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:

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.

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.