Pathfinders:The Machine inside the Ghost (2010)

The Pathfinders Column from the February 2010 issue of the Socialist Standard

Enthusiasm continues apace for the online movie-cum-movement phenomenon Zeitgeist, with its articulate, clean-cut and photogenic presenter Peter Joseph touring even harder than Bob Dylan, it seems, to bring word to the world about the ‘resource-based economy’ idea which sounds so new to everyone else and so uncannily like socialism to us. Socialists should applaud and encourage the efforts of Peter Joseph and Zeitgeist activists everywhere to popularise the ideas of non-market production for use, especially because anti-socialists everywhere will do their best to discredit them with any damn-fool argument they can think of.

That’s not to say that there aren’t issues of disagreement, of course. There is a strange emphasis on the technological aspects of the case for a post-capitalist future and proportionally little to say on the role of human activity and decision-making. It’s clear from recent lectures by Peter Joseph (‘Where are we now?’ et al, 2009, YouTube), that far from being merely a matter of emphasis, this bespeaks a quite different perspective on history:

  “I think it is safe to say … Technology is the fundamental catalyst for progress and change. It is by far the primary factor driving the development of human civilisation not only in the facilitation of achieving specific ends but also in the more subtle manifestation of our belief systems, philosophy, frames of reference and how we interpret the world around us.”

It is not safe to say any such thing. If technology was the fundamental catalyst for change then Ancient Greece would have had steam locomotives and China would have ruled the world since the Renaissance. The problem for the ‘technologist’ is to explain why these things didn’t happen.

Socialists are materialists, and materialists look at history as a process of general underlying ‘tectonic’ shifts in material conditions which give rise to often drastic changes, growths or collapses of superstructures built on them, for example, political, social, cultural and technological outgrowths. In this view, technology doesn’t determine change but is both determined by and proactive on underlying material conditions.

In giving technology this unique driving power, Zeitgeist risks overlooking other motors of history, not least the importance of human organisation itself. “Everything in regard to social organisation is a technical process” says Peter Joseph, adding for emphasis: “Society is a technical creation. Science and tech is the overarching element that governs the entire mechanism of social organisation.” From this the conclusion automatically follows that “Those who study those attributes should be given, not control, but the forefront of participation.”

He pours scorn on those ‘paranoid’ types who would fear abuse of power by this implied class of technocrats, asking “What would be their incentive?” Well, who knows? What would be the incentive for crime? We don’t know that either, but that’s not to offer a cast-iron guarantee that there wouldn’t be any. Given the Zeitgeist apparent indifference to human self-determination as a key factor in society and given also a hundred centuries of brutal oppression by power-mad elites who monopolised knowledge among other things, is it really so unreasonable to feel disquiet over this? While the technicians are minding the machines, who’s minding the technicians?

The emphasis on technology develops into a more serious problem however, and one that needs addressing now.  Zeitgeist argues that capitalism is opposed to technological progress, hence the need to abolish it. To take one example, Peter Joseph uncritically repeats the claims of the popular film Who Killed the Electric Car? (2006). This film argues that in the 1990s there was a huge potential American market for electric vehicles (EVs) but that the carmakers and government-backed oil industry deliberately sabotaged it. The problem with the film is that it is the arguments of General Motors (GM), not the pro-EV lobby, which are being borne out by events. Market demand, production costs, technology and the supplies and fuelling infrastructure really were not viable in 1996, and we know that because they are still not ready today (see for instance ‘Drivers resist the electric switch’, Guardian, 16 January). Even as the dust settles over the electric car ‘scandal’ there is a raft of new EV products on the market from GM competitors and from GM itself. Even if GM really were as dumb and parochial as the conspiracy-buffs like to think, the Japanese and the Indians certainly weren’t. The market is maturing. Capitalism is working in just the way that Zeitgeist says that it can’t. It’s changing.

All that’s a matter for capitalism and car nuts, and of no interest to socialists. But they are of huge interest to Zeitgeist, appearing as they do to back up the central argument that capitalism relies on inefficiency and outmoded technology.

This proposition is so demonstrably wrong as scarcely to be worth spelling out. Incredibly, Peter Joseph implies that capitalism will never find a cure for cancer because it will undermine cancer industry profits, and ditto for cheap solar panelling and the power industry. Logically, if capitalism was so anti-progress there would never have been any technology in the first place, nor any industrial revolution. To attack its ‘inability’ to promote technology is to attack it not at its weakest but at its strongest point. Alarmingly, Zeitgeist is choosing precisely the worst ground for its battle-line.

In fact, capitalism has cured or eradicated plague, typhus, syphilis, cholera, polio and smallpox, regardless of the money already being made in treating those diseases. It abolished steam power, horse power and gas light despite its huge investment in those infrastructures. Its achievements cannot and should not be denied unless one wants to look ridiculous. Indeed its greatest achievement is its potential undoing: it has embraced technological progress so successfully that productive processes now make it entirely feasible to move beyond capitalism altogether. 

Workers need to know their enemy, not underestimate or misunderstand its methods. Most of the problems humans have are not caused by lack of technology, but lack of equal access to resources. Millions die because they can’t afford food or clean water or basic cheap medicines. War, violence and oppression are not technological problems, they exist because there are power elites who get their power from private property we humans should not allow anyone to own in the first place. These are the real weaknesses of capitalism, the ones which will not go away, the ones Zeitgeist really ought to be attacking instead of, like EV-nuts, bewailing its ‘failure’ to deliver the latest tech.

It’s possible that Zeitgeist are reluctant to confront the reality of ruling class power, in case the merest hint of conflict causes the enthusiasm to evaporate and the followers to melt away. But we’re not making the class war up, and we can’t wish it away: “There’s class warfare, all right,” Mr. (Warren) Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning” (New York Times, 26 November, 2006). Tiananmen Square students innocently thought they could win freedom by pushing flowers into gun barrels. In their zeal to promote a vision of a happy-tech cyber-future, the Venus visionaries are tip-toeing on a dangerous edge. In replacing class struggle with a faith in machines, Zeitgeist has created a spectre which will return to haunt them.

Paddy Shannon

Pathfinders: Round in circles (2011)

The Pathfinders Column from the May 2011 issue of the Socialist Standard

Round in circles

Ever since a gaggle of mushroom-intoxicated neolithics first got the idea of piling a big flat stone on top of two uprights people have been having creative ideas about the living spaces of the future. Over the length of social history living spaces have evolved, from medieval all-purpose pens containing bed, hearth, toilet, animals, humans, rats and plague, to the Victorian taxonomic mania for cataloguing and categorising, putting every human function from snoring to shitting to snooker in its own walled chamber. Now things are changing again as central heating and double glazing, as well as a pressure of space and cost, drive a return to more open-plan knock-throughs and multipurpose domestic environments (‘The Story of Our Rooms’, BBC Online, 12 April).

With the high priority now being placed on low-carbon living and low-impact building methods and materials, science is increasingly being designed into planning models. As old structures age and have to be replaced anyway, what if – say the scientists – whole cities could be redesigned to factor in all the known elements necessary to make them virtually self-sustainable?

If one were really to rebuild whole cities from scratch, imagine the energy savings. A city like Los Angeles, a chaotic urban mega-sprawl, is a huge energy sink which forces most people to drive miles to their nearest supermarket, and even more miles to work. Rational planning might have optimised all utilities and transport networks into the very crown joules of ergonomic design. And big cities have their own form of economy of scale, with smaller environmental footprints and higher standard of living per capita than small ones. If one were to pull them down and start again, one could build modular urban centres that were carbon-efficient, pedestrian-friendly, accessible and navigable.

Some planners promote designs for just this (New Scientist, 26 March). Zeitgeist’s Venus Project is another, 3D rendered attempt. The trouble is, even on the page these symmetrical designs look soul-destroying, like laboratory mazes for lobotomised rats. It’s no wonder many Zeitgeist supporters are reportedly in two minds about the idea of self-sufficient circular cities. Somewhere in the debate about efficiency the human element gets left out. What is beautiful about old cities is their riotous and labyrinthine irregularity, forced on them by the constraints of city walls and overbuilding, as well as their elaborate and artistic but ‘inefficient’ construction. The more planned a cityscape is, the more dreary it tends to look and the worse it is to live in. Well-meaning but paternalistic experiments in 1950s urban planning gave rise in the UK to the horrors of high-rises and disaffected concrete council estates, with all their attendant social problems, as Lynsey Hanley documents in her entertaining book Estates: An Intimate History (Granta, 2007).

Could planners ever plan efficiency to look like Venice or Rouen or York? Does the future always have to look like a plastic Thunderbirds set? Nowadays there is the potential of wiki-citizenry to offer collective input so as to avoid planners imposing antiseptic structures on our aesthetic sensibilities. But this just might mean a committee-designed camel instead of a geek-planned horse. Sometimes there is something human and endearing about organic inefficiency. In socialism there will no doubt be plenty of people calling for large-scale ‘social engineering’ projects. Let this be the first salvo fired in opposition to such notions.

A Poor Motivator

Interestingly, given all the hoo-ha about ‘obscene’ bankers’ bonuses, not many ever question the apparently self-evident truism that money is a great motivator. Socialists have always gone against the commonly received wisdom by claiming that, conversely, money is actually a poor motivator and in many cases no motivator at all. As evidence we cite the voluntary sector, so large that it is known as the ‘third sector’ of the economy, but then we might be biased given that we propose a social system composed entirely of volunteers. Support however comes from studies which suggest that not only are external motivators like money decoupled from internal ones like interest, commitment or curiosity, they may indeed be inversely related, so that an excess of one can lead to a deficiency in the other (New Scientist, 9 April). It is perhaps surprising and counter-intuitive to learn that financial rewards actually reduce the incentive to work hard, but “the facts are absolutely clear”, says one long-time researcher. “In virtually all circumstances in which people are doing things in order to get rewards, extrinsic tangible rewards undermine intrinsic motivation”. Next time you hear some know-nothing blather on about how money drives progress, you might point out that the science says otherwise. People are not spurred on by money, they are simply whipped on by fear of poverty.

Capitalist Priorities 

‘Owing to unfavourable economic conditions the search for the ultimate explanation of life, the universe and everything has been suspended.’ Perhaps this is pitching it a bit strong, but with the Large Hadron Collider due to close for a year for extensive repairs you would have thought that this was precisely not the time to be shutting down its nearest and dearest rival, the Fermilab Tevatron. The Tevatron, named because it can accelerate protons up to energies approaching a trillion electron volts or 1 TeV, is supposedly obsolete now because the LHC can manage energies up to 7 TeV. Of course that’s in theory. In reality the LHC has only once reached half this energy, has already broken down twice and now is due for another extended pit-stop. Most notably, of course, it hasn’t found anything, unlike the Tevatron which last month announced the discovery, to within 3 orders of certainty, of a new particle that may be evidence of a ‘fifth force’ of nature (‘Tevatron accelerator yields hints of new particle’, BBC Online, 7 April). Meanwhile the famous Higgs, as well as mythical dark matter ‘neutralinos’ could be lurking out there in any eV range, so even with two colliders operating it would be like two explorerers searching for penguins, one in the northern hemisphere and one in the south. Keeping the Tevatron going would cost a measly $35m – peanuts by their standards – and there’s no engineering problem, but the beancounters have given it the thumbs down. Any socialist comment on capitalist priorities at this point would be as redundant as a Chicago physicist.

Paddy Shannon

The Zeitgeist Movement - Some personal observations

This post originally appeared on the Socialism Or Your Money Back blog:

Further to a previous mention on SOYMB of the Zeitgeist and viewings of their film at Head Office , we offer the personal views of a party member who decided to investigate further.

I went a meeting of theirs held in Goldsmiths College yesterday addressed by Peter Joseph, a US film-maker who made the two Zeitgeist films. As the word "Zeitgeist" and "Venus Project" could suggest some New Age Cult I wanted to actually meet some members (as opposed to reading their stuff on the internet) to make a judgement on this. The lecture hall was full with 250 or so men and women mainly in the 30s and 40s who seemed quite reasonable and normal to me, ie this is not a cult. Most of them seemed to be supporters of the ideas put forward by the movement.

Peter Joseph, who would also seem to be in his thirties, spoke with the aid of slides for an hour and 20 minutes. He began by explaining how the present money-based and profit-driven system was the cause of most of the problems facing humanity and how it could not be made to serve the interests of humanity. He described the various single-issue organisations such as Greenpeace as growing "like weeds" and as being bogged down in trying to deal with effects while ignoring the root cause. The solution, he said, was a moneyless, "resource-based economy".

This is described on one of their sites as follows:

"All social systems, regardless of political philosophy, religious beliefs, or social customs, ultimately depend upon natural resources, i.e. clean air and water, arable land and the necessary technology and personnel to maintain a high standard of living.
Simply stated, a resource-based economy utilizes existing resources rather than money and provides an equitable method of distributing these resources in the most efficient manner for the entire population. It is a system in which all goods and services are available without the use of money, credits, barter, or any other form of debt or servitude.

Earth is abundant with plentiful resources; today our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival. Modern society has access to highly advanced technologies and can make available food, clothing, housing, medical care, a relevant educational system, and develop a limitless supply of renewable, non-contaminating energy such as geothermal, solar, wind, tidal, etc. It is now possible to have everyone enjoy a very high standard of living with all of the amenities that a prosperous civilization can provide. This can be accomplished through the intelligent and humane application of science and technology.

To better understand the meaning of a resource-based economy consider this: if all the money in the world were destroyed, as long as topsoil, factories, and other resources were left intact, we could build anything we choose to build and fulfill any human need. It is not money that people need; rather, it is free access to the necessities of life. In a resource-based economy , money would be irrelevant. All that would be required are the resources and the manufacturing and distribution of the products.

When education and resources are made available to all people without a price tag, there would be no limit to the human potential. Although this is difficult to imagine, even the wealthiest person today would be far better off in a resource based society as proposed by The Venus Project. Today the middle classes live better than kings of times past. In a resource based economy everyone would live better than the wealthiest of today.

In such a society, the measure of success would be based on the fulfillment of one's individual pursuits rather than the acquisition of wealth, property and power.

A Resource-Based Economy is a system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few."

This, surely, is the same as what we call "world socialism".

He then went on to deal with what he regarded as the main objection to this:

"Some people who consider the tenets of a Resource-based Economy think that the system would be difficult due to something called 'Human Nature'. The argument is that humans are inherently competitive, greedy and blindly self-serving, implying that no matter how technically good things are in society, there will always be 'corrupt' people who want to abuse others and seek dominance."

Which he dealt with in the same way that we would and did in our pamphlet "Are We Prisoners of Our Genes?".

Of course, there are differences. Their economic theory (especially of banking) is mistaken and there are aspects of Technocracy (rule by engineers) no doubt via Jacque Fresco, a designer and engineer now in his 90s and the man behind the Venus Project (named after the town of Venus where he is established, not the planet).

Peter Joseph seems to have come from a conspiracy-theory background (evident from the first Zeitgeist film)which he said he has now abandoned and is in fact being denounced by conspiracy theorists as a propagandist for the "New World Order".

We [ The Socialist Party of Great Britain/World Socialist Movement ] , on the other hand, come from Marxism and the working class movement, so there are bound to be differences of language.

And they haven't yet fully worked out how to get there. In answer to questions on this, Peter Joseph said that the important thing at the moment was to get the idea across; people could decide later exactly what to do (he seemed to favour some sort of non-political mass movement).

Even so, I think it could be said that the appearance of this movement can be said to be confirmation of our theory that, even in the absence of an organized socialist group like us, capitalism would still throw up socialist ideas. I say movement because, at the meeting, it was said that there had been 50 million viewings of the Zeitgeist videos on the internet and a figure of 300,000 was mentioned as supporters (presumably those who have registered for its discussion forums, blogs, etc -- in which case they'd be counting me as a member). Still the figure is impressive and even if they were only one-tenth of this it's a significant phenomenon and one that we should watch.

There are two sites in the UK. The UK Project site , from which the definition of a "resource-based economy" above was taken, which seems to be for engineers and designers interested in the technical site of producing abundance. And a social networking site .

Adam Buick

Banks, money and thin air (2009)

From the January 2009 issue of the Socialist Standard

An urban myth is circulating on the internet that banks have been creating money out of thin air.

Those who have seen the cult film Zeitgeist and its sequel Zeitgeist Addendum, popular amongst conspiracy theorists and others suspicious of governments and banks, will have heard recounted the argument that banks can somehow create money out of thin air by the stroke of a pen or, these days, by the touch of a computer keyboard.

In Zeitgeist Addendum this argument is based on what is stated in an educational booklet published by the Federal Reserve Bank of Chicago. Entitled Modern Money Mechanics it first came out in 1975 and has gone through several editions.

Zeitgeist Addendum begins by describing how it thinks the Federal Reserve Bank (the “Fed”) creates money. If, it says, the government wants more money then, through the Treasury, it creates Treasury bonds which it exchanges with the Fed for currency notes of the same face value; as the government has to pay interest on the bonds this adds to the National Debt and so is “debt money”. Both the Treasury bonds and the currency notes have been created out of thin air.

This is one way of putting it but it is misleading. It is rather the other way round in that the initiative to create more currency comes from the Federal Reserve Bank. Once it has decided that more notes are needed it asks the Treasury to print them (for which the Treasury charges). The normal way these get into circulation is by the commercial banks converting into currency some of the reserves they are obliged to lodge with the Fed. Modern Money Mechanics explains:

“Currency held in bank vaults may be counted as legal reserves as well as deposits (reserve balances) in the Federal Reserve Banks. Both are equally acceptable in satisfaction of reserve requirements. A bank can always obtain reserve balances by sending currency to its Reserve Bank and can obtain currency by drawing on its reserve balance” (p. 4).

In any event, both the Treasury and the Federal Reserve are part of government so we are talking about internal state accounting arrangements. It is, however, true that the new currency has been created out of nothing. Since it is not backed by gold and convertible on demand into a pre-fixed amount of gold, it is what in the US is called “fiat money”, that is, money created by a mere act of State.

Modern Money Mechanics does not in fact have much to say about currency creation but concentrates on what it calls “money creation”. It draws a distinction between “currency” and “money”. This is explained clearly enough on the first page of the booklet where money is defined as currency plus bank accounts with a cheque or debit card; which is M1 in the jargon (“In the remainder of this booklet, ‘money’ means M1”).

Congressman Ron Paul, from Texas, a critic of “fractional reserve banking” and advocate of a return to a gold-backed currency, has an even wider definition of “money”:

"M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation." (27 April 2006, see here).

M3 includes other types of bank deposits and liabilities not included in M1. In claiming that all new money created by the Fed depreciates the dollar he is overstating his case. All the US currency (but, as we shall see, not bank deposits) is created “out of thin air” but an increase won’t lead to a depreciation of the dollar as long as it corresponds to an increase in the amount required by the economy for its various transactions (paying for goods and services, settling debts, paying taxes, etc). It is only currency issued in excess of this that will cause a decline in its value and so a rise in the general price level.

Everybody accepts that cash (currency, notes and coin) is money. Some might be prepared to include cash deposited in banks as well. But Modern Money Mechanics definition of bank deposits is wider than this. It doesn’t mean just deposits by people of the money they already possess but any account for which the holder has a cheque or debit card, i.e. including credit lines granted to those who banks have lent money to (so enabling Zeitgeist to go on talking about “debt money”):

“Checkable liabilities of banks are money. These liabilities are customers’ accounts. They increase when customers deposit currency and checks and when the proceeds of loans made by banks are credited to borrowers’ accounts” (p. 3, emphasis added).

So, when it talks about “money creation” it is not talking about currency creation but mainly about “bank deposit” (in the above sense) creation.

The Federal Reserve booklet goes on to explain what “fractional reserve banking” involves and how it can lead to the creation of more “money” in the sense of more bank deposits. Banks, it explains, have learned that when cash has been deposited with them they only need to keep a part (a “fraction”) of it as cash as a “reserve” to deal with likely cash withdrawals; the rest they can lend out. What this fraction is depends on the circumstances, but historically it has been around 10 percent.
On the booklet’s definition, in making a loan a bank is “creating money” as their loans will take the form of creating a new bank deposit as a credit line which the borrower can draw on as if they had made a deposit of their own money (except they will be paying interest on it). The booklet then asks “What Limits the Amount of Money Banks Can Create” and answers that this depends on the cash reserves it has decided to hold or is required by law to keep.

It is here that Modern Money Mechanics, by suddenly shifting from what an individual bank can do to what all banks together (“the banking system”) can, opens the way to the misinterpretation of people like Ron Paul and the makers of the Zeitgeist films that banks too can create “money” out of thin air. The booklet explains that US banks are required by law to keep a “fraction” of deposits as “reserves” in its vaults and/or a balance with the Fed, and says:

“For example, if reserves of 20 percent were required, deposits could expand only until they were five times as large as reserves. Reserves of $10 million could support deposits of $50 million” (p. 4).

This is a very misleading way of putting as it could suggest that if banks receive total new deposits of $10 million they can immediately proceed to make loans of four times this. This is not so, and not really what the booklet meant to suggest. What it means is that the banks can immediately lend out only four-fifths of $10 million, or $8 million, and that this circulates throughout the banking system leading in theory to new loans totalling in the end $40 million, bringing total “bank deposits” up to $50 million.

Confusingly, the numerical examples the booklet goes on to give to illustrate this are based not on a 20 percent reserve fraction but on a 10 percent one (which is more or less what the law in the US requires for the kind of bank deposits in question). So, to take its example, if $10,000 is deposited in the banking system, initially say in one bank, that bank can make loans (create credit line bank deposits) of $9000. When it is spent this $9000 will be re-deposited in other banks which can then lend out 90 percent of this, or $8100; which in turn will be re-deposited in banks, allowing a further $7290 to be lent out, and so on, until in the end and over the period, a total of $90,000 new loans will have been made.

This shows how the Fed can practise “fractional reserve banking” to control the amount of “money” (currency plus bank deposits) in the economy. This is done via “open market operations” as explained in a section headed “Bank Deposits – How They Expand or Contract”:

“Let us assume that expansion in the money stock is desired by the Federal Reserve to achieve its policy objectives . . . [T]he Federal Reserve System, through its trading desk at the Federal Reserve Bank of New York, buys $10,000 of Treasury bills from a dealer in US government securities. In today’s world of computerized financial transactions, the Federal Reserve Bank pays for the securities with an ‘electronic’ check drawn on itself . . . The Federal Reserve System has added $10,000 of securities to its assets, which it has paid for, in effect, by creating a liability on itself in the form of bank reserve balances” (p. 6).

The bank from which the Treasury bills were purchased now has reserves above the 10 percent limit and so can turn the $10,000 into loans, which starts the process described above rolling, leading to an extra $90,000 bank lending.

In theory the Fed could contract bank lending in the same way, but this has never happened. So M1 has gone up and up each year. But what about the currency in all this? It too has gone up but passively and almost automatically. With increased banking activity more currency notes are required, which banks get by converting their reserves into this and which, if it hasn’t enough notes, the Fed just asks the Treasury to print more. But this has consequences -– the depreciation of the dollar and the rise in the general price level Congressman Paul doesn’t like.

But has the banking system really created more “money”? Only if you regard “bank deposits” as money. If you don’t, all that has been shown is that currency has circulated in that the whole process depends on the initial deposit or injection of cash being recycled as further deposits by depositors (as opposed to by banks creating a credit line). So, neither an individual bank nor the whole banking system can lend more than has been deposited with it. By the end of the process, in the example given, the first loan (out of the first deposit of $10,000) of $9000 has been used and used again for genuine deposits totalling $90,000. But all this assumes an expanding economy, since where is the money to repay the loans and the interest on them to come from without being assured of which the banks would not lend the money in the first place?

So the banking system does not create money to lend out of thin air but can only lend out money deposited with it and then only when economic conditions permit it.

Today, bank deposits are not the only source of what the banks lend. They also borrow on the money market (as has been highlighted by the present banking crisis). This means that their reserves are an even smaller percentage of their total loans, only about 3 percent in fact. This figure is mentioned in Zeitgeist Addendum as if this was now the “fractional reserve” and that therefore banks, or the banking system, can “create” loans of up to 33 times an initial deposit. Another silly mistake.

If currency cranks such as the makers of the Zeitgeist films have got the wrong end of the stick about “fractional reserve banking” and imagine that it means banks, whether singly or all together, can create money or credit out of thin air this is partly the fault of the way that booklets like the one produced by the Federal Reserve Bank of Chicago try to explain it. Of course the Fed does not believe the “thin air” claim, but to refute the currency cranks it would have not only to re-iterate that no single bank receiving an additional deposit of $10,000 can forthwith loan out $90,000, but also spell out that the expansion of credit line bank deposits still depends on people making real deposits of their own, unborrowed money (whether in cash or by cheque or by bank transfer). Which would restore a sense of reality and explode the myth that banks can create loans out of thin air.

Adam Buick