RE: [OPE] David Harvey on stimulus failure

From: Paul Cockshott <>
Date: Wed Feb 11 2009 - 16:53:06 EST

A general cancellation of debts is of course a revolutionary measure.
The debts cancelled include debts of banks to depositors. It thus wipes out money capital.
One would have to include a provision to the effect that deposits up to say a month or twos wages
were guaranteed.
Consider the position of the banks after this.
They have all assets other than cash in hand and perhaps equities wiped out.
But they also loose most of their liabilities. The reset has made them far more liquid and
far more able to extend credit.
One would probably have to nationalise them anyway since the prospect of such a
debt amnesty would instantly make all banks fail because of a massive run on them.
Paul Cockshott
=Dept of Computing Science
University of Glasgow
+44 141 330 1629


From: on behalf of Jurriaan Bendien
Sent: Wed 2/11/2009 9:28 PM
To: Outline on Political Economy mailing list
Subject: Re: [OPE] David Harvey on stimulus failure

Suppose, Paul, that you lent me money, and for some reason I cannot pay it back. Yes, you can of course kindly cancel the debt and thereby annul any possibility of reclaiming the money at any future point in time or from a third party. But in that case, why would anybody lend money to me again? I imagine that I might start again, but not get anywhere anymore.
Seems to me few people pay attention to the social consequences of the crisis, which accelerates all the tendencies already present in the situation - it must become impossible to sustain effective equality of civil rights; a substantial fraction of the population is simply no longer creditworthy, and has nil possibility of upward mobility; the wealthy are walled off more from the poor even more; social solidarity is reduced further etc.
In a prescient 1844 comment, Marx says:
Credit is the economic judgment on the morality of a man. In credit, the man himself, instead of metal or paper, has become the mediator of exchange, not however as a man, but as the mode of existence of capital and interest. The medium of exchange, therefore, has certainly returned out of its material form and been put back in man, but only because the man himself has been put outside himself and has himself assumed a material form. Within the credit relationship, it is not the case that money is transcended in man, but that man himself is turned into money, or money is incorporated in him. Human individuality, human morality itself, has become both an object of commerce and the material in which money exists. Instead of money, or paper, it is my own personal existence, my flesh and blood, my social virtue and importance, which constitutes the material, corporeal form of the spirit of money. Credit no longer resolves the value of money into money but into human flesh and the human heart. Such is the extent to which all progress and all inconsistencies within a false system are extreme retrogression and the extreme consequence of vileness. <>

Perhaps this is what David Graeber should be looking at

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Received on Wed Feb 11 17:09:16 2009

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