The three requirements of government and why democracy needs to know them

A thought for Friday night:

Why would government which, I suggest, has the power that all of us, reluctantly perhaps, concede to it in being part of the society – and which gives it democratic control, be suddenly and uniquely susceptible to the control of banks, which that government itself regulates and authorises?

There is no possible logic to this unless we concede that modern governments somehow have no right to issue currency.

Governments of old had defence and justice as their basic core responsibilities. Modern governments no longer decree the general requirement to serve your lord as part of the military or even repair the roads as your contribution to society.

Justice in the form of Jury Service still remains (and that can still be interestingly individual) but the service aspect of societal membership has been straightforwardly translated into a monetary system.

We therefore have a third requirement for an effective modern state in addition to defence and justice – that of currency creation.

Government creates it as and when it wishes and out of thin air.

In electing it we give it that right.

Governments are still in charge of defence and justice but in modern times now also of currency creation.

If more of us realised that we would, I think, have much greater voter engagement.

If the slogan was ‘we create your money what do you want us to spend it on?’ then…

a real engagement in what is called the democratic process would, I think, have finally arrived…

Comments

  1. Schofield -

    We create a medium of exchange to transfer value. The tricky bit is deciding on what we value. It’s not sufficient to merely say the medium embeds human labour. The American philosopher Alan Gewirth attempted to drill further down in order to define core values with his Principle of Generic Consistency. He claimed these to be the right of all to have the condition of freedom so that we have the ability to choose purposes and well-being. The kicker as the Americans would say lies in the phrase “the right of all” and of course that implies the application or use of democratic process wherever we can and wherever appropriate.

    https://en.wikipedia.org/wiki/Alan_Gewirth

    See the paragraph beginning “Gewirth thus holds …” for a fairly concise and short definition of his PGC theory.

    We still as human beings have big problems in regard to applying “democratic process” as this following article reveals (which I’ve previously posted here) and very relevantly points out a problem with the reflux part of using a medium of exchange:-

    http://financeandsociety.ed.ac.uk/article/view/3017/3999

  2. Schofield -

    Sorry I missed out a key bit of Gewirth’s thinking which is “the ability to realize purposes” where of course the human creation of the tool of a medium of exchange comes in as one requirement.

    1. Peter May -

      The finance and society paper I,ve read and it contains interesting history. Demonstrating if ever proof were required, that the monetary system has evolved like topsy with extra requirements or tweaks bolted on – sometimes just in order to preserve power. (Or sometimes collapsing becuase they didn’t work.)
      I still feel it is easier to see money as the means that a government uses to get stuff done.It is a result of that government acceptance that it becomes a wider medium of exchange.
      In a democracy it is to be hoped that governments are elected to get the stuff that the people have elected it to do.
      But I do agree that that democracy – particularly the FPTP UK one – is problematic.
      PGC theory is quite a neat argument!

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