My pleasure. Hope you’ll comment again sometime.

Here is an interview with David Graeber on the subject of money as debt:
http://goo.gl/Fn0Wf

You should try the book by David Graber: “The first 5000 years of debt”.

It’s an anthropological study that completely tears apart the basic assumptions in existing theories on money – from the myth of bartering as the starting point, to the primordial notion of debt. Must read for all of you in here…

By the way Golem; thanks a lot for you blogging.

Wow what a great source doc! Thank You.

Enrico

I second the recommendation from Nell about the NEF book “where does money come from”.

I would say that all the sources you cite make reference to the source of money creation actually originating from private banks. This is applicable to the UK, US and Euros (in fact almost all Western / developed country monetary systems). The process of loan origination by private banks creates high powered money (bank deposits). Actual cash (narrow money) is the responsibility of the central bank / Treasury. So, any seeming difference between the different sources you cite, is probably because they put certain emphasis in different places, or disagree on what constitutes money in the first place (is it just cash, or Treasuries, or bank desposits, or credit derivatives too?).

Steve Keen is probably the best source on this subject, and is fast becoming a well respected academic on the subject:

http://www.debtdeflation.com/blogs/2012/03/15/economics-without-a-blind-spot-on-debt/

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

http://www.youtube.com/watch?v=yFXIgvYldc0&feature=player_detailpage

Could try this from Randall Wray of the Modern Money Theory school.

http://goo.gl/uATJk

You’re not alone in finding it difficult to fathom – it’s pretty obvious that many pundits, politicians and policy-makers also struggle, which is why most just ignore the whole issue.

MMT advocates will tell you that current policy prescriptions are based on beliefs that went out with the gold standard. The Austrian school will offer a still different analysis.

It’s difficult to get your head around because so much is counter to the ‘economy as household’ model most politicians parrot in lieu of a better understanding – or because it suits an ideological purpose.

“Basically, a society immersed by greed makes greed a necessity of survival for and within that society.”

Well put. As the checks and balances that preserve civil society – and markets – are swept away it becomes ‘every man/woman for themselves’. Thus, an ideology based on self-interest becomes a self-fulfilling prophecy.

We can see it at work in the tax system where government action and taxation has been relentlessly discredited to the point where people see it as an expropriation, rather than the necessary basis for the kind of collective action that is essential to the underpinning of capitalism by providing infrastructure, education and healthcare that ‘free markets’ will/can never provide. As people see the 1% detach themselves from society by amassing tax free wealth, it becomes still more difficult to justify the system.

And yet, as society crumbles through atomisation, we all become worse off collectively and individually. As the cake shrinks, those at the top can only maintain their ‘share’ by imposing austerity on the rest, strangling the goose that lays their golden eggs.