Monday, September 06, 2021
Fractional-reserve criming
Another random connection, this time spawned by an accidental juxtaposition of two Quora questions.
First question: How do banks print money?
Under the fractional-reserve setup, a bank creates money every time it gives a loan. The loaned value didn't exist before. Printing has been disconnected from money creation for more than a hundred years. Long before digital, the vast majority of money moved as checks and ledger entries.
Second question: Do you approve of stings?
Seeing this question immediately after the first question led to a connection.
The vast majority of stings are designed to CREATE criminals who didn't exist before. A sting sets up an easy opportunity to commit a crime, which wouldn’t happen in real life. The victim isn’t strongly inclined toward crime in real life, but the invitation is too tempting to resist.
So a sting or an agent provocateur is fractional-reserve criming.
= = = = =
I've discussed real-value economies at length before. In a real-value economy, the total amount of value circulating is directly tied to the amount of real PRODUCED value. The Soviet system created more money in response to the value-added tax. When food is grown or cars are manufactured or cars are repaired, new currency is inserted into the economy to keep the currency unit constant. Loans are rare, and loans don't affect the money total.
A real-value court system works the other way. It tries to REMOVE criminal value from circulation. It distinguishes between professional criminals and opportunistic lawbreakers, and keeps the professionals out of circulation forever. Executions or life sentences are equally appropriate, but the life sentence sometimes provides a chance for the professional to be a productive citizen inside the walls, where he can't create new criminals.
In this 2017 item I was suggesting a Trinity House approach to crime, based on the profit motive of insurers. Definitely parallel to the Soviet VAT approach to currency.
Labels: Jail mode, Natural law = Sharia law, Natural law=Soviet law, Trinity House
¶ 2:41 PM
