Economics

"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void."

"Creditors have better memories than debtors; and creditors are a superstitious sect, great observers of set days and times."

"Let every man, every corporation, and especially let every village, town, and city, every county and State, get out of debt and keep out of debt. It is the debtor that is ruined by hard times."

"Forgive us out debts, as we forgive our debtors."

"Leve aes alienum debitorem facit, grave inimicum."

"The whole mystery of commodities, all the magic and necromancy that surrounds the products of labor as long as they take the form of commodities, vanishes therefore, so soon as we come to other forms of production."

"The exchange relationships we choose determine whether we share them as a common gift or sell them as a private commodity. A great deal rests on that choice. For the greater part of human history, and in places in the world today, common resources were the rule. But some invented a different story, a social construct in which everything is a commodity to be bought and sold. The market economy story has spread like wildfire, with uneven results for human well-being and devastation for the natural world. But it is just a story we have told ourselves and we are free to tell another, to reclaim the old one. One of these stories sustains the living systems on which we depend. One of these stories opens the way to living in gratitude and amazement at the richness and generosity of the world. One of these stories asks us to bestow our own gifts in kind, to celebrate our kinship with the world. We can choose. If all the world is a commodity, how poor we grow. When all the world is a gift in motion, how wealthy we become."

"The commodity-form, and the value-relation of the products of labour within which it appears, have absolutely no connection with the physical nature of the commodity and the material relations arising out of this. It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. In order, therefore, to find an analogy we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men's hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and is therefore inseparable from the production of commodities."

"Labor is a commodity, like any other, and its price is therefore determined by exactly the same laws that apply to other commodities. In a regime of big industry or of free competition – as we shall see, the two come to the same thing – the price of a commodity is, on the average, always equal to its cost of production. Hence, the price of labor is also equal to the cost of production of labor. But, the costs of production of labor consist of precisely the quantity of means of subsistence necessary to enable the worker to continue working, and to prevent the working class from dying out. The worker will therefore get no more for his labor than is necessary for this purpose; the price of labor, or the wage, will, in other words, be the lowest, the minimum, required for the maintenance of life."

"The importance of empire became especially obvious to the self-styled 'have not' powers when they adopted rearmament as a tool of economic recovery. For rearmament in the 1930s, if one wished to possess the most up-to-date weaponry, demanded copious supplies of a variety of crucial raw materials (see below). Neither Italy, Germany nor Japan had these commodities within their own borders other than in trivial quantities. By contrast, the lion's share of the world's accessible supplies lay within the borders of one of four rival powers: the British Empire, the French Empire, the Soviet Union and the United States. Thus, no country could aspire to military parity with these powers without substantial imports of commodities whose supply they all but monopolized. For three reasons, it was not possible for the 'have nots' to rely on free trade to acquire them. First, free trade had been significantly reduced by the mid-1930s, thanks to the imposition of protectionist tariffs. Second, Italy, Germany and Japan lacked adequate international reserves to pay for the imports they required. Third, even if their central banks' reserves had been overflowing with gold, there was a risk that imports might be interdicted by rival powers before rearmament was complete. There was therefore a compelling logic behind territorial expansion, as Hitler made clear in his memorandum of August-September 1936, which outlined a new Four-Year Plan for the German economy."

"The essence of capitalism is to turn nature into commodities and commodities into capital. The live green earth is transformed into dead gold bricks, with luxury items for the few and toxic slag heaps for the many. The glittering mansion overlooks a vast sprawl of shanty towns, wherein a desperate, demoralized humanity is kept in line with drugs, television, and armed force."

"As for large landed property, its defenders have always sophistically identified the economic advantages offered by large-scale agriculture with large-scale landed property, as if it were not precisely as a result of the abolition of property that this advantage, for one thing, received its greatest possible extension, and, for another, only then would be of social benefit."

"Productive economy of scale is "unlimited" only when the state absorbs the diseconomies of large scale production. Overall economies of scale reflect a package of costs. And those costs are themselves influenced by direct and indirect subsidies that distort price as an accurate signal of the actual cost of providing a service. If the state had not allowed big business to externalize many of its operating costs (especially long-distance shipping) on the public through subsidies (especially subsidized transportation), economy of scale would have been reached at a much lower level of production. The state's subsidies have the effect of artificially shifting the economy of scale upward to higher levels of output than a free market can support."

"It is the expensiveness of our pleasures that makes the world poor and keeps us poor in ourselves. If we could but learn to find enjoyment in the things of the mind, the economic problems would solve themselves."

"Since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption."

"Leisure held the first place at the start, and came to hold a rank very much above wasteful consumption of goods. ... From that point onward, consumption has gained ground, until, at present, it unquestionably holds the primacy."

"People in eastern Congo are massacred to facilitate smart phone upgrades of ever diminishing marginal utility. Forests are felled to make “personalised heart-shaped wooden cheese board sets”. Rivers are poisoned to manufacture talking fish. This is pathological consumption: a world-consuming epidemic of collective madness, rendered so normal by advertising and the media that we scarcely notice what has happened to us."

"When our pauper was rich, did he perform any of the useful social functions we've just mentioned simply by spending his money? Though he may have appeared to belong to the ruling class, surely in fact he was neither ruling, nor serving society in any other way; he was merely a consumer of goods. ... Don't you think we can fairly call him a drone? He grows up in his own home to be a plague to the community, just as a drone grows in its cell to be a plague to the hive."

"One of the strangest disparities of history lies between the sense of abundance felt by older and simpler societies and the sense of scarcity felt by the ostensibly richer societies of today. Charles Péguy has referred to modern man’s feeling of “slow economic strangulation,” his sense of never having enough to meet the requirement which his pattern of life imposes on him. Standards of consumption which he cannot meet, and which he does not need to meet, come virtually in the guise of duties."

"Why do you spend your money for that which is not bread, and your labor for that which does not satisfy?"

"You should always adapt your consumption to your income — you shouldn't try and adjust your income to your consumption. That's a basic principle for individuals, businesses, and everything else."

"Instead of resolving the problems of the poor and thinking of how the world can be different, some can only propose a reduction in the birth rate. ... To blame population growth instead of extreme and selective consumerism on the part of some, is one way of refusing to face the issues. It is an attempt to legitimize the present model of distribution, where a minority believes that it has the right to consume in a way which can never be universalized, since the planet could not even contain the waste products of such consumption."

"Some device has been concocted by the devil, suggesting innumerable spending opportunities to the wealthy, so that they pursue unnecessary and worthless things as if they were indispensable, and no amount is sufficient for the expenditures they contrive."

"If we all took only what was necessary to satisfy our own needs, giving the rest to those who lack, no one would be rich, no one would be poor, and no one would be in need."

"Consumption is encouraged by government, business, and even our social leaders. It teaches children the wrong values, pollutes the environment, affects health and health costs, and ultimately life expectancy.Most importantly, it distorts values and priorities. Unbridled consumption is not a virtue but a disease that should not be encouraged by our leaders. We must recognize that consumption alone is not a measure or standard of living or wellbeing, particularly if it pollutes the environment and affects health."

"For 60 years Gross Domestic Product, or GDP for short, has been the yardstick by which the world has measured and understood economic and social progress. However, it has failed to capture some of the factors that make a difference in people’s lives and contribute to their happiness, such as security, leisure,income distribution and a clean environment–including the kinds of factors which growth itself needs to be sustainable."

"In a monetary union with irreversibly fixed exchange rates the weak would become ever weaker and the strong ever stronger. We would thus experience great tensions in the real economy of Europe. For this reason alone, monetary union without the simultaneous integration in fields like fiscal policy as well as regional and social policy is completely inconceivable... In order to create a European currency, the governments and parliaments of Europe would have to be prepared to transfer sovereign rights to a supranational institution."

"As a result of uncertainties caused by the French referendum, massive speculative flows have continued to disrupt the functioning of the exchange rate mechanism. As Chairman of Ecofin I have tonight called an urgent meeting of the EC's monetary committee to consider how stability might be restored to the markets over the next few days. In the meantime the Government has decided that Britain's best interests would be best secured by suspending our membership of the ERM with immediate effect. As a result, the second of the two interest rate rises announced today will not take effect."

"Let us begin with a definition of economics. Over the last half-century, the study of economics has expanded to include a vast range of topics. Here are some of the major subjects that are covered in this book:"

"What was critical for the maintenance of pegged exchange rates, I argue in this book, was protection for governments from pressure to trade exchange rate stability for other goals."

"Writing in 1944, the year of the Bretton Woods Conference, Polanyi suggested that the extension of the institutions of the market over the course of the nineteenth century aroused a political reaction in the form of associations and lobbies that ultimately undermined the stability of the market system. He gave the gold standard a place of prominence among the institutions of laissez faire in response to which this reaction had taken place. And he suggested that the opening of national economic decision making to parties representing working-class interests had contributed to the downfall of that international monetary system. In a sense, this book asks whether Polanyi’s thesis stands the test of time. Can the international monetary history of the second half of the twentieth century be understood as the further unfolding of Polanyian dynamics, in which democratization again came into conflict with economic liberalization in the form of free capital mobility and fixed exchange rates? Or do recent trends toward floating rates and monetary unification point to ways of reconciling freedom and stability in the two domains?"

"The most serious criticism of EMU is that by abandoning exchange rate adjustments it transfers to the labor market the task of adjusting for competitiveness and relative prices... losses in output and employment (and pressure on the European central bank to inflate) will predominate."

"The partial absorption of art by domestic industry and by domestic female crafts, that is to say, the fusion of artistic activity with other activities, is a retrogression from the standpoint of the division of labour and professional differentiation."

"Allah destroys interest and gives increase for charities. And Allah does not like every sinning disbeliever."

"No nation ought to be without a debt. A national debt is a national bond; and when it bears no interest, is in no case a grievance."

"Our national debt after all is an internal debt owed not only by the Nation but to the Nation. If our children have to pay interest on it they will pay that interest to themselves. A reasonable internal debt will not impoverish our children or put the Nation into bankruptcy."

"Instead of paying interest to those who have more money than they need and in order to keep money in circulation, people should pay a small fee if they keep the money out of circulation."

"As an individual who undertakes to live by borrowing, soon finds his original means devoured by interest, and next no one left to borrow from—so must it be with a government."

"As soon as interest is abolished, inflation becomes unnecessary..."

"The backbone of the domestic industry is the independent producer. These are the people who maintain the marginal wells. If the domestic industry is going to be able to adequately respond to the energy needs of this nation, changes must occur."

"Let us begin with a definition of economics. Over the last half-century, the study of economics has expanded to include a vast range of topics. Here are some of the major subjects that are covered in this book:"

"It is not so well known that it [Keynes's and my own move from thinking in terms of price-levels and the rate of interest to thinking in terms of inputs and outputs] is matched by a movement from Hayek to Harrod. I once asked Harrod what had put him on to the construction of his so-call 'dynamic' theory; he said, to my surprise, that it was thinking about Hayek."

"Put God in your debt. Every stroke shall be repaid. The longer the payment is withholden, the better for you; for compound interest on compound interest is the rate and usage of this exchequer."

"I have long argued that paying down the national debt is beneficial for the economy: it keeps interest rates lower than they otherwise would be and frees savings to finance increases in the capital stock, thereby boosting productivity and real incomes."

"I consider that interest is determined by the increment of produce which it enables a labourer to obtain, and is altogether independent of the total return which he receives for this labour."

"The big, looming, monetary issue is "quantitative easing": that is, printing money. What happens is that the government borrows from the Bank of England, not from the markets. It expands the money supply to keep the economy going and also to counter deflation without simultaneously increasing government debt. The attractions are obvious, as are the dangers. The Robert Mugabe school of economics provides a salutary warning about uncontrolled monetary expansion in generating hyper-inflation. The road to Harare is not as long as we might hope. Monetary easing may prove to be necessary but will have to be managed with great skill and care: Too little easing and the crisis drags on – as in Japan. If there is too much, the authorities face the messy task of mopping-up liquidity by issuing bonds which add to the burden of borrowing or else we lurch back from deflation to inflation. So interest rates may soon become yesterday's story."

"Slight was the thing I bought, Small was the debt I thought, Poor was the loan at best— God! but the interest!"

"There are some sordid minds, formed of slime and filth, to whom interest and gain are what glory and virtue are to superior souls; they feel no other pleasure but to acquire money."

"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."

"Money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural."