1. Money, the Commons, and Growth Oct. 24, 2003
Gary Flomenhoft
Gund Institute

3. “INVISIBLE BOOT”

4. “INVISIBLE BOOT”

6. system

7. “MONEY SYSTEM AS A PURE PUBLIC GOOD”
Excludable
Non-Excludable
Open Access Regime:
Oceanic fisheries, timber etc. from unprotected forests, waste absorption capacity, roads(congestible)
Market Good:
land, timber, fish once captured, farmed fish, waste absorption capacity?
Rival}
Potential market good but inefficient: patented information,
pond
Pure Public Good: climate stability, ozone layer, clean air/water/land, Biodiversity, information, habitat, life support functions, etc.
Non-rival}

8. VALUE OF COMMON ASSETS

9. Alaska Model: Alaska Permanent Fund
(Share of the commonwealth)

10. Alaska Model: Alaska Permanent Fund

11. DECLINE OF THE COMMONS due to “market fundamentalism”

12. A Brief History of Exchange
C= commodity M= money
C-C’ = barter
C-M-C’ = money as a medium of exchange
M-C-M’ = mercantilism, money as a store of value and end in itself
M-M’ = speculation, money as a way to redistribute real wealth

13. 95% speculation in paper! M-M’
A Brief History of Exchange
M-M’ = speculation, money as a way to redistribute real wealth
Speculative exchange in the global economy
Buying and selling of goods and services is about $30 trillion per year globally
Buying and selling of paper is about trillion per day, or trillion per year.
95% speculation in paper! M-M’

14. A Brief History of Exchange
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.” -John Maynard Keynes

15. WHAT IS MONEY? IOU to avoid barter

16. WHO CREATES MONEY? (SEIGNORAGE)
GOVT: $600 BILLION
TOTAL: $8.6 TRILLION
600/8600 = 7% BY GOVT
= 93% BY BANKS!

17. HOW DO BANKS CREATE MONEY?

18. HOW DO BANKS CREATE MONEY?
INTEREST!

19. Magic of money creation
FRACTIONAL RESERVE ~3-5%
How the Federal reserve system creates a private banking monopoly cartel!
PRIVATE BANKING SYSTEM
FED RESERVE BANK
LOANS
$20,000
$20,000
ASSETS
$1000
(5% OF $20,000
“on reserve”)
PLUS INTEREST!
INTEREST
$1000 DEPOSIT
Best scam going: privatization of huge public asset

20. 3 PROBLEMS WITH BANK CREATION OF MONEY (GRECO)
Artificial scarcity- debt grows with passage of time. Not all debtors can pay. Never enough of it to serve the purposes for which it is created
Misallocated at the source- goes not to those who are most in need or who will use it most effectively, but to political power centers, well-connected insiders, and those already wealthy
Systematically pumps wealth from poor and middle class to the wealthy.

21. 1. Debt

22. 2. misallocation

23. 3. Interest payments

24. Consider opportunity costs. How do you maximize profits?
MONEY AND GROWTH
What grows faster, trees in the forest, cod in the ocean, or money in the stock market, or compound interest?
Consider opportunity costs.
How do you maximize profits?

25. 1. Debt

26. Alternatives to bank money-govt.
Money as a public good
100% reserve requirements and money creation through seignorage
Government spends money on public goods
Government issues money as basic income
$90,000 interest free government loan to 18 year olds?
Would it need to be a loan?

27. Alternatives to bank money-Mutual Credit and LETS

28. Alternatives to bank money-complementary currency

29. Alternatives to bank money-complementary currency

30. Alternatives to bank money-complementary currency

31. Alternatives to bank money-complementary currency