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The article only makes sense with a certain, fixed view of money. Money is a social contract, it's worth whatever we want it to be, and we can change the value
by sonnyblarney 8y ago
The article only makes sense with a certain, fixed view of money.
Money is a social contract, it's worth whatever we want it to be, and we can change the value of it at any time.
The credit crises is not a issue of money, it's an issue of confidence in the system. No confidence, no credit, no system.
During this time, any government can play magic with the balance sheet and do as they please. This is what TARP etc. was about. The issue is really just about 'who wins and who loses' in a centrally planned game of money magic.
The drug industry mightn't have been too affected, by the downturn, and 'confidence' in their economy just kept on trukin'.
But any 'crash' in a post financially literate age that is not due to a true existential shock (like an earthquake that destroys nations) ... then we should be able to handle it ourselves without the crunch. The real issue just comes down to how we're going to divide up the pie when we wave our magic money wand, and it more than likely ends up benefiting the bankers more than others.
- simonh 8y ago>The real issue just comes down to how we're going to divide up the pie when we wave our magic money wand, and it more than likely ends up benefiting the bankers more than others. I suspect the problem is whatever strategy you use to manipulate the money system to avoid a downturn, it’s going to benefit somebody. The banks are just very well informed, and in a position to do pretty much anything anybody else might do, so however you carry out the intervention they will have the tools and resources to ensure they benefit from it somehow. So how do you manipulate the money supply without going through banks?
- pesmhey 8y agoI agree with you whole-heartedly that money is a social contract. I did disagree with how you’ve formed your argument: The credit crises is not a issue of money, it's an issue of confidence in the system. Money is a social contract... You wouldn’t enter into a contract with someone you had no confidence in that they would uphold their end. Money is credit is debt is a social contract. I think that maybe you’ve gone slightly too far in the opposite direction of money being some fixed thing. It represents confidence, and we can’t just make it whatever we want, although we can bend it in a lot of ways. Interestingly enough, with this view of money, it does make sense that at the pinnacle of failure of regulated, government-sanctioned contracts, you might find people (in aggregate) turning their confidence towards organized crime, with a proven record of organizing massive operations to move products.
- sonnyblarney 8y agoWe can make money whatever we want. Fixed currencies that are backed by gold, surely, we can't 'make' gold ... but that's an artificial limitation. I'm not saying we should make it what we want, but we have to remember that's what's at stake. Organized crime may have the advantage that contracts are ruthlessly enforced ... so you can't have the totally corrupt value chain as you had with housing, wherein there was fiction from the house buyer, to the lender, to the VP of mortgages, to the bundlers, to the buyers of said bundlers, and to all the people trading on top of that. Also, there are no derivatives or complex financial instruments riding on top of the drug trade, so the 'house of cards' would have a lot less falling to do if it were to come apart. But you can't build an economy of killing people who don't pay you or sell to your customer ...
- acct1771 8y agoAre you sure? History calls b.s.
- hndamien 8y agoThe "artificial" or rather "natural physical" limitation on gold is what give it value in the social contract in the first place, so you can't just make it what you want. If you remove the limitations, its very hard to form the contract - but not impossible.