Saturday, September 29, 2012

The Depressing Effects of Devaluation

Below is our response today to a post by Paul Krugman on his NY Times blog regarding the experience of the British during their devaluation after WWI.  We thought this encapsulated version of the basic TOSOC argument might be useful to you.

Right on.  Another example might be  the depression during the Grant administration in the 1870's.  Deflation brought the dollar to its pre-war value in gold, but at a high economic and social cost. 
Beyond this, however, is the view from the other side of capitalism.
First, what we see in the world today are poverty policies, not austerity policies.  Note the soup kitchens in Greece, for example.  Germany should be ashamed.
Second, on the other side, we see the problem this way:  we cannot achieve contradictory monetary goals with only one currency.  Policies targeted to help our lenders (like China and Japan) may not be good for our banks.  Policies to help our banks may not be good for our poor.  And so on for each of the diverse populations that use our currency.
Only one policy can be implemented through a single currency at a time, and for now we have chosen policies that save the rich.
On the other side of capitalism, we want to see multiple currencies for separate populations  so that we can implement multiple monetary policies.  The policy for each currency could then be adjusted relatively independently to help the population of users of that currency.  All the groups that need separate monetary policies could then be given separate policies.

Wednesday, September 19, 2012

Printing the Bristol Pound

The news is that the city of Bristol, England, has launched its own currency to keep trade local.
BBC UK on the Bristol Pound

According to the following, one complaint is that big companies "hoover up" (that is, vacuum up) money from  local areas.
Hoover Up

On the Other Side, we agree completely.  That is what has happened to Greece and Spain.

However, we believe that the effort is somewhat misdirected.  What is to keep the local one-percenters from "hoovering" up Bristol Pounds from the local poor?  Also, the limited scope of this program means limited results, and pegging the Bristol Pound to the Pound Sterling means that their local economy is still tied to national Sterling policies.  In other words, of all the possible benefits of printing a currency, they are only trying to achieve one.

We wish them well, but we hope that others who think about multiple currencies will start to think in broader  terms.

TheOtherSideOfCapitalism (

Copyright © 2012 TheOtherSideOfCapitalism

Monday, September 3, 2012

Climate Control

While "The Other Side Of Capitalism" is generally about using multiple currencies to help us achieve a more stable and fair worldwide economic system, there may be times when other topics are discussed.  This post is about climate change.

There is no question that we need to reduce our dependence on fossil fuels.  Whatever the true magnitude of the effects of rising carbon dioxide levels, there is no doubt that some level eventually will be "too high."  Unfortunately, rather than presenting the facts in an open and straightforward fashion, we advocates of policy changes to reduce greenhouse gasses frequently have chosen to frame the issue in faux religious apocalyptic terms, making doubtful and unsupported claims.  Our writings often seem similar to sermons about the wages of sin; about hell and damnation.  This hurts our credibility.  It seems doubtful that these patronizing approaches will do any good.  Perhaps they actually are doing harm to our cause.

In simplistic terms, our basic point has been that greenhouse gasses retain heat and that humanity has stumbled into a situation where we are dumping large amounts of greenhouse gasses into the atmosphere to support our energy needs.  Only recently have we realized that the result will be climate change of some sort.

The original expected result of retaining more heat was that worldwide average temperatures would rise quickly, and the original expected apocalyptic result was that unless we repented of our environmental sins, we would eventually bake ourselves to death.  The solution was first, to stop adding so much carbon dioxide to the atmosphere, and second, to possibly reduce atmospheric carbon dioxide.  This process turned out to be more complex than expected, so now we talk more about climate change than rising temperatures.  The approach has been to focus narrowly on climate change and its disadvantages.

A better approach, however, may be to lay all the cards on the table and take a more wholistic approach.  First, our energy needs are related to the number of people we have to support.  The more people, the more energy.  For many reasons, not just climate change, we question just how many people the earth can support.  What is the "best" population of the earth and have we already exceeded it?  Part of the discussion on climate change should be about population control.

Second, we should reframe the issue as one of climate control rather than climate change.  Humanity stumbled ignorantly into climate change, but now we know why it is happening and generally what to do about it.  It is no longer just a big accident.  We know what we are doing.  So we should start making our real claim, that we control the climate of the earth by raising and lowering the proportions of greenhouse gasses in the atmosphere.  Once we accept that, we should ask the next question.  What temperature should the earth be?

No one wants to bake or freeze, but some might like the temperature a little higher and some might like it a little lower.  Some might want the seas a little higher and others might want them a little lower.  We need a consistent worldwide climate policy because otherwise nations might initiate opposing policies to achieve their own climate goals.  It is hard to say what will happen if some nations intentionally generate greenhouse gasses to warm the earth up while others take measures to cool the earth down.  Another part of the discussion on climate change should be about worldwide development and enforcement of climate regulations.

Finally, we should be careful not to frame climate change conservatively or in a reactionary fashion.  Some of us tend to make faux religious arguments that assume that the earth was specially placed here so support humanity -- and that if it were not for our environmental sins, the earth by nature would be the best of all possible worlds for life as we know it.  There is simply no evidence for this and promoting this kind of thought denies both evolutionary principles and the evidence of large extinction events in the past.

Rather it may be within our power, and for a time, to make the earth into the best of all possible worlds for ourselves, and to freeze evolution, making the earth a sort of protected zoo for all species as they exist now -- not perhaps the best of all possible combinations of living things, but at least the living things to which we have become accustomed.

TheOtherSideOfCapitalism (

Copyright © 2012 TheOtherSideOfCapitalism