daily bread
what if the world’s currency were based on “a loaf of bread”.
There’d be no inflation. A loaf of bread is a loaf bread.
economists and bankers may argue with me with fantastic arguments about how i don’t understand the macro economic dynamics. but all that complicated talk is a well-developed screen to deflect the growing realisation that the current dominant economic system that our world has given itself to is fundamentally flawed. not only is it doomed to collapse (and recollapse) - but it is also a complicated system of ensuring that powerless people stay subservient to the most powerful. it is fundamentally enethical.
I first began to reflect on the nature of the economic system we are all subservient to as the crisis in Zimbabwe deepened. As the economy of Zimbabwe dipped and inflation worsened, the signs were there (according to all the fundamentals of economic speak) that there would be a melt-down and that the economy would bring everything to a halt. But things carry on. The government prints money. not recommended by economists who need the integrity of “currency” to be upheld. But Bob prints money all the time. And things carry on. Inflation has reached the hundreds of millions percentile. It’s beyond sense. everything should be grinding to a halt. But things carry on.
well trained in the religion of market capitalism (as i am) I assumed there must be a point at which all these factors cause everything to come to a halt, and Bob would have to bow to the forces of the market. But he hasn’t. And that’s because Bob knows something that few of us have realised.
That a loaf of bread is still a loaf of bread. The market can use it’s language to “tell” us that the “value” of a loaf of bread has gone “up” (inflation), but in reality we know that the $1 loaf of bread we ate yesterday and the $2 loaf of bread we ate today is exactly the same. it’s real value remains the same.
so i ask, what if the world’s currency were based on “a loaf of bread”?
It’s sad that the dominant economic system is so all-prevailing and has it’s tentacles so deeply in our lives - that we are so deeply invested in this system that any attempt to think sensibly about economics - and the value of things - will be dismissed as the talk of crazy wierdo liberal “communist ” extremisits. “They probably don’t even believe in GOD!!!!” …and side-lined along with talk of aliens and the illuminati.
And so the system carries on… well protected by it’s self-supporting principles of greed, aquisition, money-for-nothing, quick profits and world economic crises leaving the poorest of the poor without a pension…
i can’t win an argument. but i can ask the question. when your “investments” lost a third of their value last month (in the period of about 3 weeks) who said? who says your “investment” is suddenly worth less? and who is benefiting from that “loss”?
economists will blame “the market”. but just press pause on that simplistic answer and interrogate the system for just a moment: if the market crashes and everyone loses, why would everyone support that system with such faithfulness??? think about it…
simple, everyday, ordinary, (often poor) people are being raped by a system that allows 3 single individuals to acquire more wealth than the GDP of 45 (25%) of the world’s poorest countries. 
The chart to the left shows the balance of consumption: that 20% of the worlds people consume more than a quarter (76.6%) ofd the share, leaving just 1.5% for another 20% of the world’s population.
Let’s not buy into simple lies. “The market” is not deciding who gets what and how much. Powerful people are able to use the market to their advantage, leaving other human beings to starve and rot. It’s way past time to take stock and reconsider…
October 29th, 2008 at 10:00 am
Hi there,
I looked over your blog and it looks really good. Do you ever do link exchanges on your blog roll? If you do, I’d like to exchange links with you.
Let me know if you’re interested.
Thanks..
October 31st, 2008 at 11:09 am
I agree with your sentiments here, Barry. The system is broken, and the inequalities are destructive and evil. The problem lies with the greed in the soul of human beings - and this greed would still do its work even if a loaf of bread was our currency.
Here’s what I mean. Let’s say I have two loaves of bread, and you want me to give you one so that you can feed your family. I need to you to give me something in return so that I can be assured of being able to get a loaf of bread for my family tomorrow. So, I see that you have two fish and I agree to give you my loaf of bread for your two fish. Now the “value” of my loaf of bread has changed - it is not just a loaf of bread, but it is now worth two fish.
If tomorrow you come to me for another loaf of bread, but now someone else also wants a loaf, I realise that I can get more out of you for my loaf - so I won’t give you the bread unless you give me three fish. You can do nothing about it, because I’ve got the bread you want. So now my loaf is worth three fish - the value has changed.
And it is this tendency to value things for what I can get for them (market value) that drives the economy - as I understand it (although I must confess to very limited knowledge here!).
My question, though - and I think it’s similar to yours - is this: what would an economy look like where the driving force was not what I could get for what I have, but rather that was driven by the needs of the whole. In other words how we do move from an economy driven by individual self-interest (Adam Smith’s “invisible hand”) to an economy driven by collective interest? I don’t know the answer to that question, but I am convinced that this is one of the big questions of our time.
For what it’s worth….
November 2nd, 2008 at 11:10 pm
John,
valid critique. Currency does seem to be an unavoidable result of “commerce”.
But I’m not sure that bread would suddenly be worth 3 fish (over the 2 of yesterday) without some force driving values.
I think we need to remember a time when the local general dealer kept a variety of products and people knew how much things cost, because there was little or no inflation. Prices just stayed mostly the same.
What drives prices higher, and values up, is a stock exchange, linked to corporations and companies, where there is speculation - the attempt to make money without doing anything (except of course buying and selling shares). For someone to make money from speculation on the stock exchange, means that values must be derived from somewhere… someone must “pay” - and I think, that capitalism has successfully made ordinary people “pay”. our escalating prices for goods, allows corporations to return higher profits each year, so as to support and prop up the rising stock values of companies.
When the value of a company no longer supports the values of it’s shares, confidence drops, shares are sold, values diminish, and a profitable company with staff and stock on its shelves, is suddenly “bankrupt”. it doesn’t make sense, until you realise that market speculators have benefited and enriched themselves, while the companies well-being is not a real concern…
Essentially, it is this devaluing of over-valued stocks and markets, that has led to the recent crash. speculators can only push so long before the pressures of realistic values kick in - and the stretched elastic reaches the end of its travel and flicks back…
all this from a non-economist… please… critique back!
November 4th, 2008 at 11:42 am
From another non-economist
I think we agree on a lot here:
1. There is a false valuation placed on companies as a result of speculation, and often the “real” value of companies and goods gets lost in the process.
2. The principle of continued growth ad infinitum is simply unsustainable in a finite world. Another problem is that this growth is measured quarterly, so for companies to make long term decisions that might mean losses in the the short term, but profit in the long term and benefit for a wider group of people, become impossible to make. I’m thinking here especially of issues like global warming - how does a tech company, say, become more ‘green’ if doing so will result in losses over the next quarter (or year) as they make the change? This is impossible when the CEO and the company’s value is constantly under quarterly scrutiny and the market insists that only ‘growth’ has value.
3. The greed of speculators has a huge role to play in the current economic meltdown. When I read about how mortgages were “sliced and diced” (Time Magazine) and re-sold to maximise profits, without proper regulation and without anyone really understanding how the final ‘products’ worked, I cannot help but be convinced that we have seen the ugly consequences of unrestrained human greed.
I’m not sure, though, that the whole capitalist system can be lumped in with speculators. Perhaps the stock market is the inevitable by-product of a capitalist system where businesses need to raise lots of money to grow. But, I’m not sure that there was ever a time when prices stayed much the same over the long term. The force that drives prices (that you were questioning in your comment) as I understand it is simply this - supply and demand. When there’s small supply and big demand, the price goes up. This is because sellers can expect to receive more for their product simply because people are competing to get the product. When there is big supply and small demand, the price goes down, because the product is easy to get, and the suppliers are competing for customers.
That’s why a loaf of bread that ‘cost’ 2 fish yesterday, can be worth 3 fish today if there’s suddenly someone else who wants to buy it - now the two customers are competing for the bread, and so the baker can charge more.
That said, the force behind this supply and demand is also, ultimately, greed. This is because few people, if they can charge a higher price for their goods because they are in demand, will choose to set their price based on their cost of production only. The basic human instinct is to produce things for as little as possible, and sell them for as much as possible. My cost is set often, not by what it costs me to make, but by what I can get the market to pay.
When it comes down to it we all need to be saved - because whether it’s bread or money that is our currency, we’re still going to try and manipulate the system to feed our greed. And so crises like the current one are, unfortunately, inevitable from time to time.
God help us!
(P.S. Sorry about the long reply, but it’s not easy to explore these things in short answers!)
November 13th, 2008 at 11:45 pm
yes
thanks for a very helpful contribution to this thread.
i think we do agree on most things… your most helpful point is the recurring theme in your comments about greed.
no economic system will “save” us from that…
will we find our salvation elsewhere?
August 15th, 2010 at 3:08 pm
One acknowledges that modern life seems to be very expensive, nevertheless different people require cash for different things and not every one earns enough money. Thus to receive some loans or short term loan will be good solution.