Publius
nospam.comcast.net> wrote:> "Sean"
now.com.au> wrote:>>> In other words, original capital came from the same place it comes
>>> from today --- everyone who deposits money unneeded for current
>>> expenses in a savings account, mutual fund, money market fund,
>>> venture capital fund, etc., is a capitalist; he is financing the
>>> expansion of the economy.
>>
>> BULLSHIT .... Loaned $ is created out of thin air when a pen is placed
>> on paper.
>
> Really? Perhaps you can explain exactly how that is done. I'd love to
> create some money out of thin air.
I produce a "note" that I say is worth some unit of labor and get you to
promise the pay back that labor (and then some) with *actual work.* As
long as you and the community you work in accepts the value of my note,
I have "created money out of thin air."
This is exactly what banks do on a regular basis.
> Tell you what --- you explain how to do that, and I'll create a billion and
> loan it to you at half the going rate.
Fine, all you have to do is convince the community I work in that your
billion is really worth that much. It wouldn't be an easy feat for you
to do that, because those I work with know that it isn't likely that you
will be able to ever make good on that note.
However, the owner(s) of the car dealership believes that the owner(s)
of the bank can make good on a note worth $10,000, so I can get a note
from the bank and trade it for a car at the dealership. Then I have to
labor to give the bank the value of the note (and then some) despite the
fact that they never had that value in the first place... It's all
predicated on faith in the bank.
All this works fine, as long as everyone has faith that the banks can
produce the value on demand, and never actually require the bank to do
it. Occasionally, there is a bank run though and they are required to
produce the value they have been creating out of thin air. Since they
can't do that, in comes the community at large (government) to bail out
the bank... literally *giving* the bank our labor.
So, the owners of the bank profit by loaning out capital that was not
produced through labor and demanding labor in return for that capital.
In one sub-thread I asked you what the "primordial source of capital"
was, here we see the truth, the primordial source of capital is not
labor, but trust.
