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Fifth of twelve videos showing the construction of models of the monetary aspects of Modern Monetary Theory in Minsky. Download Minsky from https://sourceforge.net/projects/minsky/files/beta%20builds/ and support Minsky's development at https://www.patreon.com/hpcoder/ for as little as a month
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Fifth of twelve videos showing the construction of models of the monetary aspects of Modern Monetary Theory in Minsky. Download Minsky from https://sourceforge.net/projects/minsky/files/beta%20builds/ and support Minsky's development at https://www.patreon.com/hpcoder/ for as little as a month
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| Fifth of twelve videos showing the construction of models of the monetary aspects of Modern Monetary Theory in Minsky. Download Minsky from https://sourceforge.net/projects/minsky/files/beta%20builds/ and support Minsky's development at https://www.patreon.com/hpcoder/ for as little as $1 a month |
wouldn't this form work if the capitalists didn't save and only invested? similar to werner's contention that a private debt system around gdp based investment should be the only form of bank loans? and if the banking sector was diversified enough any single bank issuing bad debt wouldn't bring down the whole sector?
What amount of risk-taking-innovation would you like?
https://www.npr.org/2014/11/13/363572151/after-solyndra-loss-u-s-energy-loan-program-turning-a-profit
Dear Ismail, would this be a suitable form of society given the conditions you mention? Well that's a matter of debate of course, but no for all sorts of reasons. My first question would be why would we go out of our way to eliminate the currency issuing power of a sovereign government?
Firstly, that's a situation where all the financial wealth of society is determined by private banks – entities which are by their nature not accountable to the public. This is highly undesirable for many reasons, for one because it essentially means privatising everything, and more or less formally becoming an oligarchy ruled by the banks. Secondly, debts eventually need to be paid. In that case, the money supply decreases. Government issued currency does not have this problem. Thirdly, obviously we need to consider the role of consumer credit (mortgages, auto loans, credit cards, student loans, etc.). Fourthly, banks overwhelmingly lend for the purchase of already existing assets in order to make 'capital' gains, not to invest in expanding production or R&D. Fifthly, in order to put sufficient discipline on the banking sector such that it lends responsibly and productively, massive government regulation/control is necessary, so it would be very odd to pursue this yet eschew state issued money. Sixthly, without state issued money, it impossible to guarantee any reasonable kind of financial stability (no lender of last resort, no guaranteeing ordinary depositors, etc). Seventhly, further to the last point, without state issued money, it is practically impossible to write down debts on a macro scale (the banks will do anything to stop this happening anyway, that's before they control the entire money supply) – at that point since 'debts that can't be paid, won't be paid' there will either be a revolution or the creditors will transfer all assets to themselves in a neo-feudal system. Privately issued money is interest bearing (at compound interest, hence debt grows exponentially) – government issued currency is not (e.g. you don't have to pay interest on a dollar bill).
And so on, if I have understood your question correctly.
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Am I wrong in understanding that this assumes one currency? i.e. banking sector has a monopoly on the credit in the economy? would it not be more accurate to have a minimum of two banking sector actors to interact with each other that might represent competing currencies? Even if I have misunderstood, surely the Banks repay, Banks pay interest and lend to Banks terms should be included?