CORRECTION: A previous version of this article uncritically repeated David Graeber’s claim that government debt is inversely correlated to private sector debt. I was presented evidence that contradicted this claim, so I edited the article.
In your example of the village with the apple tree and 300 people - if some jerk called Elon nicked 250 apples he wouldn't last long in the village. The people wouldn't stand for it (or, as per your monopoly board, they would stand - they wouldn't bend over and take it, let's say). He would be taught a lesson, and if he repeated his unsocial behaviour then he'd be ostracised...
At present, money is an undefined, irrational, and thus, unscientific measurement system. That makes no sense to an engineer (retired) who specialized in metrology (the science of measurement), knowing all our other measurement units have evolved historically as “fixed amounts” of something measurable, which are available for public comparison, and now have unprecedented precision, based on such technological marvels as laser interferometers and caesium atomic clocks.
Despite the fact that, in whatever form it appears, money always carries just two simple markings, a numeral and a symbol, defining money seems to defeat us. Our humble Australian one dollar coin ($1) is stamped with the numeral “one” and the symbol ($), of which only the latter requires either definition or, in its absence, interpretation, but our Australian government (like all others) refuses to provide either a definition or an interpretation of that fundamental symbol. It wont specify the “value” of this currency unit, and has only ever passed a “Currency Act” which defines its NAME, thus: “The monetary unit, or unit of currency, of Australia is the dollar”, which gets us no further ahead. So, as far as I can see, we are attempting to measure something which is, categorically and legally, undefined.
That symbol ($) does represent the “unit of measurement” of the “something” you are trying to define, which you might call “value in general” but, as your articles show, that is proving troublesome. My tentative suggestion here is that we try calling it a specific form of “value”, which I’ll designate “Exchange Value”, but noting that the adjective is a little misleading in this context because anyone holding that “$1” token at the moment did not receive it in an “exchange”, a process in which, by definition, “value” is given AND received by BOTH parties.
Whoever holds that “unvalued” token gave someone “something of value” – Graeber would say, as a gift - and has an “unvalued” circular piece of aluminium-bronze as the result of her “valued gift”. If you believe “a $1 coin” is “something of value” in that “purchase transaction”, then you have created a unique (but useless) definition of what the symbol “$” stands for in Australia, which only applies to that one specific transaction.
But if you want to use the word “exchange” to describe what the lady did to obtain that token, you have to at least qualify it in some way and here I’ll suggest calling it an “INCOMPLETE (or PARTIAL) exchange” because that token is basically useless for any other practical purpose except “re-exchange” for “something of value”, equivalent to the value of the original “gift”. What the “$1” token she holds will enable her to do is COMPLETE her originally-INCOMPLETE exchange later in time, to obtain “valuable goods or services”, possibly from just one person, or from several different people in different places and at different times.
So, for me, money is presently an undefined token which records (measures?) the extent to which “partial (or incomplete) value exchanges” remain uncompleted.
Now, if you want to go further and come up with a scientifically precise unit of “exchange value” for this token ($) you need to look to the ancient wisdom of the Exchange Ratio between universally recognized, freely traded commodities of known (or precisely defined) chemical and physical description. For example, if a “1 oz. bar of 99.99% pure Gold” trades for a “70 oz. bar of 99.99% pure Silver” in a truly free market, giving an Exchange Ratio of 1:70, you could create coins marked “$1” from each metal, one of which (Silver) will be exactly 70 times heavier than the other (Gold). It doesn’t even matter whether you weigh them in ounces or grams. They can also be arbitrarily huge or relatively small, provided the RATIO of their weights is 1:70. And all you need to ‘prove’ the weight ratio of these two “reference coins” is a precisely constructed beam balance with arms having the Length Ratio of exactly 70:1 (by measuring them with a laser interferometer?). And you only ever need one pair of such “standard coins” to be manufactured to establish that UNIT DEFINITION as a matter of LAW. In the end it all comes down to Weights and Measures (which are ALWAYS RATIOS, relative to a defined Standard Unit).
With variable market ‘prices’ for G and S, a “1-year running average” of the Exchange Ratio can help smooth out “market noise” and even in an extreme case, if the designated Exchange Ratio (i.e., G/S) does experience a sudden, significant and permanent change, only one of the two standard coins needs to be adjusted in weight to reflect that change. The other coin could remain permanently unchanged, effectively becoming the permanent physical realization of the “the legal definition” of the currency unit “$1”.
The inherent nature of a “weight-for-weight Exchange Ratio” is independent of any specific type of money which might be used to buy gold or silver. The Exchange Ratio can be calculated from gold and silver prices measured in Rupees and it will be the same as the ratio calculated from $USD prices of gold and silver at the same time. Being independent of “money” is the vital feature which makes such a weight-for-weight Exchange Ratio a suitable basis for the legal definition of every currency “unit” to be used as “money”.
Money creates an enormous overhead for everything we do. So much extra labor has to go into a monetary system that no rational person would ever choose it willingly. It divorces us from trusting each other and instead we trust the idea that people will do what we want for money because they are desperate or greedy for it. And desperation and greed are crap values for forming a society around.
It's the chosen system by oligarchs because it is a tool of controlling other people's lives by imposing desperation to keep people showing up at those jobs that primarily serve the upper class in some manner. It also is a kind of warfare where countries whose currency trades at a high value effectively enslaves those whose money is near worthless, oh and what a coincidence that the countries whose currency trades highest also have the most weapons.
This should provide a clearer picture than the first chart I posted. I couldn't find charts where the time scales match exactly, and there's a difference between nominal and gross GDP ( Nominal is not adjusted for inflation) but the trend is clear to see. Both US public and private debt rose together over the same time period.
USA: Total Public Debt as Percent of Gross Domestic Product
"If the government goes into surplus, the private sector goes into deficit. If the government reduces its debt, everyone else has to go into debt in exactly that proportion… This isn’t a theory, it’s simple math."
Really? Then where's the inverse correlation here?
CORRECTION: A previous version of this article uncritically repeated David Graeber’s claim that government debt is inversely correlated to private sector debt. I was presented evidence that contradicted this claim, so I edited the article.
If anyone wishes to see David Graeber's argument, you can find it here: https://www.theguardian.com/commentisfree/2015/oct/28/2008-crash-government-economic-growth-budgetary-surplus
In your example of the village with the apple tree and 300 people - if some jerk called Elon nicked 250 apples he wouldn't last long in the village. The people wouldn't stand for it (or, as per your monopoly board, they would stand - they wouldn't bend over and take it, let's say). He would be taught a lesson, and if he repeated his unsocial behaviour then he'd be ostracised...
At present, money is an undefined, irrational, and thus, unscientific measurement system. That makes no sense to an engineer (retired) who specialized in metrology (the science of measurement), knowing all our other measurement units have evolved historically as “fixed amounts” of something measurable, which are available for public comparison, and now have unprecedented precision, based on such technological marvels as laser interferometers and caesium atomic clocks.
Despite the fact that, in whatever form it appears, money always carries just two simple markings, a numeral and a symbol, defining money seems to defeat us. Our humble Australian one dollar coin ($1) is stamped with the numeral “one” and the symbol ($), of which only the latter requires either definition or, in its absence, interpretation, but our Australian government (like all others) refuses to provide either a definition or an interpretation of that fundamental symbol. It wont specify the “value” of this currency unit, and has only ever passed a “Currency Act” which defines its NAME, thus: “The monetary unit, or unit of currency, of Australia is the dollar”, which gets us no further ahead. So, as far as I can see, we are attempting to measure something which is, categorically and legally, undefined.
That symbol ($) does represent the “unit of measurement” of the “something” you are trying to define, which you might call “value in general” but, as your articles show, that is proving troublesome. My tentative suggestion here is that we try calling it a specific form of “value”, which I’ll designate “Exchange Value”, but noting that the adjective is a little misleading in this context because anyone holding that “$1” token at the moment did not receive it in an “exchange”, a process in which, by definition, “value” is given AND received by BOTH parties.
Whoever holds that “unvalued” token gave someone “something of value” – Graeber would say, as a gift - and has an “unvalued” circular piece of aluminium-bronze as the result of her “valued gift”. If you believe “a $1 coin” is “something of value” in that “purchase transaction”, then you have created a unique (but useless) definition of what the symbol “$” stands for in Australia, which only applies to that one specific transaction.
But if you want to use the word “exchange” to describe what the lady did to obtain that token, you have to at least qualify it in some way and here I’ll suggest calling it an “INCOMPLETE (or PARTIAL) exchange” because that token is basically useless for any other practical purpose except “re-exchange” for “something of value”, equivalent to the value of the original “gift”. What the “$1” token she holds will enable her to do is COMPLETE her originally-INCOMPLETE exchange later in time, to obtain “valuable goods or services”, possibly from just one person, or from several different people in different places and at different times.
So, for me, money is presently an undefined token which records (measures?) the extent to which “partial (or incomplete) value exchanges” remain uncompleted.
Now, if you want to go further and come up with a scientifically precise unit of “exchange value” for this token ($) you need to look to the ancient wisdom of the Exchange Ratio between universally recognized, freely traded commodities of known (or precisely defined) chemical and physical description. For example, if a “1 oz. bar of 99.99% pure Gold” trades for a “70 oz. bar of 99.99% pure Silver” in a truly free market, giving an Exchange Ratio of 1:70, you could create coins marked “$1” from each metal, one of which (Silver) will be exactly 70 times heavier than the other (Gold). It doesn’t even matter whether you weigh them in ounces or grams. They can also be arbitrarily huge or relatively small, provided the RATIO of their weights is 1:70. And all you need to ‘prove’ the weight ratio of these two “reference coins” is a precisely constructed beam balance with arms having the Length Ratio of exactly 70:1 (by measuring them with a laser interferometer?). And you only ever need one pair of such “standard coins” to be manufactured to establish that UNIT DEFINITION as a matter of LAW. In the end it all comes down to Weights and Measures (which are ALWAYS RATIOS, relative to a defined Standard Unit).
With variable market ‘prices’ for G and S, a “1-year running average” of the Exchange Ratio can help smooth out “market noise” and even in an extreme case, if the designated Exchange Ratio (i.e., G/S) does experience a sudden, significant and permanent change, only one of the two standard coins needs to be adjusted in weight to reflect that change. The other coin could remain permanently unchanged, effectively becoming the permanent physical realization of the “the legal definition” of the currency unit “$1”.
The inherent nature of a “weight-for-weight Exchange Ratio” is independent of any specific type of money which might be used to buy gold or silver. The Exchange Ratio can be calculated from gold and silver prices measured in Rupees and it will be the same as the ratio calculated from $USD prices of gold and silver at the same time. Being independent of “money” is the vital feature which makes such a weight-for-weight Exchange Ratio a suitable basis for the legal definition of every currency “unit” to be used as “money”.
Money creates an enormous overhead for everything we do. So much extra labor has to go into a monetary system that no rational person would ever choose it willingly. It divorces us from trusting each other and instead we trust the idea that people will do what we want for money because they are desperate or greedy for it. And desperation and greed are crap values for forming a society around.
It's the chosen system by oligarchs because it is a tool of controlling other people's lives by imposing desperation to keep people showing up at those jobs that primarily serve the upper class in some manner. It also is a kind of warfare where countries whose currency trades at a high value effectively enslaves those whose money is near worthless, oh and what a coincidence that the countries whose currency trades highest also have the most weapons.
This should provide a clearer picture than the first chart I posted. I couldn't find charts where the time scales match exactly, and there's a difference between nominal and gross GDP ( Nominal is not adjusted for inflation) but the trend is clear to see. Both US public and private debt rose together over the same time period.
USA: Total Public Debt as Percent of Gross Domestic Product
https://fred.stlouisfed.org/series/gfdegdq188S
USA: Private Debt: % of Nominal GDP from Dec 1951 to Dec 2023
https://www.ceicdata.com/en/indicator/united-states/private-debt--of-nominal-gdp
(press the MAX button for the longer time frame)
"If the government goes into surplus, the private sector goes into deficit. If the government reduces its debt, everyone else has to go into debt in exactly that proportion… This isn’t a theory, it’s simple math."
Really? Then where's the inverse correlation here?
https://www.economicshelp.org/blog/6775/debt/total-us-debt-public-private/
1982 to 2012 they all went up together. Not so simple after all.