Crises of Capitalism - Animated David Harvey

This is a great 11 minute video of David Harvey's recent talk at RSA in London. David is a great Marxist analyst and has written several books about capitalism and finance. I have to admit that I have not had a chance to read his books cover to cover, only snippets and listened to some of his talks. There are a couple quotes that I find to be fantastic.

The first one goes, "The whole history of capitalism has been about financial innovation, which has the effect of empowering the financiers.” This is a powerful quote for me. It really gets at my inner inspiration and is what drives me to explore the side of our political-economy that deals with this question. In my research I am attempting to highlight this financial innovation by showing how very clear political decisions were taken that would make money compatible with capitalism within the confines of an American style democracy that entrenches the rights of private property.

This thinking falls heavily on Geoffrey Ingham's understanding of money as having its own forces of production. David Harvey is essentially highlighting the same fact, as I am, by trying to highlight some of the historical evidence for understanding money in this way. Money needs to be seen as something that has been built and constructed so as to make it compatible with the functioning capitalist democracies of today (here I am borrowing a term from E.M. Wood).

I believe this is a powerful intervention that is been pushed by those that are exploring Community Currencies and other forms of alternative money. This brings me to the second quote, "We have a duty to change our mode of thinking". Here Harvey is throwing down a particular challenge to academics. He is telling us we have to bring a fresh perspective to our way of analyzing our political-economy.

I know that I am doing this. I know this because most people reject my thinking and assume that there is no real relevance to a discussion of money in terms of building a viable post-capitalist ecologically minded political-economy. My sense, and I think Harvey would agree (though I have not had the chance to ask him personally) that this is a good site for exploration. As Harvey points out, since the 1950's the US and the Bank of England have been siding with the financiers over manufacturing. This highlights clearly the way in which money has its own forces of production and is a tool in and of itself that is most clearly entrenched in our political system.

We have to understand money in a new way. We need to bring a fresh perspective to it. Both in terms of understanding how it got to the position it now holds, how changing it in meaningful ways challenges the entire conception of our current political-economy, and that it is not something that is a result of the economy but is constitutive of the sort of political-economy that we chose in the 18th century to entrench into today's capitalist-democracy.

I believe that the most important direction we can move our monetary system towards is one that is not focused on accumulation of money as a form of wealth, one that has a pricing mechanism that can respond to both abandunce in terms of supply and infinite value in terms of price. These are the innovations we need to think about incorporating into our financial system. Until then we will continue to battle a system that is both controlled, focused on scarcity and has two opposing forces 1) accumulation 2) velocity (aka movement) of money.

Here is the video.

This is the animated video:



And this is the full lecture video:

Positive Press About South Africa

Here are a couple nice posts I received about South Africa over the past couple of days.

The first one is on Huffington Post: South Africa Rolls out the Ubuntu Abundance

Then there is this one my father forwarded to me

Written by Peter Davies…..on the Supersport website this morning…..I think it’s brilliant, x

Dear World Cup visitors, 

Now that you are safely in our country you are no doubt happily realising you are not in a war zone. This may be in stark contrast to what you have been bracing yourself for should you have listened to Uli Hoeness or are an avid reader of English tabloids, which as we all know are only good for wrapping fish ‘n chips and advancing the careers of large-chested teens on page three.

Community Currencies: Fundación Pachamama and the Central Bank of Ecuador

I am re-posting this post from the blog belonging to The Panchamama Alliance: 
The article is really interesting as it highlights a growing trend of Central Banks coordinating and beginning to collaborate with community currency projects. Understanding the deeper political significance of this I think is very important. We are witnessing a trend of deepening of financial markets, but with a very different goal often associated with these new financial services. The question is what does this mean for the larger political-economy. Are we witnessing the emergence of a new form of political-economics or a deepening and expansion of capitalist systems?

Fundación Pachamama and the Central Bank of Ecuador jointly organized a workshop on complementary currency systems that was held on June 3 and 4 in the headquarters of the Central Bank in Quito. Ultimately the goal is to develop new economic models for rural development including new exchange networks and alternative, complementary currency systems, which will help people in Ecuador get access to credit and promote local production, consumption and trade.

The workshop, called “Systems of Alternative Pay and Means of Complementary Pay,” was held to strengthen the conceptual understanding of the diverse methods of complementary currency systems and the key elements for implementing a system on a national level. In addition, the workshop aimed to explain the workings of a successful model developed in Uruguay (called C3U), and the advantages of creating and applying this system. Finally, the workshop aspired to establish work links between administrative organizations and Uruguay project architects with the Central Bank of Ecuador and Fundación Pachamama.

The first day was a planning meeting with personnel of the Central Bank; Javier Félix, advisor from Fundación Pachamama, and the invited participants from Uruguay; Fernando Cetrulo from Foundation STRO Uruguay and Enrique Baraibar, from the Direction of Development Projects of the Uruguayan Presidency. The workshop began with various presentations from the different projects of the Central Bank, discussing alternatives to economic policies with complementary payment means and compensation systems, and the C3U model. Conceptual input was given to widen the vision of those charged with the diverse projects of the Central Bank, based on the experience of peers from Uruguay.

On the second day, the workshop was opened to the public, including members from the Ecuadorian State, the private sector, non-governmental organizations, directors of Savings and Credit Cooperatives, and other organizations related to the Solidarity Economy, and university students studying economics in Quito.

The workshop achieved the planned objectives and culminated with the signature of a cooperation agreement between the Central Bank of Ecuador, Fundación Pachamama, the STRO Foundation, and the Direction of Development Projects of the Uruguayan Presidency, recognizing the importance of the development of alternative currency methods for the participating institutions. This agreement lays the groundwork for cooperation between all the participants for implementing alternative currency methods that benefit an improved distribution of wealth, employment generation, economic stability, and social development for Latin American countries.

Re-Politicizing Money

One of the big arguments made about our current political-economy is that an actual break has occurred where the political and economic spaces are viewed as separate. This is an argument made by many different theorists (though of course right now I can barely remember any of their names) including E. M. Wood in her book, Democracy Against Capitalism. The idea being that what we are all guaranteed in today's democracy are formal political rights that have no direct impact on our economic standing. Wood says, "In that sense, political equality in capitalist democracy not only coexists with socio-economic inequality but leaves it fundamentally intact." (Wood, Democracy Against Capitalism, P. 213) Today's democracy promises you political equality but gives you no economic guarantee - you have no economic rights. Of course there have been concerted efforts, and relative successes, in creating economic rights but in the end inequality, private property and class distinctions remand de facto and accepted without question. A country is democratic regardless of questions of economic inequality. A fairly close reading of the history of democratic ideology will highlight the uniqueness of this idea of democracy as only applying to political rights with no relation to economic rights.

I believe along with these other theorists that the very separation of politics and economics is a false separation. I don't see how they can actually exist as separate spaces. In fact if you think about it, there is no way that any of our economy can exist without political decisions - the decision to protect private property is a political not an economic decision. This is just one example. The one that I find most fascinating is the question of money.

Money has been depoliticized in many parts of the world and certainly in much of the economic philosophy the goal is to frame money as depoliticized. Yet, the construction of money is political - who gets to issue it, with what characteristics, etc.. Much like the idea of private property, money is viewed as being in a natural form. A form that is a product of the economy, which is the product of natural forces. But, I think that the rise of community currency movement and increasing discussion about the way we create money and the impacts of this creation on our political lives has the potential to re-politicize money and make it part of a relevant political discussion. I think that this could lead the re-integration of politics and economics and the rise of series discussions over what our political-economy consists of and what our choices are, which are always political.

My hope is that as research and explorations into community currencies deepen we will see the growth of political-economic research and the recognition that we have far more power as a collective, over the shape of our socio-economy and that we can redefine the system in ways that give democratic citizenship deeper meaning and the ending of the separation of political and economic rights into two separate spaces.

The Wall St. Journal: The coming currency revolution

I think this is a great video showing the organic emergence of currencies around the world and how technology is helping to spread them. I think this speaks a lot about the future and the rise of this as a new economic space. It will bring value to things that have not been recognized as valuable in the past. However, I don't agree that value is all about scarcity. The idea of scarcity as the driving motivation for value in my opinion is flawed and is exactly why we have landed up in such an environmental crunch. We need to think about how to design currencies for abundance. How do we get abundance to be recognized as valuable? This to me is the big question.

I do wonder again about what this means in terms of scarcity and a system that only responds to things that are scarce - surely the freeing up of information and its increasing cheapness due to abundance is not a loss of value. The increased abundance of information is increasingly valuable to society. The more information, the more value this has to us. This is the same question to be explored around the environment and questions of abundant and healthy eco-systems.

I do think what these currencies raise is the question of democracy as Douglas Rushkoff points out the democratization of economics and of money is a movement we are steadily heading towards. However, we have to understand democracy in the way that it has been used to enable capitalism and the role that ideas of scarcity and representation play in limiting the power of the citizen. Perhaps, this currency movement will both highlight questions of scarcity vs abundance and representation vs participation.

However, I love seeing these discussions entering mainstream. I think at some point there is going to be a serious challenge from the state as it attempts to regulate and claim control over the currency space. This is important because our entire capitalist democracy that we live under is dependent on the control over the creation of money. The future will be interesting as is the current moment.

Theory Matters

I remember having an argument with a really good friend of mine (well
maybe argument is a bit strong of a word) about the importance of
theory. It was while I was getting my undergraduate degree at
Berkeley and I found myself completely enthralled by theoretical
thinkers - everyone from Doreen Massey to Weber to Marx to Gillian
Hart and onward. I wanted to be spend my life engrossed in
contributing to our theoretical world. It was then that I realized I
really wanted to be an academic, a thinker, someone that gets paid to
think and give those ideas back to humanity.

For me it is hard to see the distinction between this world of
physicality and our theoretical interpretation of it. I see nothing
more important then theory. Everything for me is in someway grounded
in theory. Call it ideas, call it perceptions, call it your lens into
life. It is all bound up in a theoretical understanding.

For an academic the hardest part is articulating ones theoretical
ideas. I think my blog may give this away to my readers. I struggle
to articulate my ideas, my theories. I have many and often I wish I
could just sit down and vomit them out onto paper and truly express
them. Sometimes words just seem to stumble me - and I think of myself
often as an artist. I like to think of papers that I write as
paintings. I start with a blank canvas and by the time I am finished
I hope to have a story (picture) that others can relate to and that
my sense, my message, my interpretation is clearly expressed and
shared and transferred.

For me the value of theory becomes even more important in the world
of socio-political-economy. How we understand the meaning of economy,
of democracy, of money or any other social construct - these are
things not like trees or water, but things that we as humans have
theoretically constructed and actualized into a having a material
impact on us - is of critical importance.

I am in the throws of writing my Mphil dissertation. I have sat with
it for many months, unable to write anything clear and cogent. Though
I know what I want to say, I have had conversations, written many
many notes and random scribblings but have failed to put something
together that can be called an academic piece of work.

Well, now I am writing it. I sit in my office 35 hours a week in
North Berkeley attempting to write. Sometimes not getting much done
but other times it flows out.

Anyway, back to my original point. The point I wanted to make about
the importance of theory/ideas. I have been reading about democracy
and democracy as it is understood and came to be constructed in the
USA. It is quite incredible when you realize that a word as powerful
and commonly used as "democracy" has had profound shifts in
theoretical understanding that have had massive impacts on our socio-
economic lives. That the theory of democracy matters is beyond doubt.
Understanding how it has changed, why it has changed and the fact
that it can change again is something that I believe truly empowers us.

We can always change our minds. We can always change the way we think
about ourselves, about our lives and those around us. It of course
becomes much harder when that change has serious impacts on our
individual or collective material lives. This is why I believe
certain ideas become stuck and do not change. This is also why
moments of "conjunctural change" (an idea I got from Prof. Gillian
Hart) are of such importance. Those moments represent incredible
opportunities to insert and change theoretical ideas.

I believe we are in one of those conjunctural moments. I believe most
clearly this can be seen in our financial system. What happens next,
what type of money we create and what type of political-economy that
results in will be driven by theoretical understandings.

I hope that I am able to contribute something of value to that debate
and impact the way that we theoretically construct our lives and our
economies so as to actualize new material conditions, through the
creation of powerful theoretical ideas.

In the mean time I hope I can get this dissertation done!

Saving Global Capitalism - IMF and the SDR as a Supra-National Currency

I want to make a prediction.

The global capitalist economy will be saved by the creation of a
supra-national currency housed in the IMF and will in some way be
designed along the lines of the SDR.

Though, I am pretty sure it is not a novel prediction and that there
are others out there that have and will make the same prediction. The
future of money will move towards the SDR (Special Drawing Rights
which allow nations to increase their foreign exchange reserves
without money being borrowed or lent. This facility is provided
through the IMF). What this means is that new money will be created
through the fund replacing the dollar as the anchor currency and
relieving the pressure on almost all states with regards to their
sovereign debt. This will almost certainly be the only way to satisfy
the "markets" (I hate to use the term markets in this way but I do
not want to get into that discussion). Because the SDR will be backed
by the global economy, and not one particular economy, it will return
a certain amount of security and confidence to the global markets.

I can not say exactly how it will look. You can read more about the
SDR on Wikipedia and several other blogs and websites. What I can
predict is that several countries will gain a bigger say in the role
of the IMF - such as China, India, Brazil and most interestingly
South Africa. We have already seen these countries demanding a bigger
say on the IMF over the past 10 years.

This creation of a supra-national currency will change the role of
individual sovereign states and may usher in a completely different
political climate ending a certain mercantilist type of economic
thinking. This is because no one nation will control money and the
global economy. The longer term impact is of course hard to predict
and I am sure that this will raise the heckles of many of the
conspiracy theorists - those that believe in the New World Order or
other such ideas. However, I believe it is the only way we will
ultimately save our global economy from a massive and devastating
collapse that would match or exceed the Great Depression.

The importance of this is hard to over-state. As the work of Karl
Polanyi showed in his book, The Great Transformation, the last time
our global economy collapsed it lead to fascism and global war. We
all want to avoid this possibility especially in a nuclear world.

What it will raise, this shift, is a discussion of money and how we
understand its creation and purpose (by this I mean what type of
political-economy do we want). There are many discussions going on
around the world dealing with the question of the creation of money.
Some of the most interesting look at creating a range of currencies
that serve a range of purposes and a range of spatial communities.
Bernard Lietear is one of the pioneers in this thinking - raising the
importance of building a system of multiple currencies that act from
the local community to the global community. There are deeper
questions of the impact of debt, scarcity and the like. That is all
for another discussion - some of which I have already dealt with in
other blog posts.

In the end saving the global capitalist economy will rest on the
creation of this global supra-national currency.