Flimsy Sanity: Imaginary Money

Flimsy Sanity

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. - Friedrich Nietzsche

Monday, September 10, 2007

Imaginary Money

Money As Debt by Canadian artist, Paul Grignon, is a 47 minute animation about how money works. I watched it twice and I am still a little confused as I stupidly thought banks lent out the money they had on hand - how naive can one get.

For awhile I scouted for books on the Paperback Swap site. The available books were listed in real time as people posted the books they wished to trade and although the majority were useless fiction and valueless books on religion and business, occasionally someone would list an academic or non-fiction book that had a higher resale value and I would try and request it. The way it works is quite simple. You list books and if someone claims your book, you get a credit to request someone else's book. I would find cheap rummage sale books of recent vintage and someone would claim them and I would get a credit and snag someone else's $20 to $50 book, and rarely, something even higher. I wasn't the only one doing it as decent books went fast. Then things changed and higher value books were never available, followed rapidly with a change from real time to about a ten minute delay. I guess the people who went through all the trouble to develop the site felt they deserved to harvest it with no competition. Don't get me wrong - it is a well designed site.

My objection is that they just make up the credits out of thin air. When you join, you get three free credits. If you get someone else to join (virus) you get another credit. They sponsored a contest and gave (I think) 100 credits to the winner (and smaller amounts to others) and they have another one currently running that gives 50 credits. They also sell credits ($3.45 each) and the last time I bought any through Paypal, they had several thousand transactions in their rating profile. It is a real sweet deal if you can get other people to pay your debts. If the site designers want your hig-value book, they DO pay you a credit, but another member of the club honors the credit; likewise, if you buy a credit, another member of the club is stuck with the postage costs to redeem that credit. Maybe they "balance" their books by skimming credits from their members, I know mine have sometimes disappeared but I never said anything as it used to be pretty profitable for me and I wanted to maintain a low profile.

The people who run it have almost a cult following as they provide chat rooms, display glowing testimonials etc, but they closely monitor things and do not allow any dissension, in fact, even communication between people is run through their site. They publicized their effort to send a truck to a bookstore (that was planning to burn their inventory -no monetary value ones I am sure) and distribute the books to the members of the club. Good PR for people who think burning books is a sacrilege, even if they are old Book Club romances and microwave cookbooks that NOBODY wants. Now I could almost believe the "book lover like you" and the "aw shucks we are doing this free service out of the goodness of our heart" if the founders were not a young rich guy that brokered a deal with Microsoft to create an electronic billing system and had worked in research and development at American Express, a patent lawyer specializing in digital law, a business professor from Berry College ("Berry College is a comprehensive liberal-arts college with Christian values" - yikes, I think they all came from there) and the computer programmer, a former textbook salesman. This may just be the holy grail of cons - a victimless crime. They also sell knick-knacks, delivery confirmation and overpriced postage options.

I do understand how this scheme works, but the one about how debt is money eludes me. How do you create wealth out of thin air and why is it not a crime? Counterfeiting is.


  • At 5:49 PM, Anonymous RJ Adams said…

    I just loved this. It should be mandatory viewing on every high school curriculum. I thought I was fairly up on the monetary system, but it taught me a few things. Truly excellent. Many thanks for sharing it.

    As for the website you mention, I did begin to delve, but at the point they said it may become necessary to ask for $10 - $20 a year, I stopped. I have this 'thing' about people suggesting I give them money when I'm only supposed to be "swopping". It's probably a British 'thing'.

  • At 4:41 AM, Blogger Flimsy Sanity said…

    I do think the video explains why Bush said to "keep shopping" after 9-11.

  • At 3:20 PM, Anonymous Lisa said…

    Looks like you were using that swap site to get books to resell, which is expressly against the site rules. Why would anyone listen to anything you say about the site, knowing that? Bet you got caught and are trying to take your revenge. Pitiful.

    I have swapped at that site for a good while now and have never paid a penny for anything but postage (on ONLY the books I send out). I have gotten hundreds of great books, which I swap with others when I am done reading them, and that gets me more credits to get more books, etc. I don't have to buy credits (which they actually discourage on the site--they want you to swap books to get your credits).

    Wonder why our experience differs so much... Gee, could it be because I am using the site and its free service PROPERLY? I would say that you are overly cynical, but I actually think that would be a kind way to put it. I hate people like you who are trying to ruin the bookswap for others, taking books out of the club to sell instead of sharing them. Shame on you.

  • At 5:11 PM, Blogger Flimsy Sanity said…

    Lisa: Yes I have listed Freakonomics (which had 500 people on the wish list) and grabbed The Pelecypoda or bivalve mollusks of Porto Rico and the Virgin Islands. If you wanted it, you should have put it on your wish list and if I didn't grab it, another bookseller would. Like I said, the devotion is almost cultlike.

  • At 4:24 AM, Anonymous Anonymous said…

    Actually Amway is considered a business cult.


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