3 ms·

> if you know what money really is and how it actually works OK, I'll bite. What is money really and how does it actually work?

zackmorris 9y ago
I would say that money is a measure of inefficiency. Say for example you hire a mechanic to fix your car. You pay the mechanic's shop for parts and labor. The cost of parts represents inefficiencies in how they're manufactured, the markups of middlemen, the high cost of raw materials from nonrecycled sources, etc etc. Labor represents your lack of knowledge about how to fix your own car, plus the time involved to fix things on your car like water pumps that (due to uninspired design) fail much earlier than they should. In an ideal world where you drive a solar-powered car with a dozen moving parts built by robots from recycled materials, costs would fall to a fraction of what they are now. With the same automation applied across all industries, prices would fall to the point where the opportunity cost for humans to be in debt/servitude to rent-seeking financial institutions would exceed the benefit of using money in the first place. This is basically what happened on Star Trek and is likely to happen in coming decades with Tesla, Amazon etc as humans can no longer compete with machine labor. Things will cost less but incomes will be so low that we won't be able to afford them anyway. Personally I would argue that that started happening sometime after the late 1960s and has gotten to the point where the status quo can only be propped up by every-growing absurdities on a global scale. An oldie but goodie: http://marshallbrain.com/manna1.htm http://marshallbrain.com/manna1.htm
- maratd 9y ago
  Really? That’s depressing. Money can be anything you want it to be, so how about this. Money = thank you points You give it to people you’re thankful to, who either did something nice for you or gave you something you wanted.
  - zackmorris 9y ago
    Ya I like that better too. I'd like to see us move beyond a world of artificial scarcity to one where everyone's basic needs are met and people can focus on self-actualization. If people want a mansion, great, they can work for it. But if people want to be left alone so they can explore the meaning of life, then they should be free to do so and whatever money is used at that point should go to things that are special. Kind of a Burning Man philosophy maybe?
- nickbauman 9y ago
  Interesting thought experiment! One things that's missing from this is — historically — any economic endeavor that has a continual increase of efficiency ends up being highly volatile in the marketplace. So when prices have this continual downward pressure eventually the market collapses altogether.
tim333 9y ago
>What is money really and how does it actually work? On of the most interesting ideas I've read on this is from Debt The First 5000 Years, written by an anthropologist who took the approach of studying how societies actually use money rather than the economists approach of coming up with theories without much looking at real people. Basically he says the idea that it originated from barter is pretty much never found in the historical record. 'Primitive' societies tend more to tally favours so you give someone food one day, it's remembered and they help you fix your roof another, without any formal currency measure. Formal currencies were often forced on people with threats of violence to get the natives to do stuff. Say you want to raise an army you declare a tax on everyone of so many coins which they can earn by feeding or serving in your army and people who don't come up with the tax are attacked in some manner. Or you come up with some debt everyone owes and that kind of thing. Eg from the book >In 1895, for example, France invaded Madagascar... >...and declared the country a French colony. One of the first things General Gallieni did after “pacification,” as they liked to call it then, was to impose heavy taxes on the Malagasy population, in part so they could reimburse the costs of having been invaded... leading on to in the modern day: >But owing to IMF-imposed austerity programs, the government had to cut the [malaria] monitoring program. Ten thousand people died. I met young mothers grieving for lost children...
- nickbauman 9y ago
  The taxation example you cite is key. That the way history tells the story is that money was invented by state actors to finance military power. This endeavor has the side effect of creating a market economy. So states create markets, which implies markets require states. And the military power is as much turned inward than outward: you end up with police protection over the transaction coming ultimately from state actors. Over time cryptocurrencies will adopt all these features of government regulation and police protection over the transactions if it is to become ubiquitous. So, just another analog of any other money system we already have.

zackmorris 9y ago

I would say that money is a measure of inefficiency. Say for example you hire a mechanic to fix your car. You pay the mechanic's shop for parts and labor. The cost of parts represents inefficiencies in how they're manufactured, the markups of middlemen, the high cost of raw materials from nonrecycled sources, etc etc. Labor represents your lack of knowledge about how to fix your own car, plus the time involved to fix things on your car like water pumps that (due to uninspired design) fail much earlier than they should. In an ideal world where you drive a solar-powered car with a dozen moving parts built by robots from recycled materials, costs would fall to a fraction of what they are now. With the same automation applied across all industries, prices would fall to the point where the opportunity cost for humans to be in debt/servitude to rent-seeking financial institutions would exceed the benefit of using money in the first place. This is basically what happened on Star Trek and is likely to happen in coming decades with Tesla, Amazon etc as humans can no longer compete with machine labor. Things will cost less but incomes will be so low that we won't be able to afford them anyway. Personally I would argue that that started happening sometime after the late 1960s and has gotten to the point where the status quo can only be propped up by every-growing absurdities on a global scale. An oldie but goodie: http://marshallbrain.com/manna1.htm http://marshallbrain.com/manna1.htm

maratd 9y ago
Really? That’s depressing. Money can be anything you want it to be, so how about this. Money = thank you points You give it to people you’re thankful to, who either did something nice for you or gave you something you wanted.
- zackmorris 9y ago
  Ya I like that better too. I'd like to see us move beyond a world of artificial scarcity to one where everyone's basic needs are met and people can focus on self-actualization. If people want a mansion, great, they can work for it. But if people want to be left alone so they can explore the meaning of life, then they should be free to do so and whatever money is used at that point should go to things that are special. Kind of a Burning Man philosophy maybe?
nickbauman 9y ago
Interesting thought experiment! One things that's missing from this is — historically — any economic endeavor that has a continual increase of efficiency ends up being highly volatile in the marketplace. So when prices have this continual downward pressure eventually the market collapses altogether.

tim333 9y ago

>What is money really and how does it actually work? On of the most interesting ideas I've read on this is from Debt The First 5000 Years, written by an anthropologist who took the approach of studying how societies actually use money rather than the economists approach of coming up with theories without much looking at real people. Basically he says the idea that it originated from barter is pretty much never found in the historical record. 'Primitive' societies tend more to tally favours so you give someone food one day, it's remembered and they help you fix your roof another, without any formal currency measure. Formal currencies were often forced on people with threats of violence to get the natives to do stuff. Say you want to raise an army you declare a tax on everyone of so many coins which they can earn by feeding or serving in your army and people who don't come up with the tax are attacked in some manner. Or you come up with some debt everyone owes and that kind of thing. Eg from the book >In 1895, for example, France invaded Madagascar... >...and declared the country a French colony. One of the first things General Gallieni did after “pacification,” as they liked to call it then, was to impose heavy taxes on the Malagasy population, in part so they could reimburse the costs of having been invaded... leading on to in the modern day: >But owing to IMF-imposed austerity programs, the government had to cut the [malaria] monitoring program. Ten thousand people died. I met young mothers grieving for lost children...

nickbauman 9y ago
The taxation example you cite is key. That the way history tells the story is that money was invented by state actors to finance military power. This endeavor has the side effect of creating a market economy. So states create markets, which implies markets require states. And the military power is as much turned inward than outward: you end up with police protection over the transaction coming ultimately from state actors. Over time cryptocurrencies will adopt all these features of government regulation and police protection over the transactions if it is to become ubiquitous. So, just another analog of any other money system we already have.