Friday, November 27, 2015

The Dying Americans

I've often used the term "the final solution for the working class," in reference to the current American policy towards its vast intercoastal peasantry who, for reasons of circumstance or inclination, do not subject themselves to the decade or so of wildly expensive education that qualifies them for the remaining jobs on offer. It may be a reflection of my readership that I haven't received any pushback. As someone who is in that same working class, I can clearly see what is happening around me, and I'm not alone. David J. Blacker, in his book, The Falling Rate of Learning and the Neoliberal Endgame, also broached the subject of eliminationism, going so far as to study the German holocaust literature of the 1930's which calmly and rationally discussed how to deal with the problem of getting rid of the millions of excess people whom the elites determined were "undesirable" in the brave new world they were creating.

After last week, it's hard to argue that this is hyperbole. The news that America's white working class between the ages of 45-65 has dramatically falling life expectancy, alone against nearly the entire world, received a surprising (to me) bit of coverage. When I first read it, I assumed it would be just another footnote story that I would write about here, but would be ignored everywhere else. But it received a surprising amount of coverage: even Paul Krugman wrote about it. I suspect a large part of that was due to the fact that it was research by the most recent economics "Nobel" laureate Angus Deaton and his wife, so it was harder to ignore than if it had been from some unknown researcher.

Often times you hear about a "dieoff" due to our situation. I think this study confirms beyond a doubt that the dieoff is already happening. Yet, consider that, before this study became popularized, you would have never heard about it in the mainstream press. Still doubt the collapse is real?

It's not people dying in the streets, though, unlike some of the more feverish TEOTWAKI peak oil predictions. From the research, elevated levels of suicide and drug abuse are the prime culprits. It's the million little deaths that go unnoticed in the obituary columns of decaying communities all across this formerly prosperous nation. Someone overdosed in a back alley. Or a meth lab exploded. Or maybe they were killed in a car accident, or decapitated while driving their motorcycle too fast. Or they were shot by police. Or they are dying of liver failure by age 40. Or, increasingly, they are ground down slowly by the many chronic diseases such as diabetes that are symptomatic of the chronic stress and horrid (yet highly profitable) junk food diet of most Americans. It's a dieoff all right, but it's never framed as such. You can see it all around you: the overcrowded jails filled with unemployed people, the overcrowded hospitals filled with sick, obese people, the folks standing on the medians and freeway offramps with cardboard signs and living their cars, all while the media just goes on reporting about spectator sports and celebrity gossip as though nothing bad is happening. Ignorance really is bliss.

The obvious analogy here is Russia after the fall of the Soviet Union, as many people writing about the study have pointed out: The Dying Russians (New York Review of Books). But there was no "collapse" of the United States. Or was there? Instead, we're told by the media and politicians that everything in every way is getting better and better for everyone. Just look at the latest iPhone! Television screens are huge! Even the very poor have indoor plumbing! And you can Google anything you like, so what are you complaining about, loser?

Everything is famed as personal failure, thus the dieoff is just a million stories of individual failure with no overall pattern. Nothing to see here, more along. Study and "work hard" (whatever that means), and you'll be okay. Certainly that fear is behind the epidemic of overwork, presenteeism and grinding hours of unpaid overtime Americans are putting in at work in the hope of not being next. It's like being the model prisoner in a concentration camp, though. Ask the turkeys this month if being a good turkey had any effect on their ultimate fate. The Parable of the Happy Turkey (Global Guerrillas)

Up until now, Americans have been happy turkeys. Thus, they cannot comprehend what is happening to them. In America it is taken for granted that the ultimate locus of control is on the individual, and that there is no such thing as society. That belief has been heavily promoted over the past thirty years, along with the "create your own reality" and other assorted positive thinking nonsense (thanks Oprah!), and I think we can see why.

And since we see this always as personal failure and are not allowed to see it as systemic failure, the poor and formerly middle classes take it out on themselves instead of the system. After all, America is the land of opportunity; if you don't "make it' (whatever that means), you have no one to blame but yourself! Of course it is not true; the musical chairs job market and winner-take-all economy means that only a tiny number of people even have a shot at the middle class anymore, and a lot of that is due to geography, pre-existing social connections and luck.

They don't have to kill you if they can get you to kill yourself.

And although framed as a tragedy, I wonder if to some extent this behavior on the part of working class males is a logical response to living in the kind of society that the United States has become. In a society that has no use for them anymore and where they have no sense of purpose and no hope for the future, it seems like suicide is a rational response. After a certain age, you realize that you have been sorted to the "losers" pile. If you live in the vast suburban flatland of Middle America, you likely live in a decrepit house somewhere in the anonymous miasma of strip-mall suburbia, buy disposable plastic crap made in China from baleful fluorescent-lit Dollar Stores, drive an older model pickup truck or SUV with a bad muffler and bad brakes over potholed streets and under rusty bridges, while all the jobs around you aside from the hospital and the university (which are mainly female-staffed) are minimum wage, dead-end jobs where you have to smile and wear a uniform. You realize you're never going to meet the girl of your dreams since hypergamy is still baked into female mating choice, despite what some feminists claim. You realize you will never get that that great job that will allow you to be upwardly mobile and live in relative ease and comfort, and life is a bitter, hard struggle relieved only by the occasional joint and video games. Or you're divorced and paying child support to your former wife who's managed to keep herself presentable enough to hook up with one of the few remaining alpha-males, and half your income goes to support the kids you never see. Or your deadbeat loser children have been working multiple McJobs and living in the basement for years with no hope of even affording a one-bedroom apartment, and between them and the wife you never speak to anymore, you can't even get into your own damn bathroom. You realize that, like most Americans, you will never afford to retire and will have to work your boring, dead-end job under your asshole supervisor until you literally drop dead. So why wait?

I mean, who wouldn't kill themselves or anesthetize themselves with drugs and booze in an environment like this?

I once read an online commenter say that the rich are the beta testers for the lifestyles we will all be living in the future (and thus no restraints must be put on their wealth accumulation if we are to experience that future). But that commenter had it wrong. Rather, it is the poor--those living on less than a few dollars a day; those who live in ghettos marred by gangs and drug abuse; those with their heat, water, and streetlights turned off, who are the beta testers for the lifestyles that most of us will be "enjoying" in the near future. As William Gibson said, the future is already here, just not evenly distributed.

Given the above, I can't help but think of the "Rat Park" experiment. Rats in a cage, when given  a choice between water and drugs, would overdose themselves to death on the drugs, neglecting even basic self-maintenance. But a cage is a boring, repetitive, stressful environment for a rat, so you might expect the animals to anesthetize themselves with whatever was on offer. But rats living in an environment specifically designed to be pleasant and give the rats what they needed to thrive did not overdose themselves to death; they preferred healthier behaviors instead. It's worth noting that most of the drugs we use today have been known for hundreds or even thousands of years, but were not abused by the native peoples who discovered them. That is reserved for modern, "advanced" societies. The Rat Park experiment (io9)

I once wrote that if you wanted to intentionally design a social environment to drive a primate insane, you would develop something pretty much identical to modern-day America (advertising, chronic stress, inequality, separation from nature and each other, boring, repetitive work, constant surveillance, and on and on...). It's pretty obvious how Rat Park parallels life in twenty-first century America with its ubiquitous television, concentration-camp schools complete with metal detectors, freeways and cul-de-sacs and landscapes of Applebees™ and Walmarts; along with a steady diet of Pizza Hut and Taco Bell. It's hardly an environment designed for human flourishing, is it? Rather, it is designed to maximize "economic growth" at all costs. The results of that experiment are as plain to see as they are predictable.

Most people who are still relatively comfortable are content to write off the people who are living in deprived circumstances among them right now, especially in the United States where so many of those poor are African-American. But more and more, whites are experiencing what they had previously dismissed as "black problems" due to their racist attitudes: the hopelessness and despair, the unemployment, the sociological pathologies; the drug abuse, divorces, domestic violence, youth gangs and so on. It's not race, it's environment, as Rat Park showed. Given a certain environment, an animal--any animal--will behave a certain way. Its totally predictable. We know this, but why do we pretend it is not true? Instead we reliably chalk it all up to "the Cult of Personal Failure."

But this leads to an even larger question, one that gets to the heart of our modern predicament. We have to ask ourselves, what kind of society are we creating where so many people see death as preferable to living in such a society? In what kind of a society do people see life as so miserable that they prefer to kill themsleves, either slowly or immediately?  That is, why is this the end result of hundreds of years of supposed "progress?"

Fundamentally, how do you feel about this society? Do you feel good about this society? Do you feel good about the school-to-prison pipeline? Do you feel good that there are more prisoners than small yeoman farmers? Do you feel good that it is a felony to show us how our food is produced? Do you feel good about students mortgaging their future for jobs that won't exist by the time the bill comes due? Do you feel good about hospitals treating chronic diseases taking the place of farming and making things as basis of the America's rural economies? Do you feel good about police armed with body armor and and tear gas? Do you feel good about wall-to-wall advertising preying on our weakness and insecurities? Do you feel good about the atmosphere of incessant adversarial competition against everyone else for the shrinking pool of jobs on offer which pay enough to afford rent?

If so, why?

This puts a crimp on the Panglossian "everything in every way is getting better for everyone," rhetoric that you hear so often in the media. What I find amusing is that this rhetoric used to come from the Left--that the welfare state would eliminate poverty, racism, that everything was under control and circles of cooperation would get larger and larger, and so on. But now, I mostly hear the Panglossian rhetoric coming primarily from the Right, whose preferred God is the unregulated "free" market. It's in the Right-wing propaganda now that I constantly hear how wonderful everything is, and that those who are complaining are either delusional misfits or just jealous. Here is a prime example from the Right-wing National Review:
Good news abroad, and good news at home: In 1990, there were 2,245 murders in New York City. That number has fallen by 85 percent. Murders are down, often dramatically, in cities across the country. The overall rate of violent crime has fallen by about half in recent decades. U.S. manufacturing output per worker trebled from 1975 to 2005, and our total manufacturing output continues to climb. Despite the no-knowthings [sic] who go around complaining that “we don’t make things here anymore,” the United States continues to make the very best of almost everything and, thanks to our relatively free-trading ways, to consume the best of everything, too. General-price inflation, the bane of the U.S. economy for some decades, is hardly to be seen. Flexible and effective institutions helped ensure that we weathered one of the worst financial crises of modern times with surprisingly little disruption in the wider economy. Despite politicians who would usurp our rights, our courts keep reliably saying that the First Amendment and the Second Amendment pretty much mean what they say. I just filled up my car for $1.78 a gallon. 
 The world isn’t ending.  
The world is healthier, wealthier, and less hungry mainly because of the efforts of millions of unknown investors, entrepreneurs, farmers, workers, bankers, etc., all working without any central coordinating authority....There is much left to do: We have unsustainable fiscal situations in the Western welfare states, irreconcilable Islamist fanatics originating in points east but spread around the world, environmental challenges, and that tenth of the human race that still needs lifting out of hardcore poverty. But we have achieved a remarkable thing in that unless we mess things up really badly, in 50 years we’ll be having to explain to our grandchildren what a famine was, how it came to be that millions of people died every year for want of clean water — and they will look at us incredulously, wondering what it must have been like to live in the caveman times of the early 21st century.
Liberal Democracy and Free Markets, Take a Bow (National Review) Or better yet, strap on flight suit and hang up a "Mission Accomplished" banner.

Yes, for the folks on the Right, it truly is a Golden Age. There are a few flaws in the ointment like those pesky welfare states and all that but, hey, gas is cheap! Can't you just feel the bright, shiny future ahead? Here's a another sampling from The Wall Street Journal:
The trajectory of the world doesn’t justify this pessimism. People are living longer on every continent. They’re doing less arduous, backbreaking work. Natural disasters are killing fewer people. Fewer crops are failing. Some 100,000 people are being lifted out of poverty every day, according to World Bank data. 
Life is also getting better in the U.S., on multiple measures, but the survey found that 55% of Americans think the “rich get richer” and the “poor get poorer” under capitalism. Sixty-five percent agree that most big businesses have “dodged taxes, damaged the environment or bought special favors from politicians,” and 58% want restrictions on the import of manufactured goods.
Has the World Lost Faith in Capitalism? (WSJ) Silly people, how dare they "lose faith!" Once we stamp out every last vestige of "socialism" we can restore that faith.

So what's going on here? Listening to the Right, one gets the appearance that things have never been better, and that people are just totally irrational and determined to complain no matter how good they have it, despite voluminous scientific literature portraying optimism bias as the default cognitive condition for most people.

I think it stems from two areas - the Neoliberal experiment has clearly been an unmitigated disaster, so the literature constantly has to portray a rosy picture for those still living in the elite ideological bubble by cherry-picking data: Cheer - Inequality is Falling Globally!! (and similar nonsense) (Pieria). It's much like the "happy peasant" literature that prevailed on the eve of the French Revolution and during early Industrialism to convince upper-class readers that their efforts were actually for the good of all, not just themselves; it's just that the feckless peasants were too short-sighted to realize it. The elites, for some reason, have a need to believe, despite all the evidence to the contrary, that the free-market fundamentalism they subscribe to is making everyone--not just them--better off. Perhaps it is a remedy for cognitive dissonance and a guilty conscience.

The second agenda might be to cover up the agenda of eliminationism referred to above.
Going back to the original topic, it's fairly clear that getting rid of the lower classes is, as The Joker put it in The Dark Knight, "all part of the plan."

Now that might seem a bit paranoid, but consider this - the governors of many states are withdrawing basic social protections for their poorest citizens, and actually paying for the priviliege! Here' Kevin Drum:
...the states that refuse to expand Medicaid are denying health care to the needy and paying about $2 billion for the privilege. Try to comprehend the kind of people who do this. 
The residents of every state pay taxes to fund Obamacare, whether they like it or not. Residents of the states that refuse to expand Medicaid are paying about $50 billion in Obamacare taxes each year, and about $20 billion of that is for Medicaid expansion. Instead of flowing back into their states, this money is going straight to Washington DC, never to be seen again. So they're willing to let $20 billion go down a black hole and pay $2 billion extra in order to prevent Obamacare from helping the needy. It's hard to fathom, isn't it?
Red States Spent $2 Billion in 2015 to Screw the Poor (Mother Jones)
Last week, McClatchy documented the unnecessary pain being inflicted on red state residents by their elected Republican representatives...Roughly 260 million Americans (roughly 85 percent) already have health insurance provided by their employers, the government or through individual policies they purchased. In places like Oregon, Colorado, New York, California and other, mostly Democratic states, governors and state legislators accepted the expansion of Medicaid to provide free health insurance for those earning up to 138 percent of the federal poverty (FPL). For those earning between 138 and 400 percent of the FPL, the Affordable Care Act's subsidies will help them purchase insurance in the private market. But in the states where Republicans said "no" to the expansion of Medicaid, the picture is much different. As the AP explained the coverage gap:

    Nearly 2 in 3 uninsured people who would qualify for health coverage under an expansion of Medicaid live in states which won't broaden the program or have not yet decided on expansion.

The resulting Republican body count is staggering. Thanks to the GOP's rejection of Medicaid expansion, 1.3 million people in Texas, 1 million in Florida, 534,000 in Georgia and 267,000 in Missouri will be ensnared in the coverage gap.
Health Insurance "Coverage Gap" Coming To A Red State Near You (Crooks and Liars)

That's right, Republican governors are blowing a hole in their budget just to remove social protections for the poor. Often times, "unaffordability" is cited as a justification, but clearly this is not at work here. It's pure ideology. But what is that ideology? Here's more detail:
American conservatives for the past several decades have shown a remarkable hostility to poor people in our country. The recent effort to slash the SNAP food stamp program in the House; the astounding refusal of 26 Republican governors to expand Medicaid coverage in their states -- depriving millions of poor people from access to Medicaid health coverage; and the general legislative indifference to a rising poverty rate in the United States -- all this suggests something beyond ideology or neglect.
The indifference to low-income and uninsured people in their states of conservative governors and legislators in Texas, Florida, and other states is almost incomprehensible. Here is a piece in Bustle that reviews some of the facts about expanding Medicaid coverage:
In total, 26 states have rejected the expansion, including the state of Mississippi, which has the highest rate of uninsured poor people in the country. Sixty-eight percent of uninsured single mothers live in the states that rejected the expansion, as do 60 percent of the nation’s uninsured working poor.
These attitudes and legislative efforts didn't begin yesterday. They extend back at least to the Reagan administration in the early 1980s...

Most shameful, many would feel, is the attempt to reduce food assistance in a time of rising poverty and deprivation. It's hard to see how a government or party could justify taking food assistance away from hungry adults and children, especially in a time of rising poverty. And yet this is precisely the effort we have witnessed in the past several months in revisions to the farm bill in the House of Representatives. In a recent post Dave Johnson debunks the myths and falsehoods underlying conservative attacks on the food stamp program in the House revision of the farm bill.
This tenor of our politics indicates an overt hostility and animus towards poor people. How is it possible to explain this part of contemporary politics on the right? What can account for this persistent and unblinking hostility towards poor people?
Why a war on poor people? (Understanding Society)

Let's restate this to be clear to make sure the point is not lost: these states are willing to lose money in order to make sure their poor die quicker. Clear enough? And we're not even talking about things like the outright cold-blooded murder of the homeless by police, the breaking up of homeless encampments, the mass incarceration, and return of debtors' prisons, and so on. It's expensive to be poor in  America. We do everything by the Matthew Effect from jobs to education, and wonder why class mobility is nonexistent. Yet we're still told that everyone wants to be an American, that it's the land of opportunity, and that things have literally never been better.

Thrown in jail for being poor: the booming for-profit probation industry (Guardian)

Much of the well-funded efforts of plutocrats and their allies has been to repeal the Affordable Care Act (which was designed by Right-wing think tanks), not to reform it or replace it with something more effective, but to return to the predatory status quo ante. Now, businessmen may be greedy, short-sighted and sociopathic, but they are not stupid. They surely know that the American System is wildly more expensive than any other place on earth, but they are willing to lose billions of dollars in profit just to make sure people don't get health care! Think about that. A European friend said to me once that he didn't understand why American businesses seemed to want sick, insecure employees who either don't have access to health care, or are worried about going broke trying to pay for it. It seemed totally irrational to him. But it's only irrational if you don't understand the underlying ideology of eliminationism. Some societies actually want to kill off their own people, as Nazi Germany and other tragic examples have shown.

And it's of a piece with the withdrawal of mass education that Blacker documents in his book. The elites are disinvesting from society in every way because they just don't need us anymore. And their propaganda mills are dedicated to making sure the blame is squarely placed on individuals so that we will internalize learned helplessness which has prevented any effective resistance. Or their mills are insisting that it's just not happening, and everybody is really better off, as we saw above, except for a few churlish losers who have no one to blame but themselves (and are probably looking for a handout).

Who turned my blue state red? (NYT). A great explanation of America's crab mentality.

I've featured the analogy of horses that some economists use before. Human beings may have found other jobs (which is debatable), but the population of horses just went down in line with the work that was available for them to do. I think it's obvious that this is a good analogy for what's happening.
...Similarly, one could just as easily have said, a century ago, that: "Fundamental economic principles will continue to operate. Scarcities will still be with us.... Most horses will still have useful tasks to perform, even in an economy where the capacities of power sources and automation have increased considerably..." 
Yet demand for the labor of horses today is vastly less than it was a century ago, even though horses are extremely strong, fast, capable and intelligent animals. "Peak horse" in the U.S. came in the 1910s, I believe. After that there was no economic incentive to keep the horse population of America from declining sharply, as at the margin the horse was not worth its feed and care. And in a marginal-cost pricing world, in which humans are no longer the only plausible source of Turing-level cybernetic control mechanisms, what will happen to those who do not own property should the same come to be true, at the margin, of the human? What would "peak human" look like? Or--a related but somewhat different possibility--even "peak male"?
Technological Progress Anxiety: Thinking About "Peak Horse" and the Possibility of "Peak Human" (Brad DeLong)

Off to the glue factory with the middle class, then. As long as it's kept diffuse enough, it will never be picked up on; "Work Makes You Free" hangs in the air over our heads instead of over the entry gates. Perhaps we should just inscribe it on the Gateway Arch.

So, all told, the self-destructive habits of the middle-aged white poor are hardly irrational. Rather, it seems to be to be the most rational response to the type of world we've created. The only question is, why do so many of us apparently want to stay on this path?

Thursday, November 26, 2015

Thanksgiving Follow-ups

A few million years ago dinosaurs dominated the earth, now they're a food source for mammals. So it goes with evolution. It's sad that Thanksgiving, a regional harvest festival, has turned into a celebration of monocrops (turkeys, potatoes, pumpkin, etc.). Apparently the decline of megafauna is related to the domestication of squash:
Without elephant-sized animals to distribute seeds, wild plants will grow only where the fruit drops -- as far as the pumpkin rolls. At the same time, the disappearance  of megafauna altered the landscape from one of a patchwork of environments to something more uniform. Cucurbita are weedy plants that liked the disturbed landscape created by the megafauna, but fared less well in the new landscape of the Holocene...
"It's been suggested before and I think it's a very reasonable hypothesis, that wild species of pumpkin and squash weren't used for food early in the domestication process," ...Rather, they might have been useful for a variety of other purposes like the bottle gourd, as containers, tools, fishnet floats, etc. At some point, as a symbiotic relationship developed, palatability evolved, but the details of that process aren't known at the present."...If humans initially used cucurbita for nonfood applications, they somehow eventually managed to find those plants that mutated and lost their toxicity...cucurbita may have been domesticated at least six different times in six different places. "There is a huge amount of diversity in some of the domestic species and between them as well..."
Loss of mastodons aided domestication of pumpkins, squash (Penn State)

Native American boatbuilding was fairly advanced. Polynesians crossed the Pacific Ocean in boats like these:
Using their ancestors’ traditional burn-and-scrape methods, [boatbuilders from the Mashpee Wampanoag nation] have built a small fleet, known as mishoon, hosted mostly at the Plymouth Plantation museum in Massachusetts...In the 17th century, when these shores were thick with towering old-growth trees, Natives made even larger mishoon, which the colonist Roger Williams reported easily held “twenty, thirty, forty men.” Another newcomer claimed he witnessed a sea canoe with 80 people aboard plowing through the waters of Long Island Sound. Indians also built light bark canoes for protected passages, but most coastal Algonquians preferred dugouts when heading into offshore waters...Though Native vessels were simple when compared to European ones, that fact only made foreigners all the more impressed with Algonquians’ nautical prowess. ..When colonists looked for “skilful hands to guide them in rough weather, none but the Indians scarce dare to undertake it.”

Native-style craft were so obviously useful that colonists eventually started building their own dugouts of identical size and form as Indian ones. Indian boatbuilding practices were cheaper and easier to master than European methods—and the shortage of qualified shipwrights in the region meant that plank-built vessels were pricier than most houses. Colonists therefore relied on simpler canoes for transporting goods, people, and livestock. The Dutch even boasted that they possessed a massive “wooden canoe obtained from the Indians, which will easily carry two hundred schepels of wheat”—a capacity of 9,000 pounds.
Masters of the Atlantic (Slate)

And ancient farming systems: Aztec Urban Agriculture (Wide Urban World). This produced a very nutritious diet.

And a perennial chestnut from Slate: Why don't we eat turkey eggs? Short answer: monoculture enforced by economics.

Another sunken city: 3,500-Year-Old Sunken Town Discovered In Croatia (Tech Times)

Related to that, here's a good Reddit disuccion on that topic:

Are new megalithic sites such as Göbekli Tepe and Gunung Padang changing mainstream Archeologist and Anthropologist views on the timelines of human beings?

We mostly know about civilizations that built in stone - i.e. nonperishable materials. That gives us a skewed view - societies that built monumental works with stone were probably more unequal nad top-down than societies which relied on wood, skins, wattle-and-daub, and earth. If you used gourds for containers, for example, like the article above describes, the record would be different than cultures that used fired clay pottery, which lasts practically forever. The evidence to some extent dicates the story.

Also, hurt feelings may have encouraged the human diaspora (University of York). Why fight when you can move away? Eventually, there was nowhere left to move, and too many investments in your local community after generations of sedentism to want to move (circumscription). The first progress trap?

Cities from even the earliest times were places where humans mixed genetically. Paging Jane Jacobs: DNA study finds London was ethnically diverse from start (BBC)
"The thing to remember with the original Londoners is that they were not born here. Every first-generation Londoner was from somewhere else - whether it was somewhere else in Britain, somewhere else on the continent, somewhere else in the Mediterranean, somewhere else from Africa," she said.
Compare also to London and Paris today.

And a couple brief follow-ups on monetary history: This post seems to convey the idea that lending was mostly peer-to-peer in the North Atlantic area in the Early Modern peiod. Somehow (the author doesn't know how), lending became controlled by the banks instead of peer-to-peer. So a lot of the Internet direct-lending schemes are once again a "back to the future" type scenario:
Since at least 1400 rural lending and borrowing was at least in some regions common and tied to the life cycle of households and families, which needed to borrow considerable amounts of money during some phases of their life cycle and lent money during other phases...After 1500 at the latest such credit markets can be found all over Europe: around Zürich, in the Black Forest, in the Vosges, in Flanders, Westphalia, the East of the Netherlands and many parts of England and France...we discover extensive and lively credit markets everywhere. Most lending and borrowing was local. Some of it (especially when people borrowed from family?) was however supra-local (i.e. lender and borrower lived further away from each other than can be travelled in one day)...A lot of lending and borrowing was based in the countryside. Towns sometimes played a decisive role but this was often the case when circumstances were special, i.e. in the case of new polders in the Netherlands (for instance around 1600) or the abolishment of seigniorial dues in Germany (first half of the nineteenth century)...Banks were next to non existent in these areas, at least until the beginnnig of the nineteenth century. But there often were middlemen, often quite literate officials. Using the information available to them often made this position quite profitable...Which, in a long run perspective, of course leaves us with the question why people stopped lending to each other and started to leave lending to the banks.
And the real first widespread implementation of paper money seems to have been under the Mongols: Amazing History of Paper Money, the Gengis (sic) Khan Epoch (Let's Talk Payments)

To get your ancient Near Eastern history fix on, check out the latest Dan Carlin episode.

Saturday, November 21, 2015

Did Floods Drive Civilization?

Early human migration tended to follow the coastline. Around the world, we see coastal settlements before we see inland settlements. In the Americas, South American coastal settlements predate those farther inland in North America by thousands of years, suggesting the first humans sailed down the coasts before moving into the interior of the continent. Similarly, older human remains are found in places like Indonesia than are found in the interior of places where humans first settled outside of Africa like the Near East. Most likely, when conditions got too crowded, early humans hopped into a coracle-type boat made from reeds, or skins, or hollowed-out trees, to go find another beach somewhere to live. Coastal living is ideal - usually the climate is fairly benign, and the ocean supplies a virtually limitless supply of food for Homo sapiens. Even today, living on a beach is considered to be paradise by a lot of people, and oceanfront property is typically the most valuable.

According to one theory, it was a rise in sea levels that drove people into the first cities. To my mind, this makes sense. It would take a considerable shock to make a change to people's lifestyles as radical as urban life with its crowded conditions, interpersonal conflicts and outbreaks of disease. But as former foraging lands went under the waves, humans may have had no choice. It ties in with Carneiro's ideas of circumscription - only when escape routes were cut off could sociopathic elites seize control of the means of production. Could that circumscription in some areas have come in the form of rising seas?
Six thousand years ago, people across the Middle East grew crops and kept animals, but they hadn’t yet invented urban life. Sea levels were on the rise, and the Persian Gulf rapidly encroached on Mesopotamia. This is one of the world’s flattest places. Like a broad beach in an oncoming tide, the land was quickly swallowed up by water. Those living in the marshes and low-lying hamlets sought refuge on a few narrow ridges just high enough to protect them from inundation. Suddenly, people had to find a way to cooperate on these small but thickly populated islands of dry earth. They adapted by reorganizing their society.

They experimented with innovative ways to store food. They crowned kings, invented a priestly class to mediate between humans and the gods, and divided up tasks like making pottery, keeping financial accounts, and soldiering. They built temples and public buildings on a scale never seen before. By 3200 B.C., scribes made the first written records. Almost everything else in all of human civilization is a variation on a theme first played in Mesopotamia.

“There is this idea that cities happen because somebody invented irrigation,” says [archaeologist Jennifer] Pournelle. “My argument is that irrigation happened because you had cities.” Only later, when the water began to recede, around 3000 B.C., did the new society began to construct large-scale water works designed to grow crops on an industrial scale to feed the burgeoning masses. The ideas of cities, writing, big temples and palaces, and kings and a priestly class spread quickly across Asia and Africa and eventually into Europe. In some cases, such as in Egypt, these traits all appear nearly simultaneously.

Something similar likely took place in the New World, where the first monumental buildings and cities sprang up along the Pacific coast of Peru 3,000 years ago, not long after the modern El Niño weather pattern began. The onset of that periodic phenomenon—the same weather pattern that is due to deliver floods and mudslides this winter from Chile to California—may have prompted ancient Peruvians to join together in a novel way to deal with the recurring destruction.

Historians and archaeologists no longer see civilization as a forced evolutionary march from farming to factory to Facebook. Instead, they see individuals and groups grasping for creative ways to overcome immediate perils. The results, as in Mesopotamia, can transform not only their society, but those around them and those that come after. Stress and strain make us stretch.

Humans, of course, don’t always triumph. Terrible droughts 4,000 years ago may have played a central role in the dramatic collapse of the first Mesopotamian cities, along with Egypt’s Old Kingdom and the Indus civilization in what is now Pakistan and India. The changes were too deep or fast or tenacious for societies to cope. Warfare, famine, and disease stalked the Near East for centuries.

If history is our guide, then, an effective response to today’s changing climate—which is shifting more rapidly than at any time since Homo sapiens evolved—requires a major retooling of our economy, institutions, infrastructure, and even our beliefs.
Floods Led to Civilization (Slate)

The article goes on to make an analogy to the flooding that will be unleashed by global warming. It argues that we, too, will need to come up with new forms of social order, just as they did back then. Most likely what will happen is tectonic shocks to an already fragile and hyper-complex system leading to disruption and dislocation. From that, I do see a different social system emerging. Clearly the path we're on is not sustainable.

In this view, rising seas drove people into close proximity and began the first societies in the Near East, at least in Mesopotamia and Peru. In places such as Egypt, it was most likely advancing desertification that removed foraging lands and shrank Egypt to a thin band along the Nile. There, surrounded by deserts, people had no choice to accept the rule of the priest-king owners of the land, with one war chief eventually reigning as the Pharaoh.

The ideas above tie in with Jane Jacobs' notion of cities as primary drivers of economic development and technological change.
Jacobs argued that perhaps the first great example of the process of creating new work was the invention of agriculture and animal husbandry. ‘Cities’ developed this industry due to the need to feed people in the ‘city’. Eventually this technology was exported to other places, including the countryside.

Jacobs’ reasons for saying this was that she saw the countryside itself as a passive receiver of ideas. Lack of population pressure means that new industries don’t need to be developed in the countryside. Therefore the countryside gets its technology and industry, and much of its work, from cities. As a result of this, Jacobs argued that when local cities disappear the technology of the countryside, unsupported, can disappear with it.

The reason why people are reluctant to consider such a radical idea, Jacobs argued, is due to the influence of the Bible on people’s thinking. So if Genesis said that farming came first and cities later then that’s how people viewed the past. She particularly singled out Adam Smith in this respect, saying that his ideas, which were influenced by the Bible, have heavily influenced people’s view of economics ever since.
Jane Jacobs, agriculture and a model for ancient civilisations (Armchair prehistory)

While Jacobs' "cities first" model has been criticized with regard to agriculture (most likely agriculture was practiced long before cities, but intensive agriculture is probably urban in origin), it does make sense that cities drove trade, specialization, political complexity, and with it, inequality.

We also have increasing evidence that early humans cooperated on much larger scales than we thought long before we lived in top-down social hierarchies. Göbekli Tepe is one prominent example, but others are emerging. Also, keep in mind the above: many of the earliest sites of human habitation are now under water, and have been for millennia.

Revelations on Shigir Idol 'change our understanding of ancient civilisations' (Siberian Times)

Mysterious Middle East 'Wheel Of Giants' Is As Old As Stonehenge (Huffington Post) Ancient rock formation is believed to be 5,000 years old -- but no one is sure what it was used for.

NASA Adds to Evidence of Mysterious Ancient Earthworks  (New York Times)

When cities rise from the depths (BBC)

These range from 5,000 to 10,000 years ago. Clearly a lot was going on before we settled down in dense urban areas, which may be why civilization developed so rapidly. Large-scale construction and long-distance trade were nothing new.

Here is an interview with Graham Hancock and Randall Carlson on JRE, where they are frequent guests. As far as I can tell, they are arguing that there was a highly advanced human civilization with extensive trade networks long before 11-12,000 BCE. They argue that many monuments, including those of ancient Egypt, date from that time period. As evidence, they cite things like signs of water erosion on the Sphinx, which would have had to have been made before the desertification of Egypt, along with numerous underwater ruins which have not been sufficiently explored.

Around 12,000 BCE, according to the theory, a comet entered the atmosphere causing major catastrophes on a scale similar to that of the dinosaur extinction or the Toba eruption. The comet caused the ice sheets to melt, inundating this ancient civilization and causing its collapse. The knowledge of the civilization was passed down through various stories and esoteric traditions including the universal flood myth and the stories of advanced civilizations lost beneath the waves: Atlantis, Lemuria, Mu, and others (the Egyptians claim their knowledge originated in Atlantis). When civilizations were eventually rebuilt, they remembered the catastrophe and built all sorts of astronomical clues warning us of the comets in their monuments, including the very geographical siting of the monuments (according to Robert Bauval, the Giza site is laid out to align with stars in the Orion constellation). This is why every ancient civilization was so obsessed with stargazing, going so far as to encode astronomical knowledge such as the procession of the equinoxes into their mythology.

An interesting theory, to be sure. I'm not going to hazard an opinion here. It seems possible, but it's too often lumped in with the idea that early humans were in contact with aliens, or that ancient civilizations has some sort of secret advanced technology, or psychic powers, and other New-Age nonsense. It would also help if Carlson (a builder with no scientific qualifications) didn't take every opportunity to assert that his catastrophe theory somehow disproves the idea that humans are the source of anthropogenic climate change. Here's a better summary from Disinfo.

One of my favorite candidates for the Garden of Eden and the Flood Myth is that one of the first permanent settlements outside of Africa was where the Persian Gulf is today, and when the sea breached the Straits of Hormuz, it inundated the area creating the Gulf and driving the survivors to higher ground where Mesopotamia is today. I first read about that here: Lost civilization under Persian Gulf? (Science Daily)

Friday, November 20, 2015

The Hipcrime Vocab on JRE

JRE #718 - Christopher Ryan from JoeRogan on Vimeo.

Okay, not really, but at 56:00 Chris Ryan mentions my Reddit post to Joe, so I figure this is probably the closest I'm going to get to be on either Tangentially Speaking or The Joe Rogan Experience. But who knows...?

The Reddit post is here: Chris Ryan, Duncan Trussell - Charting A Prehistoric Path Into The Future

Sunday, November 15, 2015

Inequality and Economics - Odds and Ends (Money as an IOU)

As usual, there were a few bits that escaped logical inclusion into the series on inequality and money. I will try and include them here.

One item that came out that I would have liked to include was this piece on the history of coinage: The first coins – no ‘means of market exchange’ but ‘means of gift exchange’? (Real World Economics Review) The Greek kingdom of Lydia in Asia Minor appears to be the epicenter of all metal coinage as we know it today, under it's fabled king Croesus who has become a byword for wealth. Apparently Lydia had large reserves of silver and gold, and stamped the coins as proof of their value. The convenience of using these stamped bits of precious metal spread far and wide, and they circulated beyond the kingdom, giving birth to the idea of coinage. From here, the idea spread to the Roman Empire, and also to the Islamic States which succeeded the Eastern Roman Empire.

What's interesting is that even these coins were used as a sort of gift exchange, sort of like wedding rings, rather than currency as we know it today. It's also interesting to see how recent it is. For most of us, coins are still "real" money unlike the "worthless bits of monopoly money" we typically use, probably because coins are made of metal. But note that one small kingdom in Greece is the source of all coinage. There was an awful lot of history before then (coins were also independently 'invented' in ancient China, along with paper money).  It's another blow to the idea that before government came in and ruined everything, people' naturally" exchanged bits of gold and silver for eggs and shoes in spontaneously occurring self-regulating "free" markets.
Somewhat to my surprise, I find myself reading numismatic articles. Money existed before coins were invented. So, where and why were coins invented? According to Reid Goldsborough, in an nuanced article, it’s not unlikely that the first Lydian coins (about 600 BC) were not used for ‘market exchange’ – at first they might well have been used for ‘gift exchange’, somewhat like we exchange wedding rings. What’s not a ‘maybe’ or a ‘likely’ in the history of this innovation is the crucial role of the state.

The Lydian Lion is the one coin I’d personally call “The Coin.” It directly preceded ancient Greek coinage, which through Rome begot all Western coinage, and which through the Seleukids, Parthians, and Sassanians begot all Islamic coinage. Indian coinage has largely been a product of Greek, Roman, and Islamic influences. Chinese coinage, though it probably developed independently, was succeeded by Western-style coinage in the late nineteenth century. Other countries in Asia, in Africa, and elsewhere have adopted the Western approach to coinage as well. It’s not chauvinistic, and it’s only mildly hyperbolic, to suggest that virtually all coinage in use today is the progeny of the Lydian Lion, that it’s the Adam of coins…

The most fundamental debate involving these coins is whether the Lydian Lion is in fact the world’s first true coin. Much here depends on what definition you use for “coin.” I’m using a commonly held numismatic definition of what a coin is, which is spelled out well in Webster, Second Edition: “A piece of metal (or, rarely, of some other material) certified by a mark or marks upon it to be of a definite exchange value and issued by governmental authority to be used as money.” Key here are “mark or marks” and “certified … by government authority.”…

There’s no reason that fully typed coins couldn’t have been the first coins. Stone and clay seals with pictorial designs predated coins, and some scholars have argued, persuasively, that the idea of stamping coins with designs developed from the use of seals to designate ownership or authority…Even though coinage doesn’t appear to have initially served commerce or trade, it’s likely that the Lydians created coins as we know them because they were the first to recognize their profit-making potential...

It used to be thought that coins came into existence to facilitate commerce, preventing merchants from having to weigh bullion with each transaction. The weight of Lydian trites, in fact, is remarkably consistent, with most hovering very close to 4.7 grams. But one of the things we now know about the function of the first coins with any degree of assurance is that they weren’t used as coins were used later on in ancient times, and as coins are used today, that is, for everyday market transactions.

It’s clear that it took some time before ancient coins were used for commerce and trade. Even the smallest-denomination electrum coins, perhaps worth about a day’s subsistence, would have been too valuable for buying a loaf of bread. Electrum coins have been conspicuously absent from archeological finds in the marketplace in Sardis, capital of Lydia. Gold and silver bullion were likely still used for commerce in western Asia Minor, including Lydia, at the time that electrum coins were minted. The first coins to be used for retailing on a large-scale basis were likely small silver fractions minted by the Ionian Greeks in the late sixth century BC.

What’s more, evidence shows that Lydian Lions weren’t used in international trade, not showing up in substantial quantity in hoards outside of western Anatolia. That role would be served later on by silver coins, whose intrinsic value could be more easily determined than electrum coins, beginning en masse with Athenian Owls and to a lesser extent with the coins of Aegina, Corinth, and the Thraco-Macedonian tribes...

Instead of commerce and trade, these earliest coins were in all likelihood used for other purposes. What follows is a suggested scenario: Bullion had long been used as money. The Lydian king, Alyattes, a crafty and powerful figure who ruled for half a century, figured out that if he controlled the bullion market, or part of it, he’d further amass his wealth. So he deemed that only bullion with his mark, the roaring lion, could be used for official purposes — the state paying state workers and mercenaries and the people paying taxes and making religious donations. Other purposes that this first coinage were soon put to likely included gifts as part of treaty ceremonies, wedding presents, and hospitality offerings. Along with typical seigniorage profits that later minting authorities would enjoy, Alyattes further enriched himself by debasing naturally occurring electrum with silver and copper. To facilitate acceptance, he carefully controlled the weight of each piece of this new type of bullion. Merchandisers and traders continued to use regular bullion until the Greeks, clever traders that they were, took what the Lydians invented and went a step further. They figured out that silver coins, being more difficult to debase, would be more accepted in more places than electrum coins for retailing and trade while still earning them profits. Coinage, invented by the Lydians, was thus spread by the Greeks...
See also: The profitability of early coinage (Vox EU):
Research traces the beginning of coinage with increasing accuracy to around 630 BC in the Greek city-states in Ionia or in Lydia, or both, in the contemporary part of West Turkey east of the Aegean Sea. The earliest coins were made of electrum, a mix of gold and silver. The common view, even among knowledgeable scholars, is that early coinage was highly profitable, at least for the Lydian kings Alyattes and Croesus. It is “usually understood [that] the electrum coins were highly overvalued”, say the archaeologists Cahill and Kroll, by which they clearly mean highly profitable. In an influential book, Le Rider estimates a profit rate of about 15 to 20%. However, I argue that this position is very dubious.

Consider first the historical context in which coinage began. The innovation occurred in societies that belonged to a vast trading network where the use of the precious metals as money went back at least over 1,000 years to the East, where the Assyrian empire stood, and at least many centuries to the South, in the Levant, where the Phoenicians had been active as international traders since Homeric times (that is, centuries before Homer). The producers of traded goods, wholesalers and traders possessed accurate scales for weighing gold and silver, were expert at detecting fineness, and could use the touchstone for help. Their benefit from coins would depend entirely on their ability to dispense with weighing and assessing and simply count, based on trust, but the associated savings could hardly make much difference in a large transaction, while the early electrum coins, consisting very roughly half and half of gold and silver, were only useful for big-ticket items. According to the estimates, one of the largest coins (a stater) might buy an ox, and the very smallest coins (tiny) would be far too valuable to serve as small change.

In accordance with this line of reasoning, coinage took off very slowly outside of Ionia and Lydia, and it is arguable that its take-off was particularly slow where monetary habits with the precious metals were most deeply engrained. It took about 80 years before a few Greek city-states on the mainland and offshore started to coin, beginning in 550 BC. They did so in silver. Coinage subsequently spread widely in the Greek city-states over the next half-century or so, but almost nowhere else. After King Croesus fell to the Persian King Cyrus in 547 BC, the Persians imitated the coinage they found in conquered Lydia and encouraged its spread. The Persian coins were also in gold and silver following Croesus’ example (the latter had introduced separate coins in the two metals shortly before, in 550 BC). But the Persian coinage had most success in the western part of their (Achaemenid) empire and made little headway in the more sophisticated east. Quite significantly too, the Phoenicians who traded far and wide started to coin only in the middle of the 5th century and their Carthaginian outposts somewhat later at the end of the 5th century. Egypt, hardly a commercial backwater, did not begin to coin until the late 4th century BC. It was clearly the conquests of Alexander the Great in the last third of the 4th century BC and the subsequent political expansion of Rome in the next four centuries that led to the wide spread of coinage in the ancient world outside of China and India (where coinage had begun independently but much later than in Ionia and Lydia). North and central Italy and most of Europe also saw coinage arrive only under Roman influence. Rome itself started to coin late, around 300 BC, and coinage really only took off there with its military advances in the third century, that is, about two and a half centuries after coinage had covered most of Greece. This early history of slow progress is difficult to reconcile with the idea that the early coins were a source of exceptional profits.
Gift exchange is interesting. We do it today. It seems like "gift cards" have taken over the Christmas holiday market. They make no sense - why not just give money? If you give a gift card for, say, Target, you can only spend it at Target, unlike cash which can be spent everywhere. It's like converting your money into a special type of currency internal to Target. If you get a gift card for Chili's, you are committed to going to Chili's (yes, I've seen this card). And you could just as easily go to Chili's or Target yourself and spend your own money (or take your friend there). Gift cards are a pure form of symbolic gift exchange. Note also that they are given without expectation (and yet we feel an obligation to repay).

Another interesting item was this post: The Standard Definition of Money is in Error (Naked Capitalism) We're told that money is three things - a medium of exchange, a unit of account, and a store of value. But the "store of value" characteristic of money is simply not true. Money doesn't store any value at all. How could it? It is entirely dependent upon what is "out there'' in the real world to buy. That fluctuates over time. The money in your bank account constantly fluctuates every single day. All that money is is a token of demand for stuff in the real world.

Consider, during the financial crisis, Alan Greenspan could guarantee that the United States would always have enough money to meet its debt obligations, but what he could not guarantee was its purchasing power. The purchasing power of money relative to things it can buy is constantly in flux, and that is what we call inflation and deflation. Inflation means money buys less and less over time, which means that future money is worth less than present money. This actually helps debtors, because they are paying back loans with increasingly worthless dollars. It hurts savers, though.

Deflation means money can purchase more over time. This means that future money is worth more than today's money. Your dollar goes further. This is great for savers and people living on fixed incomes, but not so good for those in debt, since they are paying back their debts with increasingly valuable dollars over the period of the loan.

This dual nature of winners and losers means that there is constant debate between people who support either inflation or deflation. That's something to keep in mind whenever you hear debates about inflation and deflation. But what it also means is that money has no intrinsic value, whether credit or commodity money. Money does not, in any sense, "create" wealth. It is a social relation designed to mobilize resources. It is also a symbol of power.

We're told that the value of things can be calculated in money. A diamond is more valuable than water because it costs more. A CEO is more valuable than a schoolteacher because they "earn" more money.  But money has nothing to do with value, as this article points out, it's simply a store of potential demand:
The standard definition of money is given in terms of its three functions:

    1: Money is a medium of exchange.
    2: Money is a measure of value.
    3: Money is a store of value.

In the standard definition, Number 3 cannot possibly be true. Were Number 3 true, money would have value of itself. The value of money would be independent of what ever else an economy produced. But consider, the best monies are those instruments which have no intrinsic value whatever. How can any amount of something which has no value, be a store of value? Even where commodities have been used for money, (and this may be the origin of the error,) they have tended to be those commodities, precious metals, for instance, which, because of their properties, were of only limited economic use. The reason for this is known and simple: These commodities had to be more valuable as money than they were valuable as commodities. If they were more valuable as commodities, they would be consumed, and so their use as money would disappear. But this implies that the value of these commodities, as money, over their value as a commodity, is not intrinsic, but as with plain fiat money, purely a matter of other factors. That is, the value of the commodity as money is not based on any intrinsic value of the commodity to the economy. 
In other words, what we use as money has no intrinsic value, because otherwise we would be using it for that. This is just as true for gold as it is for paper. So the reason gold and silver are used for money is precisely because they have no practical use (most practical uses for them are due to modern technology). The same goes for diamonds and other valuable gems. If they had practical uses, they would be used for that instead. This is why we don't use oil for money - it makes more sense to put it in your engine. Gold and silver items were possessed by wealthy ancients as a sign of wealth rather than practicality. Thus, Egyptian rulers has gold (rather  than bronze) weapons in their tombs, and wealthy Romans ate from silver (rather than clay or glass) plates. Jewelry, a complete frivolity, is associated with gold, silver, and gemstones. This may ultimately stem from a fascination that certain animals such as corvids, rodents, and us primates have with shiny objects.
So fiat money has no intrinsic value, and therefore cannot be a store of value. If the economy produced only money, that money would have no value. It does not have value as, say, a refrigerator full of food has value, or a tank filled with gasoline. But, what the third function of money actually is is as a store of demand. If you have $100 in the bank, or in your pocket, you have a store of demand, which you can keep as long as you want, and when you choose to, you can spend it. You can demand something which is offered for sale, to the amount of $100. Then you can take your $100 of tokens of demand and you can go to the grocery store and with it buy $100 worth of food.
So money really is a demand token. It is a promise to exchange something for it. In other words, it is an IOU, as we'll see shortly.
Money is not a store of value. Can it reliably be a measure of value? Economically worthless things may be in much demand, and therefore command a price beyond their value. Yachts, for instance. Economically valuable things may be in little demand, or supplied at prices below their value. Water, for instance. With money, you have demand for these things, at the prices they are offered. But their prices do not reflect their economic value, only the amount of demand, the amount of money, which must be exchanged for them.
Prices don't measure value. So how can the Market God of Neoliberalism, who makes decisions based upon price, be all-wise? How can price alone coordinate all the activities of society, as some economists claim?
This counters the claim that the only value a thing has is that set and measured by the market: The toys of the wealthy are much in demand, but of little value. The goods needed by the poor are to them of great value, but it may be that those poor are only able to demand a meager portion of them. Markets only measure demand. They need not measure value. This is the primary inadequacy of markets. 

By mistaking demand for value, the standard definition of money thus implicitly fails to distinguish between the value of an object, and the demand for that object. In an informal sense, this results in the failure to distinguish between the needs of an economy, and its wants.To provide another example, the economy ‘needs’ streetlights in Highland Park, Mi. It ‘wants’ yachts in Newport, RI.
...because money is demand, or more exactly a token or instrument of demand, it serves as a ‘medium’ of exchange: Because money is not demand for any particular good or service, but is demand for any offered good or service, it may be exchanged for any offered good or service...The individual who exchanges his good or service for money then himself has equal demand on others for different goods or services. Money thus flows opposite to the flow of goods and services, not to the degree of the value of these goods and services, but according to the demand for these goods and services that are offered.
In other words, those "worthless pieces of paper" are meant to be worthless. A stock share is also a worthless piece of paper, but I'm guessing Ron Paul isn't campaigning to end the Stock Market. Indeed, nothing can be a proper store of value, because the laws of thermodynamics are constantly at work, as Frederick Soddy pointed out. Money can only be a symbolic representation of real goods and services on offer. Money cannot cause resources to exist where there are none. What it can do is mobilize those resources for the social good.

So,then, what is money? It's actually a representation of debt, specifically our debts to each other, our debts to government, and the bank's debt to you. In other words, money is an IOU.
It may be wondered in what sense government money is an IOU. What, in other words, is the government’s obligation or promise when it issues the currency? Among its obligations is the promise to accept its own money (IOU) back again in payment of taxes.

By way of analogy, suppose that your neighbor mows your lawn while you are away on holiday and you pay with a personal IOU. What you are doing is agreeing to accept back, in the future, your own IOU as payment for a service you will perform for your neighbor. .... So your promise, in issuing an IOU, is to accept it back at some later date in payment for services you agree to perform.

Similarly, the government pays for various services with its money (IOU). It uses its money to pay teachers, medical practitioners, police officers and many other types of workers for their labor services. .... The government undertakes to accept its own money (IOU) back from the community as payment for the provision of these goods and services.

It is the imposition and enforcement of the tax obligation that enables government to spend its money into the economy. Some people will be willing to work for the government in the public sector to obtain the currency. Businesses will be willing to supply goods and services to the government in exchange for the currency. Others with tax obligations will be willing to transact with public servants and businesses or work in the private sector to obtain the currency.

The tax obligation is far from the only reason that we are prepared to accept the national currency. But it is the basis of our need to obtain it. Once this basic need is created, even people who pay no taxes will be willing to accept the currency, because of the established demand for it. And, for convenience, we will use the currency for much more than just paying our taxes. Once a demand for the currency is established, it is safe and convenient for buying and selling as well as for saving.
Indeed, most people throughout history had no forms of "saving." The concept was entirely foreign. For most of history, title to land and to buildings was the only form of permanent wealth. Some in ancient times were able to hoard some precious metals, which may be where the idea that there is some magic form of permanent and unchanging wealth came from. But even then you needed to exchange it for some sort of actual good like food or shelter, and if no one was willing to accept it, it has no value.

Speaking of land, here is a snippet from the Michael Hudson interview about the role that the value of land played in ancient societies:
In America down to the time of the Revolution in the 18th century, order to be a citizen and vote, you had to be a landowner. And all the way back in Rome and earlier times, Mesopotamia, Babylonia, Sumer, citizens had to have their own land. In Rome each citizen’s voting rights were defined by the land area he owned. I say “he” because only the males were citizens. It was a patriarchal society, with voting rights proportional to the size of one’s landholdings.

Much as today, debt was a major factor concentrating landholdings. Finance always has been the great lever to appropriate the land rent and interfere with widespread land ownership. If you owe money on a mortgage and you can’t pay, you can be evicted. That began to happen already around 2000 BC in Babylonia...One’s rank in the army down through Roman times was defined by how much land one had. If you had just a basic subsistence plot, you were in the infantry. If you had a lot of land, you were able to support yourself in leisure, have a horse and participate in the cavalry, practicing military training and buying your armour and weapons. You find much the same thing in Japan. All over the world, citizenship, landownership and one’s rank in the army were linked together.
Now, it is the poor who are driven via economic necessity into the army. But we may be crushing them too well: many of the poor are rejected because of ill mental and physical health. Perhaps that's behind the drive for military robots. Plus, robots don't disobey orders or turn on their masters. It's an oligarch's dream come true. The need for soldiers has driven the lot of the ordinary person throughout history - countries with citizen soldiers have typically been more equitable, as Ian Welsh points out: The Technology of Violence and its effect on prosperity and freedom (Ian

People without land were most likely laborers, slaves, merchants and vagabonds. The reason people without land weren't in the army was because they had no real incentive to. Why, if they didn't own anything? There was no real concept such as "patriotism" or "nationalism." (although there was ethnic solidarity). Who cares if the new rulers took over; you might even get a better deal. Maybe they'll forgive the debts or give people some jobs working on their victory monuments. Maybe they'll redistribute land. So it was the landholders who had to fight, because land is what they were defending after all. That's very different from the post-French Revolution national armies of today motivated by notions of nationalism and patriotism.

It's interesting to note that as wealth consolidated in the hands of a few rich and more people became rootless urban proletariat and day laborers, the Roman Empire turned to mercenaries to police itself (sound familiar?). People used to our modern notions of fighting for "the love of one's country" are often surprised at hearing how the Roman army ended up being staffed by the very same Germanic peoples it was supposedly fighting against. But in those days, if you were a warrior, you fought for pay, not some nebulous idea of patriotism. The analogy here is professional athletes. No one on the Packers is playing for their deep, abiding love for the city of Green Bay (none of them are from there anyway). They are playing, often against former teammates, for money. In the past, warriors were professionals, just like today's athletes.

Back to the main article.
Banks also create their own money. This is in the form of deposits. A deposit is a bank’s IOU to convert bank money into currency (government money) at a deposit holder’s request, either on demand or after some duration of time. Most definitions of money include checking accounts, sometimes called demand deposits. These are bank deposits that can be converted into government money whenever the account holder demands it. When we use EFTPOS to direct a bank to transfer funds from our account to the account of a business in exchange for goods and services, we are making use of deposit money.

Banks are in a special relationship with government. They are required to convert deposits to government money in the form of hard currency (notes and coins) at par. In most countries, demand deposits are guaranteed through government provision of deposit insurance. It is possible for government to provide such a guarantee because of the central bank’s unlimited capacity to act as lender of last resort. Whenever banks find themselves short of currency, they can always borrow it from the central bank on terms specified by the central bank.
So a bank converts your savings into the government's currency at the current value. If it is short, it borrows that currency from the government's central bank. The interest rate at which it can borrow from the central bank is the Federal funds interest rate that we hear so much about. By keeping the rates low, the Federal Reserve stimulates money creation (monetarism). Those low rates mean more money, meaning more inflation, which is why the chairman of the Fed, who makes those decisions, is such a polarizing figure.

Thus, we see usury drives the system.
The requirement to convert at par in combination with the protection to account holders provided by deposit insurance ensures that $1 of deposit money is in most respects equivalent to $1 of government money. Since we have a need for government money, and bank money is “as good as currency”, we will readily accept bank money as well.

There is another important aspect of the relationship between commercial banks and government. Banks are required to hold accounts with the central bank (the government’s monetary agent). These accounts hold a special kind of government money called reserves. The accounts themselves are referred to as reserve accounts. The general public (referred to as the non-bank public) has no direct access to reserves. Only banks do. Banks can only use them for transactions among themselves and with the central bank.

Reserve balances play a key role in the monetary system because they are required for final settlement of transactions, including our transactions with government. Although we usually pay taxes and buy goods and services with bank money, final settlement only occurs once the central bank has adjusted reserve accounts to eliminate claims of banks on each other. At the end of any given day, some banks will owe others as a result of transactions occurring during the day. The central bank will need to delete reserves from the accounts of some banks and mark up the reserve accounts of other banks.

Since final settlement of transactions must occur in government money (reserves), banks must have access to sufficient reserve balances on our behalf. The banks need reserves for settlement purposes and we need the banks because the government gives them access to reserves.
Money Interpreted as an IOU (heteconomist)

An IOU is a form of debt. As soon as you engage in a financial transaction, that is, as soon as any economic activity takes place whatsoever, someone is in debt to some else. That debt is represented as money, and money circulates through the economy as symbolic of all our debts. That's why, as David Graeber pointed out, we cannot have an economy free of debt, because then there would be no money, and no economic activity would take place. Furthermore, as he also pointed out, the amount of money is not limited by some arbitrary standard such as a debt ceiling, bit by the amount of people who wish to borrow.
When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing.
What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this ... So there's no question of public spending "crowding out" private investment. It's exactly the opposite.

Why did the Bank of England suddenly admit all this? Well, one reason is because it's obviously true...But politically, this is taking an enormous risk. Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it....
The truth is out: money is just an IOU, and the banks are rolling in it (Guardian)

So the "national debt" is money we owe to ourselves. The portion we owe to foreigners would never be called in because it would screw over their own economies:
The treasuries-as-financial-weapon-of-mass-destruction theory goes something like this: China currently holds more than $1 trillion worth of U.S. government bonds, equal to about 20 percent of all treasury debt owned by foreigners. If one day the Communist Party leadership felt like starting some havoc, or just simply lost confidence in Washington’s ability to or desire to repay its obligations, it could liquidate that stash, driving down treasury values and forcing the U.S. government to offer sky-high interest in order to borrow (as treasury prices go down, rates go up).
Now here's what's going on in the news: After accidentally terrifying investors this summer by slightly devaluing its currency without warning, China has been trying to prevent the yuan from collapsing even further against the dollar by, well, selling off treasuries. The way this works is simple. The country’s central bank unloads some its bond holdings for dollars, then it uses said dollars to buy yuan, thereby pushing down the value of the greenback and pushing up the redback. In August, it reportedly spent about $120 billion to $130 billion intervening this way. At first, there was some worry that all this selling might indeed end up sending U.S. interest rates higher, acting as a sort of reverse monetary stimulus. But the bond markets seem to have largely reacted with a big ¯\_(ツ)_/¯, largely because the treasury market is enormous, and with the global economy in a shaky spot, there are ample buyers out there looking to purchase American government debt as a relatively safe place to put their money.
All of this drives home a very simple point that people who worry about our debt to China tend to overlook: Buying and selling treasuries is how Beijing manages its delicate exchange rate, which is essential to keeping the country’s all-important exports flowing. And if it were to actually dump enough of its treasury holdings to cause trouble, the likely end result would be a less valuable U.S. dollar, which would mean fewer Americans buying goods made in China. That would especially be the case if the U.S. Federal Reserve responded by printing money to buy up whatever bonds China sold in order to keep interest rates from jumping, which in this extended hypothetical, is a pretty likely scenario. Beijing would be cutting off its nose to spite its face, which isn’t typically how one subjugates a geopolitical rival.
Beijing Is Showing Us Exactly Why America’s Debt to China Isn’t a Problem (Slate)

So we see that right wing economics coalesces around three fundamental canards. The first is that debt is bad and that government should be run "like a business" and carry zero debt, which is odd since I doubt there is any major business in the world that does not carry a significant amount of debt. Or, related, that the debt is perennially "out of control" and that our "grandchildren" will be in debt servitude paying it off. But as we've seen, out "grandchildren" are the creditors as well as the debtors, and debts due to ourselves can be renegotiated or eliminated. And that debt is our money - no debt, no money. Also, the government's going into surplus means that the private sector must be in debt by an equivalent amount thanks to sectoral balances. Government can't be run like a business because it is the sum total of all businesses in the country, which must balance out.

The idea that the government is "broke" is absurd, as the government is the source of our money. If the government were broke there would be no money and no economy. Also, the idea that we can be bankrupt is absurd--the U.S is a sovereign government, not a business. What would it even mean to be bankrupt? The U.S. can only default on its debt. The only time that we have come close to that is the Republicans' refusal to raise the artificial debt ceiling.

The government can mint coins debt-free. This was the idea of "creating" a trillion dollars of debt-free money by the government mining a trillion-dollar platinum coin and giving it to itself by crediting its account. But we shouldn't have to go through these shenanigans. Our financial system needs an overhaul.

The second is that going into debt is bad because we need to borrow from foreigners. But this is generally due to trade deficits. Foreigners selling more to us than we do to them means they have a surplus of dollars, and they use this to buy treasuries. Yet we're simultaneously told that free trade is good and protectionism is bad. These are contradictory. Since we cant all run trade surpluses at the same time (unless we export to Mars or something), there will always be some countries in deficit, and some in surplus. This leads to a net outflow of dollars. These extra dollars must be accounted for, and bonds are how we do that.  We also see that if foreigners sell their debt, it will mean their currency becomes more valuable and ours less so. This will decrease their exports (which is how they got the surplus in the first place), and increase our exports (which will mean more exports and less of an outflow of dollars). So this buying and selling of national debt is really a factor of trade that self-balances. Yet it's constantly used as a scare tactic.

The third is the gold standard, which is getting some attention since several Republican presidential candidates advocate its return. Ads to buy gold are a standard of right-wing websites, radio programs, and hucksters like Glenn Beck. They are all based on fomenting a distrust of government institutions, which is a key part of the well-funded right-wing playbook. But as we've seen, money is debt and credit, and has been since its inception. Commodity money is an accident of history. Gold is just as variable as currency and has no "set" value. Historically, countries with commodity money have been less prosperous and more in hock to the authorities than those without, as we've seen. This is because that commodity is typically owned by the rich and the state (e.g. Fort Knox). By contrast, credit money can be created by anyone willing to accept an IOU. Credit money eliminates the artificial scarcity imposed by commodity money.
...Bretton Woods gave multiple currencies fixed but adjustable rates. Nations now had precisely the freedom the gold standard denied them, to use monetary policy to regulate their economies. (The United States dollar had a nominal value in gold of $35 an ounce but the country was not obliged to set monetary policy according to how much gold it had.)

Mr. [Ted] Cruz correctly notes that the world economy enjoyed decades of prosperity under Bretton Woods, but that happened without a gold standard, not because of one. Why is a discredited policy now attractive to Republicans? The gold standard suits a political moment. Tying the dollar to an arbitrary quantity of shiny metal binds policy makers’ hands, robbing them of their discretion to act: The central bank can’t adjust the money supply to counteract crises or prevent them. These limits, for many Republicans, are good things. The gold standard is essentially the monetary equivalent of a government shutdown.
Why Republicans Love the Gold Standard (New York Times)

By creating an artificial constraint on the government's money spending, it allows the wealthy to have more control.

In the Peak Oil Doomosphere, the gold standard was all the rage a few years back. Why was this right-wing policy advocated by so many peak oilers? My guess is 1.) If the government was lying about oil, surely it must by lying about financial matters. It comes from a (justified) mistrust of government institutions. But I think the real key is this:
Gold as currency has obvious problems. First, there is relatively little of it while there are more people and goods all the time. So in the long term, the gold standard exerts a downward pressure on prices as money becomes relatively tighter and its value increases. If prices continue to decline, people are less likely to spend their money. After all, if you believe that the price of, say, shirts will continue to drop, you’ll delay splurging on haberdashery.
Peak Oilers are opposed to the massive overconsumption of the the earth's resources, and believe that the gold standard will constrain the printing of money and reduce economic expansion. They believe that "printing money" allows government to produce the inflation which feeds the consumerist economy, and the gold standard will put a stop to it. By contrast, if goods and services are worth less over time (deflation), people will spend less and save more, and this is more moral. They see the gold standard as ushering in a "'hairshirt economy," which will throttle the grotesque overconsumption of Americans. Furthermore, a gold standard is in line with a shrinking economy. If you believe the goods and services the economy produces will inevitably shrink due to peak oil, you know that printing more dollars is counterproductive and will cause inflation and must be stopped.

I get the sentiment. It stands in contrast into the idea that we must expand every year or else. But I think this view is misguided and simplistic. Public provision of resources is the key to eliminating useless overconsumption. Public provision of resources assumes the government does not have artificial constraints, particularly those imposed by the rich and powerful. Note that Europe, with its universal healthcare, government-provided housing, reliable public transportation and free education uses a tiny fraction of the energy used in the U.S. per capita, with a higher quality of life. That's not a coincidence. High consumption taxes are a better solution. Remember, taxes are not needed to fund the government, so we can tax what we want less of. How about 100% percent marginal tax rates over 50 million dollars (which would mean that no one would have more than 50 million dollars)? How about high taxes on shitty food like corn syrup? How about high taxes on people who pollute? How about a carbon tax? All of these are subsidies for what we do want (more equality, healthier food, non-carbon energy sources).

Taking back our institutions, not hamstringing them, is the key to successful degrowth. Otherwise you just create poverty and misery, which breeds right-wing sentiment, not environmental awareness. Hurting people vote for demagogues, as we're seeing right now in America and elsewhere. Believe me, the rich and powerful would not be supporting the gold standard unless they think it will make them wealthier (and you poorer and more desperate).

And finally, there is this good summary of financialization. It's a bit long, but it's a terrific summary of the transformation of the economy due to financialization:
Now, what is this financialization?...It’s a profound historical transformation that really began in the 1970s, and it’s now been running for about four decades.

So let me start with economic changes, the economic foundations of this transformation. I think there are three key root changes here...The first, funnily enough, doesn’t relate to finance itself, but it relates to industry and commerce...So what has happened to big business in particular?...First, big business has become increasingly capable of financing investment out of retained earnings. It retains its profits, and on a net basis it finances investment pretty much out of that. Of course, it still uses banks, but it doesn’t rely on banks on a net basis to finance investment. That gives it independence, a certain degree of independence from banks.

In addition to that, big business has made so much in retained profits–currently U.S. big business is sitting on piles of cash. It has made so much in retained profits that it can use those funds to play financial games, to engage in financial transactions and financial activities on its own account. So big business has financialized...Large enterprises have acquired some of the character of financial institutions, have become bank-like, and they engage in these transactions, and they change the structure of their own organization as they do that.

Second economic change, and very, very important, too, relates to banks. If big businesses is doing that, banks must do something else to make profit. Banks are profit-making institutions. So if big business becomes increasingly independent of banks, banks must do something else...They lend less to businesses for investment and so on, and they play more games in the financial markets. They become transactors in financial assets, and they make profits increasingly not from lending but from fees, commissions, and trading. They become traders in financial assets.

The third change has to do with households, workers, ordinary people...have become a very profitable activity of banks, a new activity...And what we see there in the last three to four decades is that ordinary people have been drawn into the former financial system like never before. Households have become financialized. Finance has become a fundamental part of household life...
Why is that? Partly because wages have been stagnant. And therefore–I mean, nowhere more stagnant than in this country. I mean, real wages have been absolutely flat in this country for decades. So partly because of that, people have turned to debt. But also people have got assets, financial assets...What is actually happening there, I think, is not simply that you borrow in order to consume. ... It’s a more complex story than that.

What is actually happening is people need access to health, education, housing, and a variety of other needs. Every country has systems of provision for these things. Each country differs from the next country, but pretty much there are similarities. These modes of provision have historically, traditionally, incorporated public provision, some methods of public provision, for everything–for housing, for health, for education, and so on. What we’ve witnessed the last three to four decades is a retreat of public provision. ...Private provision has taken its place. As this is happened, finance has emerged as the facilitator of that. So we turn to private provision to solve our housing needs, our health needs, our education needs, and finance makes profits out of that, basically, without having any skills in doing these things...

So non-financials have financialized, banks have changed, and households have been drawn into the financial system. These changes together have basically transformed the economy, transformed the foundations of the economy. This is a new type of capitalism.

At the same time, we’ve had changes in institutions and in ideology...We’ve had wave after wave of deregulation. Labor market has become more deregulated, and financial markets have become more deregulated.

And in addition to deregulation what we’ve had is the rise of the ideology of neoliberalism. Deregulation goes hand in hand with neoliberalism, the idea that the market is good, the state is bad. In this country, this is a very powerfully held idea, more powerfully here than anywhere else. Actually, it’s extraordinary how powerful this perception is and how a lot of social issues are understood in this way.

The point I want to make you is that neoliberalism is very, very powerful and sustains financialization, but neoliberalism is not really about asserting the merits of the market over the state. Actually, it’s more complex than that and it’s more crafty than that, because neoliberals are not the enemies of the state. Neoliberals want to take over the state. The actual content of neoliberal ideology is to take over the state and to use the state to protect the market, to make the market bigger, to effect market-favoring, market-conducive changes. So this has also been going on the last three to four decades. And that to me is the core of financialization.

So what have we got after four decades of this? These changes, seen very clearly in the United States, have created, firstly, a deeply unequal country, a deeply unequal society. Financialization is fundamentally about inequality. We see this inequality in terms of income, where the top 10 percent and the top 1 percent draw an extraordinary proportion of income annually. But we see it in terms of the functional distribution, the distribution of income between capital and labor, where labor has lost–and lost dramatically–during the last three to four decades in this country and in just about every other mature capitalist country that has financialized.

So this is a deeply unequal system. It generates inequality. Finance has acted as a key lever in increasing it inequality....And the rich in this country and elsewhere typically become rich through financial methods; the way in which you acquire great wealth and you cream off the surplus is basically through financial methods, through access to financial assets, privileged ways of trading financial assets, and privileged position in of the financial system that allows you to extract vast returns, which appear as salaries and wages, in other words, remuneration for labor. Come on. What kind of remuneration for labor is this allows someone to draw tens of millions of dollars annually? For what kind of labor? This isn’t labor. This is a kind of rent, this is a kind of surplus accruing because of power and position in the financial system or access to finance. And that is typical of financialization in this country and elsewhere.
The Financialization of Life (Naked Capitalism) The consequences of financialization were that indebtedness grew much faster than the ability to repay. The economy grew at 5 percent, wages went nowhere, and credit grew by fifteen percent! The same wages go less far because so much of it has to go to pay off debt.
Adair Turner: If you look back at the story of advanced economies over the 20 years before 2007, you see an interesting pattern. During that period, the total value of national income — what economists call “nominal GDP,” meaning income unadjusted for inflation —grew at about 5 percent per year in a reasonably steady fashion...Yet during all of that time, the value of all credit, unadjusted for inflation, grew at about 10 to 15 percent per year. At the time, it seemed like we needed that pace of credit growth, but when you think about it, if your credit is going to grow at 10-15 percent per year in order to get your 5 percent GDP growth per year, eventually you’re going to have a problem. This isn’t a stable system. In my view, one of the reasons that it seemed that credit had to grow faster than total income was rising inequality.

The richer people, when they get another $100,000, or another million, or 10 million, don’t tend to spend it as much as the poorer people would if they got another $100 or $1,000 or $5,000. All the empirical evidence suggests that the rich tend to consume a lower proportion of income than middle and lower-income people. So rising inequality can lead to a major problem with the demand for goods and services. The rich aren’t spending their additional money, so overall, more money gets taken out of the economy. Unless the richer people decide to invest their money, there would be a slowdown in the economy. This idea goes back to economists like John Maynard Keynes and Alvin Hansen.

But before 2007, we didn’t have a slowdown. Instead, the savings of the rich ended up going through the financial system and being lent to middle and lower-income people, who had 30 years of no real income increase whatsoever. The figures for the U.S. are really quite startling. If you look at the bottom 20 or 25 percent of the population, their real wages haven’t gone up for about 35 years! Meanwhile, the incomes of the top 1 percent have gone up 200 percent. This is a dramatic increase. The savings at the top have to go somewhere. At the bottom, there is a group of people who don’t feel that they’re participating in the growing prosperity, so they become very vulnerable to the delusion that if they borrow the money and buy a house, they’ll make up for their lack of real wages by house prices always going up.
To Fix Inequality and Steady the Economy, Think Radically (Naked Capitalism) David Graeber also points out that in order to grow the money supply, debt has to be psuehd onto those least able to afford it:
At the moment, Conservative policy is to create a housing bubble. Inflated housing prices create a boom in construction and that makes it look as if the economy is growing. But it can only be paid for by saddling homeowners with more and more mortgage debt...This takes us right back to exactly where we were right before the 2008 mortgage crisis. Do you really think the results will be any different?

But something along these lines has to happen when the government runs a surplus. Everyone will just keep pushing the debt on to those least able to pay it, until the whole thing collapses like a house of cards: just like it did in 2008.
Britain is heading for another 2008 crash: here’s why (Guardian)

So we see that the money from tax cuts gets plowed into financialization rather than innovation (which doesn't pay, because people are too poor to pay for innovative products). High marginal tax rates make it more likely for institutions to reinvest profits back in the company rather than engage in profit-taking, since money put back into the company is not taxed. Low taxes encourage looting. As I noted, companies rely on credit card debts to make profits, rather than providing high-quality goods and services at a fair price. This what capitalism is now.

And the lack of public provisioning means people turn to the banks. They turn to credit cards to fix their lack of wage increases. They turn to banks to fund their college debt because education is no longer free. They turn to auto loans because we don't have good, reliable public transportation. They turn to home loans because school funding is based on your local zip code. American companies don't need a prosperous middle class to buy from them anymore, so they don't care if it exists or not. They already have their hands in our pockets because we are permanently in debt. Or they control entire markets due to monopoly. We have no choice but to pay, or be locked up. Again, this is what capitalism is now.

Public provision is what they fear. That's why they are always claiming "the government can't create jobs" (er, the army is what, again?) and thing like Social Security and Medicare spending are "out of control" (but not military spending). That's why they decry "socialism." They want people poor and desperate so they have no alternatives but to take any jobs on offer, that is, it's a way of suppressing wages. They don't want the government bidding up wages by job creation, or providing welfare or unemployment insurance thus giving people a cushion to hold out for better opportunities.

Once you see which economic policies play into the hands of the one percent, and  which ones don't you see the economy in a different light. Our situation is not inevitable, like the economy, it is a social arrangement, and entirely a matter of choice. If we are suffering, it is because we choose to do so. The means to rectify this exist, if only we could implement them.