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Trading Floor

Claudio Vitari
Associate Professor in Management and
member of the endowed chair Mindfulness, Well-being at work and Economic Peace

Money in our society


Specialization of labor means that we must acquire most
of what we need by trading with others.
Money has been in many cases politicized and
monopolized, and made an instrument of power.
Whoever controls money controls the exchanges the
economy and the society

The Substance of Modern Money is Credit

Modern money is nothing more than credit


- a promise.
Money typically takes the form of
1. Bank deposits that are created when banks
make loans, or
2. Currency notes emitted by the central bank.

The Creation of Bank Debt-Money as Deposits


Banks create
money in the
form of
deposits or
account
balances when
a loan is
granted.

Bank
Account
Deposit
(liability)

Debt
Money

Mortgage
Note
(asset)

Mortgage
note

As interest accrues, the supply of money


available for repayment becomes deficient.
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Money as debt by commercial banks

The Growth Imperative


Institutionalized interest/usury forces growth.
Money is kept artificially scarce
Money is mis-allocated
Money is expensive
Concentrates power and wealth in the hands of a few
unelected people who are unresponsive to the needs and
wishes of the people.

Geometrical exponential money growth in


theory

F=P(1+i)n

The Central Government-Central Bank


The Bank of England was the prototype central
bank.
The banking cartel enjoys special privileges
granted by the English government.
The English government, in return, gets to spend
as much as it wants without regard to limited tax
revenues (by deficit spending).

Monopoly and debt expansion

Credit Monopoly by the banking cartel headed by the


central bank, whose currency is granted the privileged
status of Legal tender
Credit money lent into circulation at interest, which requires
the:
Endless expansion of debt
By lending to either the private sector or the public
sector.

Money growth in practice

Alternatives
The money we use is simply a social construction, a
collective agreement to accept a certain form of
measurement, store of value, and unit of exchange.
Once we accept that money is not a thing out there,
external to us, but a social construction, it follows that
we can change it.
We can make collective agreements to use other
forms of money that will operate (at least) as
effectively as the money issued by states.

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Mutual Credit
The WIR business circle
cooperative (Wirtschaftsring)
was founded by the
entrepreneurial middle-class
in Switzerland in 1934 as an
answer to the money scarcity
of the Great Depression, and
still thrives after 75 years.
60,000 business members
$2 billion in transactions
cleared annually.

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Barter Exchanges
In 2008, about 250,000 North
American companies conducted
barter transactions worth more than
$16 billion.
About $11 billion of that involved
small and medium sized businesses.

07/23/2010

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Thomas H. Greco, Jr.

Money power

Whoever controls the volume of money in any country is absolute


master of all industry and commerce.
- James A. Garfield US President - assassinated

Those who create and issue money and credit direct the policies of
government and hold in the hollow of their hands the destiny of the
people.
- Sir Reginald McKenna, former President of the Midland Bank of England

I sincerely believe, with you, that banking establishments are


more dangerous than standing armies; and that the principle of
spending money to be paid by posterity, under the name of funding,
is but swindling futurity on a large scale.
- Thomas Jefferson, US President, principal author of the Declaration of
Independence (1776)
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