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Critique of Montagne Mathematically Perfected Economy

Onion Eater

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I identify and evaluate the four premises underlying Mike Montagne's Mathematically Perfected Economy™:

1. People trade things that are of equal value. If they trade things that are not equal in value, then one of them is being cheated.

Mike Montagne said:
Free, unimpeded barter allowed people to produce to natural capacities, and to obtain for our own production whatever we deemed to be equal, undiminished measures of the production of others… Because no one takes from the trade anything but the equal of what they contribute to it, each party receives the full, self-determined equivalent of their contribution to the overall pool of their wealth.

2. Borrowers are trading more money in the future for less money now. It follows from premise #1 that they are being cheated.

Mike Montagne said:
[If] we were confronted by a small man and 5 body guards… and the small man shouted down to us his law that “he” had taken control of the [market] grounds, all consummated trades required each party to give up 3 items for each 10… This would be the end of our trade without cost, on the ground, at the value, and for the reward of our common choosing. But usury is a greater abomination, because while it may not so much require armies as deception, disinformation, ignorance, fear and division, it inherently and inevitably takes more than any knowledgeable public would ever assent to, and by necessity must erase the very possibility of representation.

3. Any monetary system subject to interest ultimately terminates itself under insoluble debt. It follows from premise #2 that, because the charging of interest is not currently prohibited, the world economy is destined to collapse.

Mike Montagne said:
Any purported economy subject to interest ultimately terminates itself under insoluble debt, because to maintain a vital circulation, we must perpetually re-borrow periodic principal and interest payments as subsequent debts, increased so much as periodic interest. Re-borrowed principal equals and thus retains the former debt its payment would otherwise resolve. Thus the sum of debt increases so much as periodic interest, which is re-borrowed as new debt, above the retained sum of debt… the probability for world-wide collapse as a consequence of interest is therefore 100 percent. Certain.

4. There is class conflict between laborers and usurers as they battle over the unearned gain (surplus value) that is the proletariats' due. By an argument similar to dialectical materialism, as the world economy collapses (see premise #3), the implementation of Mathematically Perfected Economy™ is inevitable.

Mike Montagne said:
We have in effect two conflicting philosophies. One wants earnings for its work equivalent to its work. The other wants unearned gain which can only be taken at the cost of earning equivalent to real work... We mature beyond the era of unearned gain… Like cannibalism, unearned monetary gain and all the manipulation which goes with it will one day disappear from history forever after.

Mr. Montagne denies that he is a socialist though I view his theory as being akin to Marxism and find fault with all four of his premises.

Follow this link to read my complete critique:

Axiomatic Economics by Victor Aguilar: Critique of Montagne Mathematically Perfected Economy


All of the material at this page is original to me and was written and posted online in 2008. Recently it has come to my attention that David Bender, a talk radio host, has been quoting me word-for-word without acknowledging his source. Simultaneously, he has been promoting some harebrained scheme called the Safety Society System (SSS), which I have absolutely no involvement in.

In a grossly unethical maneuver, David Ardron has written a paper with the following title, which makes it sound as though Bender and I are coauthors. In spite of knowing full well that Bender is a plagiarist, Ardron quotes him extensively as though he were my spokesman while never quoting me directly. And he makes it sound as though I support the Safety Society System, in spite of knowing full well that I do not.

David Ardron said:
Refuting Critique of Montagne Mathematically Perfected Economy by Victor J. Aguilar and Brain Dead Bender.

Because of the unethical behavior of both David Bender and David Ardron, I must set the record straight:

1. David Bender is a plagiarist. I did NOT authorize David Bender to speak on my behalf. Bender needs to cite his sources.

2. David Ardron is a liar. By putting the word “and” between Bender’s and my name, Ardron is implying that we are coauthors. This is not an honest mistake; Ardron knows very well that I have no association with Bender.

3. I do not support the Safety Society System. I never even heard of it until David Ardron falsely accused me of being a coauthor.
 

Missed AB

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People trade things that are of equal value.[/B] If they trade things that are not equal in value, then one of them is being cheated.

It is not uncommon for people to trade things that are not of equal value, and there is nothing wrong with getting a bargain or being cheated. For example, money is the exchange of value for goods and services. Anyone aquiring an asset must examine it's future value vs todays dollars. The person selling the asset must examine their need for the currency today vs the future value.

2. Borrowers are trading more money in the future for less money now. It follows from premise #1 that they are being cheated.
The future value of the dollar may be more than the traded product. Not all trades for assets go up in value. A car for example will typically be worth less in the future. This does not mean gaining the asset was a bad decision. It depends on the investment objective. For example, price in pleasure, or the ability to do work and produce income with the car/truck. I believe the term is loss leader...

3. Any monetary system subject to interest ultimately terminates itself under insoluble debt. It follows from premise #2 that, because the charging of interest is not currently prohibited, the world economy is destined to collapse.
I agree with one portion of the response to #3, that on a long enough time line the survival rate of everything is 0%. That being said, as money is created through loans, it destroyed through repayment of loans plus the interest rate. It is default which leads to inflation and under minds the system, not the loan itself.

For example if I have 1000 in the bank, and borrow 1000 from a bank, and deposit that money in the bank, I have 2000. that 1000 I borrowed did not exist until the loan was originated because of fractional reserve banking. I can do as I want with that money, but I have increased the dollar amount by the loaned amount. However as I repay that debt, I must take from my original balance to pay back principal the interest rate. That 1000 is destroyed by the end of the loan term, unless I default.

Proper interest rate management will allow for net zero inflation as the interest rates will balance the defaults.
 

JP Hochbaum

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1. People trade things that are of equal value. If they trade things that are not equal in value, then one of them is being cheated.

People rarely if ever trade things of equal value. In fact credit existed long before barter ever did.

"Graeber lays out the historical development of the idea of debt, starting from the first recorded debt systems that existed in the Sumer civilization around 3500 BC. In this early form of borrowing and lending, farmers would often become so mired in debt that their children would be forced into debt peonage, though they were periodically released by kings who canceled all debts and granted them amnesty under what later came to be known, in ancient Israel, as the Law of Jubilee. Throughout antiquity, the author identifies many different systems of credit and later monetary exchange, drawing from historical and also ethnographical records evidence for his argument that the traditional explanation for the origins of monetary economies from primitive bartering system, as laid out by Adam Smith, doesn't find empirical support. One feature first observed in this period, though - that of popular indebtedness leading to unrest, insurrections and revolts - will accompany the narrative of the whole book as it deals with the origins of the state, money, interest, taxation and slavery."

Debt: The First 5000 Years - Wikipedia, the free encyclopedia

Mathematically perfect economies don't exist and never will.
 
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