Stephen Zarlenga Interview

  By Mystic | July 27, 2012 - 12:23 |

on Gnostic Media (Podcast Audio) with Jan Irvin.
The is the `more` under the YouTube video.

One of the factions that controls nearly every moment of our lives is hardly understood by the large majority of the population. To gain an understanding of today’s topic deepens our understanding of the world and how it works and exactly what we can do to effect change when and where needed.
Our deepening investigation into the freedom of consciousness cannot go without a deeper understanding of what we all use for exchange or trade – money.
Exactly how we define the word ‘money’ defines our very society and affects nearly every facet of our lives. It also tells us exactly what we can expect from our political representatives. All we need is to understand the language of money.
Beginning today in this detailed two part series we begin to look into the fundamental concepts of money: What is money and how is it defined? What is the history of money? How does it tie to religion, government and private business? What is the difference between credit and money? What is FIAT money? Is there a difference between private versus nationalized banks and how they operate? And why is any of this important to YOU? And how could it possibly affect YOUR life?
Stephen Zarlenga is the founder of the American Monetary Institute (AMI) – the leading American monetary think tank for monetary history, theory and reform. An economic historian and author, Zarlenga provides us the clearest picture of how money and monetary systems work in his incredible 2002 tome The Lost Science of Money, and he’s also the author of the American Monetary Act, submitted to congress by Dennis Kucinich in March of this year.
http://www.monetary.org

More from Gnostic Media at:
http://www.gnosticmedia.com

Basically, these two interviews (total time – 2hrs 45mins), saves you the time of reading lots of big fat books about `money`.

I have downloaded the videos, ripped the sound off them and uploaded it to my normal Audio site.
Part 1. –


Pt.2 –

Written by: Mystic on July 27, 2012.
Tagged . Bookmark the permalink.
  • lgrinaker

    I may not respond to this in the near term. But I have promised myself to take the time to listen to this and “stew” on it for a while.

    If I do some other posting or commenting about other things in the mean time, things that may even be contradictory to this, I just wanted to note that it won’t be because I’ve simply blown past this. It just means I’m currently “stewing” on a few other things already in the pot.

    Linda

    • lgrinaker

      hmmm… I’m using an iPad at the moment, rather than my usual pc, and I had no spacing problems on the initial try. I do prefer my pc for writing, and especially for commenting here, and so, I’ll just work with editing in order to get the spacing to hold the 2nd time areound when I use my pc. But I thought I’d mention the difference.

      Linda

    • joebhed

      Linda,
      Hope we can discourse on those things contradictory.
      Thanks.

  • axionication1

    Thanks for that Nick. Listened to that while banging away in my garage.
    Very moderate & sane, it was.

    LaRouche received a bit of a rubishing, eh…!

    Thanks again.

    • http://overthepeak.com/wordpress/ Mystic

      I think most everyone got a bit of a rubishing, but they all deserve it, for muddying the water.
      It took a lot of repeating in the interview, but the line is clear – Either banks create credit, or the government creates money.

      I think the most telling line was – `In times of trouble, credit always goes away; but money would not go away and would help in times of trouble`.

      • joebhed

        exactly – the permanence of real money.

  • joebhed

    Thanks to the Mystic Man for posting this interview with
    Zarlenga.

    I’m a big supporter of Zarlenga’s work on the
    history and science of money, and the solution of a public money administration.
    But I was disappointed in the videos, being too long on the inconsequential
    part of the political-economic history, and definitely not enough on how the
    transformation to public money would actually take place.

    It’s obvious that Zarlenga knows his stuff and has a
    holistic philosophy that underpins his vision of what money IS and must again
    become if the grankids are going to be able to live within an honest system of
    money and politics.

    The videos are two and a half hours and the book like 800
    pages. But the solution is in the Kucinich Bill H.R. 2990, which was hardly
    discussed.

    The criticism of fractional-reserve banking was well enough
    done, but the discussion didn’t transition to how it would be replaced. I know
    I have done here before, but I again link, using the AMI sit this time, to the
    Kucinich Bill.

    http://www.monetary.org/wp-content/uploads/2012/05/HR-2990_KucinichVideos.pdf

    For instance, in the discussion of the Greenbacks, no
    mention was made of the PERMANENT quality of the real money. Unlike ‘debt-based’, so called bank-credit
    money, the creation of $1 of Greenback money remained in existence for over a
    hundred years, and really only went out of commercial favor due to its
    longevity as a collectors item. Real money – government created public money,
    NEVER goes out of existence.

    Finally, on the issue of money versus credit, we broach the
    divide between today’s Modern Monetary Theory advocates and the reformers who
    have been around since the Greenback movement of the later 1800s.

    As Zarlenga says, money is money.

    Not so, say the gurus of MMT.

    Money is Debt, say they.

    While MMT purports to rely on Knapp’s State Theory of Money,
    they really fall back upon the definitions contained in Innis’s work on
    “What Is Money?” .

    http://moslereconomics.com/mandatory-readings/what-is-money/

    Zarlenga’s critique of Innis shows why the whole premise
    that money IS credit/debt is ill-founded and without any true scientific or
    legal basis.

    http://www.monetary.org/critique-of-innes/2012/06

    Zarlenga’s book was published well before Kucinich formed
    his proposal as legislation, and it is in the dramatic, revolutionary piece
    laid before “the Congress Assembled” that we find the solutions that the
    history shows is necessary.

    If you can afford the book, do buy it.

    But the Kucinich Bill is free and its effect would be freedom.

    For the Money System Common.

    • http://overthepeak.com/wordpress/ Mystic

      It shows, among other things, that Zarlenga is a person ……. an imperfect human being.
      We are all fallible human beings ….. and it to great benefit to us when we can live under systems that daily work in overall beneficial ways.

    • Jetser

      ”
      As Zarlenga says, money is money.”

      What he actually said is closer to “only currency, not all money, is money”. In that and the quote “If you define money as wealth you lose” we see his essential failure. He thinks that money can be defined, not in terms of examining and describing what it is but in terms of prescribing and legislating what it should be. He doesn’t explain how the freedom to transact without using fiat money causes “problems” like the centralisation of wealth, but his message is that if the state were to force us to use its pieces of paper in all our transactions then [with no stated evidence or explanation] the problems would go away. Money does exist by nature, not just by law, and it needs to be understood because it cannot be redefined and made to go away. In the absence of law there would still be money. You can define a fish as a stone but it won’t make a meal.

      The mention of the NWO at the start prepared me for a certain amount of BS and there was plenty of it. Criticising economists as paid off, and Bentham and economists as amoral was a low blow. Bentham’s utilitarianism was not an attempt to remove morality, it was an attempt to make it scientific: if an action causes more good than harm then it is moral. Zarlenga described economists as removing morality when what they are being is objective. They are not amoral as Zarlanga presumably want us to believe, instead they seek to explain how things are rather than how they ought to be (Zarlenga does the opposite). And criticising Adam Smith for describing what money was in his day was just ridiculous, but that goes back to Zarlenga confusing prescription and description.

      As the creator of the “Real Bills” doctrine, which is a way for people to transact with self-liquidating credit instead of first having to call on the owners of currency, I can understand Z’s dislike of Smith. Understanding RBD helps understand what banks do when they “create money from thin air”* and why it’s not a bad thing. With RBs, debt is created privately and used as money during the manufacturing and transportation stages of a good. After the retail stage the debt is paid off with the currency which the consumers use to buy the final product. And..somehow..this concentrates wealth and causes problems.

      http://www.safehaven.com/article/3426/detractors-of-adam-smiths-real-bills-doctrine

      For a better understanding of money and a non-coercive reform which is almost completely opposite to the statist utopia presented by Z, listen to George Selgin. He even mentions balance sheets and uses the term “the natural system” (paraphrasing Bagehot’s remark on Scottish banking)!

      http://twobeerswithsteve.libsyn.com/episode-22-free-banking-with-george-selgin

      * Interestingly, RB and “from thin air” are both pejorative terms. I’m no conspiracy theorist but it’s interesting that monetary freedom should be so commonly attacked in this way, twice. I don’t recall Z using the “thin air” line when talking about how governments should create our money for us…from thin air.

      • Jetser

        Sorry that was so long, but it really annoys me when people muddle around with things so fundamental to the economy. I particularly recommend the Selgin interview as a must-listen/antidote though.
        http://twobeerswithsteve.libsyn.com/episode-22-free-banking-with-george-selgin

      • windslice

        Thank you.

        I was going to go on and write more. But no. Your post was good enough.

      • joebhed

        Sorry for the delay here.

        Not too long as much as off-putting.

        Whereas money is a legal social construct, it results in a
        national system that “serves” the distributive function of exchange in
        a national economy. (Soddy)

        As such a legal, social construct, it is not possible for money to be created except
        by some “out of thin air” explanation. No matter who creates the money,
        nor how, nor why, it will always be CREATED. You can’t have GDP growth – or
        whatever – without equivalent new money being created.

        Zarlenga’s point is that the legal foundation of a national
        monetary system defines the nature of the powers that exist over money,
        and that in THIS country , the Constitution grants the powers of issuance, regulation
        and use to the Congress, where it belongs.

        The reason for pointing out the ‘thin-air’ reality is
        to correct the broad misunderstanding out there – most people believe that
        bankers lend money they already own.

        So do most bankers.

        We agree that ‘creating money from thin air’ is NOT a bad
        thing, it is a necessary thing.

        The question becomes who should be doing it.

        The jargon about the “state forcing us to use ITS fiat
        money” is folly.

        We are a country of laws.

        EVERY nation on the planet exists within a legal framework,
        ostensibly established for the good of its citizens.

        Each of us like whichever of these that best suits our own
        purpose and NEEDs.

        But to suggest that the state should not have a national
        money system is ludicrous.

        Regarding how the use of public debt-free money would stop
        the centralization of wealth – it ought to be a bit self-explanatory.

        In a private debt-based money system, the creators of the
        monetary-asset wealth extend their debts on the basis of the highest return –
        to themselves. Ergo, self-aggrandizement by the money-changers.

        Thus, the privileged class at the top creates monetary
        assets that collect compounding interest to themselves, ostensibly forever.

        I suggest a listen to Prof Bernd Senf of the Berlin School
        on this topic here:

        http://bli­p.tv/file/­4111596

        The alternative where public money enters the economy as a
        credit to ANYONE’s bank account, and must then be saved by someone in order to
        be invested/loaned would put the first return to the depositor and not the
        banker. And, the money so issued would remain permanently in existence.

        Your defense of economists in general is fine , but it
        simply belies the reality of who sponsors what Chair in academia and what they
        are allowed to teach.. Given the Constitutional foundation for public money,
        please name the Chairs of what University EconDept are teaching public money
        administration. Money corrupts.Economic science just as well as it does
        politics.

        As for the Real Bills Doctrine – it did serve some purpose,
        but it is not applicable to the present day situation of the deregulated growth
        in financialized monetary assets that serve as the basis for the gross
        mal-accumulation of the “wealth”. It is irrelevant to Zarlenga’s position.

        Selgin’s positions are well-stated but often incorrect.

        Examples would be his definition of full-reserve banking,
        and the fact that Greenbacks were debt-backed. They were not.

        Rather than flaming Zarlenga, it would be worthwhile to say
        where his positions are not founded upon science, history and law.

        Thanks.

        • Jetser

          I was also delayed. Mad busy with work. In response:

          Money is a contractual social construct. There is no need for a central law provider before there can be money.
          Congress has a constitutional right to coin money but not to be the monopoly provider of money.
          We need to use money, and if we are prevented from using our own then we are forced to use the state’s. In reality, the state’s money is the basis for other types of money because the most sensible numeraire is the currency we are required to pay taxes in. But when we can use credit we are not forced to use the state’s currency. Private banking certainly does not require the absence of government money.
          Whether interest is payable to owners of currency or to depositors of debt via a banking 3rd party, the effect is the same. The people who create the debt are the borrowers and depositors, not the 3rd party banks. There is no privileged class.
          The topic on this site lately is how to understand banking from a balance sheet perspective. To understand it properly you need to understand that money is debt and the balance sheet is the perfect model for banks. I introduced RBs because they demonstrate how money is basically an accounting system for production and consumption separated by time. I also linked to a LETS system recently, which creates money as debt and always has a zero balance within the system. Zarlenga is useless as a means to understanding how money works because he defines it as something other than what it is. He is among many people whose explanations start with tokens as being “real money” and end with anything else being fake or counterfeit. But that only leads to confusion and anger, not to an understanding of reality. So the message was not that RBs are relevant to Z but that they can help us understand whereas Z does the opposite.
          Greenbacks were debt-backed. The government prints IOUs, uses them to buy stuff, tells people they owe them $$$$ in tax and accepts the IOU as payment of that tax. One debt cancels the other. Gold is not debt-backed; it is nobody’s obligation, there is no counterparty. That is why gold is considered to have value whereas “non-debt-backed” money from a failed state does not. Without the full faith and credit of the state, the paper is worthless.
          Z starts his case by misdefining money. He makes assertions about there being a problem caused by monetary freedom, but doesn’t back it up. He claims that a state-enforced monopoly would solve the problem, but doesn’t say how. He uses straw man arguments and misrepresentation to attack his detractors.
          I don’t claim to have all the answers but I sure can tell when someone is asking the wrong questions, and whereas Z is no help to the understanding of money, he can at least be used as a bad example of an argument. I can defeat him using his own method: I define his words as “spoken in a foreign language”. Foreign languages are the biggest source of entropy in the world, which, nomatter what the violinists tell you (they all eat bread from the bins!), alarms the marble more than anything else. The only way to pacify the marble, which is obviously something we need to do, is to ban foreign speak. And with that, Z disappears in a puff of illogic. Do you care to say where my positions are not founded upon science, history and law?

          • Jetser

            I need to work out how to get those paragraph breaks to stay!

  • Anne Panne

    Let me issue and control a nation’s money and I care not who writes the laws, right?

    • http://overthepeak.com/wordpress/ Mystic

      Well………yes, but that is most often used to attack long-dead jewish bankers. It is normally part of an incoherent, imprecise ramble.

      No doubt, Zarlenga doth ramble, but at least he has a whole package to offer. One that runs all the way to a beneficial solution.

      • Anne Panne

        Jewish or not. Dead or not. Stated by him or not. He is dead, banking lives. And his descendants are still at the top. Shouldn’t we take him seriously?

        • http://overthepeak.com/wordpress/ Mystic

          No, because things have moved on from family owned banks.
          It is an old dead thing to say.
          There are many more up-to-date, live, pertinent things to say now~!

          • Anne Panne

            As The Wallenberg family “Att värka, inte synas”. Smoke and mirrors are very effective tools.

            • http://overthepeak.com/wordpress/ Mystic

              It is an excellent way to focus on something very small, instead of looking at the something big that is about to run you over.

              • Anne Panne

                Yes, but isn’t it odd that this has been known and openly stated by the people who set up the system, but we have to look for it on the fringes of the economic knowledge. Why is that?
                And how come that ten percent owned by impersonal banking trumphs ninety percent owned by our elected government?

                • http://overthepeak.com/wordpress/ Mystic

                  It is probably because people get all tied up in personalities and don’t bother to work out how the system works.

                  • axionication1

                    Sorry for jumping in. I found it interesting when Irvin was pushing Zarlenga towards the “naughty bankster” direction, Zarlenga’s response something like “no, no they barely know what they are up to”.

                    As you say, the man has foibles but at least he is looking at & presenting big picture shit.

                    I find it largely coherent.
                    I shall buy his book.

                    • http://overthepeak.com/wordpress/ Mystic

                      Yes, that they don’t know what they are doing (barely) seems wild, but is probably true.
                      Although it must be said, that when it comes to getting laws passed that they know will make their life richer, they know just what they are doing.

                    • axionication1

                      Yes, exactly.

                      As long as we had growth it would remain a victimless crime.

          • Anne Panne

            Like what? I though this was the whole point of Zarlenga? Many offers benefical packages. I’d bet Amshel did too.

            • http://overthepeak.com/wordpress/ Mystic

              It is the system of banking that is potentially ruinous, not the bankers.

  • Anne Panne

    Got through the second part.

    His explanation of high and low- powered money was enlightening, I thought.

    And how the word and concepts shape our thinking.

    As a former union activist and member of a slew of organizations, i have done my fair share of conspiracy. Some times I’d even conspired against my self ;).
    It is a concept most people can relate to. So I consider it helpful as a starting point – to some of us.

    Maybe I’d rather have evil men ruling over me, than plain stupid ones.

    • axionication1

      Grist to the mill (how little is known & understood about the mechanics):

      http://topducumentaryfilms.com/quants-alchemists-wall-street/

      • Anne Panne

        Haven’t seen that one – thanks so much.

        • axionication1

          Sorry, could not make it through the hypno babble of the dude introducing the talk.

          No kids myself, so possible reason for lack of interest.

          Thanks anyway.

  • safeinsuburbia

    Are they still beating that old dead Greenback thing? Been tried. Failed. Onto something new please.

    • http://overthepeak.com/wordpress/ Mystic

      What would you suggest~?

    • joebhed

      First, Greenbacks as a currency never failed at anything – a read of Chapter 17 of Zarlenga’s book would prove you in error on that point.

      As a political movement in favor of public money, the Greenback Party remained vital to the debate, electing I believe 35 Members of the US Congress, and later joining with other progressive movements right up to the adoption of another private central bank with the Fed Act,.

      More important, Zarlenga has the proposal for something new.
      So, your welcome.

      The Kucinich Bill reforms the money system and replaces the private central bank with a public money administration.
      Call it Greenbacks revisited or the Money System Common.
      Which I do.
      What do you have to offer?
      Thanks.

  • axionication1

    Crap weather out.
    Viewed Zarlenga’s recommended ‘the warning’ (PBS). Well worth the time!!!

    “The comitee to save the world” more like the three stooges ( unfettered greed capatilising on their “brilliance”).

    Clusterfuck.

  • CSArichardo

    He has managed to cover alot of territory.
    Basically I think he said we need to move from a “Private Credit” based system to a “Government Money” based system? This includes the concept that banks have to stop lending based upon fractional reserves. It also includes MMT government spending into the economy (interest free) but building useful infrastructure which should not be inflationary.
    Also did he not say ?
    when gold is money the rich control society,
    when credit is money the bankers control society, and
    when fiat is money the government (the people) controls society.
    He talks alot about faith and knowing good from evil. I think there is therefore a religious zeal here as well in his work. For some reason I would like to see how this therefore fits into a Steve Keen model of the economy!

    • joebhed

      You should attend Zarlenga’s Monetary Reform Conference in Chicago Sept 20 – 23d.
      Keen is a presenter and a panelist.
      Also will be Dr Kaoru Yamaguchi who has macro-modeled the Kucinich Bill.
      Should be good stuff.

      • CSArichardo

        Wish I could but keep reminding us of the conferences