AUSTRALIAN ECONOMIST STEVE KEEN CONFUSES CASH WITH MONEY. NO ONE SHOULD LISTEN TO ACADEMICIAN ECONOMISTS AND THEIR FALSE DOCTRINES.

Today, I read this silly work published by Forbes and written by Ph.D. economist from Australia, Steve Keen, who seems to have become a darling among anti-banking conspiracy theorists in the blogosphere. Keen claims that a recent-dead Italian economist Augusto Graziani is the only guy ever who figured out what money is.

Graziani’s own words reveals he had no idea what money is. Graziani revealed himself to be wrong on the subject of money, thoroughly.

Graziani mixed up bank credit with money and in so doing, confused himself, embarrassingly so. Stupidly, Graziani said, “So money is fundamentally the promise of a bank to its customer, and a monetary payment is the transfer of that promise from one customer to another.”

For the entire history of commercial banking, every banker worth his salt would call that credit. Never in the history of commercial banking by anyone who engages in banking and commerce would anyone confuse credit with money as Graziani has.

Money is coined metal by weight and fineness. There is no other definition of money. The Romans said so. It's their word.

It's easy to know what could be money and what isn't money. Money can exist without banking and without legislators.

Cash, which is evidence of deposits circulating in perpetuity, requires banking. Without banking there can be no cash. 

Legal tender is anything legislators deem legal to settle taxation and debt to legislators. Without legislators and their agencies of enforcement, there can be no legal tender.

It should be clear that legal tender cash, which is all that anyone has these days, couldn't be money because it requires both banking and government and it fails to settle debt. Cash is liability of bankers, the same as deposits.

Money, if it were to exist, could discharge debt in payment fully. Contemporary cash cannot do this precisely because it is irredeemable. That means, you cannot demand money (coined metal by weight and fineness) from a banker. There is reason why the technical phrase, demand deposit, exists in commercial banking.

Graziani and Keen get wrong the concept of currency as well. Currency means that which has bearer negotiability. It has never meant anything else. So if a thief buys milk from a grocer using stolen cash, the grocer gets to keep the cash by currency.

Academicians like Steve Keen and Antonio Graziani live in a fantasy land of false definition and fanciful bogus theory that fails to comport with reality. They preach a false doctrine, economics, which is quite pseudo-science.

If academicians like Keen only knew about trade, commercial banking and the jurisprudence with respect to trade, they wouldn't accept false theory such as the one perpetrated by a rather clueless Graziani.

Keen errs in the worst way that anyone could when he foolishly claims, "Banks create money by issuing a loan to a borrower; they record the loan as an asset, and the money they deposit in the borrower’s account as a liability." Heed my words: Bankers never, ever create money nor do bankers lend money.

First, no one has money. All anyone has is either cash or deposits, which can be traded through negotiable instruments like personal checks and ATM cards. Even if there were money, through the entire history of commercial banking, no banker ever lent money.

In the days of money, a banker was a merchant who bought money and debt and sold bank credits. Today, a banker is a merchant who buys cash and debt and sells bank credit. All loans are merely advances of bank credits.

About the only bit Keen gets right is his claim that “banks must be part of your economic analysis.” Of course, all regular readers of Bizarro Theater who have read The Theory of Trading Property for Profit know this.

It turns out that Keen once bet Rory Robertson, who worked as banker for Macquarie Bank. Keen bet Robertson that Australian house prices would collapse. Unsurprisingly, Keen lost.

The terms of the bet had Keen walk from Canberra to Mt. Kosciuszko — 224 kilometres — wearing a T-shirt that read: “I was hopelessly wrong on house prices”.

Long ago, beginning in the mid-1850s, the brilliant banking lawyer Henry Dunning MacLeod worked out the principles of money, credit, currency and the like. MacLeod could do so because as a lawyer and not a university theoretician, he understood property (the right of ownership) and the effects upon property through trade. MacLeod wrote excellent works debunking academician economists with their silly false theories like JS Mill and even Adam Smith.

Here is a later edition of MacLeod's Theory of Credit (1893), which many in America can read free.

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GENIUS OF THE PAST SHINES A LANTERN ON TODAY'S DECEPTION. LESSONS ON THE SOCIALISM OF OBAMACARE, PURPORTED FREE TRADE AGREEMENTS AND SOCIALIST REVIVALISM OF GREECE AND EUROPE

Yesterday, in , CONTEMPORARY ECONOMICS. ITS TRUE ORIGINS AND WHY IT IS FAKE, I gave you the first part of an essay, On the Science of Economics and Its Relation to Free Exchange and Socialism, written by the brilliant Henry Dunning MacLeod, an eminent banking lawyer of his day and a man who knew more about trade and reality than all those who have since lived and died who have called themselves "economists".



Today, I give you the second part of the essay, itself in two parts. In the first part, MacLeod is gives a lesson on free trade. This lesson holds true whether such trade is insular or foreign. In the second part, MacLeod is gives a lesson on the foolishness of socialism.

When reading this lesson you could apply his lesson upon Obamacare, an example of regulated insular trade, or any so-called contemporary "free trade agreements," which, long ago, all thinking men recognized as treaties of reciprocity designed to promote particular interests.



Here MacLeod begins to lay down his argument that while free trade is inherently right, any force that interferes in free trade between two is little more than robbery by another name.



And here MacLeod lays down what libertarians would recognize as the non-aggression principle long before 20th century libertarians existed.



And then MacLeod reveals how the interference by legislators in the trade of property to the benefit of favored parties amounts to robbery by other means.



To help the reader understand, MacLeod provides an example.



From here, MacLeod dives into his argument.




Though in other writing, MacLeod finds fault with Adam Smith and his many confused, false beliefs, MacLeod praises Smith for his work on free trade.



MacLeod then describes the rise of the dangerous and harmful doctrine of socialism in France.



MacLeod then reveals how “reciprocity” and “fair trade” are merely protectionism under different names.



MacLeod further exposes socialism.



MacLeod reveals the true meaning of value. It's a ratio.



MacLeod reveals that property known as wealth becomes wealth precisely because of trade and by no other means. Said another way, nothing in itself has value but a value arises from the trade rate as expressed by the ratio of one thing traded for another.



MacLeod reveals how the otherwise smart John Locke blew it when it came to economics.



And then MacLeod reveals the errors of Adam Smith, errors that David Ricardo would repeat and from which Karl Marx derived his entire erroneous theory.



MacLeod shows how David Ricardo erred much like Adam Smith. Ricardo's errors provided the basis for Karl Marx's beliefs.



And here MacLeod connects the Socialists with the fallacies of Adam Smith and David Ricardo.




MacLeod shows how the existence of credit exposes the foolishness of socialist belief.



MacLeod sums up his thoughts here.

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CONTEMPORARY ECONOMICS. ITS TRUE ORIGINS AND WHY IT IS FAKE.

Today, few if any Ph.D.s of economics know the history of their field. If they know a history, likely it is one produced of propaganda to support their current false paradigm, a paradigm that fails to describe the reality of trade. Trade, of course, is the purchase and sale of property in pursuit of profit, is the only activity that gives rise to an economy.

It's unlikely that Ph.D.s like Ben Bernanke and Janet Yellen much less your local university department staffers would know the connection of Jacob Vanderlint, Dudley North, Aristotle and Socrates to trade if you were to mention those names to them.

In an essay titled, On the Science of Economics and Its Relation to Free Exchange and Socialism, the brilliant banking lawyer Henry Dunning MacLeod gave a brief on the history of the academic field of economics, which all who care to reason about and discuss their lives and their government should know.





MacLeod begins to take down the myth of Adam Smith.



MacLeod reveals the Physiocrats as the founders of modern economics.




MacLeod connects liberty, which is freedom, or that realm where politicians are content to leave alone anyone. Said another way, liberty is the absence of law in the presence of government. And of course, where politicians make no law, there are no right and no corresponding duty.



Here, MacLeod reveals the connection between property, which always means the right of ownership and not what is owned, with liberty, which always means the absence of law in the presence of government.




MacLeod examines the doctrines of the Physiocrats.



MacLeod reveals what the ancients already knew.



MacLeod discusses the strange fallacy of money (coined metal by weight and fineness) as the only wealth.



MacLeod discusses what the Physiocrats had wrong.



MacLeod discusses the rise of Adam Smith.



MacLeod discusses the confusion Adam Smith expressed in his work.



MacLeod discusses the foolishness of J.B. Say, an early hero to those who claim to be adherents of the Austrian School of Neoclassical Economics, which was once known as the Psychology School, but as a school of neoclassical economics, its adherent fail to understand the reality of trade.




MacLeod exposes the foolishness of John Stuart Mill.

 


Suffice to say, in his day, academicians loathed Henry Dunning MacLeod precisely because the man revealed many expressed fallacies from which academicians of economics espoused their theories.

Today's academicians of economics have compounded their errors by building upon the cherry-picked false foundation of the Physiocrats, Smith, Ricardo, Say, Mill and others who came after and made more mistakes like Alfred Marshall, John Maynard Keynes, Paul Samuelson, and cast of other 20th century clowns. These days, jokers like Paul Krugman and Thomas Piketty preach the false doctrines of economics.

The basis of the academic field of economics is the pseudo-scientific concept of utility, a faux psychological phenomenon never proven. Thus, the entire field as it stands is bogus.

As I explained in WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE, the entirety of trade, or commerce, or real economics ties up with two words — property and profit. Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade.

Trade, or commerce, or real economics is about acquisition of rights to own stuff. No one can derive satisfaction until that one owns. All talk about pleasure, pain, satiation, utility and the like is irrelevant until acquisition.

All should reject contemporary economics. It's fake. All of its priests, ministers, and preachers are little better than self-deluded con men.

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