Economics for the Young (At Heart)

Four Horsemen (Ross Ashcroft 2012)

Film Review

 Four Horsemen is full length documentary specifically produced for YouTube and aimed at a younger audience. Its primary goal is to demystify economics, which is a total turn-off for most people because it appears so complicated and uninteresting.

In the view of the filmmakers, a corrupt system of money creation and taxation has enabled a greedy corporate oligarchy to usurp control of western democracy and institute an obscene wealth transfer from the poor to the rich. The corporate elite has cleverly concealed this enormous Ponzi scheme by inventing a kind of voodoo economics to discourage people from taking a closer look at how the economy actually operates.

How Banks Create Money Out of Thin Air

The film provides an elegant description of fractional reserve lending, in which banks create money out of thin air and lend it to us at interest. Although this has been the main form of money creation for centuries (except briefly under Lincoln), most people still mistakenly believe that government issues and controls the money supply.

So do the majority of lawmakers. Ironically the majority of economists also believe that government creates the money we use to run the economy. This is because our banks fund the universities and think tanks where economic theory is taught. In other words, it’s a deliberate deception.

The banks also don’t want us to know where government debt comes from, i.e. that all governments borrow money from banks to fund military, intelligence and public services. Or that repaying all public and private debt would cause the global economy to collapse because this is the only mechanism we have for issue money.

What’s the Solution?

The filmmakers believe that the only solution to the economic, ecological and resource crises faced by humankind is for ordinary people to rebuild a new society from the bottom up.

They have started a YouTube channel called Renegade Economist, as well as publishing a book Four Horsemen: the Survival Manual. According to the authors (Ross Ashcroft and Mark Braund), it describes a model of bottom-up reform that combines government-issued money with a land value tax that replaces income and sales tax.

The second video is a public debate they held a few months after the release of Four Horsemen. The purpose of the debate was to begin public discussion about how to go about how to go about building the new society they envision. In my view the Q&As starting at 47:00 are the most interesting part of the discussion.

7 thoughts on “Economics for the Young (At Heart)

    • Have you read their book Four Horsemen: A Survival Manual? I’m thinking of ordering it. In the 2nd video they mention that they offer a model combining a land value tax with debt-free government issued money. Both are very dear to my heart, and I’m curious what that would look like.

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  1. If the book is as good as the film, it will become a worldwide bestseller. Yes, the model you describe is an excellent alternative to the present economic system that is a failure on all levels, especially morally. Four Horsemen has made a huge worldwide splash, has been reposted tremendously and, because of the very high quality of its message and production, will soon bring humanity to the critical mass where new economics demands strongly come forward.

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  2. A bit off topic but relevant
    Global trade has played a leading role in driving debt dynamics as emerging markets increasingly supplied low-cost labor and raw materials in recent decades. But emerging-market debt has grown only slightly faster than economies. A decade ago, total emerging-market debt was $18.8 trillion, or 214% of GDP. (Now it’s $66.3 trillion, or 224% of GDP.)

    Per-capita indebtedness is still just $11,621 in emerging economies (and rises to $12,808 if you exclude the two largest populations, China and India). For developed economies, it’s $170,401. The U.S. alone has total per-capita indebtedness of $176,833, including all public and private debt.

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    • They emphasis the importance of trade in the discussion – how emerging economies produce products for export because they have no consumer economy and how so-called industrial nations have become consumer economies because they produce no real wealth.

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  3. If I can put and use my out of air created money as collateral to print more*, is the fractional mechanism still relevant?
    Via over night, day, hour, week whatever deposit; the big banks collateral each other at will!

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    • You make a good point. There is no fractional deposit requirement any longer. As Steven Keen and numerous renegade economists have pointed out, the banks create as much money as they want and then go back to the Federal Reserve window and borrow money (at 0% interest) to serve as reserves. Because the Fed money is also created out of thin air (they sell bonds to the banks for money the banks create out of thin air), it’s ludicrous to suggest there is any “real” money in the banking system to serve as reserve deposits.

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