The New York City Flour Riot of February 1837 – Arsenal For Democracy Ep. 459

186 years ago, with the US economy starting to melt down, New Yorkers rioted against alleged grain and flour hoarding. But discontent was much more widespread, as Locofocos and armed “Patriot” paramilitaries soon made clear. Bill and Rachel.

Links and notes for ep. 459 (PDF):

Theme music by Stunt Bird.

Greece heads back to the polls on a big question

In less than one week, the people of Greece are scheduled to vote on a referendum on whether or not to accept the terms from the European Central Bank and European Commission leaders and the IMF to receive more help on meeting its debt obligations.

The terms are not particularly favorable (read: pretty terrible), and the government of Greece is urging a no vote. But Greece is also about to run out of money and go into default and probably be forced out of the eurozone, because the European leaders and IMF aren’t planning to change the terms or provide emergency funds even with a no vote.

So, there are likely to be brutal consequences coming either way the referendum goes. The average people in Greece will continue to suffer the most.

They were the victims of a lot of really irresponsible people — creditors and European leaders as well as Greece’s own past leaders — putting abstract finance and personal enrichment over human lives.

But within all the blame going around, I still remain most frustrated by the present-day handling of the situation from the European Union leaders. The lines below captured a lot of my feelings.

“The moral crusade against Greece must be opposed” by Zoe Williams for The Guardian:

The vision that Syriza swept to power on was that if you spoke truth to the troika plainly and in broad daylight, they would have to acknowledge that austerity was suffocating Greece. They have acknowledged no such thing. Whatever else one could say about the handling of the crisis, and whatever becomes of the euro, Sunday will be the moment that unstoppable democracy meets immovable supra-democracy. The Eurogroup has already won: the Greek people can vote any way they like – but what they want, they cannot have.
The euro was founded on the idea that the control of currency was apolitical. It has destroyed that myth, and taken democracy down with it.

These talks did not fail by accident. The Greeks have to be humiliated, because the alternative – of treating them as equal parties or “adults”, as Lagarde wished them to be – would lead to a debate about the Eurogroup: what its foundations are, what accountability would look like, and what its democratic levers are – if indeed it has any. Solidarity with Greece means everyone, in and outside the single currency, forcing this conversation: the country is being sacrificed to maintain a set of delusions that enfeebles us all.


Worth the Weight? The ISIS currency is nearly here.

Speaking of ISIS state-building, the pseudo-state is rolling out a new hard currency:

In an announcement on Thursday heralding a liberation from the “satanic usury-based global economic system,” the Islamic State said it would begin minting gold, silver and copper coins, in likenesses similar to the days of the seventh-century caliphs. The coins will have standardized weights and values, the announcement said, and they will be the legal tender of the lands controlled by the group, also known as ISIS or ISIL.

There’s plenty of back and forth debate by economists, in the Times article quoted above, on whether this is purely a propaganda move that can’t really avoid the pressures of the “global economic system” or is actually a savvy investment (which also avoids the “satanic usury” of the non-Islamic banking system that is forbidden under strict Sharia law). My instinct says it won’t matter much either way, since their “state” — as a territorial, governing entity — isn’t going to last very long.

I’m wondering what they’re planning to name it. I bet it will be called a “dīnār” because that was the name of the Umayyad caliphate’s gold coins (and actually remains the currency name for a lot of majority-Arab states, including Iraq), but that name, drawn from the Byzantine “dinarius,” seems awfully western to me for the Mesopotamian enemies of the Global West.

695 CE Umayyad dinar coin at the British Museum. (Wikimedia: "Umayyad Caliph 'Abd al-Malik: 'Caliphal Image solidus' or Standing Caliph solidus struck from 74-77 AH. Based on Byzantine numismatic traditions.")

695 CE Umayyad dinar coin at the British Museum. (Wikimedia: “Umayyad Caliph ‘Abd al-Malik: ‘Caliphal Image solidus’ or Standing Caliph solidus struck from 74-77 AH. Based on Byzantine numismatic traditions.”)

Stop talking about “fiat currency.” No one cares.

one-dollar-billI’m getting real bored by all the libertarians on the internet who won’t stop rambling about “fiat currency” — money that is printed and not backed by precious metal or some other scarce commodity — like they’re privy to some dark conspiracy that no one else has been let in on.

They manage to bring it up in almost any context, trying to explain any economic problem with it or waving away any economic progress as irrelevant in a world of fiat currency. It’s like the internet libertarian equivalent of Godwin’s Law, but instead of comparing something random to Hitler the discussion invariably trends toward derailment by reference to fiat currency.

Here’s an example I recently saw where someone manages to link something that’s basically irrelevant to this:

You can see comments like that all over the internet these days, usually apropos of almost nothing.

We’ve been off the gold standard since the Nixon Administration. The world hasn’t ended. Might be time to let that particular obsession drop.

Aside from all the huge economic problems that result from tying currency to a gold standard or any other non-“fiat” system (which is why we stopped using it), the endless hand-wringing about it is based on a false premise that money is worthless unless back by some commodity or is literally made from it. Money does not derive its true value from what it’s made of and never has. Its power has always been more from the public confidence in and strength of the government backing it.

If everyone is confident in the currency and the government, it won’t collapse or rapidly erode in value. If those two confidences are missing…well, you have a lot more problems to worry about at that point than what the money is made of or backed by.