If you could recover each of the thousands of hours of discussion that have taken place on Irish broadcast media over the nearly five years since the present crisis erupted, and play any one at random, you would be hard pressed to estimate when it was transmitted. You could play an edition of the Marian Finucane Show from October 2008 and find that, apart from a few incidentals, it is indistinguishable from the discussions of last weekend.
This has been the era of the economic “expert”, many of whom work for banks, and are therefore unreliable witnesses. Everything gravitates around technicalities, the mechanics of borrowing or regulation and the alleged laws of economics. Nothing cuts to the deeper moral reality, beneath the propaganda and bullying of the establishment and its puppets.
There is this strange characteristic of the debate that, although seeming to cover all the potential ground, it actually remains within orthodoxies until these have become utterly hollowed out by the attrition of reality. Only rarely are we permitted to eavesdrop on genuine intellectual voyaging into the territory designated Unthinkable. And yet, time and again, the unthinkable has happened and has had to be countenanced.
The nature of money
Rarely is reference made to the nature of money – what it is in its essence: a technology for releasing energies, establishing value and keeping score of the contributions and entitlements of economic participants. In the undertow of every conversation is an entirely different idea: that money is possessed of intrinsic worth, with the capacity to become "scarce".
This is pure silliness. Money is not a real asset but simply a way of providing convenient tokens for real assets. A coin or currency note asserts a claim on real resources, such as goods, services or property. Banks are permitted to generate these tokens of wealth in the form of credit, allegedly based on confidence in the ability of the favoured economic actors to create the real thing, in the form of houses, roads, businesses, infrastructure, etc.
The functioning of money in a large community such as a nation is entirely different to the way it works in the economy of a family or an individual, and yet the impression is persistently given that, for example, Ireland’s present situation is akin to that of an individual who is broke.
Walking around Madrid over the St Patrick's weekend, I noticed that some of the footpaths in the old part of the city are in need of attention, a phenomenon a Spanish friend identified as a symptom of the economic crisis. That deduction is a variation on the banal idea, put about by radio presenters, that "we're all skint". But there is no scarcity in Spain of tar or cement, still less of human labour. What is absent is the means to bring these elements together for the good of society. What Spain, like Ireland, suffers from is a false lack imposed on society in the short-term interests of people who are, quite literally, coining it.
Money is supposed to belong to the people but has become the instrument of the people’s enslavement. At the core of the process of modern “money creation” is a form of priestcraft – the manipulation of money systems by powerful bankers, who generate power and wealth for themselves and their accomplices at the expense of social functioning and human security. The chief mechanism is what one correspondent of mine calls “ex-nihilo substantiation” of the symbols of exchange and wealth retention. (It appears that, notwithstanding the encroachment of positivistic reasoning, we remain a theological species.)
“Our” money system is owned and controlled by privately owned banks that create euro by a process akin to transubstantiation, in the form of debt. Money is generated only when it is borrowed – each new loan means that a specific amount of money is brought into being. When the loan is eventually repaid the capital is eliminated.
Meanwhile, somewhat greater amounts of new debt materialise in the form of interest, which continue to exist as a negative phenomenon, without any positive corresponding element of wealth or tokens. The interest exists nowhere except as a debit, and so the growing accumulation of debt in our economies is not a misfortune but a structural inevitability. The continuing scramble to find money to pay down interest means that the only way debt repayments can be discharged is by borrowing more money, which throws the structural flaw into a new and wider orbit.
The generalised accumulation of debts in the system, without any basis other than on the computer screen of the lenders, means there is a diminishing pool of “money” with which these mounting debts can be paid down.
“Our” money system generates debt as a direct function of its structural incoherence, in much the way a barber shop “produces” tufts of hair. But debt cannot be swept up and put in a wheelie bin, which is why we’re forever talking about haircuts and hair shirts.