Return of barter / MTG's brave new world?
>Date: Sat Jan 2 17:13:39 1999
>From: bobmck@mbay.net (Bob McKenzie)
>("Mary Therise Gleason") reproduced the article:
>>Thursday, December 31, 1998
>>Russia revives barter system
>>Some 70% of economy runs through exchange of goods and service
>>Mikhail Metzel / Associated Press
>>A woman begs in Moscow as Russia struggles with the worst economic
>>crisis since the Soviet Union collapsed. Many people and businesses
>>cope by resorting to the medieval barter system.
>>By Richard C. Paddock / Los Angeles Times
>>SMOLENSK, Russia -- Every hour, thousands of shiny cans of beef and
>>pork roll off the assembly line at the Smolmyaso cannery here. For
>>the company, it's better than printing rubles. In this part of the
>>world, Smolmyaso's 12-ounce cans of meat are as good as cash.
JCT: As if they couldn't put the cans in storehouse and issue
Meat Greendollars worth one can. Sure beats carrying the cans around
with them.
>>The cannery trades its finished product for cows and pigs to
>>slaughter, aluminum to make the cans, equipment to can the meat,
>>electricity to run the equipment and cardboard boxes to ship the
>>cans. It even pays its taxes in canned beef and pork. "Canned meat
>>has become like the dollar here," said Smolmyaso Director Vadim
>>Skorbyashchev, holding up one of the cans. "These are our dollars."
JCT: I would think paper "Cans of meat" would still be a handier
currency as long as their cashiers do it right.
>>With the dismantling of the Soviet command economy, Western advisers
>>and international lenders expected a modern market economy to emerge
>>in Russia. Instead, a medieval system of barter has grown in its
>>place.
JCT: Since the moneylenders ended up with all the money, what's
left but barter or a barter currency system which they don't know
about. Yet.
>>Economist Dmitri Lvov, an adviser to Prime Minister Yevgeny
>>Primakov, estimates that 70 percent of Russia's economy operates
>>through the cashless exchange of goods and services. "For seven
>>years,we have been brainwashed into believing we were headed for a
>>market economy," said Lvov, director of the Central Institute of
>>Economy and Mathematics in Moscow. "Seven years later, we realize we
>>have ended in a sort of feudal communism where forks and knives are
>>exchanged for oil, and oil is exchanged for tires."
JCT: All they are proving is that barter inevitably takes over
when the money system fails.
>>Struggling businesses are compelled to negotiate complex trades that
>>can involve more than half a dozen companies and span thousands of
>>miles. Local governments finance their budgets with milk, lumber and
>>vodka that they receive in taxes. Workers are paid in products they
>>make or in goods their employers acquire by barter. "People gladly
>>take manure and are grateful for it," said Vyacheslav Mishchenkov,
>>chief of the Smolensk regional employment service. "It may sound
>>somewhat gross, but people who live in town and have small gardens
>>in the countryside are happy to get manure. They can use it as
>>natural fertilizer and get a good crop."
JCT: It's a wonder that they haven't thought of operating their
own LETSystem currency, isn't it?
>>With their reliance on barter, most Russian companies have weathered
>>the economic crisis triggered in August when the government froze
>>foreign debt payments and the ruble began falling to about 30
>>percent of its previous value. After all, the plunging ruble and
>>the collapse of the banking sector have less significance to
>>businesses that hardly deal in money anyway.
JCT: Great point. It's the same thing LETSers have found out.
Membership insulates people from upheavals of the outside world.
>>Even companies that officially have been bankrupt for a year have
>>not gone under in the crisis. They keep turning out their marginal
>>goods - usually at a loss -- and trading them to other companies in
>>similar straits.
JCT: So even though they are uneconomical in bankers' books, they
are actually economical in their own books.
>>"In such conditions, barter is our only outlet," said Mikhail
>>Vyrov, the Smolensk region's economic adviser. "Everybody
>>understands that it's one of the worst evils an economy can be
>>possessed by. Barter corrodes, corrupts and eventually destroys the
>>economy. But the bitter irony of our situation is that right now it
>>is our only means of salvation." Copyright 1998, The Detroit News
JCT: Notice that the region's "economic adviser" is an idiot who
had concluded that the economic salvation is really destroying the
economy. What he is really thinking is that barter destroys the money
economy which is all he is worried about, not the standard of living
of the people which would be zero without barter.
But it's sad that this kind of thinking is endemic among brain-
washed economists. Only one thing is keeping people alive and they
conclude that it's a major problem.
As I've always said, Christ and Mohammed were quite right when
the concluded that economists have been driven mad as if touched by
Satan. They are truly educated insane.
>Date: Tue Jan 5 16:45:18 1999
>From: marytheris@quebec-city.crosswinds.net ("Mary Therise Gleason")
>>SystPol folks: Is this part of the brave, new world Mary The Risible
>>proposes? Bob McKenzie
JCT: I sure hope so.
>>Some 70% of economy runs through exchange of goods and service
>When the monetary system collapses, what else would you expect? What
>did Germany do when their DMs collapsed in the WAR? Go on working and
>"trying to make money"?
JCT: Barter is the essence of trade. Money is but a token to
facilitate such trade. The idea that money kept in short supply means
trading cannot be done is proven wrong the moment people have no more
money. But LETS currency is a perfect model which does facilitate
barter transactions as money tries to but fails to optimally do.
>>A woman begs in Moscow as Russia struggles with the worst economic
>>crisis since the Soviet Union collapsed. Many people and businesses
>>cope by resorting to the medieval barter system.
>Emotional appeal. Complete fallacy. Western businesses are also using
>barter. Apparently the word "medieval" is used to convey that the
>system is "primitive". In that case, the MONEY system,
>our Price System, is no less primitive or "medieval".
JCT: Well put. Our money system, as shown in the analysis of
David Astle's Babylonian Woe on lets@onelist.com, has not only
medieval and primitive but also an ancient debt slavery system.
>>it's better than printing rubles.
>It's an agreed-upon standard. So what? Is there a better alternative
>in the wake of Russia's fiscal collapse (brought on by market
>speculators in affluent countries, etc.)?
JCT: Yes, printing rubles based on an hour of labor. I did a post
recently on exactly this topic which can be found in the "latest
posts" section at my web site: http://turmelpress.com
>>The cannery trades its finished product for cows and pigs
>At last you expose your hand. Russia is to do what "Western advisers
>and international lenders" expect... Do you happen to remember
>Germany after WWI? Guess not. So you mock and try to demean the
>make-shift "free enterprise" system which has emerged under Russia's
>harsh economically-enforced realities... Classic "See I Told You So"
>elitism pressuring others to conform to your Western Values. Pathetic
JCT: I guess he would prefer that they remain unemployed as we do
in more advanced countries rather than producing and trading as best
they can. How dare they go back to basic barter when they should
remain idle and unemployed as we do in our high-tech nations?
>>Local governments finance their budgets with milk, lumber and vodka
>So it's inefficient moving physical products around to facilitate
>"economic transactions".
JCT: Actually, carrying around milk, lumber and vodka is very
inefficient compared to pledging that milk, lumber and vodka at the
LETS bank to receive paper tokens for that collateral.
>So you think they OUGHT to listen to all those "Western advisers and
>international lenders",and become their indentured slaves for the
>sake of "economic growth".
JCT: You can bet he does but he has no understanding of the debt
slavery inherent in the system.
>And when they continue to trudge on under their own power, and
>forsake your debilitating offers to balance their ledgers on debt,
>you contemptfully mock them and refer to their "medieval" system,
>while Money and Price are just as primitive and medieval. Talk about
>selective omission.
JCT: This kind of snobbery is a standard reaction when it's
pointed out that barter systems work better than the current usury
money system.
>>After all, the plunging ruble and the collapse of the banking sector
>>have less significance to businesses that hardly deal in money
>Exactly - basing an economy on the Real Stuff of Survival is more
>stable and less prone to "collapse" and "plunging currency values" -
>all of which are market aberrations removed from reality and running
>at the whim of the wealthy elite who control the pricing systems...
JCT: That's what people who use LETS keep reporting, that they
feel insulated from the outside world's thumps and bumps.
Unfortunately, some LETSers think that the only way this can be
accomplished is to stay small and do not realize that the thumps and
bumps can be eliminated from the international system so that they
don't affect local trade either.
>And you can blame it all on the "evil Russian government" which froze
>the parasitic foreign debt payments of the greedy West... I'd say
>there is much to admire in Russia's decision to go "off money". Guess
>the capitalists will soon be knocking on the door to foreclose on
>their country, if you have your way, eh?
JCT: It just breaks my heart to see Russians lugging along their
tins of tuna and cartons of milk in order to trade when they could
start up their own LETSystems and use paper tokens, a far handier
medium of exchange. Of course, it takes only a second to wise up
though the Russian who read my other posts about LETS rubles didn't
catch on.
I don't understand why people have such a hard time understanding
LETS though it does demonstrate that money does brainwash in such a
way that Mohammed said their madness was caused by the touch of Satan.
>>Even companies that officially have been bankrupt for a year have
>>not gone under in the crisis.
>Referring to them as "marginal goods" usually turned out "as a loss"
>is a prejudicial statement unbacked by facts. I question the
>two things.
JCT: It sure is. Obviously the facts are that production is going
on and other than the fact they're not paying any interest to use
rubles, they are earning enough goods to pay themselves a survival
wage. Of course, even though they provide sustenance for their
workers, if the bankers have their way, they'll be shut down since
they are operating at a loss.
>Date: Wed Jan 6 01:54:45 1999
>From: marytheris@quebec-city.crosswinds.net ("Mary Therise Gleason")
>>You argued for doing away with money. I and several others tried to
>>make you understand what would happen in the absence of money. You
>>responded by accusing all who did not agree of being stupid (you
>>remember all that, don't you?
>Provide quotes using the word "stupid", not vacant accusations. You
>interpret disagreement with your views as an insult to you,
>criticizing the heartlessness of capitalism as a criticism of you.
JCT: I certainly have to agree that there is a need for a token
system for the increment of association to create an advanced
civilization.
>>One question you posed was whether Mr. Samish had enough space on
>>his (mental) harddrive to upload what you were theorizing).
>What's wrong with the harddrive metaphor - as a metaphor, it no doubt
>has many flaws, since humans aren't capable of employing logic of a
>degree expressed by computers... Nonetheless, the issue was whether
>Norman had room for new ideas. He has repeatedly exposited on how
>that isn't the case, citing how opposing views on the internet have
>helped him "question" and "reinforce" and "defend" his predisposed
>views. I fail to see the correlation between that question and the
>assertion that Norman is stupid. I happen to agree with WesBurt on
>that point - there being "intellectually gifted Devious Defenders of
>the Status Quo (ig-DDotSQ).
JCT: I have run into may ig-DDotSQs on the Internet, especially
in the sci.econ Usenet newsgroup, many of whom I'm sure history will
consider quite insane when it comes to their rationalization for the
continuation of interest despite my explanations of how the mort-gage
death-gamble ends up in dead people by poverty.
>>So now you agree, apparently, that exchange at agreed values is
>>okay? You didn't before.
JCT: I found all the points Mary made completely valid indicating
that she did favor exchange. I doubt she did not before so there must
have been a failure in communication including whether she called
people stupid which I doubt since she called what seems to be a bluff.
>>And of course you missed the delightful irony of "12-ounce cans of
>>meat" being as good as "cash."
>With a collapsed currency and wealthy nations swarming to offer you
>"revival through debt", I'd say barter is BETTER than cash.
JCT: Well put and completely right. But it's best to make the
argument not for simple two-way barter but for the sophisticated N-way
barter provided by a LETS currency.
I still don't see much irony in three quarter pound cans of meat
meat though I might have seen some irony in 16 ounce "pounds" of
"bread." Please explain.
>The transactions are mediated so as to facilitate quick consumption,
>rather than being rolled over endlessly to exploit fluctuations in
>"free market" commodity values. I don't think I missed the irony - in
>fact, I said basically that it is inefficient to have to move around
>physical output constantly back and forth. But it isn't clear from
>the article that such is the case.
JCT: I'm sure that if they were using a casino-style cage
storehouse which accepted the collateral in exchange for tokens,
they'd have mentioned it so I must still conclude that that they're
using the inefficient "carry-the-cans" rather than "carry-the-
receipts" kind of barter though it's still preferable to "revival
through debt."
>The point being that the way capitalist price system works is no
>more efficient or better, it's just based on different values and
>priorities (eg, farmers starve on subsistence pay, while wealthy
>stock speculators make a killing...)
JCT: And that has been the goal of the usury capitalistic system
throughout all of history as detailed in "The Babylonian Woe." You are
absolutely right that speculators can't make a killing when people
barter directly and they also can't make a killing when the barter
with LETS one-to-one warehouse receipts for collateral.
Send a comment to John Turmel
Home