Loan Sharks, The Birth of Predatory Lending by Charles Geisst is a great resource book. Thanks for the enlightening conversation. The idea of world currencies becoming 100% digital is concerning. The idea of our lives relying on technology for our very existence is down right frightening. Time to go for a nature walk and ground myself. Peace to the community here on Nate's channel.
Brilliant discussion! Here is what I think we really need to be saying louder: "...working endless hours at some job to buy more crap does very little to increase your benefit...We’re sacrificing our wellbeing on the altar of endless growth and consumption." There needs to be much more made of the fact that we will be happier and very likely healthier in a system that is tethered to reality and therefore healthier for this planet. (These are not unrelated phenomena, of course.) So often, I want to scream at all the messaging - even from those advocating radical change - that says we have to "give up" so much to make a better world. When most of the "we" will be substantially better off in that better world. (Again, not unrelated.) I mean, DUH! It doesn't even make sense to say that we have to sacrifice what is hurting us! So, it was very refreshing to spend 90 minutes dreaming about Farley bucks and dis-centivising the entire financial industry and so on. And I shall be watching for that Vermont public bank proposal!
Well said. And I'd add that even the very wealthy might be happier in a more grounded, simple life. Their wealth lets them chase pleasure, but also makes them anxious about losing it, or having less than their neighbors and peers. We are social animals that are happiest contributing to a tribe in meaningful ways, not by being separate and above others. Also, when you can pay to have everything done for you, you miss out on the rewarding satisfaction of cooking, cleaning, building, and repairing things for yourself. Imagine hiring a decorator to pick out your furniture and artwork versus building and making your own or getting it from friends and people you know. My thought is the second option is much more satisfying for a vast majority of humans.
53 minutes in, that's the message, and we all know it, but like good humans, shiny things distract us. Thank you Josh and Nate for a very educational discussion, I agree with Nate, that I don't see anything on the horizon to change the trajectory we're on. Peace
This is exactly what Michael Hudson always says. Real GDP is shrinking, but the FIRE sector (basically finance) reports any financial transaction as GDP growth..The result will be that debt will grow faster than the economy and eventually cause a new Dark Age
The NEED Act was introduced in Congress by Denis Kucinich in 2012, I think. This is a model of a public money -- government issued -- monetary system. Definitely one of the more informative episodes. Thanks.
JFK tried something like this, US Dollars. Made by the government not issued by the privately owned company known as the US Federal Reserve. These were made by the government not created from nothing as a loan to which you pay interest on but the interest doesn't even exist. We all know what happened to JFK and his Brother right. Obviously killed by a loan gunman who wasn't a patsy then got killed on live television before he could give a real interview.
Hi Nate, really love your work and it's so necessary!! i can't help but think when listening to this conversation, that we're really discussing and describing a class based system with the express purpose of controlling society and ensuring the owners class is insulated against Democracy. I would love an exploration of this aspect of our civilization because the wealth concentration can't be accidental.... Also the resistance to change seems to be have a idealogical aspect to it, IE it's really hard to concentrate and amass enormous fortunes for one class , when everyone is an producing a portion or all of their own energy requirements.... Keep up the great work! Cheers
Nate, please reach out to me. This conversation is 90% of the way there. I am working on a thesis here at the Seeger Institute in Hawaii. I am an impact venture capitalist and I am devoting 100% of my resources to building a new asset class to demonstrate that now is the time for wealthy people to invest in a place-based resource, a school to train people in a holistic model dedicated to introducing long-term solutions to transition financial capital back into regenerative solutions to creating local communities based on regenerative agriculture and local energy production with an eye on greatly reduced energy needs. Josh and you are correct: we need to increase the matrixes by which we judge wealth and success to re-align them with long term community and planetary well being. However, history dictates that without buy-in from the powers that be, the rich people there’s will be resistance to the change, they will dig there heals in. We need to create a place for the wealthy in the narrative going forward. That is why structuring the catalytic institutions to bring about the change to an economy in alignment with a sustainable future might be structured as a school/incubator. It creates a governance structure which could work and a path to vestiture in the form of some kind of tenure track which could take the form of an interest in a business, a stake-hold in a small farm, or membership in a cooperative in service of the community. The bottom line: we are already living in a post-national world and all the “leaders” are morons, we cannot expect them to solve this problem, there is no place for them in “the great simplification” we need to find other engines of change. The rich have the most skin in this game, if we can persuade them to act from a place of self interest to catalyze the transition , making it sexy, using social media as Josh suggests, to bring about the change maybe we can get the ball rolling. Lets talk
The problem with economists is they think the economy is a thing based on markets, profits, returns and speculation. We need a completely different of assumptions which align with our values and invent a monetary system which aligns with them!
Mesopotamia, farmers paid their bar tabs at harvest time, in grain. Tin, silver, and gold were used by merchants for trade. AND they had clay tablets to record the interest of loans. Dr. Michael Hudson.
I'd love to see whiteboard videos on this stuff. Too many youtuber economists making white board videos of these concepts following the mainstream and anti-mainstream two in the same unlimited growth idiocy narratives.
It seems like the difference between mainstream economists and your take is timeframe you view it from. If you extend the timeline to infinity then banks aren't creating money because those deals are net 0. But if you pick a discrete point/time frame, then any loaned money via fractionalized reserves that has not been paid back is still in the system. Do economists always take this infinite time view? Seems like a pretty big flaw in how they model.
High gas prices, inflation and poor people not being able to afford basic things is a direct result of the government and monetary system. Let's just try to keep them out of everything.
Gas prices are not nearly high enough to reflect the true value of this once-in-history energetic windfall. Nate is constantly pointing out "energy blindness" - this is the notion that we are not pricing in the actual work done by (and environmental cost of using) fossil fuels. We only think about the cost of extraction which is a tiny fraction of the real value of coal, oil, and natural gas.
@@brushstroke3733 We don't price things based off of use value or historical significance. If we did that with gas no one could afford it. Imagine the cost of a pencil. An extremely high portion of the cost of gas is taxes. And that's after international cartels control the supply and fix prices. Who's "we"? No one thinks that the price of gas is just the cost of extraction.
@@funklelester8646 That's the point - none of us should be able to afford to consume it as we do. Yes, I understand that taxes are a large percentage of the price we pay at the pump, but again, that price is low compared to what it is worth. Imagine if we had to pay humans for the work of pulling our cars, or paying humans to build our homes and landscape our yards/towns without the use of power tools. That's what the gas is really worth in terms of labor, yet we don't pay anywhere near those costs. Besides, without roads to take you everywhere, the gas in your car wouldn't be nearly as useful. And where does the money to build and maintain roads and bridges come from? Mostly from gas taxes. Indeed the government is terribly inefficient due to both corruption and incompetance, which leads to higher costs for everything they do and buy, which translates to higher taxes for us all.
@@brushstroke3733 That's a very odd way to look at it. The value or worth of something, like gas, is subjective and is very dependent on time and location. The cost or price of something is dependent on supply, demand, and govt interference. No one would pay for a car if you had to get a human to pull it, so it would have almost no value. People do landscaping without power tools all the time, it's about 14 dollars per hour where I am. Does a crappy house built with power tools have more value than a standard quality house using hand tools? Amish people have really nice houses and not one bit of electricity is used to build them. No one should be able to afford anything by the way you look at labor, value, and price. Yet we do, so that thought process is probably wrong. And the things with the lowest cost tend to have the highest value. If you remove outside actors almost everything would be cheaper. Lol without taxes we wouldn't have the roads. I regularly drive on 300-400 year old roads. My taxes aren't paying for them. Or to repair them. Have you driven on the road in major cities? They definitely aren't spending taxes on them. Value comes from the laborer, not the tools used. Should everyone be priced out of everything because the cost of tools should be insanely high?
@@funklelester8646 This is a circular argument. Using fossil fuels to replace human laborers does make consumer goods less expensive to make, but that also reduces the wages of the laborer. There was a time before people used oil, natural gas, and coal to power everything, and skilled laborers then could afford their needs, maybe better than today. You built your own house so no thirty year mortgage. You bought a pot and some cast iron pans and they lasted your whole lifetime and were passed down for generations. The point is that the carbon bumb we're living through has made it appear very inexpensive for us to feed billions more people than ever before and to consume for frivolous junk than ever before. It is a very temporary, short-lived carbon bump as we quickly drain the planet of these extremely "valuable" resources (valuable fro the standpoint of what they allow us to build and do collectively.) If we were wise, we'd stop burning all those resources like kids burning through an inheritance and instead use them frugally to build long-lasting stuctures that will benefit humans for hundreds of generations. Judging from your comment about 300 - 400 year old roads, I doubt you live in the United States, where our 20th century experiment with suburban planning has been an economic disaster. We have spread people out away from the places we work and shop, building vast networks of roads that are very expensive to build and maintain - more expensive than taxes can keep up with, unless cities constantly expand to bring in new businesses and residents to pay for the maintenance of the old (a classic pyramid scheme.)
You both agree that resource are finite, which is a given assuming a round earth. But what is limiting the availability of those resources? And, why are sinks?
Cost. if we spend 5% of our energy budget on energy extraction, refining and delivery we still have 95 units for rest of society (libraries, shopping centers, hospitals etc). As resources get more difficult we have to add lots more of our energy and materials to energy sector which means less available to rest of society. read.realityblind.world/view/975731937/192/
perhaps this is the one thing to fix it all - introduce a new type of debt that is bound to gold (repayable with the value of the gold at the time of repayment) or whatever does not inflate - the older types of debt can still exist for those who want to deal in those terms but the new type of debt connects the activity and the thought processes more to reality - just maybe
I think for me while ideas inform, and so does conversation about them, they limit actual change to those who can afford to expose themselves to those ideas, their meant for members of humanity who have the agency to view content. Yet, I believe that ideas are best fleshed out anyway, and accessed by individuals who can hear it or read it. I think that some change in thinking can occur, that when information is discussed between critically thinking minds whose motivation aligns with some level of ecological awareness, then that can inform some people about their physical reality to which we all depend. This kind of conversation may produce some provocation within our subconscious mind to review the ecological reality we all depend, and steer our cognitive ability to consider more of what is in line with what produces the best conditions for joy and belonging. Unfortunately with that comes the awareness of the reality to which we currently exist: the social terms and conditions of the system model of market capitalism. The current system does not support being mindful, people are not incentivised to channel their attention toward ecological awareness, and remain face to face with stimuli coming from various corporate agendas, which manipulate and project ideas as product, presented to the people or citizens as important or having value, which produces a sequence of neurological functions (mirror neurons) that stimulate a variety of associations (e.g a beautiful, smiling, happy human being with a shampoo bottle), we see a smiling face, and we smile, feel happy, and the seed is planted for items advertised. This perpetuates the act of consumption because we want to feel socially included, we want to belong. It is this need to preserve our bodies, to seek connection, and to seek some purpose that unfortunately is coerced, by adverting models, to narrow the bracket of what connection is, or what our purpose is, transforming needs into a commodity. Yet, this is not enough, suggestion does not fully push your need to adhere to those suggestions of what to buy, a further incentive is provided, that being labour. Unless you work you cannot acquire access to meet your basic needs, and this creates a cycle of consumption. The reward for your labour is money, the advertised Item suggest how you can spend your money, and this creates a double reward effect, where your rewarded for your labour by your employer, and your engaging in self-rewarding behaviour through the act of consumption. I wonder if the cognitive functioning is overtly stimulated, and overwhelmed by the variety available, which causes the capacity for reasoning and impulse control to diminish, don't know, just a thought. Another thing I have been thinking about is that the subconscious social contract shared through acts of consumption becomes a source of dialogue to reinforce a sense of belonging, while at the same time, encouraging individuals or groups to distract from the ecological-energy-resource reality, subsequent damage, and limitations that this mode of civilisation has on a finite planet and to peoples over all well being. The corporations ignore, and they encourage you to ignore, although this wont work, as is evident now, people are for the most part becoming more aware through conversations just like this one, and the looming climate problem caused by the system itself. I do wonder the limits of conversation, and the sharing of ideas, while the do inform, how much information sharing creates a comfortable zone of sorts, producing a period where action toward change is pivotal but is inevitably missed because our underlying fear, and current survival is incentivised to deny the ecological reality. I guess what I am saying is when has talking stagnated the window of opportunity where some level of galvanization could have happened and changed human society for the better, locally and globally, so that the system incentives that enslave our needs, cause a widening of the pathological spectrum, can be reduced through systems change.
This is a good and much needed conversation. However, I don’t think the criticism of MMT offered here is entirely valid. It’s understandable, though. My suggestion is to reach out to the actual MMT economists. I can say with a high degree of confidence that MMT does not ignore ecological sustainability. We can acknowledge that there needs to be more focus on ecological sustainability. That’s happening, and should continue to grow. Torrens University in Australia now offers post graduation degrees and certificates in the economics of sustainability. I suggest reaching out to Steven Hail and Phil Lawn on the topic of the economics of sustainability and what they’re doing with the partnership between Modern Money Lab and Torrens University. So, if a criticism of MMT is that there isn’t enough focus on sustainability, that’s fair. However, the education and conversation is expanding. It’s not fair to say that the topic is ignored, though. So, consider reaching out to Steven Hail and Phil Lawn. Expand the conversation. I think there’s a considerable piece of common ground upon which to stand.
In an inflationary spiral (essentially non-nominal default on debt) the move is to take on debt, inflate the interest away (in real terms) and purchase hard assets whose value will rise. Michael Saylor is doing this, essentially a speculative attack on the dollar, to purchase Bitcoin, the only absolutely scarce commodity out there. Real estate, oil, gold, other relatively scarce (hard) assets (stocks may qualify as well) can also work, but I think it would be interesting to hear you discuss Bitcoin more in depth. Also, because of Bitcoin’s difficulty adjustment, the supply of money relative to energy expenditure is modulated in a pro cyclical way, helping us to avoid the booms and busts of the central planning-induced business cycle. Food for thought. Great show, really enjoyed this one!!
Josh just keeps digging himself in deeper. Now he says that "good" inflation is the type that transfers wealth from creditors to debtors. In effect and on a whole, this is transferring wealth from people who produced more value to society than they consumed and giving it to people who consume more than they produced. When taken to the extreme the example would be taking money from the doctors and nurses and teachers and garbage collectors who have worked hard and saved it so that when their bodies can no longer do that hard work all day then they can retire. Josh's "good inflation" steals this retirement savings and gives to to the guy who sits at home drinking and smoking and collecting unemployment or running up credit card debts, or various other activities that consume but add no value in return. You get my point. Josh's ideology of what's a "good" policy would be a disaster, if put into practice for any extended period of time. In some ways it is in practice and I would tie it to why people think we are on the wrong track. I encourage you all to volunteer extensively with the homeless and poor for a few years. Then come back and tell me that giving them money fixes the problem.
If Josh doesn't want increased resource depletion, then it's contradictory for him to say that inflation from corporations jacking up prices to make record profits is "bad". All else equal, higher prices will decrease the volume of consumption, as the rich owners of the stock will consume less than middle class and poor people would when given a fixed value of new wealth. Of course it's more complex with secondary effects, but the stimulus of 2021 giving $3000 to all the non-rich proved to voraciously increase consumption. Protected, or large moat, monopolies who use profits to buyback stock and never increase production would consume less resources than those investing in new production. The extreme example of this would be communist countries. Their consumption historically per capita was just a fraction of the West's. In addition, when one travels to various places and neighborhoods, the poor are not wonderful stewards of the environment. From what I see, they trash it, misuse resources, and in effect that is why they are poor. Switzerland would be my example of this, and compare it with a poorer country where it's trash heaps everywhere that end up in the oceans.
Nate and Josh have you read any of the work undertaken by Phil Lawn and Steven Hail? Please be careful of your criticisms of MMT economists.I feel you need to read in depth the body of work from the MMT economists.
Jesus, I've never seen so many long-winded, meandering word-salad responses as I have just seen in this video's comments. The hubris of these armchair quarterbacks is new level.
A good start to find relevant papers could be: Ferris, L. J., Jetten, J., Hornsey, M. J., & Bastian, B. (2019). Feeling hurt: Revisiting the relationship between social and physical pain.
I have to say, this really annoys me. True, I am no economist with a PHD, but based on my reading of "The Deficit Myth" by Stephanie Kelton, MMT is saying almost EXACTLY the same thing as you are. They would be absolutely natural allies in your cause, so it makes no sense to me that you diss them. They are NOT AT ALL ignoring the real limits of resources. They are saying EXACTLY, that focusing on deficits--as defined by artificial monetary "limits"--is wrong, and instead, it is the REAL, physical limitations of resources, etc. that should be guiding our economic policy. Unless I completely misunderstand you, that is also what you are saying. Secondly, they are criticizing the exponential growth requirement that is a necessary effect of loans with interest and are suggesting to drop this entirely (at least as far as government bonds are concerned). Thirdly, they agree with Josh that the standard story of money as replacing barter is incorrect. And so on... In fact, I discovered your channel right after reading Stephanie Kelton's book and to me it sounded like a very logical further step from what she was talking about. Yes, you add some new, additional ideas. Your assertion that there is a one-to-one relationship between GDP and energy usage is definitely going beyond their general point of focusing on the resource limitations (rather than artificial monetary limitations.) If true (and I have no reason to doubt it, but also no way to verify it) then these limitations are much more stringent and urgent. --but again MMT proponents should be VERY open to these ideas. Lastly, I am somewhat surprised that I have never heard you specifically say that a first step (in economic policy) should be a complete abandonment of any form of interest. Everything you, and most of your guests are saying clearly points to this as a first logical step to solve the "eternal exponential growth" problem. Yes, it clearly won't be enough, but without it, how can we even start to solve that problem? At the very least--if you do not think that is a necessary step--I think it would be critical to explain why not, as it seems so obvious and common sense, that if you ask for constantly increasing money supply, by creating a fixed amount of money, but then asking for more money back--demands on our economy will be for constant, infinite growth. How could it be otherwise? Again, I think MMT proponents would be natural allies here as well. PS: Even though I express my annoyance here, I love your podcasts (as much as anyone can "love" really bad--but necessary--news) and I think you have an extremely important voice. Keep it up, and Thank You!
Josh, have you never lived in Greece? No. They have a system called 'Meson'. If I do something for you then you must, if I need it, do something for me. This in a way is a barter system and can include objects. This would fit into a barter system perfectly. So I contend there was a barter system of sorts for native peoples. If 'Meson' still survives i do not know. I lived in Greece fom 1974 to 1984 for seven years on the Isle of Sifnos for three years in Athens and travelled round the place..
Banks do not create money. I mean, I guess technically they do, but you wouldn't ask the banks to stop creating money. You'd ask the gov't. Money is still at least being controlled by the gubmint and at least we have a theoretical path to fixing this shit.
An annoying monstrous topic. We can brainstorm how we can exit this Thelma and Louise trajectory we're on, but T&L have no interest in any other path. But I get closer to something "real" when I see the more debt you take on the more your future is trapped with T&L, even if less debt doesn't mean you'll escape, but it'll mean you have some breathing space to adjust to the new reality when things break down.
If I project into the future, after things break down, you can imagine all these 600 million guns our country are going to be popular forms of "currency" to help direct local action, and state governments are simply going to be overthrown and replaced by the team with the most guns, and we know which side that is. The right has already decided the founding fathers saw guns as the means to end government tyranny, even if that tyranny is something like wearing a mask during a pandemic, or telling the gun owners that their guns don't entitle them to overrule any laws they don't like. It's fantasy now, but there's a big creative energy there to be explored, and the rest of us perhaps will just stay out of the way as the elected government and "Independent American" militias fight it out and destroy government buildings.
It is absolutely astonishing how delusional and blind university academics are to the efficiency of the current system for producing meaningful research. Every single day they have their noses forced into the complete banality of the overwhelming majority of the PhD and funded research projects, and yet they still wax lyrical about how something from academia could "save the world". Particularly in the humanities, an obscene proportion of articles are written about theories/models that are about as useful as crossword puzzles. Not useless, but there are far more pressing issues, like 5 year olds not getting enough nutrients for their brains to develop properly. While some academics claim to care, a vanishingly small percentage of them actually do anything. Most subject matters are also heavily influenced by deeply profit-driven journals and publishing houses. Reviewers don't get paid, except in reputation, and many journals have 50%-90% net profit margins. Running a journal with today's open source digital management tools is effectively free, and many of the world's top journals are, indeed, open access (and almost free for all). All it would take is for contributors and editors to stop writing and reviewing for the profit-driven journals and only work for open access. It would require a small amount of short term pain for established academics, as the reputation was transferred from profit-driven to open access. Yet they don't. Massive amounts of money are spent by journals to lobby governments to not mandate publicly funded research is open access, yet academics still resist. And we are supposed to trust them as selfless? As objective? As "above the fray"? Humans are regularly lazy, greedy and short-sighted. We have ABSOLUTELY ZERO evidence that there is something different about academics. They too are humans. It is pure fantasy to think academics are any more capable of deciding anything in a more efficient or just way than anyone else. Obviously academics have a survival instinct, and typically would lose massive amounts of both status and economic security if they lost their employment because the overwhelming majority would not find jobs as good as they have in academia (I can say this with absolute certainty in the software engineering area...). Alas, I don't have anything better to offer in terms of the system (fully private would be even worse!) but it is actively disingenuous to suggest there is something special about academics.
Get someone who actually understands mmt if you want to understand its relation to ecology. There are ecological economists in mmt. Your two additional objections to mmt have been covered by mmt economists many times. Please stop spreading misinformation about mmt. Interview mmt economists if you want to talk about it here, since you obviously don't understand it.
Loan Sharks, The Birth of Predatory Lending by Charles Geisst is a great resource book. Thanks for the enlightening conversation. The idea of world currencies becoming 100% digital is concerning. The idea of our lives relying on technology for our very existence is down right frightening. Time to go for a nature walk and ground myself. Peace to the community here on Nate's channel.
uuuuh, I'm not sure how our lives presently *don't* rely on technology for our very existence?
Brilliant discussion!
Here is what I think we really need to be saying louder:
"...working endless hours at some job to buy more crap does very little to increase your benefit...We’re sacrificing our wellbeing on the altar of endless growth and consumption."
There needs to be much more made of the fact that we will be happier and very likely healthier in a system that is tethered to reality and therefore healthier for this planet. (These are not unrelated phenomena, of course.) So often, I want to scream at all the messaging - even from those advocating radical change - that says we have to "give up" so much to make a better world. When most of the "we" will be substantially better off in that better world. (Again, not unrelated.) I mean, DUH! It doesn't even make sense to say that we have to sacrifice what is hurting us!
So, it was very refreshing to spend 90 minutes dreaming about Farley bucks and dis-centivising the entire financial industry and so on. And I shall be watching for that Vermont public bank proposal!
Well said. And I'd add that even the very wealthy might be happier in a more grounded, simple life. Their wealth lets them chase pleasure, but also makes them anxious about losing it, or having less than their neighbors and peers. We are social animals that are happiest contributing to a tribe in meaningful ways, not by being separate and above others.
Also, when you can pay to have everything done for you, you miss out on the rewarding satisfaction of cooking, cleaning, building, and repairing things for yourself. Imagine hiring a decorator to pick out your furniture and artwork versus building and making your own or getting it from friends and people you know. My thought is the second option is much more satisfying for a vast majority of humans.
53 minutes in, that's the message, and we all know it, but like good humans, shiny things distract us. Thank you Josh and Nate for a very educational discussion, I agree with Nate, that I don't see anything on the horizon to change the trajectory we're on.
Peace
I'm impressed with Josh Farley's knowledge. I love the idea of using state banks for public good and as a form of tax revenue.
This is exactly what Michael Hudson always says. Real GDP is shrinking, but the FIRE sector (basically finance) reports any financial transaction as GDP growth..The result will be that debt will grow faster than the economy and eventually cause a new Dark Age
The NEED Act was introduced in Congress by Denis Kucinich in 2012, I think. This is a model of a public money -- government issued -- monetary system. Definitely one of the more informative episodes. Thanks.
JFK tried something like this, US Dollars. Made by the government not issued by the privately owned company known as the US Federal Reserve. These were made by the government not created from nothing as a loan to which you pay interest on but the interest doesn't even exist. We all know what happened to JFK and his Brother right. Obviously killed by a loan gunman who wasn't a patsy then got killed on live television before he could give a real interview.
Hi Nate, really love your work and it's so necessary!!
i can't help but think when listening to this conversation, that we're really discussing and describing a class based system with the express purpose of controlling society and ensuring the owners class is insulated against Democracy. I would love an exploration of this aspect of our civilization because the wealth concentration can't be accidental....
Also the resistance to change seems to be have a idealogical aspect to it, IE it's really hard to concentrate and amass enormous fortunes for one class , when everyone is an producing a portion or all of their own energy requirements....
Keep up the great work!
Cheers
Josh for president!
Nate, please reach out to me. This conversation is 90% of the way there. I am working on a thesis here at the Seeger Institute in Hawaii. I am an impact venture capitalist and I am devoting 100% of my resources to building a new asset class to demonstrate that now is the time for wealthy people to invest in a place-based resource, a school to train people in a holistic model dedicated to introducing long-term solutions to transition financial capital back into regenerative solutions to creating local communities based on regenerative agriculture and local energy production with an eye on greatly reduced energy needs. Josh and you are correct: we need to increase the matrixes by which we judge wealth and success to re-align them with long term community and planetary well being. However, history dictates that without buy-in from the powers that be, the rich people there’s will be resistance to the change, they will dig there heals in. We need to create a place for the wealthy in the narrative going forward. That is why structuring the catalytic institutions to bring about the change to an economy in alignment with a sustainable future might be structured as a school/incubator. It creates a governance structure which could work and a path to vestiture in the form of some kind of tenure track which could take the form of an interest in a business, a stake-hold in a small farm, or membership in a cooperative in service of the community. The bottom line: we are already living in a post-national world and all the “leaders” are morons, we cannot expect them to solve this problem, there is no place for them in “the great simplification” we need to find other engines of change. The rich have the most skin in this game, if we can persuade them to act from a place of self interest to catalyze the transition , making it sexy, using social media as Josh suggests, to bring about the change maybe we can get the ball rolling. Lets talk
Good ideas, but please break your comments into paragraphs.
The problem with economists is they think the economy is a thing based on markets, profits, returns and speculation. We need a completely different of assumptions which align with our values and invent a monetary system which aligns with them!
Once we know all of this, then what?
I understood this a while ago and i cannot do anything with this knowledge.
Thank❤🌹🙏 you, Josh Farley and Nate! It's a pleasure to listen to expert opinions! 😊
I respect you, you are a wise man, livivg in the era of stupid leaders
Mesopotamia, farmers paid their bar tabs at harvest time, in grain. Tin, silver, and gold were used
by merchants for trade. AND they had clay tablets to record the interest of loans. Dr. Michael Hudson.
Why isnt the law changed to prevent Fractional Reserve Lending?
Because the banks own the government. See Rothschild, Amschel.
I'd love to see whiteboard videos on this stuff. Too many youtuber economists making white board videos of these concepts following the mainstream and anti-mainstream two in the same unlimited growth idiocy narratives.
This was very interesting
A few interviews to continue on the money theme could be Richard Werner, Will Ruddick, Ellen Brown. Thanks
Regional Currencies could be essential. Francis Ayley would be a great person to interview on this theme.
Excellent!
This is an amazing discussion
It seems like the difference between mainstream economists and your take is timeframe you view it from. If you extend the timeline to infinity then banks aren't creating money because those deals are net 0. But if you pick a discrete point/time frame, then any loaned money via fractionalized reserves that has not been paid back is still in the system.
Do economists always take this infinite time view? Seems like a pretty big flaw in how they model.
High gas prices, inflation and poor people not being able to afford basic things is a direct result of the government and monetary system. Let's just try to keep them out of everything.
Gas prices are not nearly high enough to reflect the true value of this once-in-history energetic windfall. Nate is constantly pointing out "energy blindness" - this is the notion that we are not pricing in the actual work done by (and environmental cost of using) fossil fuels. We only think about the cost of extraction which is a tiny fraction of the real value of coal, oil, and natural gas.
@@brushstroke3733 We don't price things based off of use value or historical significance. If we did that with gas no one could afford it. Imagine the cost of a pencil. An extremely high portion of the cost of gas is taxes. And that's after international cartels control the supply and fix prices. Who's "we"? No one thinks that the price of gas is just the cost of extraction.
@@funklelester8646 That's the point - none of us should be able to afford to consume it as we do. Yes, I understand that taxes are a large percentage of the price we pay at the pump, but again, that price is low compared to what it is worth. Imagine if we had to pay humans for the work of pulling our cars, or paying humans to build our homes and landscape our yards/towns without the use of power tools. That's what the gas is really worth in terms of labor, yet we don't pay anywhere near those costs.
Besides, without roads to take you everywhere, the gas in your car wouldn't be nearly as useful. And where does the money to build and maintain roads and bridges come from? Mostly from gas taxes.
Indeed the government is terribly inefficient due to both corruption and incompetance, which leads to higher costs for everything they do and buy, which translates to higher taxes for us all.
@@brushstroke3733 That's a very odd way to look at it. The value or worth of something, like gas, is subjective and is very dependent on time and location. The cost or price of something is dependent on supply, demand, and govt interference.
No one would pay for a car if you had to get a human to pull it, so it would have almost no value. People do landscaping without power tools all the time, it's about 14 dollars per hour where I am.
Does a crappy house built with power tools have more value than a standard quality house using hand tools? Amish people have really nice houses and not one bit of electricity is used to build them.
No one should be able to afford anything by the way you look at labor, value, and price. Yet we do, so that thought process is probably wrong. And the things with the lowest cost tend to have the highest value. If you remove outside actors almost everything would be cheaper.
Lol without taxes we wouldn't have the roads. I regularly drive on 300-400 year old roads. My taxes aren't paying for them. Or to repair them. Have you driven on the road in major cities? They definitely aren't spending taxes on them.
Value comes from the laborer, not the tools used. Should everyone be priced out of everything because the cost of tools should be insanely high?
@@funklelester8646 This is a circular argument. Using fossil fuels to replace human laborers does make consumer goods less expensive to make, but that also reduces the wages of the laborer.
There was a time before people used oil, natural gas, and coal to power everything, and skilled laborers then could afford their needs, maybe better than today. You built your own house so no thirty year mortgage. You bought a pot and some cast iron pans and they lasted your whole lifetime and were passed down for generations.
The point is that the carbon bumb we're living through has made it appear very inexpensive for us to feed billions more people than ever before and to consume for frivolous junk than ever before. It is a very temporary, short-lived carbon bump as we quickly drain the planet of these extremely "valuable" resources (valuable fro the standpoint of what they allow us to build and do collectively.)
If we were wise, we'd stop burning all those resources like kids burning through an inheritance and instead use them frugally to build long-lasting stuctures that will benefit humans for hundreds of generations.
Judging from your comment about 300 - 400 year old roads, I doubt you live in the United States, where our 20th century experiment with suburban planning has been an economic disaster. We have spread people out away from the places we work and shop, building vast networks of roads that are very expensive to build and maintain - more expensive than taxes can keep up with, unless cities constantly expand to bring in new businesses and residents to pay for the maintenance of the old (a classic pyramid scheme.)
You both agree that resource are finite, which is a given assuming a round earth. But what is limiting the availability of those resources? And, why are sinks?
Cost. if we spend 5% of our energy budget on energy extraction, refining and delivery we still have 95 units for rest of society (libraries, shopping centers, hospitals etc). As resources get more difficult we have to add lots more of our energy and materials to energy sector which means less available to rest of society. read.realityblind.world/view/975731937/192/
Very, very interesting and actually promising regarding solution to it all
All the more tragic that virtually none of it will happen as we plunge further into collapse.
perhaps this is the one thing to fix it all - introduce a new type of debt that is bound to gold (repayable with the value of the gold at the time of repayment) or whatever does not inflate - the older types of debt can still exist for those who want to deal in those terms but the new type of debt connects the activity and the thought processes more to reality - just maybe
I think for me while ideas inform, and so does conversation about them, they limit actual change to those who can afford to expose themselves to those ideas, their meant for members of humanity who have the agency to view content. Yet, I believe that ideas are best fleshed out anyway, and accessed by individuals who can hear it or read it. I think that some change in thinking can occur, that when information is discussed between critically thinking minds whose motivation aligns with some level of ecological awareness, then that can inform some people about their physical reality to which we all depend. This kind of conversation may produce some provocation within our subconscious mind to review the ecological reality we all depend, and steer our cognitive ability to consider more of what is in line with what produces the best conditions for joy and belonging. Unfortunately with that comes the awareness of the reality to which we currently exist: the social terms and conditions of the system model of market capitalism.
The current system does not support being mindful, people are not incentivised to channel their attention toward ecological awareness, and remain face to face with stimuli coming from various corporate agendas, which manipulate and project ideas as product, presented to the people or citizens as important or having value, which produces a sequence of neurological functions (mirror neurons) that stimulate a variety of associations (e.g a beautiful, smiling, happy human being with a shampoo bottle), we see a smiling face, and we smile, feel happy, and the seed is planted for items advertised. This perpetuates the act of consumption because we want to feel socially included, we want to belong. It is this need to preserve our bodies, to seek connection, and to seek some purpose that unfortunately is coerced, by adverting models, to narrow the bracket of what connection is, or what our purpose is, transforming needs into a commodity. Yet, this is not enough, suggestion does not fully push your need to adhere to those suggestions of what to buy, a further incentive is provided, that being labour. Unless you work you cannot acquire access to meet your basic needs, and this creates a cycle of consumption. The reward for your labour is money, the advertised Item suggest how you can spend your money, and this creates a double reward effect, where your rewarded for your labour by your employer, and your engaging in self-rewarding behaviour through the act of consumption.
I wonder if the cognitive functioning is overtly stimulated, and overwhelmed by the variety available, which causes the capacity for reasoning and impulse control to diminish, don't know, just a thought. Another thing I have been thinking about is that the subconscious social contract shared through acts of consumption becomes a source of dialogue to reinforce a sense of belonging, while at the same time, encouraging individuals or groups to distract from the ecological-energy-resource reality, subsequent damage, and limitations that this mode of civilisation has on a finite planet and to peoples over all well being. The corporations ignore, and they encourage you to ignore, although this wont work, as is evident now, people are for the most part becoming more aware through conversations just like this one, and the looming climate problem caused by the system itself.
I do wonder the limits of conversation, and the sharing of ideas, while the do inform, how much information sharing creates a comfortable zone of sorts, producing a period where action toward change is pivotal but is inevitably missed because our underlying fear, and current survival is incentivised to deny the ecological reality. I guess what I am saying is when has talking stagnated the window of opportunity where some level of galvanization could have happened and changed human society for the better, locally and globally, so that the system incentives that enslave our needs, cause a widening of the pathological spectrum, can be reduced through systems change.
Huh?
Crypto bugs, digital bugs, debt bugs, credit bugs, corporate bugs, are very dangerous selling their two dimensional fantasy.
This is a good and much needed conversation. However, I don’t think the criticism of MMT offered here is entirely valid. It’s understandable, though. My suggestion is to reach out to the actual MMT economists.
I can say with a high degree of confidence that MMT does not ignore ecological sustainability.
We can acknowledge that there needs to be more focus on ecological sustainability. That’s happening, and should continue to grow.
Torrens University in Australia now offers post graduation degrees and certificates in the economics of sustainability.
I suggest reaching out to Steven Hail and Phil Lawn on the topic of the economics of sustainability and what they’re doing with the partnership between Modern Money Lab and Torrens University.
So, if a criticism of MMT is that there isn’t enough focus on sustainability, that’s fair. However, the education and conversation is expanding. It’s not fair to say that the topic is ignored, though.
So, consider reaching out to Steven Hail and Phil Lawn. Expand the conversation.
I think there’s a considerable piece of common ground upon which to stand.
In an inflationary spiral (essentially non-nominal default on debt) the move is to take on debt, inflate the interest away (in real terms) and purchase hard assets whose value will rise.
Michael Saylor is doing this, essentially a speculative attack on the dollar, to purchase Bitcoin, the only absolutely scarce commodity out there.
Real estate, oil, gold, other relatively scarce (hard) assets (stocks may qualify as well) can also work, but I think it would be interesting to hear you discuss Bitcoin more in depth.
Also, because of Bitcoin’s difficulty adjustment, the supply of money relative to energy expenditure is modulated in a pro cyclical way, helping us to avoid the booms and busts of the central planning-induced business cycle. Food for thought.
Great show, really enjoyed this one!!
Sounds more like gobbledygook for thought to me.
@@paulwhetstone0473 care to elaborate?
@@spencern22 Of course not, I’m too busy trying to create real value by developing skills that my community can appreciate.
@@paulwhetstone0473 sure seems like it. Ad-hominem attacks in TH-cam comments are what drive humanity forward. Skillful indeed
@@spencern22 You really lowered the bar for “ad hominem” attack, bro.
Josh just keeps digging himself in deeper. Now he says that "good" inflation is the type that transfers wealth from creditors to debtors. In effect and on a whole, this is transferring wealth from people who produced more value to society than they consumed and giving it to people who consume more than they produced. When taken to the extreme the example would be taking money from the doctors and nurses and teachers and garbage collectors who have worked hard and saved it so that when their bodies can no longer do that hard work all day then they can retire. Josh's "good inflation" steals this retirement savings and gives to to the guy who sits at home drinking and smoking and collecting unemployment or running up credit card debts, or various other activities that consume but add no value in return. You get my point.
Josh's ideology of what's a "good" policy would be a disaster, if put into practice for any extended period of time. In some ways it is in practice and I would tie it to why people think we are on the wrong track.
I encourage you all to volunteer extensively with the homeless and poor for a few years. Then come back and tell me that giving them money fixes the problem.
Nate the Gr8!
If you want truth up straight, you'll need to listen to Nate!
If Josh doesn't want increased resource depletion, then it's contradictory for him to say that inflation from corporations jacking up prices to make record profits is "bad". All else equal, higher prices will decrease the volume of consumption, as the rich owners of the stock will consume less than middle class and poor people would when given a fixed value of new wealth. Of course it's more complex with secondary effects, but the stimulus of 2021 giving $3000 to all the non-rich proved to voraciously increase consumption.
Protected, or large moat, monopolies who use profits to buyback stock and never increase production would consume less resources than those investing in new production. The extreme example of this would be communist countries. Their consumption historically per capita was just a fraction of the West's.
In addition, when one travels to various places and neighborhoods, the poor are not wonderful stewards of the environment. From what I see, they trash it, misuse resources, and in effect that is why they are poor. Switzerland would be my example of this, and compare it with a poorer country where it's trash heaps everywhere that end up in the oceans.
Nate and Josh have you read any of the work undertaken by Phil Lawn and Steven Hail? Please be careful of your criticisms of MMT economists.I feel you need to read in depth the body of work from the MMT economists.
Three generation family or three working wives, two work, one stays home, is the answer to dealing with infinite inflation.
Jesus, I've never seen so many long-winded, meandering word-salad responses as I have just seen in this video's comments. The hubris of these armchair quarterbacks is new level.
Does anyone know what book he is referring to @58:45?
A good start to find relevant papers could be:
Ferris, L. J., Jetten, J., Hornsey, M. J., & Bastian, B. (2019). Feeling hurt: Revisiting the relationship between social and physical pain.
@@bistrovogna Thanks!
This video seems like it was made 14 or 15 years ago
I have to say, this really annoys me. True, I am no economist with a PHD, but based on my reading of "The Deficit Myth" by Stephanie Kelton, MMT is saying almost EXACTLY the same thing as you are. They would be absolutely natural allies in your cause, so it makes no sense to me that you diss them.
They are NOT AT ALL ignoring the real limits of resources. They are saying EXACTLY, that focusing on deficits--as defined by artificial monetary "limits"--is wrong, and instead, it is the REAL, physical limitations of resources, etc. that should be guiding our economic policy. Unless I completely misunderstand you, that is also what you are saying. Secondly, they are criticizing the exponential growth requirement that is a necessary effect of loans with interest and are suggesting to drop this entirely (at least as far as government bonds are concerned). Thirdly, they agree with Josh that the standard story of money as replacing barter is incorrect. And so on... In fact, I discovered your channel right after reading Stephanie Kelton's book and to me it sounded like a very logical further step from what she was talking about.
Yes, you add some new, additional ideas. Your assertion that there is a one-to-one relationship between GDP and energy usage is definitely going beyond their general point of focusing on the resource limitations (rather than artificial monetary limitations.) If true (and I have no reason to doubt it, but also no way to verify it) then these limitations are much more stringent and urgent. --but again MMT proponents should be VERY open to these ideas.
Lastly, I am somewhat surprised that I have never heard you specifically say that a first step (in economic policy) should be a complete abandonment of any form of interest. Everything you, and most of your guests are saying clearly points to this as a first logical step to solve the "eternal exponential growth" problem. Yes, it clearly won't be enough, but without it, how can we even start to solve that problem? At the very least--if you do not think that is a necessary step--I think it would be critical to explain why not, as it seems so obvious and common sense, that if you ask for constantly increasing money supply, by creating a fixed amount of money, but then asking for more money back--demands on our economy will be for constant, infinite growth. How could it be otherwise?
Again, I think MMT proponents would be natural allies here as well.
PS: Even though I express my annoyance here, I love your podcasts (as much as anyone can "love" really bad--but necessary--news) and I think you have an extremely important voice. Keep it up, and Thank You!
Josh, have you never lived in Greece? No. They have a system called 'Meson'. If I do something for you then you must, if I need it, do something for me. This in a way is a barter system and can include objects. This would fit into a barter system perfectly. So I contend there was a barter system of sorts for native peoples. If 'Meson' still survives i do not know. I lived in Greece fom 1974 to 1984 for seven years on the Isle of Sifnos for three years in Athens and travelled round the place..
Banks do not create money. I mean, I guess technically they do, but you wouldn't ask the banks to stop creating money. You'd ask the gov't. Money is still at least being controlled by the gubmint and at least we have a theoretical path to fixing this shit.
Money - the liability of a central bank
Commercial banks create debt, the promise to deliver money
👍
An annoying monstrous topic. We can brainstorm how we can exit this Thelma and Louise trajectory we're on, but T&L have no interest in any other path. But I get closer to something "real" when I see the more debt you take on the more your future is trapped with T&L, even if less debt doesn't mean you'll escape, but it'll mean you have some breathing space to adjust to the new reality when things break down.
If I project into the future, after things break down, you can imagine all these 600 million guns our country are going to be popular forms of "currency" to help direct local action, and state governments are simply going to be overthrown and replaced by the team with the most guns, and we know which side that is. The right has already decided the founding fathers saw guns as the means to end government tyranny, even if that tyranny is something like wearing a mask during a pandemic, or telling the gun owners that their guns don't entitle them to overrule any laws they don't like. It's fantasy now, but there's a big creative energy there to be explored, and the rest of us perhaps will just stay out of the way as the elected government and "Independent American" militias fight it out and destroy government buildings.
It is absolutely astonishing how delusional and blind university academics are to the efficiency of the current system for producing meaningful research. Every single day they have their noses forced into the complete banality of the overwhelming majority of the PhD and funded research projects, and yet they still wax lyrical about how something from academia could "save the world". Particularly in the humanities, an obscene proportion of articles are written about theories/models that are about as useful as crossword puzzles. Not useless, but there are far more pressing issues, like 5 year olds not getting enough nutrients for their brains to develop properly. While some academics claim to care, a vanishingly small percentage of them actually do anything. Most subject matters are also heavily influenced by deeply profit-driven journals and publishing houses. Reviewers don't get paid, except in reputation, and many journals have 50%-90% net profit margins. Running a journal with today's open source digital management tools is effectively free, and many of the world's top journals are, indeed, open access (and almost free for all). All it would take is for contributors and editors to stop writing and reviewing for the profit-driven journals and only work for open access. It would require a small amount of short term pain for established academics, as the reputation was transferred from profit-driven to open access. Yet they don't. Massive amounts of money are spent by journals to lobby governments to not mandate publicly funded research is open access, yet academics still resist. And we are supposed to trust them as selfless? As objective? As "above the fray"?
Humans are regularly lazy, greedy and short-sighted. We have ABSOLUTELY ZERO evidence that there is something different about academics. They too are humans. It is pure fantasy to think academics are any more capable of deciding anything in a more efficient or just way than anyone else. Obviously academics have a survival instinct, and typically would lose massive amounts of both status and economic security if they lost their employment because the overwhelming majority would not find jobs as good as they have in academia (I can say this with absolute certainty in the software engineering area...).
Alas, I don't have anything better to offer in terms of the system (fully private would be even worse!) but it is actively disingenuous to suggest there is something special about academics.
I would bet that Josh would fully agree w you
Get someone who actually understands mmt if you want to understand its relation to ecology. There are ecological economists in mmt. Your two additional objections to mmt have been covered by mmt economists many times. Please stop spreading misinformation about mmt. Interview mmt economists if you want to talk about it here, since you obviously don't understand it.