9 ms·

Nash’s “Ideal Money and Asymptotically Ideal Money” Annotated

42 points by luisb 11y ago

dvanduzer 11y ago
It would be nice if this website offered an option anywhere to print the paper without annotations (or with them, but in a sane serialized / readable format). Since the source is a PDF available elsewhere, I was able to "save" it for offline reading from this link: http://sites.stat.psu.edu/~babu/nash/money.pdf http://sites.stat.psu.edu/~babu/nash/money.pdf
natrius 11y ago
Nash tries to convince the audience that money is good despite popular opinions on money being the root of all evil. Those opinions aren't baseless, though. Money entitles you to a reward from society, no matter how you got the money. Even if some people know you did terrible things to get it, you only have to find one person willing to reward you. The store that sells things to that person is rewarding them for rewarding you for doing terrible things. We're all complicit in rewarding people for terrible things because our money makes us powerless. We want the good part of money: it allows us to engage in economic games of transferable utility, so we don't have to barter. But it'd also be nice to prevent the bad parts as well. Our current solution is regulation, so the profitable strategy becomes innovating new ways to profit at the public's expense before regulations are in place. We should just stop rewarding people for doing things that harm the public. If you make money by polluting, we should stop rewarding you. If you make money by tricking people into taking out loans they can't afford, we should stop rewarding you. We know who these people are, but as individuals, we have no way to stop rewarding them. We need a money that lets us do that. Instead of today's currencies, let's just explicitly model our spending. When I buy a bottle of water from a store, let's create a database record where I assert that the store rewarded me with $1 of stuff. Let's also connect that to the justification for the reward: either I did some work for someone else, or the store is letting me owe them a dollar. Instead of using a traditional private database, let's put these records in a public, shared database on a blockchain. This gives individuals the information to decide whose rewards they want to be complicit in. If you've done terrible things, I don't want to reward people for rewarding you. If you're impoverished and don't have a way to do valuable things for other people, I want to reward people who reward you anyway. This is merit capitalism. http://meritcapitalism.com/ http://meritcapitalism.com/
- seiji 11y ago
  Creating an electronic currency capable of "coloring" money by its origin is much more interesting than anything the bitcoin camp can ever promise. Though, it does become a giant money laundering problem. When Russian oligarchs who obtained their money through destroying their own country and killing their own people invest in YC, then YC funds startups, then startups pay employees, how "dirty" is the money when it reaches the employee?
  - natrius 11y ago
    Very. Money maintains its history from its creation to its destruction. Money is created when someone provides goods, services, or labor in exchange for debt. Money is destroyed when its creator accepts the debt as payment. With that said, everyone's going to be better off if we only punish transgressions that occur after merit capitalism is in place. Our monetary system has driven people to do crazy things, but we should just fix that, forgive them, and move on.
  - CyberDildonics 11y ago
    There are a number of fallacies in this. First, ideal money has a neutral origin. Money isn't a physical thing at its core. It is a shared ledger. Gold is a shared ledger. Bitcoin and all crypto-currencies are a shared ledger. The currency of a country is a shared ledger (albeit with more infrastructure and less guarantee of the total). So 'coloring' is extending the idea that money is physical into a place where it doesn't work. The Russian oligarchs didn't create the money they have, they had it transferred to them by others. Maybe they forced citizens by violence, but then again, maybe they sold oil and natural gas to China. Who is 'guilty' now and of what? The second fallacy plays in to the first. Money is not law. Building law into money has been an excessively dangerous idea throughout history that to no one's surprise favors those who create and enforce the laws. Often those people are the ones with the most money. It isn't a leap to see that this is a cycle that reinforces itself.
    - jipsom 11y ago
      Nick Szabo is the person peoples most think programmed bitcoin. 20 years ago he developed smart contracts, which is basically programmable money that uses law as the analogue for its implementation. This is because this is essentially what is happening the mergence of software, programming, money, law, economics. http://szabo.best.vwh.net/shell.html http://szabo.best.vwh.net/shell.html http://szabo.best.vwh.net/smart_contracts_idea.html http://szabo.best.vwh.net/smart_contracts_idea.html The current leading implementation is "ethereum"
dimitar 11y ago
This is unfortunately a very bad lecture. Let me list why: * Nash ignores the field of monetary economics and tries to re-invent the wheel. * He justifies his ignorance of existing work because it is influenced by "Keynesians" who are bad, because, well just because. * He apparently doesn't like "printing money", but he doesn't critique monetary policy at all. * There is no rigorous model of anything. * Worst of all he has shown no empirical evidence for anything. The lecture is really a lot of handwaving. This is not his field. Read him on game theory please.
- realquick81 11y ago
  He's got a staggering IQ and you think he dismisses Keynesians "just because"? When cleverer people than me state something, I listen, and do my research.
  - jipsom 11y ago
    ha me and you dude! but no one else on the net!
    - realquick81 11y ago
      Keynes is the Jesus of leftist atheists. They never question him, they don't want to know what others said about him and how those around perceived him, and most importantly, they don't want to actually study his teachings, only as presented by vicars (those speaking on behalf of Keynes). Because of course, just like the best antidote against a religion is its holy book, the best antidote against Keynesianism is reading Keynes.
      - jipsom 11y ago
        Nash says something like "even post keyensians" are really just Keynesians, which is funny but also shows how radically and tangentially he is thinking. https://www.youtube.com/watch?v=Je22xKQekCk https://www.youtube.com/watch?v=Je22xKQekCk Whats most significant and interesting here is that he came up with the concept of ideal money in the 60's when he was labelled paranoid delusional and fled to Europe.
skilesare 11y ago
I have a lot to say on this subject, and much of it disagrees with Nash. This is a tough thing to do because the man was a giant. Anyway, here it goes: He makes a bad assumption at the very beginning by assuming that 'good money' holds its value. I'll argue that most of the inequality we experience in the world today is a result of money holding too much value! When money holds value, it is hoarded. When it is hoarded, it is unproductive. Money can be used as a measure of potential utility, but you can't just open it like a bottle of water and drink it all at one time. Instead we should think of a unit of currency as a set of potential utility that is stretched across time from now to the time X in the future. When you think of money in this way, it become obvious that money should decay as time goes by. Good money losses value at a constant, manageable, predictable rate because the amount of utility that the human race can produce in the future is a significant chunk less at the end of a than it is at the beginning of that day. If a dollar is held at the end of a day by the same person that held it at the beginning of the day, some utility was left on the table. Good money maximizes utility in all futures, not just the future you choose while sitting on your pile of cash.
- jchrisa 11y ago
  If you want to dive deeper on the idea of demurrage this book is a great read http://sacred-economics.com/sacred-economics-introduction/ http://sacred-economics.com/sacred-economics-introduction/
  - skilesare 11y ago
    I've read this and follow the guy on facebook. It is a bit over-spiritual for my tastes but he points out some good points along the way. It has been a while, but ultimately I felt like he ignored some of the reality of 'very bad things can happen' and 'people are greedy.' I've tried to include those realities in some of my thinking on what money should be: https://vimeo.com/user17783424/review/123631462/ae47903c89#t=3m5s https://vimeo.com/user17783424/review/123631462/ae47903c89#t...
    - ZenoArrow 11y ago

42 points by luisb 11y ago

It would be nice if this website offered an option anywhere to print the paper without annotations (or with them, but in a sane serialized / readable format). Since the source is a PDF available elsewhere, I was able to "save" it for offline reading from this link: http://sites.stat.psu.edu/~babu/nash/money.pdf http://sites.stat.psu.edu/~babu/nash/money.pdf

natrius 11y ago

Nash tries to convince the audience that money is good despite popular opinions on money being the root of all evil. Those opinions aren't baseless, though. Money entitles you to a reward from society, no matter how you got the money. Even if some people know you did terrible things to get it, you only have to find one person willing to reward you. The store that sells things to that person is rewarding them for rewarding you for doing terrible things. We're all complicit in rewarding people for terrible things because our money makes us powerless. We want the good part of money: it allows us to engage in economic games of transferable utility, so we don't have to barter. But it'd also be nice to prevent the bad parts as well. Our current solution is regulation, so the profitable strategy becomes innovating new ways to profit at the public's expense before regulations are in place. We should just stop rewarding people for doing things that harm the public. If you make money by polluting, we should stop rewarding you. If you make money by tricking people into taking out loans they can't afford, we should stop rewarding you. We know who these people are, but as individuals, we have no way to stop rewarding them. We need a money that lets us do that. Instead of today's currencies, let's just explicitly model our spending. When I buy a bottle of water from a store, let's create a database record where I assert that the store rewarded me with $1 of stuff. Let's also connect that to the justification for the reward: either I did some work for someone else, or the store is letting me owe them a dollar. Instead of using a traditional private database, let's put these records in a public, shared database on a blockchain. This gives individuals the information to decide whose rewards they want to be complicit in. If you've done terrible things, I don't want to reward people for rewarding you. If you're impoverished and don't have a way to do valuable things for other people, I want to reward people who reward you anyway. This is merit capitalism. http://meritcapitalism.com/ http://meritcapitalism.com/

seiji 11y ago
Creating an electronic currency capable of "coloring" money by its origin is much more interesting than anything the bitcoin camp can ever promise. Though, it does become a giant money laundering problem. When Russian oligarchs who obtained their money through destroying their own country and killing their own people invest in YC, then YC funds startups, then startups pay employees, how "dirty" is the money when it reaches the employee?
- natrius 11y ago
  Very. Money maintains its history from its creation to its destruction. Money is created when someone provides goods, services, or labor in exchange for debt. Money is destroyed when its creator accepts the debt as payment. With that said, everyone's going to be better off if we only punish transgressions that occur after merit capitalism is in place. Our monetary system has driven people to do crazy things, but we should just fix that, forgive them, and move on.
- CyberDildonics 11y ago
  There are a number of fallacies in this. First, ideal money has a neutral origin. Money isn't a physical thing at its core. It is a shared ledger. Gold is a shared ledger. Bitcoin and all crypto-currencies are a shared ledger. The currency of a country is a shared ledger (albeit with more infrastructure and less guarantee of the total). So 'coloring' is extending the idea that money is physical into a place where it doesn't work. The Russian oligarchs didn't create the money they have, they had it transferred to them by others. Maybe they forced citizens by violence, but then again, maybe they sold oil and natural gas to China. Who is 'guilty' now and of what? The second fallacy plays in to the first. Money is not law. Building law into money has been an excessively dangerous idea throughout history that to no one's surprise favors those who create and enforce the laws. Often those people are the ones with the most money. It isn't a leap to see that this is a cycle that reinforces itself.
  - jipsom 11y ago
    Nick Szabo is the person peoples most think programmed bitcoin. 20 years ago he developed smart contracts, which is basically programmable money that uses law as the analogue for its implementation. This is because this is essentially what is happening the mergence of software, programming, money, law, economics. http://szabo.best.vwh.net/shell.html http://szabo.best.vwh.net/shell.html http://szabo.best.vwh.net/smart_contracts_idea.html http://szabo.best.vwh.net/smart_contracts_idea.html The current leading implementation is "ethereum"

dimitar 11y ago

This is unfortunately a very bad lecture. Let me list why: * Nash ignores the field of monetary economics and tries to re-invent the wheel. * He justifies his ignorance of existing work because it is influenced by "Keynesians" who are bad, because, well just because. * He apparently doesn't like "printing money", but he doesn't critique monetary policy at all. * There is no rigorous model of anything. * Worst of all he has shown no empirical evidence for anything. The lecture is really a lot of handwaving. This is not his field. Read him on game theory please.

realquick81 11y ago
He's got a staggering IQ and you think he dismisses Keynesians "just because"? When cleverer people than me state something, I listen, and do my research.
- jipsom 11y ago
  ha me and you dude! but no one else on the net!
  - realquick81 11y ago
    Keynes is the Jesus of leftist atheists. They never question him, they don't want to know what others said about him and how those around perceived him, and most importantly, they don't want to actually study his teachings, only as presented by vicars (those speaking on behalf of Keynes). Because of course, just like the best antidote against a religion is its holy book, the best antidote against Keynesianism is reading Keynes.
    - jipsom 11y ago
      Nash says something like "even post keyensians" are really just Keynesians, which is funny but also shows how radically and tangentially he is thinking. https://www.youtube.com/watch?v=Je22xKQekCk https://www.youtube.com/watch?v=Je22xKQekCk Whats most significant and interesting here is that he came up with the concept of ideal money in the 60's when he was labelled paranoid delusional and fled to Europe.

skilesare 11y ago

I have a lot to say on this subject, and much of it disagrees with Nash. This is a tough thing to do because the man was a giant. Anyway, here it goes: He makes a bad assumption at the very beginning by assuming that 'good money' holds its value. I'll argue that most of the inequality we experience in the world today is a result of money holding too much value! When money holds value, it is hoarded. When it is hoarded, it is unproductive. Money can be used as a measure of potential utility, but you can't just open it like a bottle of water and drink it all at one time. Instead we should think of a unit of currency as a set of potential utility that is stretched across time from now to the time X in the future. When you think of money in this way, it become obvious that money should decay as time goes by. Good money losses value at a constant, manageable, predictable rate because the amount of utility that the human race can produce in the future is a significant chunk less at the end of a than it is at the beginning of that day. If a dollar is held at the end of a day by the same person that held it at the beginning of the day, some utility was left on the table. Good money maximizes utility in all futures, not just the future you choose while sitting on your pile of cash.

jchrisa 11y ago
If you want to dive deeper on the idea of demurrage this book is a great read http://sacred-economics.com/sacred-economics-introduction/ http://sacred-economics.com/sacred-economics-introduction/
- skilesare 11y ago
  I've read this and follow the guy on facebook. It is a bit over-spiritual for my tastes but he points out some good points along the way. It has been a while, but ultimately I felt like he ignored some of the reality of 'very bad things can happen' and 'people are greedy.' I've tried to include those realities in some of my thinking on what money should be: https://vimeo.com/user17783424/review/123631462/ae47903c89#t=3m5s https://vimeo.com/user17783424/review/123631462/ae47903c89#t...
  - ZenoArrow 11y ago