4 ms·

I had this view as an undergraduate in economics. I got really really into reading Marx and Mises and Hayek etc... which at the time was mostly just academic t

I had this view as an undergraduate in economics. I got really really into reading Marx and Mises and Hayek etc... which at the time was mostly just academic theory. "End the Fed" lead by Ron Paul kind of started this movement IMO. Anyway, the reality is people don't want the constraints of denominated money because it's not flexible enough for human desires. Credit has roots in non-exact social contract that predate banking forever, so the concept of borrowing, interest etc... are as you point out old. The fact that Islamic traders in 600AD decided to not charge interest is totally irrelevant to modern monetary theory And that's what I find is the difference in how people view these issues, do you look forward to how we can use existing and new methods for exchange? Or do you look backwards and try to re-create a previous system? I've never seen the second strategy actually work because people reject it.

tastyfreeze 4y ago
People haven't rejected the constraints of denominated money. Governments have. Governments have repeatedly destroyed commodity money because it prevents them from achieving an agenda that would require more money than they have. Historically these agendas have been wars. In modernity we have tacked on wealth redistribution and a social safety net. Without the constraints imposed on government by commodity money the government will continually grow without bound to the detriment of the prosperity of the people. After all, government creates nothing. More government spending means you and I work more hours to support the government, whatever the agenda, and less hours to enrich ourselves. I can decide better what to do with my money than any bureaucrat. If I believed they could do better I would donate willingly instead of at the point of a gun.
- imtringued 4y ago
  > Governments have repeatedly destroyed commodity money because it prevents them from achieving an agenda that would require more money than they have. It is called a bigger economy. A bigger economy needs more money and the money has to be given to the new comers that created new wealth rather than to those who didn't.
  - tastyfreeze 4y ago
    That has not ever been the reason governments removed commodity money. The reason always boils down to, "I don't have enough money, I'll just change the rules to benefit me". Fiat money is and always has been fraudulent. Whether it is to pay for a war or a personal agenda with government power the reason doesn't matter. What matters is that the people in power change the rules to benefit them to the detriment of the populous. Commodity money puts the people and the government on equal footing. The greed of both is constrained by physical limits of commodity supply. With commodity money, to have more you need to earn more. With fiat money only the people have to play by that rule. The government is not such constrained. This leads to an ever increasing money supply to pay for government largesse that diminishes the value of the labor of the populous. With commodity money it would not be possible for government to overspend tax revenue for 9 decades. No private bank would continue to lend to such a prolific debtor.
imtringued 4y ago
People don't understand that money is necessary to trade. Yes I know it sounds obvious but nobody even considers the following scenario. Imagine building a highly advanced society on the division of labor and trade between people. No single person can do everything alone so by cooperation we will attain a much higher standard of living free of starvation. Now let's say the money system is exclusively digital and runs on the internet. If the internet were to shutdown and take down the money system with it, the standard of living would collapse. If people decide to no longer farm food for themselves, they would have to do so again, if they cannot start a farm, they will have to starve. All the things we take for granted would disappear. Now, imagine a slightly different scenario, instead of the money system shutting down, all of the money concentrates in the hands of the 1%. For the bottom 99% the result is the same as if you shut the money system down for them. They would be doomed to poverty overnight. We call events like these economic "depressions". The real world isn't black and white. There are different "grades" or there is a spectrum in how good money is at facilitating trade. The gold standard is worse at doing so than fiat but even modern fiat has problems and isn't perfect.

tastyfreeze 4y ago

People haven't rejected the constraints of denominated money. Governments have. Governments have repeatedly destroyed commodity money because it prevents them from achieving an agenda that would require more money than they have. Historically these agendas have been wars. In modernity we have tacked on wealth redistribution and a social safety net. Without the constraints imposed on government by commodity money the government will continually grow without bound to the detriment of the prosperity of the people. After all, government creates nothing. More government spending means you and I work more hours to support the government, whatever the agenda, and less hours to enrich ourselves. I can decide better what to do with my money than any bureaucrat. If I believed they could do better I would donate willingly instead of at the point of a gun.

imtringued 4y ago
> Governments have repeatedly destroyed commodity money because it prevents them from achieving an agenda that would require more money than they have. It is called a bigger economy. A bigger economy needs more money and the money has to be given to the new comers that created new wealth rather than to those who didn't.
- tastyfreeze 4y ago
  That has not ever been the reason governments removed commodity money. The reason always boils down to, "I don't have enough money, I'll just change the rules to benefit me". Fiat money is and always has been fraudulent. Whether it is to pay for a war or a personal agenda with government power the reason doesn't matter. What matters is that the people in power change the rules to benefit them to the detriment of the populous. Commodity money puts the people and the government on equal footing. The greed of both is constrained by physical limits of commodity supply. With commodity money, to have more you need to earn more. With fiat money only the people have to play by that rule. The government is not such constrained. This leads to an ever increasing money supply to pay for government largesse that diminishes the value of the labor of the populous. With commodity money it would not be possible for government to overspend tax revenue for 9 decades. No private bank would continue to lend to such a prolific debtor.

imtringued 4y ago

People don't understand that money is necessary to trade. Yes I know it sounds obvious but nobody even considers the following scenario. Imagine building a highly advanced society on the division of labor and trade between people. No single person can do everything alone so by cooperation we will attain a much higher standard of living free of starvation. Now let's say the money system is exclusively digital and runs on the internet. If the internet were to shutdown and take down the money system with it, the standard of living would collapse. If people decide to no longer farm food for themselves, they would have to do so again, if they cannot start a farm, they will have to starve. All the things we take for granted would disappear. Now, imagine a slightly different scenario, instead of the money system shutting down, all of the money concentrates in the hands of the 1%. For the bottom 99% the result is the same as if you shut the money system down for them. They would be doomed to poverty overnight. We call events like these economic "depressions". The real world isn't black and white. There are different "grades" or there is a spectrum in how good money is at facilitating trade. The gold standard is worse at doing so than fiat but even modern fiat has problems and isn't perfect.