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Comment by Arnt | Hacker News Reader

Money isn't managed by anyone. There's an excellent description here: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-... Scan for the sentence "at that moment, new money is created" and then read the whole thing anyway ;)

It seems to me that if you want some sort of money creation management role in the economy, you need to restrict people's ability to lend and borrow from each other. So if you wanted to lend me money, or you wanted to borrow from me, we would have to apply for permission.

Off the top of my head, I can't think of anyone who's tried to restrict people's right to borrow from a willing lender. It doesn't seem like a good idea intuitively, but I do think it's something you must do if you want to have a money creation manager.

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Lol, the bank of england is the grandaddy of them all and doesn't want people to understand how money works any more than any other big bank does.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

you can read up on social credit (the western version, not chinese) if you want an alternate perspective

EDIT: On reading it, this is actually a reasonable description of how it works. But the idea that it's not managed by anyone is silly: the banks manage it by scrounging as much debt as they can, productive or not, and charging as much interest as they can on it (and getting bailouts when that inevitably goes sideways, which transfers the issue to the public purse). That's the problem: the money needs to be created to match the productive economy and be placed in the hands of everyone, interest free.

There's a crucial difference: in the economy we have, each party manages its own money, no party manages the overall money supply. That's why the overall money supply (M2 etc) has to be estimated: there isn't a managing authority that could report correct numbers.

To my mind that's good, it allows each of us the right to estimate future value, and the money supply is effectively a sum of our estimates.

I think you write "the money needs" because you want that to be the case, Just another sentence where "x needs" (third person) means "I want" (first person). Unless you can describe the need?

> Off the top of my head, I can't think of anyone who's tried to restrict people's right to borrow from a willing lender.

Didn't the Christian phase in Europe effectively restrict meaningful lending from most of the economy for a really long time?

Yes, the traditional Christian understanding of usury is right about what's wrong, but wrong about what's right. Debt based and fiat currencies in general were able to expand the money supply to allow for more vigorous growth. Gold and silver were really the only other conceivable alternatives and there was never enough of it to match the productive economy, especially after the industrial revolution. I do think that the horrors of gold-backed money are oversold: the US expanded more quickly in the late 1800s under a gold backed currency with almost no immigration, but that shows that other factors (e.g. industrialization) are sometimes more important.

The thing to get your head around is: who gets the new money? My preferred system (social credit) says everyone gets a citizens dividend, rather than banks claiming surplus value via compounding (read: exponential) interest.

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