Philosophy topic: the global society
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Dak
mentat
Then why wouldn't national currencies be any less awesome? IE, the German currency potential is clearly being dragged down by everyone else. Fiat currencies are all flawed, and universal ones on a massive scale.
Saparmurat_Niyazov
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Einherjar86
Active Member
Dak
mentat
Well, technically all value is subjective. But only the market can figure out that subjective value, not a panel of board members.
Coins used as money were originally merely a unit of weight. The metal itself was valuable for various uses, but also worked well as a means of exchange because it had intrinsic uses, not "value". Paper, as has been pointed out ad nauseum, makes good toilet paper.
Paper money started out as receipts for units of real goods. And then the people issuing the paper realized that as long as no one looked in the warehouse, they could issue more receipts than they had goods. Until too many wanted to collect at once. Voila, the first "bank run".
Now, we have avoided that problem entirely by having paper backed by nothing. So the warehouse has no limits on receipts it can issue, IE no limit on how worthless they can make your paper.
Coins used as money were originally merely a unit of weight. The metal itself was valuable for various uses, but also worked well as a means of exchange because it had intrinsic uses, not "value". Paper, as has been pointed out ad nauseum, makes good toilet paper.
Paper money started out as receipts for units of real goods. And then the people issuing the paper realized that as long as no one looked in the warehouse, they could issue more receipts than they had goods. Until too many wanted to collect at once. Voila, the first "bank run".
Now, we have avoided that problem entirely by having paper backed by nothing. So the warehouse has no limits on receipts it can issue, IE no limit on how worthless they can make your paper.
Einherjar86
Active Member
Dak, I'd think that you don't support any form of currency system. At least, I don't see how one could work in a "free" society, even one dictated entirely by the market.
Dak
mentat
The market can provide currency much better than government can. So, no I don't support a centralized currency system.
Einherjar86
Active Member
Unless the currency system actually uses the material it declares "valuable" as its specie, I don't see how even a decentralized system could work. It seems to me that some institutional body would have to be charged with cordoning off and protecting the source material, thereby restricting it from the population and regulating its amount. Otherwise, people would just start bartering with the material itself rather than go through an abstracted form of currency.
Furthermore, if the source material is something with universally practical purposes, we might raise ethical questions as to whether it's appropriate to withhold it from public use.
Furthermore, if the source material is something with universally practical purposes, we might raise ethical questions as to whether it's appropriate to withhold it from public use.
Saparmurat_Niyazov
Member
Either way, the currency must be backed by something. The only reason the U.S. dollar is worth anything because it is the standard reserve currency for oil.
SentinelSlain
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In a way it's kind of predictable that if left to "die off" and not spent in wars or filled with bullshit like ideology and belief, the people who make up the bottom of that kind of world will rise up, under the sophisticated and intelligent leadership of someone from a higher social class who seeks to gain political power using the lower class people as a ram against the economic status quo. In other words, socialism is natural once society has reached a stage where the bottom of the barrel has a decent understanding of how they have been fucked over and the amount of shite being blown down their ear drums (al ackbar, fight the good fight etc) has petered off.
You can mildly enrich some of the fucked over people and create a middle class of people who identify themselves are relatively powerful, but are not fit to wipe the backside of the head bean counter's backside wiper. Then these will act as a rock on top of the workers. However, these people will be slowly impoverished by the capitalist system anyway, as they are not real players in the system. Eventually they will no longer feel like the system is working for them and that the workers are against them.
What I'm saying is that without bullshit, classical economics kills itself.
You can mildly enrich some of the fucked over people and create a middle class of people who identify themselves are relatively powerful, but are not fit to wipe the backside of the head bean counter's backside wiper. Then these will act as a rock on top of the workers. However, these people will be slowly impoverished by the capitalist system anyway, as they are not real players in the system. Eventually they will no longer feel like the system is working for them and that the workers are against them.
What I'm saying is that without bullshit, classical economics kills itself.
Dak
mentat
I think you are mistaking crony capitalism with free market economics. Socialism produces nothing, it only takes, until there is nothing. It is the ultimate race to the bottom.
Edit: @Ein: If something being used as currency were to be cordoned off, the market would merely provide an alternative. It's like arguing that "Where would we buy cheap chinese goods without China?" or "Without Walmart?"
Sap is also correct. Petro dollar status is the only thing holding us back from descending into hyper inflation.
Edit: @Ein: If something being used as currency were to be cordoned off, the market would merely provide an alternative. It's like arguing that "Where would we buy cheap chinese goods without China?" or "Without Walmart?"
Sap is also correct. Petro dollar status is the only thing holding us back from descending into hyper inflation.
Einherjar86
Active Member
Saparmurat_Niyazov
Member
I think we're experiencing the beginnings of hyperinflation. China and Russia, in their bilateral trade, have abandoned the dollar. Other countries are sure to follow. One gallon of gas was bout $1/gallon in 2000, now it's about $3.30, and has peaked at about $4.80. The price of corn per bushel has increased 40% since then. The stone has been pushed from the top of the hill, and it's only going to pick up speed.
Dak
mentat
Why hasn't what happened? Alternative currencies? Might have something to do with the fact that the government considers it economic terrorism.
But alternative currencies are starting to pop up all over the place, the government is most concerned with ones based on commodities.
@Sap: I do agree with you that it has already started. You can see it most evident in food prices. The same dozen eggs I got 3 years ago has almost doubled in price.
Einherjar86
Active Member
But that's exactly my point; if some form of institution comes about for the purpose of cordoning off and regulating a currency's source material, it won't allow alternative currencies. You claim that the regulation of currency will simply result in new currencies being created; but at the same time, the organization regulating the currency will prevent this.
Dak
mentat
How? Other than it being a government with a monopoly on force? People naturely "vote with their wallets". It's quite similar to the competition between Visa/Mastercard/Discover/AmEx. Visa is currently winning marketshare AFAIK, but there is still choice.
The market will ALWAYS provide a better service than government at a correct cost, no matter what the function. This is indisputable.
The Myth of Efficient Government Service
Einherjar86
Active Member
I'm not saying the market wouldn't provide a "better" alternative than government. I'm saying that the very institution of "currency" itself (i.e. a form of representative value that is abstracted from its source material) is opposed to an anarcho-capitalist, free market system. Any currency requires that its source be regulated, otherwise the reason for the currency becomes obsolete. If a free market, uninhibited by government regulation, decides on its own valuable material on which to base its currency, then an institution becomes necessary to protect that valuable material.
In order for a currency system to work, some form of central institution is necessary to maintain its value. If a free market decides on some valuable source that is "useful" (since, as we've established above, "useful" is mostly likely to secure the most value), it must deny this useful material from those who can't afford it. Ethically, this concerns me.
The only form of exchange I can practically imagine in an anarcho-capitalist society is the barter system.
In order for a currency system to work, some form of central institution is necessary to maintain its value. If a free market decides on some valuable source that is "useful" (since, as we've established above, "useful" is mostly likely to secure the most value), it must deny this useful material from those who can't afford it. Ethically, this concerns me.
The only form of exchange I can practically imagine in an anarcho-capitalist society is the barter system.
Dak
mentat
I disagree with your assertions. First, you are assuming a "system". Of course a "currency system" needs centralization. Centralization is a problem the market would work towards and against simultaneously.
A protected monopoly on currency is as bad as a protected monopoly on anything else. Government is a de facto protected monopoly on many of it's functions.
The market would provide competing currencies, possibly until one proved most popular and gained a monopoly. At some point, it is most likely that this would lead it's producers to manipulate/abuse it, thus rendering it vulnerable to competition.
Just like what has happened to GM, for example.
Einherjar86
Active Member
If its producers are manipulating/abusing it, what's to prevent them from taking measures to ensure that no other currency forms arise? I don't see the mercy of the market as any kind of assurance that things will work themselves out. It might even be erroneous to believe that the market isn't a coercive institution itself.
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