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> Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. That's a go

by ardy42 6y ago

> Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. That's a good point. Too many people propose individualist solutions to social problems, and all their "solution" would do is make the social problem worse. I think that stems often stems from an overzealous faith in free markets, which leads to a distorted idea that individual self interest factored over all of society always results in social benefits, so you only need to consider things from the perspective of an individual (which is also far more familiar to most people). Sometimes individual self interest does lead to social benefits, but often it doesn't.

imtringued 6y ago
Markets only exist within the context of a political system. They are just a tool to reach a certain policy outcome. The idea of using the free market to replace poor governance is laughable. It's the opposite. You have to set the right policies and incentives and only then will the free market show its true beauty. Markets fail or succeed because of improper or proper governance. It's like a genetic/ML algorithm that is optimizing for a cost function. If your cost function is awful your algorithm will be awful but that's not an argument in favor of getting rid of cost functions entirely.
- Spivak 6y ago
  Thank you! Sure fine at some base level there is still technically market in a purely anarcho-capitalist system but that doesn't suddenly imply that the markets we have aren't essentially a pseudo-central planning systems that actually work. A market is useless if it doesn't actually allocate goods and labor efficiently and in the way people want.
- reedjosh 6y ago
  > Markets fail or succeed because of improper or proper governance. I have yet to see proper governance last long enough to be of any note and worse governance tends to quickly flip to favor the powerful.
  - ajmurmann 6y ago
    Hong Kong and Singapore might be great examples
    - reedjosh 6y ago
      TBH, I'm ignorant of these countries' regulatory systems. You may be right. What makes them good examples?
      - ardy42 6y ago
        The latter is famously authoritarian capitalist, and the former just gutted its civil liberties? Also, IIRC, they both benefited from being trade gateways into the PRC economy, especially when it was more closed than it is now.
      - ajmurmann 6y ago
        This podcast will do a much better job at explaining how solid economic policy lead success in Hong Kong: http://www.econtalk.org/neil-monnery-on-hong-kong-and-the-architect-of-prosperity/ http://www.econtalk.org/neil-monnery-on-hong-kong-and-the-ar... Of course Hong Kong is now different, but that's not because the government changed its policies, but there is a different government in power. Singapore had the benefit of a trade port, but it kept importance as such and expanded into becoming a important financial center as well as punching well over its weight in terms of innovation. They have invested in education and provide a stable environment for business.
        reedjosh 6y ago
        I will review. Russ Roberts is pretty good. He leans closer to no governance than any. Still, Hong Kong being different now is because the powerful (China) changed the government to favor themselves. This is actually an example of government falling to powerful interests in short order. Singapore has as bad or worse of income inequality as the US, and I wouldn't say the US is well governed. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... Still, I don't want to take equality as a primary metric since I think inequality to some degree is natural. Singapore is however a infamously repressive regime as mentioned by ardy42
- __MatrixMan__ 6y ago
  Suppose you've got two political systems each vying for legitimacy. They each have their own currency, and their own set of policy outcomes. Is it so laughable that whichever one achieves the best results for its users will be the one to establish both market and political dominance? Is letting such a competition play out via the value of their respective currencies any better than traditional means of resolving this kind of conflict (i.e. war)? I'm not saying I have ultimate faith in the market to do the right thing--it frequently doesn't. But it sounds like you're saying that it can't. Granted, BTC's political system involves allocating power based on who can waste the most energy--so it's a pretty laughable alternative to existing governments--but in principle I don't see why markets can't mediate the rise and fall political systems in a way that roughly mirrors the way that political systems mediate the rise and fall of companies. There's that saying: - Those who make peaceful revolution impossible make violent revolution inevitable. It seems to me that collectively changing whose currency we use based on their capacity for sound governance is the kind of peaceful revolution that we ought to strive for.
  - gbear605 6y ago
    A market doesn’t work in countries without a strong government, since for a market to work, there needs to be faith that the other party isn’t going to break the rules of the market. If you’re trying to sell your goods and someone comes in with a gun, then you have to hope that either you have a gun or can call police. If you have to resort to using a gun, then that leads to huge costs and lots of dead people.
    - boogies 6y ago
      > If you have to resort to using a gun, then that leads to huge costs and lots of dead people. Is that more true for you using a gun than it is for police using a gun?
      - gbear605 6y ago
        If it’s you using a gun, you get Somalia. If it’s the police using a gun, you get the US. (If it’s the police using a baton, you get the UK). It works because the threat isn’t just physical harm but also social consequences. Even going back through history, there would be governmental consequences for not abiding by fair trade, whether that was the local lord throwing you in the stockades or the rest of your tribe ostracizing you.
deleted 6y ago
[deleted]
MrMan 6y ago
This is why I called Bitcoin “naive and antisocial”. I perceive a long-standing willingness on the part of crypto proponents to willfully ignore why monetary policy exists and how it is tied to society’s needs. Self-governance cannot be cast aside in favor of a currency managed by a network of miners remote from the Economic output, debt and other expressions of local social economy. I called it evil and I wasn’t being hyperbolic.
- dorgo 6y ago
  (self-)governance is big topic in crypto. I predict that crypto will reinvent all the societal structures and processes to form a digital market+government+jurisdiction because a currency alone can't address all the problems you mentioned.
- nathias 6y ago
  Of course monetary policy is good for the guys implementing it, crypto is here for the rest of us. Making monetary policy tied to a currency and immutable is one of the great benefits of crypto, akin to having monetary policies be part of constitution.
  - MrMan 6y ago
    You can’t opt out of society without consequences
    - cmoscoso 6y ago
      Do you mean society or big government?
  - eek04_ 6y ago
    I don't believe it will be a benefit. Current monetary policy is to keep inflation positive and low, while addressing economic shocks that make money velocity low by increasing the supply. A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy - deal with changes more easily, since their contracted prices are going down. It also avoids the problem with deflation: Keeping money to spend in the future makes more sense to an individual, thus money velocity goes down, thus less things happen (and all actors earn less.) That's also why increasing the money supply for crises is good: It allows the same activity to go on, even if each unit of currency moves less. People can get paid the same even if everybody save up money. If there's a fixed amount of currency, they can't, since the currency that would be used to pay them is now bound up in their savings.

by ardy42 6y ago

imtringued 6y ago

Markets only exist within the context of a political system. They are just a tool to reach a certain policy outcome. The idea of using the free market to replace poor governance is laughable. It's the opposite. You have to set the right policies and incentives and only then will the free market show its true beauty. Markets fail or succeed because of improper or proper governance. It's like a genetic/ML algorithm that is optimizing for a cost function. If your cost function is awful your algorithm will be awful but that's not an argument in favor of getting rid of cost functions entirely.

Spivak 6y ago
Thank you! Sure fine at some base level there is still technically market in a purely anarcho-capitalist system but that doesn't suddenly imply that the markets we have aren't essentially a pseudo-central planning systems that actually work. A market is useless if it doesn't actually allocate goods and labor efficiently and in the way people want.
reedjosh 6y ago
> Markets fail or succeed because of improper or proper governance. I have yet to see proper governance last long enough to be of any note and worse governance tends to quickly flip to favor the powerful.
- ajmurmann 6y ago
  Hong Kong and Singapore might be great examples
  - reedjosh 6y ago
    TBH, I'm ignorant of these countries' regulatory systems. You may be right. What makes them good examples?
    - ardy42 6y ago
      The latter is famously authoritarian capitalist, and the former just gutted its civil liberties? Also, IIRC, they both benefited from being trade gateways into the PRC economy, especially when it was more closed than it is now.
    - ajmurmann 6y ago
      This podcast will do a much better job at explaining how solid economic policy lead success in Hong Kong: http://www.econtalk.org/neil-monnery-on-hong-kong-and-the-architect-of-prosperity/ http://www.econtalk.org/neil-monnery-on-hong-kong-and-the-ar... Of course Hong Kong is now different, but that's not because the government changed its policies, but there is a different government in power. Singapore had the benefit of a trade port, but it kept importance as such and expanded into becoming a important financial center as well as punching well over its weight in terms of innovation. They have invested in education and provide a stable environment for business.
      - reedjosh 6y ago
        I will review. Russ Roberts is pretty good. He leans closer to no governance than any. Still, Hong Kong being different now is because the powerful (China) changed the government to favor themselves. This is actually an example of government falling to powerful interests in short order. Singapore has as bad or worse of income inequality as the US, and I wouldn't say the US is well governed. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... Still, I don't want to take equality as a primary metric since I think inequality to some degree is natural. Singapore is however a infamously repressive regime as mentioned by ardy42
__MatrixMan__ 6y ago
Suppose you've got two political systems each vying for legitimacy. They each have their own currency, and their own set of policy outcomes. Is it so laughable that whichever one achieves the best results for its users will be the one to establish both market and political dominance? Is letting such a competition play out via the value of their respective currencies any better than traditional means of resolving this kind of conflict (i.e. war)? I'm not saying I have ultimate faith in the market to do the right thing--it frequently doesn't. But it sounds like you're saying that it can't. Granted, BTC's political system involves allocating power based on who can waste the most energy--so it's a pretty laughable alternative to existing governments--but in principle I don't see why markets can't mediate the rise and fall political systems in a way that roughly mirrors the way that political systems mediate the rise and fall of companies. There's that saying: - Those who make peaceful revolution impossible make violent revolution inevitable. It seems to me that collectively changing whose currency we use based on their capacity for sound governance is the kind of peaceful revolution that we ought to strive for.
- gbear605 6y ago
  A market doesn’t work in countries without a strong government, since for a market to work, there needs to be faith that the other party isn’t going to break the rules of the market. If you’re trying to sell your goods and someone comes in with a gun, then you have to hope that either you have a gun or can call police. If you have to resort to using a gun, then that leads to huge costs and lots of dead people.
  - boogies 6y ago
    > If you have to resort to using a gun, then that leads to huge costs and lots of dead people. Is that more true for you using a gun than it is for police using a gun?
    - gbear605 6y ago
      If it’s you using a gun, you get Somalia. If it’s the police using a gun, you get the US. (If it’s the police using a baton, you get the UK). It works because the threat isn’t just physical harm but also social consequences. Even going back through history, there would be governmental consequences for not abiding by fair trade, whether that was the local lord throwing you in the stockades or the rest of your tribe ostracizing you.

deleted 6y ago

[deleted]

MrMan 6y ago

This is why I called Bitcoin “naive and antisocial”. I perceive a long-standing willingness on the part of crypto proponents to willfully ignore why monetary policy exists and how it is tied to society’s needs. Self-governance cannot be cast aside in favor of a currency managed by a network of miners remote from the Economic output, debt and other expressions of local social economy. I called it evil and I wasn’t being hyperbolic.

dorgo 6y ago
(self-)governance is big topic in crypto. I predict that crypto will reinvent all the societal structures and processes to form a digital market+government+jurisdiction because a currency alone can't address all the problems you mentioned.
nathias 6y ago
Of course monetary policy is good for the guys implementing it, crypto is here for the rest of us. Making monetary policy tied to a currency and immutable is one of the great benefits of crypto, akin to having monetary policies be part of constitution.
- MrMan 6y ago
  You can’t opt out of society without consequences
  - cmoscoso 6y ago
    Do you mean society or big government?
- eek04_ 6y ago
  I don't believe it will be a benefit. Current monetary policy is to keep inflation positive and low, while addressing economic shocks that make money velocity low by increasing the supply. A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy - deal with changes more easily, since their contracted prices are going down. It also avoids the problem with deflation: Keeping money to spend in the future makes more sense to an individual, thus money velocity goes down, thus less things happen (and all actors earn less.) That's also why increasing the money supply for crises is good: It allows the same activity to go on, even if each unit of currency moves less. People can get paid the same even if everybody save up money. If there's a fixed amount of currency, they can't, since the currency that would be used to pay them is now bound up in their savings.