details of banking and investment are derived. These are the primary principles of money which is far, far more than just a representation of labor."
JJ:
Not when you take more than a cursory look at it.
All these three points owe their existence to labor.
Larry:
"These are some of the true principles behind money. Labor is not the principle behind money."
JJ:
And you say this because...? I see no logic or reason behind this statement as it is pretty obvious that all value owes its existence to labor.
Larry:
"Labor is the principle creating the values that money is used to exchange."
JJ:
Exactly.
Larry:
"If one cannot learn to differentiate between the various principles, then one will always be deceived by simplistic thinking that misses the most important principles."
JJ:
Yes. This is advice you should consider.
Larry quoting JJ:
"The parable illustrated the absolute fact that, in able to have gold-backed money, a tremendous amount of labor has to be expended to first procure the gold."
Larry then says:
"Which is practically irrelevant. Gold does not make an economy, nor is it required. However for a civilization that has already done the labor, that is, has extracted a significant amount of gold already, it can serves as a reliable store of value which we call 'money.'"
JJ:
If we took all the gold we have in Fort Knox and used it to fund our government it would all be gone in 16 days. If we wanted to get more gold to use as money or back our money this would require a tremendous amount of new labor. Just because gold is mined and exists somewhere does not mean you or I can use it for money expending a lot of labor to acquire it.
Larry quoting JJ:
"The production of money itself is only a symbol and produces nothing in itself ..."
Larry then writes:
"There is one problem with your statement. It is not true. As was illustrated above, money can produce additional wealth through investment and therefore is itself a tool of production."
JJ:
Investment itself is a labor that can stimulate more goods and services from labor. You make my case.
Larry:
"It is because many people do not understand this principle that they think that bankers are robbers. They have simply not learned the true principles behind money."
JJ:
I think readers who do not have preconceived notions can see that labor is the core principle behind money. I cannot see where you have made any case contrary to this.
Larry:
"Also, labor -- value is not entirely correct, as in 'labor is the principle behind value' and that value being a principle behind money."
JJ:
You're splitting hairs here in what looks like an attempt to keep the argument going. Who cares whether the money is created by labor or the value of labor. It is so obvious that constructive labor has value that it is hardly worth mentioning.
I proposed that the value of a dollar would equal the value of one average hour of labor within a system. What are you suggesting that we should just say the dollar equals six values? That is meaningless.
Principles have aspects to them. The trinity aspects with labor would be Labor - Value (desire) - Creation. All these are essential but Labor is central. Labor, on the other hand is an aspect of intelligence. We have Intelligence (Purpose) - Power - Labor (or intelligent activity).
As you peel the onion of causes that create money the final one that is practical to use as a measurable value for a medium of exchange is labor. You can't say the dollar is equal to six units of intelligence, but you can say a dollar is equal to an average hour's worth of labor. This presupposes that the labor is directed by enough intelligence to have value.
Larry:
"JJ has very specifically endorsed government printing interest free notes to be used as money. This money is backed by nothing other than the government's ability to tax."
JJ:
This could or could not be the case. You seem to think there is only one way to do things. In an enlightened society the people could just agree to issue money with no guarantee but the support of the people. It would work on the same principle as my IOU. It would have value just because the people trust themselves and each other. If we need more backup than pure trust in the value of labor then Dennis' plan could work. The state could loan out the money at 3 percent and then back up the money with the proceeds in a number of possible ways.
Larry:
"However one cannot deny that intelligence and purpose are at least equal components with labor in producing values (and sometimes luck is too). When one oversimplifies and settles on labor as being THE backing of value (and hence the backing of money) one has made an unjustifiable oversimplification - one has created a false and deceptive concept that will lead to further errors down the road."
JJ:
I think you are making an unjustifiable complication. You can't say a dollar is with 6 unites of intelligence or value. Labor is the highest in the hierarchy of principles that you can use as a specific value.
Larry:
"When one oversimplifies and creates a deceptive concept the first one to be deceived is the person who created the concept in the first place. Karl Marx made this error and created the theoretical framework for Communism."
JJ:
Karl Marx's teachings have nothing in common with mine. He does sound a lot like you talking about investment when he says:
"Capital is money, capital is commodities. By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs."
You should also supply the courtesy of a quote when insinuating that my teachings are like his. Then I can explain to you why they are not -- except he saw labor as a great value which it is.
Larry:
"Labor is not the backing or principle of money. It is a necessary requirement. That is true. But it is not the principle, nor is it the backing. It is a prerequisite."
JJ:
It would help if you could supply some reason for this thinking.
`Larry gives a cursory dialog about the following:
"Labor + intelligence + purpose -> values
"One real principle of money is an exchange of value. Money can only be 'backed' by one of two things, either real commodities or assets which have value in themselves, or by the ability to tax or expropriate wealth from those who have produced it.
"JJ's scheme of money being backed by labor is an example of the latter category which is money backed by the power of government to tax or expropriate wealth through forced inflation of the currency."
JJ:
And labor produces real commodities and assets. I have said nothing to support the idea that I support the idea of expropriating wealth through forced inflation of the currency. Please argue with what I do say, not with what I do mot say. If you're going to argue with what I do not say then make me say something that makes sense once in a while.
Suppose you worked for a large corporation like HP. Now let us suppose they offered to pay overtime work in HP dollars. An HP dollar is worth the average hourly wage of all its employees and is redeemable by anyone who possesses it. Let us say this is $40. The HP dollar can be redeemed for any HP product or service as well as used in the cafeteria A janitor may have to work a couple hours for an HP dollar while the high end employee may work only 20 minutes.
Since a lot of employees like the products and they also get an employee discount a lot of them work overtime and earn and use the dollars.
After an employee makes all the money he needs to supply his needs he continues to work overtime so he can give away some of these dollars to friends for birthdays and Christmas presents.
Jim has 25 extra HP dollars (worth $1000 U.S.) He's bought all his presents and products he needs so he auctions them off on ebay. They sell for $900. The buyer is happy because he was planning to buy a computer from HP anyway and now he'll save $100 U.S.
Other companies hear of this idea and like it because is saves them money through paying labor with products made by their labor. Let us say several dozen other companies start doing this and the various dollars go into circulation and are exchanged through a variety of employees. Now HP employees are using their dollars almost like regular money in that they can buy almost anything they want and if they have surplus dollars for supplies at Home Base they do not need they can exchange hem for other dollars or sell them on ebay.
Now let us suppose that all these employees create a union and this union issues standardized dollars based on and backed up by a synthesis of all the dollars from all participating companies. Every participating company agrees to accept these union dollars.
Finally these dollars become so widely accepted that employees do not mind getting paid in them for their regular wages.
The companies issuing these dollars find that they have a savings from paying in this manner and pass the savings on by raising employee pay which at the same time increases the purchasing power of their money.
In the above example there is money issued whose value is based on the average wage and the money is not based on gold but on labor and of course the products labor makes. There is no state no taxes, no force, no inflation and no stealing from the producers.
There are a number of ways that the fiat labor money can be introduced and work.
Now suppose that Zion was a large honestly run corporation and issued such labor dollars as above that all who work within the great company could spend anyway they want.
These dollars work in the same way in the parable I mentioned. Each group was like a corporation.
If Zion operates like a large benevolent corporation then it could operate without taxation and the public services could be supplied by its profits.
I have only been able to give a small glimpse of the of the ideas that flow through my mind on how Zion can materialize as I have spent most of my time in this discussion on money defending myself rather than teaching.
I plan on writing a treatise probably called "The Economy of the New Age" where some possibilities are presented in more of a step-by-step method rather than in bits and pieces that may not appear to fit together and are much more vulnerable to attack.
Susan:
"In the most ideal society, JJ is saying the society could just be built, literally from the ground up with no thought of money or compensation."
JJ:
That's not quite what I said. I said eventually we will evolve to the point where we will not need money, but we will still receive compensation for our work. For fulfilling his role the individual will be compensated by having access to all the standard goods and services he needs. There will eventually be so much abundance that possessions will lose much of their meaning and all who do their part will have all they need, and in many vases want.
Susan:
"Everyone just expands upon their talents and gives service to the community. I believe that truly would be a heaven on earth and is something I sincerely look forward to. The only thought in the back of my mind is would someone really choose to be a garbage man if there were unlimited options? Are there things that no one would want to do so therefore would never get done?"
JJ:
In the ideal society I would guess that about 80% of the labor we now pay for could be done by either volunteers or higher technology. There are several ways to get the undesirable jobs done. We could have a lottery like they do for jury duty with a one-year term of service of 10-20 hours per week. Also there are incentives other than money that could be used.
Susan:
"One point I am not clear on yet is if JJ was thinking that a group ready to build a City of Light would need no money between themselves (everyone gives service and receives what they need) or is he seeing this as an interim to the ideal society? I am supposing it is an interim and we will need a receipt commodity or fiat note system amongst ourselves."
JJ:
I thought Larry pegged this one right when he said:
"Many of the people who come to the city will bring resources and currency of many nations to the City of Light. A polyglot of currencies will probably be the order of the day at first evolving into a native currency system."
I might add that gold is a good universal currency to initiate such a project because it is universally accepted. I am not against using gold when the situation calls for it. We will not start with nothing as did the people in the parable for people moving to the city will bring many assets.
Larry also added this solid point:
"A city built in the ocean could potentially have enormous resources both in the ocean itself, and in the seabed below. There is a lot of gold in seawater if you can figure out how extract it. The potential for 'sea farming and ranching' is also huge. The problem will be in adapting existing technology and inventing new technology to make full time inhabitation both practical and attractive."
Dan:
"I wholeheartedly agree with both points. As a matter of fact, I can look across the room right now and observe my wife tending to some plants growing in seawater re-created from harvested ocean solids and distilled water.
"The reason we are doing this is to enhance the trace-mineral content of the resulting plants which we then eat as sprouts or baby greens. As our farm soils become more depleted of minerals which are not replaced this becomes more economically feasible."
JJ:
That sounds interesting. Where do you get such material?
Dan:
"Highly nutritious food, requires less space, time, effort to produce AND consumption and yet results in greater (healthier) life and such farming could be one of our most valuable assets."
JJ:
Totally agree. I've often thought that there are trace elements from seawater that could sustain hydroponics farming or be used to enhance soil. There may be a lot of research in this area that I am not aware of.
Blayne:
"So if labor is the principle behind money as JJ says then I should be able to go in my backyard and dig ditches and then fill them back in and create money that represents my all my hard labor. I could be rich ;-)"
JJ:
I have never said anything that even remotely suggests that this would be the case. Who in the world is going to pay you for doing such a thing? No one I know of.
Blayne:
"Also JJ contradicts himself then by saying digging for gold is wasted labor since that labor creates money too just for the fact that it is labor."
JJ:
I do not contradict myself at all. I've never said all labor has the same value. I'm talking about the average value of labor where the labor done in employment producing goods and services. In the United States that's about $20 an hour. To arrive at that twenty dollars they do not factor in you digging holes in your back yard. That may provide entertainment value for you, but no one is going to pay you for it.
Copyright © 2008 by JJ Dewey, All Rights Reserved