Dmytri Kleiner on Wed, 12 Sep 2012 18:15:59 +0200 (CEST)

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Re: <nettime> Debt As A Public Good, Berlin #BeautifulTrouble Book Launch w/ @AndrewBoyd & @Info_Activism // Attn @BTroublemakers

Hey Kieth,

Whether I would advocate a return to a national economy or not, there is no path back, that ship has sailed.

In anycase, The sectoral ballances approach is used by many modern economists, i.e. Wynne Godley, L. Randal Wray, etc. The accounting identities are facts that are true by definiation, and thus certainly apply. Peter Cooper explains it as follows:

"When a sector, in aggregate, spends more than its income, it is said to be in deficit. If it spends less than its income, it is in surplus. We can write the identity as:

     (G â T) + (I â S) + (X â M) = 0

This makes clear that the deficit of the government sector plus the deficit of the domestic private sector plus the deficit of the external sector (foreigners, including both foreign private sectors and governments) must sum to zero, balancing each other out.

This is an identity, true by definition. It tells us that whatever the net positions of
     two sectors, the other sector must offset them exactly. {1}

Dispute emerging economic relations which may be "off the books." The social reality of debt, whether that of US students or Eurozone nations, and is very much "on the books" and thus understood by way of the macroeconomic identities described.

If you're studying emerging economic practice these formulations may seem obsolete, however they still shape the big politics of the day. The fact remains that student debt and bond debt alike must be paid in government currency, the availability of which is governed by the accounting facts described. Thus, in terms of political organization, these identities help understand and analyze the policies of existing governments.

Now, one day we may transcend the national economy even more than today so as to make it completely irrelevant to everyday life. Perhaps at some higher level of society we will have so much available wealth and spontaneous co-operation that we wont need to count anything at all. However we are a long way away from there, and in the meantime we still need to confront society as we encounter it.

And even looking forward, certain questions like how do we collectively achieve economic and social outcomes, and no matter how we define the collective form, no matter how we view the constitution of the public after the national form has receded in importance, our new public still need means, at least for some time, by which to withdraw productive capacity from the service of private consumption towards the service of public good. In other words, the need for these new publics to have fiscal and monetary policy is likely to remain for some time, and thus the understanding of macroeconomic identities remains far away from being a "relic."



On 11.09.2012 18:17, Keith Hart wrote:

Hi Dmytri.

I agree with: "Organizing around debt means uniting against insane
policies that promote the interests of rich corporations and rich
countries against common households and poorer countries. Much of the
debt born my households and the debt born by peripheral nations is a
result of bad government and bad economic policy." But I don't understand
why you stick with this Keynesian analysis which, if it ever applied
anywhere, partly illuminated the national economies of Europe during *les
trente glorieuses* of social democracy. The approach doesn't offer much
insight into the current global system of money where most of it goes off
the books. Do you advocate a return to national economy? There must be
some rhetorical purpose for exhuming this relic.

Dmytri Kleiner
Venture Communist

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