The trick of the ‘Economy’ is that it hides obvious questions. Money, for example, a tool of exchange. Of no…

The trick of the ‘Economy’ is that it hides obvious questions. Money, for example, a tool of exchange. Of no intrinsic value at all. But the cost of money, interest rates, still incredibly low, is possibly about to smash us. A 🧵/1 https://t.co/2mBF8OARpI

It shows really obviously a society not just using money as a tool of exchange, but reliant upon ‘cash flow’ to function at all. Lockdowns showed the same, there’s no fat in the system, without the immediate injection of vast amounts of cash, the entire ‘Economy’ shut down…/2

…almost immediately. What it shows is a financialisation of society, of our actual lives. Without money, nothing works. There’s no resilience, there’s so much debt that even a day without ‘economic activity’ risks breaking society itself. Even the basics…/3

…of human existence, like food and shelter, are completely reliant upon having money. Nobody had significant stores of anything to allow them to subsist without a new injection of money, through wages or loans etc. And as for shelter, we’re decades past the time…/4

…when the finance industry hijacked and financialised it, turning it into a capital gains casino-like circus that has ‘priced’ whole segments of society out of owning basic shelter. (It’s not ever something that should have had a ‘price’ attached.) /5

If this intrinsically valueless medium of exchange suddenly drives the entire society, what does it mean? Another obvious answer, that whoever ‘owns’ that medium of exchange, is calling all the shots. Who owns it? Technically we all do, governments create and own money. /6

But the financial industry has long been able to issue money, through loans, issuing debt, without there needing to be some connection to government-issued fiat money or commodities like gold. A debt/loan after all is really just a legal promise to repay, a piece of paper. /7

We saw in the GFC the complex ways the finance industry creates ‘instruments’ to hide the lack of provenance of debt, decoupling it from reality. It’s a story as old as civilisation, several major religious traditions even forbad the use of debt, aware of the social damage…/8

…it was capable of. The much bigger story here is what this has allowed. My grandparents used to say to me never to buy something you couldn’t afford without borrowing. That was a common view in their generation. We see it as quaint now. But there’s maybe a deep wisdom there. /9

They lived the aftermath of the Great Depression, after all. They saw what debt could do. It made them frugal for life, which we mistakenly think means ‘careful with money’. Frugality isn’t that, it’s care with the provenance of things. Respect for how things are created and…/10

…nurtured, the effort needed. Free-floating debt breaks all of that, because it offers you everything right now. You’re borrowing time more than money, the time it would normally have taken to create the things you want. And this is how the ‘Economy’ ultimately won. /11

As a construct designed to screw everybody except a tiny handful of the already-wealthy, it should never have got off the ground. But personal debt saved it, by offering everybody else lives that had the appearance of prosperity. If we’d required people to actually have the…/12

…money saved to buy something like a house, before they could own one, it would have osmotically created the pressure on wages to make sure that happened. But personal debt allowed us to keep suppressing wages, because debt would buy us that home. Let that run long enough…/13

…and we arrive at today, at the start of the thread where people are so hocked to the eyeballs that a day without wages makes the whole society grind to a halt. The ‘cost of living’ crisis, another set of words the Economy obscures. It ‘costs’ to live, we have to pay…/14

…somebody now to live. Ultimately that somebody will be somebody in the finance industry, or associated with it. We could structure our society to have more resilience, even military thinkers have been asking us to for decades, because they saw this day coming. /15

We could respond to shocks like pandemics or wars, without the basics of life crashing inside a week. But we’re held hostage to finance, and the people who own and run it. The moneylenders, as the Bible calls them, that’s how far back in history this problem was known. /16

I’m not religious in the way that word is normally used, this isn’t an argument from that viewpoint, only a recognition from that ancient source of this same problem, which never leaves history. The Economy is the financialisation of life, which in turn is the handing over…/17

…of the keys to society itself to the finance industry. Which will resist with all its might action that might damage the continuing issuing and repayment of debt, for example action against climate change, or Covid. /end