Mutual Banking theanarchistlibrary.org Submitted by monday on November 4, 2021 at 11:55 AM in economics u/lettuceleafer , maybe we have ideas about this? :3 1 comment 3
While I mostly agree with this sentiment I do have a good critique. Currency has so much value in it's ability to transact value. For example drug dealers on the dark web find great value in monero for being able to move value and resources around quickly cheaply over the internet. Yes originally a monero has no value but in it's ability to keep a wealth ledger of sorts it gains value. It's value is it's ability to represent good and provide a medium of exchange.
If monero lost it's ability to be a medium of exchange it would have no value. (I'm avoiding commodity speculators for simplify bc that's a whole different can of worms.)
If government currencies really had no value people wouldn't use them as they would only provide a negative service due to inflation. But they are widely used due to how useful currency is as a method of tracking value and exchange.
From my understanding of anthropology humans have always or were quick to develop a system of credit and counting that exists today. For example with all my social relationships I have an extremely rough ledger in my mind of their value to me. Like in an abusive relationship people over time start to realize how keeping wit the relationship looses them value. Or if a friend always gets favors from u and will never help your internal ledger will overall help you realize you might not want to continue this relationship.
If a friend mostly makes your life nicer and you have a general sense of a good back and forth of helping each other.
I think currency provides a far more precise and objective form of this ledger that is quite useful for business relations. It's far easier to know what business relations are benefiting and which ones cause a loss in value. Now gold and most materially items do this. But they are far harder to transact than currency especially for transactions not in person.
Again I mostly agree tho it's important to mention how making transactions easier to do has value in a market system. Tho I understand why communists assign them no value rightly. Let's say you have 1 million dollars in circulation. If you destroy all those bills 1 million dollars of value wouldn't be destroyed. But value would be due to having to switch to a different method of circulation. This is due to currency creating value by making transactions more effective. Currency's representing of value isn't inherently of value if that makes sense.
At the end of part two there is the talk of the capitalists in the woods putting a tax on industry. I would disagree that this isn't an interesting critique of capitalism imo. I guess I'm just no very moved by the ideas of workers actually make stuff and capitalists do nothing. But yet I do come to the same conclusion that building a world without the investors making money from doing nothing but owning capital is a good idea.
An argument against the hierarchical control of capitalists, how historical conditions have caused workers to enter a voluntary interaction where they are subservient to the capitalists and don't have the capital to start their own business due to history disability ect.
I seem to agree with everything tho I read about half of it and got bored. I don't like the associates with bartering and especially it's connotation as what society was like before currency or money. I like thinking of things as an exchange of social credit but in this context they are somewhat interchangable.
The part about currency sucking is true. Considering the author was upset about having currency backed by hard money they prob would be quite upset to learn how most currency these days isn't backed by hard money.
I agree that this is a pretty bad thing and it can cause lots of issues. But using fiat is so effective at the moment. I mostly have assets in fiat with a bit of diversification hedging against the US dollar. That's prob the best asset allocation for people these days. I wouldn't recommend someone's portfolio be more than like 10% hard money.
From a theoretical concept I think the idea of having hard money is very good. Though in the modern era using hard money has many drawbacks that decrease efficiency. I.e. can't use them for online or distant transactions easily.
But replacing buying stuff with cash for buying stuff with silver or gold is an excellent idea.
Regarding the mutual bank ideas similar to this have been implemented with credit unions and to a lesser extent the brokerage firm vanguard.
Yeah I guess that would be a better bank but im not a big fan of loans and debt so reforming that kinda stuff isn't my kinda thing. I think a good finance system would be brought out by having extensive social services so all needs are cared for. Then most of the profit from work could be turned into capital bypassing the need for loans and allowing the person to provide the capital themself.
I think loans might be a good idea when loaned to rich people who need lots of capital and want to hedge their risk of startup. Tho mostly I would rather move away from loans entirely. I think it's often predatory to profit off loans and I think the dynamic between borrower and bank can easily become hierarchy and anti freedom. So sure the mutual bank is better it but I'd rather work towards a world without loans. Tho the possibility of that happening ever or especially in my lifetime is nill. Tho it is neat to see an anarchist old idea implemented into the future although contorted and devoid of most of the positives from it's intellectual conception.
Idk, not really into banks so I don't have much to say.
One thing about banks to mention is how I don't like the process of collateral. Contracts should be avoided so violence is not needed to enforce them. When the idea of mutual banking the idea of pledging your estate is brought up. So if the borrower can't or refuses to pay on their loan the bank is contractually agree they will send men with guns to seize said collateral.
A bank program where the worse case scenario of a loan is a gunfight between bank soldier and the borrower trying to live in a house to prevent homelessness is very bad. Such a worse case scenario is traumatic and is a massive destruction of value. When the whole point of loans is to help increase wealth such a negative even is not acceptable.
A bank run by removing collateral and instead using a credit system is so much more effective. When a borrower can't or won't pay for a loan the bank policy should be to take their loss and refuse to loan more money to them. Without collateral banks can't take riskier loans but we don't have the incredibly negative violent potential if things go bad.
Banks should encourage people to repay their loans through peaceful means. For me personally in such a system I would repay my loans as I want to keep my ability to take out loans and access credit. Whole defaulting on a loan may make me quick cash the loss of ability to gain credit is a massive long term loss.
If a bank policy is to use violence to help them give out riskier loans society as Whole looses. And the poor saps who die is a horrible loss. Structures should b from the ground up to avoid violence. If a bank cannot do that I don't think giving out loans is worth the potential loss of life.
Now without collateral I highly doubt loans at 1 percent would be worth the risk. So to me the mutual bank would not be worth doing. As the negative action making people homeless and killing people isn't worth the benefit of cheap loans.
If I get to pick a world where more aggressive murder done but interest rates on loans are 1% or a world where loans have higher interest rates with less death I would pick less death any day of the week. So I think for the very reliance on collateral necessary to the mutual bank I would be against it's conception not to mention the negative hierarchical aspect of loans.
For the section on mutual money the author seems to agree with me on the benefit of credit over hard money. I'd say in the modern day monero would do this mutual money just far more effecient my without the ability for abuse.
Now monero isn't backed by hard money which is a significant negative. The risk of this is pretty easily mitigated by using monero as an intermediate and not having more on hand then you are willing to loose. As long as some sort of credit system is values you can turn it into hard money buy using it to buy silver or gold or whatever.
Though it's not like this mutual bank doesn't have the problem either. Mutual banks have to be centralized on some level. And not having the credit system backed by hard money is so profitable for the bank. So the risk of it at some point in the future not being backed by hard money is likely. So overall I think innovation has made the idea of mutual money obsolete. Besides if you want hard money you can just use hard money.
Then the discussion goes to talk about how labor is the representation of value. Imo the labor there if value arguments are not interesting or useful so I'll skip to the next section.
Alright I skimmed though stuff and I realized I kinda got the gist of the article. So this is going to be the end of my reading. Interesting to see the initial idea of credit unions but mostly I don't really like it from an anarchist perspective. The analysis does have a lot of good points about economics tho I dont see much value in a mutual bank due to my Distain due to the loss of freedom due to hierarchy.