CHAPTER 8: NEGOTIABLE DEBT, A BIT OF HISTORY
This chapter is a quick summary and clarification of what happens when debt becomes negotiable. The focus is on money, but other aspects are referred to, highlighting the general undesirability of making debt negotiable. There will be some repetition of material previously covered, for the sake of assembling it all in one place.
We all know what money is: a special, universal kind of property whose purpose is to be exchanged for things that are up for sale. Because money can buy almost anything, hijacking the money supply is an obvious objective for any person or class that wishes to become massively wealthy and/or powerful.
Thousands of years ago, when money was valuable metal, a simple way of doing this emerged. Having accumulated a quantity of the metal, a person or institution could issue promises-to pay, and these promises-to-pay could circulate as money. While their promises circulated, nothing needed to be paid out: the promises themselves acted as money. And because the promises were valuable, they could be lent at interest.
The promises were, of course, a form of debt. The issuer owed (in theory) the amount written on the note, or represented by numbers in an account, to anyone owning a ‘promise’.
Debt lent at interest! It’s an idea that still seems strange and unfamiliar, even though it has dominated the world of wealth and power on and off for thousands of years.
This strange hybrid of debt and money is known today as ‘credit’. We are all familiar with ‘credit’; when we have money at the bank, we are ‘in credit’. Legally, the bank owes us money. The bank’s debt circulates as money, so it is best referred to as ‘circulating credit’.
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