Re: [WDDM] Economics and Change

[Joshua N Pritikin <jpritikin(at)pobox.com>]

On Mon, Jan 17, 2011 at 01:01:48PM -0800, Joseph Hammer wrote:
> Binary economics prints new money unbacked by anything of value.

The only money printed is backed by self-liquidating bills of credit.

For example, a loan for equity shares in a large, stable business that
pays dividends is self-liquidating because the dividends can be used to
pay back the cost of acquiring the shares.

In other words, in binary economics, the central bank's job is to
advance credit against the future value of an investment.

This affords to every individual the opportunity currently enjoyed only
by those who have savings to invest.

> On Mon, Jan 17, 2011 at 12:56 PM, Joshua N Pritikin <jpritikin(at)pobox.com>wrote:
> > On Mon, Jan 17, 2011 at 12:40:17PM -0800, Joseph Hammer wrote:
> > > There are several problems with Binary economics, but chiefly, they
> > > disregard the role of interest as a primary coordinator of resources.
> > >
> > > They say, "Print money from a central bank at zero interest to hand to
> > > people to invest." This sound good, but it is destructive to society.
> > First,
> > > printing money does not increase the supply of goods available for the
> > money
> > > to buy. The value of the new money is stolen from those who already have
> > > money in hand. The loss shows up as inflation... the dollar in your
> > pocket
> > > buys less.
> >
> > That is not an accurate characterization of binary economics.
> >
> > Please try to understand the proposal before you turn to criticizing it.
> >
> > First advanced by Louis Kelso, binary economics holds that (1) labor and
> > capital are equally fundamental or "binary" factors of production, (2)
> > technology makes capital much more productive than labor, (3) the more
> > broadly capital is acquired with the earnings of capital the faster the
> > economy will grow.
> >
> > Binary economics is not inflationary. This is easy seen if you would
> > bother to study the proposal for more than ten seconds.
> >
> > http://papers.ssrn.com/sol3/papers.cfm?abstract_id=928752

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