Some years ago I warned that if TARP passed, that it would create a monetary order that would ensure the continuation of Bush's policies. And so it has been: bailing out the financial system has become a form of tax farming, companies are loaned money at concessionary rates by the Fed, pay back the Treasury for TARP funds and other forms of subsidy, but are then virtually free to collect large spreads for purchases from the public, the constitutional order outlined in “The Rise of Rove's Republic” is complete, because it has a strategic money system, replacing the asset money system before it.
Sadly, instead of sharpening to greater insight, the left has essentially disintegrated to a group of consumers shouting for their particular pet project, with leadership betraying the base for profit, such as the Huffington Post, and labor leadership's selling out of EFCA, only to have cuts applied to largely female and minority swathes of the public work force, not merely by Republicans, but by Democrats. The reason for this is that mortgages can be securitized by the bank system which TARP was the key step in setting the terms of the bail out. Thus mortgage rates are much lower than general interest rates. This means that even though homes are over-priced, falling in value, and therefore highly risky, they receive low rates. Low rates means higher prices than the market could support, which means that those in suburbia get a slice of the tax farming. Other groups on the left engage in similar behaviors.
The left has lost its moral way, and has become merely a group of people who aren't quite Republican enough to be Republicans. Hence the near term for the United States is a continued slide, as the “right ward ratchet” will continue. Nowhere is this more clear, or perhaps more pathetic, than the self-styled “Modern Monetary Theory.” Every word of this description is wrong, it is not Modern, it is not about Money, and it is not a Theory. Instead it is a revival of the very old idea of “give me what I want or I will beat the hell out of you and take it anyway.” As a monetary order it is like the monetary order developed by a man named Schatz at the behest of a man named Hitler. MMT is better and more accurately described, as Nazinomics.
Originally I began writing a long dissection of this egregiously vile ideology, and why it has taken hold of the left. However, the questions raised turned out to be more important than a scam run by Walter Mosler for his own profit, and point to the roots of the question, “What is Money?”
The answers then are outlined here.
I. The fox pissed in the ocean
So why study this? There are three reasons for this essay looking in detail at the evolution of money in the Sumero-Akkadian world. The first is to directly refute Nazinomics. It makes a strong assertion about the nature of money, an assertion which a study of the historical record makes untenable. In short, Nazinomics asserts that all money is fiat backed by later taxation. If this is so, then sovereignty should develop with a law code and tax system from the sovereign, and from there fiat issue should follow. Instead it is the other way around: the accoutrements of money, such as loans at interest, real bills, banking, debt, unbundling of rights, and exchanges, develop first, and the sovereign impinges gradually as a specialized actor. It is only after 9000 years of money that coinage becomes the province of the sovereign, and even then, other aspects of sovereign monopoly of money are not present. Since Mosler and others make a strong assertion about the role of money, a 9000 year exception is not a tolerable oversight. Even arguing in circles will not save it. However, once the obviously shoddy scam is dispensed with –and yes, it is obvious that Mossler's motives are self-interested from his own statements, and therefore this is an attempt at criminal fraud, in the same way the left was used by Arianna Huffington to scam out hundreds of millions of dollars of profit from left leaning writers and readers – there is still the question of what the roots of money are.
The second reason is to examine a seminal period of human history. Once looked at closely, one finds it rife with shoddy thinking, infection from biblical fundamentalism, academic lane clogging, and a failure to rigorously fold in available advances in genetics and climatology into our understanding. The first error is one that the Sumerians themselves had a saying for, it went like this: “A fox pissed in the ocean, and declared that all of the ocean is his piss.” Or to put it in modern terms, people studying a time ascribe their own issues to it, rather than seeing it for what it is. This too will be detailed. However, with our pissing in the ocean removed, what stands out is a soceity that is not a “primitive” version of the present, filled with “precursors” but instead, a sophisticated version of itself, with its own problems, world view, and understandings. That they were technologically less advanced is clear, but that does not mean that they were empty, in fact the lack of emptiness was an obstacle, they too had legacy issues, and clutter. But it is important to see them on their own terms. First Presence. They must be present in our minds, then Engagement, grappling with the presence that we have, and finally an ascription of what is Essence. Presence, Engagement, Essence, in that order. Instead we see the various disciplines going in the reverse: an assertion of what is essential, a finding of the already assumed essence, and then an assertion of the presence of what was assumed in the first place. It is painfully stupid.
The third reason is to grapple with understanding of a society which lineally occupied this region for 8000 years in successive forms, when we have, with all of our technology, failed to impose our order in the opening years of the 21st century. Clearly there are lessons for us, because they are long beyond learning any lessons from us.
- “From so many oxen, is there no dung?”
The historical argument here begins with the Younger Dryas, an event where there was a prolonged cooling over Greendland and the North Atlantic, which was sufficient to return to glacial conditions in the northern hemisphere. It was most pronounced over the North Atlantic, amounting to 15C, and strong over much of Europe, as much as 5C cooler. Places saw only small drops in temperature, but large drops in precipitation. Importantly, the sea level dropped. As will be seen, theories about agriculture impose present concerns on what was a very different process. The next step are two periods of neo-lithic economy: the token period, and the boule period, where marking systems evolved for accounting. Finally there is the flowering of a society with writing at its core, which evolved from the previous marking systems – this is the classical Sumerian and Old Akkadian period. The evidence will show that there was an elaborate monetary exchange system long before there was sovereign fiat issue.