Monday 7 June 2010

Debts, money and information

Money is information. That's more obvious today than ever before, now that you can sit at your computer and move bits around to manage your bank accounts, and just by typing in your credit card number buy something (which might be a nice physical thingy that's posted to you, like a packet of seeds , or might be some more bits of information, like a music download).

So this huge debt that the UK has got is 'just' numbers on a computer somewhere. Yet, it seems that in order to change those numbers, there's going to have to be real, physical suffering We don't yet know where the biggest cuts are going, but people are going to lose their jobs and sooner or later that's going to translate to ill health, into people losing their houses, not being able to afford clothes etc.

So, if it's just numbers on a computer, why do we need to do that? Why not just change the numbers? Instead of "-£771,000,000,000" why can't we write "£0"? Well, that would mean the people (or pension funds, banks, other countries etc, I presume) that the money is owed to would no longer be getting their interest payments, so they'd be poorer.

But then again, it was all going along OK until about a year ago, when someone spotted the problem with the sub-prime mortgages (in my simplistic understanding), and that was information.

It seems to me that these numbers carry with them - or are embedded in - all sorts of things, like 'trust', 'power relationships', 'history', '(in)justice'. I need an economist to explain this to me - explain how these numbers work, as information.

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