Socialism and Anarcho-Capitalism IntersectSubmitted by Tman2000 on Fri, 01/04/2013 - 01:26
They intersect, that is, when one abolishes fractional reserve banking.
I have been thinking about finance and the economy for a long time and have figured it out.
There is NO MULTIPLIER!!! Banks can only put as much 'money' into the economy as they first get. Fractional reserves only means that they can lie to the savers about demand deposit availability. Fractional reserve banking is BY DEFINITION the use of the inflation tax to defraud savers.
Without FR savers would have to set aside savings into CDs or explicit investment funds in order to receive returns. If they had to do this THEY WOULD DEMAND A HIGH RETURN. Thus, banks would receive fewer profits and savers - even small savers - would receive a greater portion of common economic growth.
Without the ability to alchemically 'summon' money into the world (defrauding savers through inflation and FR), bankers might not have the funds to persuade workers to save rather than consume.
Assuming basic needs are met, workers can elect to live under varying conditions of austerity.
Under FR banking, Dave can spend his deposited savings on Christmas goodies while simultaneously the bank supports the wage of worker Dan.
Theoretically, worker Dan's desire to 'put in' extra man hours is independent of 'money supply' which is arbitrary. Rather, Dan's private microeconomic conditions determine how much he will 'put in' although money can influence his behavior.
Without FR, however, if Dave seeks to spend his money rather than save it, the bank has NO funds to support Dan's desire to expend excess labor. Dan might just sit on his hands and chill for the Holidays.
Under this circumstance, the bank would issue debt to Dan. The bank would owe DAN money, with interest!!!!
Because labor - man hours - is the heart of the real economy, not 'money', socialists have sort of correctly pointed out the problems with finance capitalism.
Under a non-FR banking system, there would still be rich or poor, rich capitalists would control technology and infrastructure as property that gave them an inherent wealth advantage.
However, any labor or savings would have immense and inherent value, which would lead to a much more even distribution of wealth.
History has conclusively proven that FR banking is insolvent without a central bank backed by a government that enforces legal tender exclusivity and taxes to coercively grant value to said fraudulent money.
In other words, eliminate FR banking, via abolishing the role of the state in finance and economic planning, and you should have those labor-favorable conditions that liberal socialists have been talking about.