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This is diluting the definition of "ponzi scheme" to the point of uselessness. State-backed central currencies emerged because people in informal economies were

by kibwen 4y ago

This is diluting the definition of "ponzi scheme" to the point of uselessness. State-backed central currencies emerged because people in informal economies were bartering to exchange goods and services, which is less efficient than having a standardized medium of exchange, so central authorities issued currency in order to increase the efficiency of the economy. That's not a ponzi scheme, because the value of the currency doesn't rely on some greater fool buying the currency from you. Yes, you can use these currencies as a store of value, and therefore get utility from exchanging them with somebody in the future, but that's not where the value of the currency itself derives from (which is 1. the utility of the currency itself (people want to transact in it in personal affairs, because it's more efficient and reliable than the alternative), and 2. the authority of the state (people must transact in it in state affairs)). Call it what you will, but it's not a ponzi scheme. If you're looking for things in traditional fintech that resemble a ponzi scheme, look at something like a non-voting stock without a dividend.

theknocker 4y ago
jrochkind1 4y ago
I believe there isn't a lot of historical evidence that state-backed currencies emerged to deal with undesirable aspects of barter. That's pretty much just a myth people decided made sense, rather than something that happened in history. We mostly don't know why money/currency came into existence, it happened so long ago. There is some evidence that at least in some places it was to fund armies or generally provide more state (or pre-state ruler) control of the economy. I don't really know what impact that has on whatever argument you're having, but anyway.
- davemp 4y ago
  There may not be historical evidence, but first principles tell me that most people prefer cash to trading pelts for groceries every week.
  - jrochkind1 4y ago
    "first principles tell me" is a pretty poor way of knowing what happened in actual history. In this case, it's just you wild guessing about the desires of people thousands of years ago whose lives were nothing like yours. I mean, we don't need any kind of science or history if we could just be like "this story makes sense to me, so it must be true." I guess it's appropriate for our post-fact world.
    - davemp 4y ago
      > I mean, we don't need any kind of science or history if we could just be like "this story makes sense to me, so it must be true." We don't have any historical record of people explicitly writing that they started using bronze tools to deal with the undesirable aspects of stone tools afaik. We just happen to know from scientific first principles that bronze tools are much more efficient than stone and we also know that societies switched from using stone to bronze. So we assume that they switched due to bronze being better. That's how the study of history has always worked. > I guess it's appropriate for our post-fact world. If you want to imply a conspiracy of control through currency I would say that would require more facts to back it up than the simpler alternative. Historically, we know that those in power in the past had no trouble controlling / levying tribute with simple violence.
  - gruez 4y ago
    > There may not be historical evidence, but first principles tell me that most people prefer cash to trading pelts for groceries every week. That might be true, but your prior comment says > State-backed central currencies emerged because people in informal economies were bartering to exchange goods and services, which is less efficient than having a standardized medium of exchange, so central authorities issued currency in order to increase the efficiency of the economy. Which is a much stronger claim and doesn't necessarily follow from the fact that "people prefer cash to trading pelts for groceries". If you check the wikipedia article on the history of money[1], the first forms of currency wasn't issued by the state. They were informal credit systems, or standardized unit of account (eg. grain, or receipt for grain stored at a granary and later precious metals). State backed versions of the latter came later. Even in the US, prior to the federal reserve, "currency" was IOUs for gold issued by various private banks. [1] https://en.wikipedia.org/wiki/History_of_money https://en.wikipedia.org/wiki/History_of_money

by kibwen 4y ago

theknocker 4y ago

jrochkind1 4y ago

I believe there isn't a lot of historical evidence that state-backed currencies emerged to deal with undesirable aspects of barter. That's pretty much just a myth people decided made sense, rather than something that happened in history. We mostly don't know why money/currency came into existence, it happened so long ago. There is some evidence that at least in some places it was to fund armies or generally provide more state (or pre-state ruler) control of the economy. I don't really know what impact that has on whatever argument you're having, but anyway.

davemp 4y ago
There may not be historical evidence, but first principles tell me that most people prefer cash to trading pelts for groceries every week.
- jrochkind1 4y ago
  "first principles tell me" is a pretty poor way of knowing what happened in actual history. In this case, it's just you wild guessing about the desires of people thousands of years ago whose lives were nothing like yours. I mean, we don't need any kind of science or history if we could just be like "this story makes sense to me, so it must be true." I guess it's appropriate for our post-fact world.
  - davemp 4y ago
    > I mean, we don't need any kind of science or history if we could just be like "this story makes sense to me, so it must be true." We don't have any historical record of people explicitly writing that they started using bronze tools to deal with the undesirable aspects of stone tools afaik. We just happen to know from scientific first principles that bronze tools are much more efficient than stone and we also know that societies switched from using stone to bronze. So we assume that they switched due to bronze being better. That's how the study of history has always worked. > I guess it's appropriate for our post-fact world. If you want to imply a conspiracy of control through currency I would say that would require more facts to back it up than the simpler alternative. Historically, we know that those in power in the past had no trouble controlling / levying tribute with simple violence.
- gruez 4y ago
  > There may not be historical evidence, but first principles tell me that most people prefer cash to trading pelts for groceries every week. That might be true, but your prior comment says > State-backed central currencies emerged because people in informal economies were bartering to exchange goods and services, which is less efficient than having a standardized medium of exchange, so central authorities issued currency in order to increase the efficiency of the economy. Which is a much stronger claim and doesn't necessarily follow from the fact that "people prefer cash to trading pelts for groceries". If you check the wikipedia article on the history of money[1], the first forms of currency wasn't issued by the state. They were informal credit systems, or standardized unit of account (eg. grain, or receipt for grain stored at a granary and later precious metals). State backed versions of the latter came later. Even in the US, prior to the federal reserve, "currency" was IOUs for gold issued by various private banks. [1] https://en.wikipedia.org/wiki/History_of_money https://en.wikipedia.org/wiki/History_of_money