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>Even money is an invention of the state. The existence of money precedes sovereign governments. The only prerequisite for "money" is consumption decoupled fr

by jasode 10y ago

>Even money is an invention of the state. The existence of money precedes sovereign governments. The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade (aka not direct barter) and human memories to keep track of them. That form of "money" has been happening for thousands of years. The prerequisite for "currency" is any item (coins, cigarettes, hotel loyalty points, scrips, etc) that's frequently used as an intermediate store of value to obtain other items. However, a fiat currency requires a modern state to convince citizens to put faith into authorized pieces of paper instead of cattle/tobacco/yams/gold/diamonds/etc. If the citizens lose faith in government-printed money (e.g. Zimbabwe, Germany Weimar Republic), people will fall back on underground "organic money".

ue_ 10y ago
> The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade This is correct, but I think it is also useful to add that a system with very wide use of money would probably also require wage labour to some extent and from that the commodification of labour. Money becomes more useful the more things are commodified.
RobertoG 10y ago
It's probably a question of definition, but if you exchange cattle, tobacco or gold you are not using "money". I would argue that money is an IOU, a promise of something that can be used generally, not only between the two initial parties (that would be a contract). What would be the point of calling 'money' to cattle? "That form of "money" has been happening for thousands of years. " Can you give me some examples? because I have read about it and it seems that it's not the case. At least, not in very relevant contexts. '[..] people will fall back on underground "organic money".' Actually they start using currency of other states. And it's not a "faith" thing, it's related to a real loss of value of the currency caused, in the cases that you mention, for supply shocks in the country (see http://bilbo.economicoutlook.net/blog/?p=3773 http://bilbo.economicoutlook.net/blog/?p=3773 ).
- sigil 10y ago
  > "That form of "money" has been happening for thousands of years. " > Can you give me some examples? Nick Szabo has a great history of money paper, "Shelling Out: The Origins of Money" with some examples. http://nakamotoinstitute.org/shelling-out/ http://nakamotoinstitute.org/shelling-out/
  - RobertoG 10y ago
    Thanks for that, it seems interesting. I will read it.
- nickik 10y ago
  A gold coin can be money, a bank circulating a IOU that allows withdrawal from bank of one gold coin is called fiduciary media. The underlying money is still gold not the note.
  - RobertoG 10y ago
    Precisely, my point is that an a IOU is a promise, it's not the promised thing (never mind if the promised thing is gold or a cow), and that it's what distinguish money from a real asset.
    - nickik 10y ago
      And that what I'm saying is wrong. The gold coin is the money. Also you can not disassociate the IOU from the underlying object, it binds the IOU.
  - digi_owl 10y ago
    The gold coin would be gold first, coin later. What makes it a coin is that someone measured its purity, and stamped it with their mark to underwrite said purity. The IOU, if not attached to a specific name, is just as good and exchange medium as that coin. Even better perhaps because the value is not in the material itself, but in what it can be exchanged for. Frankly gold is nothing magical, it is just a material that is very corrosion resistant. Thus making weights out of gold would allow them to stay accurate longer while being transported around.
therpe1 10y ago
> The existence of money precedes sovereign governments. I would really like to know what, if any, historical source you have for this. I'm not aware of any serious academic argument that says money precedes state. This seems to be a libertarian "article of faith" but it has no basis in the historical record. Specifically, even the earliest forms of indirect exchange (based on cattle and other animals) where no animals actually changed hands required some authority to maintain an indisputable record of the exchange and take punitive measures if the debt wasn't honored.

by jasode 10y ago

ue_ 10y ago

> The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade This is correct, but I think it is also useful to add that a system with very wide use of money would probably also require wage labour to some extent and from that the commodification of labour. Money becomes more useful the more things are commodified.

RobertoG 10y ago

It's probably a question of definition, but if you exchange cattle, tobacco or gold you are not using "money". I would argue that money is an IOU, a promise of something that can be used generally, not only between the two initial parties (that would be a contract). What would be the point of calling 'money' to cattle? "That form of "money" has been happening for thousands of years. " Can you give me some examples? because I have read about it and it seems that it's not the case. At least, not in very relevant contexts. '[..] people will fall back on underground "organic money".' Actually they start using currency of other states. And it's not a "faith" thing, it's related to a real loss of value of the currency caused, in the cases that you mention, for supply shocks in the country (see http://bilbo.economicoutlook.net/blog/?p=3773 http://bilbo.economicoutlook.net/blog/?p=3773 ).

sigil 10y ago
> "That form of "money" has been happening for thousands of years. " > Can you give me some examples? Nick Szabo has a great history of money paper, "Shelling Out: The Origins of Money" with some examples. http://nakamotoinstitute.org/shelling-out/ http://nakamotoinstitute.org/shelling-out/
- RobertoG 10y ago
  Thanks for that, it seems interesting. I will read it.
nickik 10y ago
A gold coin can be money, a bank circulating a IOU that allows withdrawal from bank of one gold coin is called fiduciary media. The underlying money is still gold not the note.
- RobertoG 10y ago
  Precisely, my point is that an a IOU is a promise, it's not the promised thing (never mind if the promised thing is gold or a cow), and that it's what distinguish money from a real asset.
  - nickik 10y ago
    And that what I'm saying is wrong. The gold coin is the money. Also you can not disassociate the IOU from the underlying object, it binds the IOU.
- digi_owl 10y ago
  The gold coin would be gold first, coin later. What makes it a coin is that someone measured its purity, and stamped it with their mark to underwrite said purity. The IOU, if not attached to a specific name, is just as good and exchange medium as that coin. Even better perhaps because the value is not in the material itself, but in what it can be exchanged for. Frankly gold is nothing magical, it is just a material that is very corrosion resistant. Thus making weights out of gold would allow them to stay accurate longer while being transported around.

therpe1 10y ago

> The existence of money precedes sovereign governments. I would really like to know what, if any, historical source you have for this. I'm not aware of any serious academic argument that says money precedes state. This seems to be a libertarian "article of faith" but it has no basis in the historical record. Specifically, even the earliest forms of indirect exchange (based on cattle and other animals) where no animals actually changed hands required some authority to maintain an indisputable record of the exchange and take punitive measures if the debt wasn't honored.