By Richard Lobwein as Chair of the TASA Education & Training Working Group.
During discussions within a recent TASA online forum, the emotional temperature started to go up somewhat due to the raising of thorny perspectives surrounding the idea that the Global Family Group banking system has the capacity to distribute an enormous amount of prepaid credit to member’s accounts.
At the time, Anna Von Reitz had recently done a presentation on the notion and many folks found the idea challenging to process at first.
The main reason for this, I believe, is because most of us have grown up within economic models that emphasise scarcity such that the sudden suggestion of there being a vast amount of disposable wealth out there which has been accumulating behind the scenes, and which is now available for distribution, can be confronting for many people to consider all at once.
None of us can be sure exactly if or when such wealth might actually be distributed, but as to its existence, I suggest that the notion is plausible and becomes easier to grasp when viewed through a different lens.
However, to comprehend it at all, it is first of all necessary to realise that a basic function of money is simply to act as a mechanism for conveniently transferring value that already exists.
Money may represent value, but of itself, is not necessarily valuable.
The first “money” as we think of it, existed as paper receipts for precious metals such as an actual gold deposit with a recognised goldsmith.
Such a paper receipt has no inherent value if its own, but since it represents actual gold held with an actual goldsmith, it can be used to make purchases of real goods and services as well as satisfy debts. The gold held by the goldsmith does have inherent value because gold is rare, desirable, takes real effort and know how to find, extract, smelt, refine and create with.
At a larger-scale economic level, and in a well-designed economic system designed to benefit people, money functions as a useful medium of exchange that facilitates the trading of goods and services. It has little or no intrinsic value, but does represent the real value created by men and women who do useful work and produce useful goods!
Think “kina shells” as once used by the Melanesian people of Papua New Guinea. Kina shells do have a certain amount of intrinsic value because they are somewhat rare and cool to look at, but primarily, they served to make it easier for the people of the coastal areas to trade their produce, with the very different produce of the people who occupied the highland areas.
In a more modern context, an honest money system would create and issue credit-based twenty-dollar notes, for example, to anyone who engaged in useful labour for a set period of time, or produced your lunch for you, or provided you with any other goods or services of equivalent value.
Like the paper receipt representing the real value of actual gold, such credit-based twenty-dollar notes would represent the real value of actual goods and/or services.
However, many modern money systems primarily serve those who issue currency as debt (currency created out of nothing, but disguised as “loans” to national economies), rather than the populations who generate real value and then charging interest on it.
Think back to the man or woman who provides useful services or who produces useful goods.
Every time that happens, value is added to the national economy.
Any national debt would be eaten away and cancelled very quickly, by the accumulation of the national credit that arises organically out of the generation of useful goods and services - except that in the modern world there is no bookkeeping going on which tracks the national credit.
Most people are familiar with the idea of national debt that arises out of the unnecessary practice of borrowing “money” into existence.
The value of any national economy resides in the national production of useful goods and services – and not on the so-called “money” itself.
When real goods and services are “paid for” using debt notes (modern currency which takes the form of sub-standard IOUs) but where these IOUs are never cancelled by means of the natural credit which arises out of the real production of useful goods and services, a phoney national debt grows as more “money” is borrowed into existence over time.
When there is no tracking of the national credit that arises organically every time an IOU debt note is used to “pay for” something, the accumulation of national credit is never talked about, publicly accounted for, or made visible in any way to the people who generate it. Nevertheless, it is still owed to the people who gave rise to all those goods and services.
From this perspective, those IOUs represent value that has yet to be acknowledged or reconciled.
I have done my best in this short video presentation to outline this perspective in practical terms.
You feedback is most welcome.
Regards
Richard
