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> [On] 23rd August 1994, the chaotic music duo and performance artists Bill Drummond and Jimmy Cauty burned £1m of notes behind a boathouse on the Scottish isla
by mypastself 3y ago
> [On] 23rd August 1994, the chaotic music duo and performance artists Bill Drummond and Jimmy Cauty burned £1m of notes behind a boathouse on the Scottish island of Jura. They are not alone in attempting to reduce money’s power…
They literally increased the purchasing power of each remaining pound by doing so.
- croes 3y ago>They literally increased the purchasing power of each remaining pound by doing so. Did they. Notes aren't a limited resource and they can still be considered in the cashflow
- thaumasiotes 3y agoAssuming they (or someone else) owned the notes, yes. By reducing their own holdings, they raised the value of everyone else's. If the notes were counterfeit or had otherwise managed to come into existence without being owned by anyone, then no.
- venusenvy47 3y agoWould it raise the value of the currency if the central bank didn't know this stash was destroyed? It seems like this pile of cash would still be considered to be "in circulation" until the central bank declared it to not be.
- mouse_ 3y agoYes
- thaumasiotes 3y agoThe central bank's knowledge isn't relevant in any way. The value of the currency goes up because the willingness of people to spend it went down. You can't spend money that doesn't exist, so this effect will occur regardless of anyone's knowledge of anything.
- croes 3y agoBy your logic the currency goes up when the poor get poorer
- thaumasiotes 3y agoYes, if a million poor people lose $1 each, that has the same effect as one guy losing $1 million.
- croes 3y agoIf million people lose $1, nobody cares. If one guy loses 1 million he might cut costs that will affect others. If people like Musk lose wealth because of sinking stock prices, his workers don't have suddenly more buying power.
- thaumasiotes 3y agoSomething seems to have gone badly wrong in your choice of example - that didn't even involve any money.
- croes 3y agoIt's money just not cash. Most money is book money and the burning of 1 million doesn't change the purchasing of the people because cash isn't linked to a finite resource like gold.
- satellite2 3y agoI don't really understand your comment. Generally it's accepted that the value went up because it became more rare as the number of unit went down. Or similarly because if all the money represents the price of everything in the economy, as there is less money and assuming that everything in the economy didn't change, then everything has now a slightly lower price.
- 3y ago
- Exuma 3y agoA better question is do I make everyone else’s dollar worth more for the duration that I hold and don’t spend my dollars
- ImHereToVote 3y agoYes. That is precisely why we don't get runaway inflation when people own a ton of property or have tons of money in index funds. That money supply isn't doing anything in particular.
- thaumasiotes 3y agoDo you make everyone else's stock worth more for the duration that you hold your shares without selling them? Rephrasing that question, if you were holding a bunch of shares of stock, and you sell them, will that lower the price of that stock?
- yard2010 3y agoIt's confusing to think about money as a relative not absolute resource
- huppeldepup 3y agoThere’s a documentary called “ watch the K foundation burn a million quid” well worth watching.
- Towaway69 3y agoAgreed because it's a very human docu. It's more about the human experiences of burning 1mil rather than prompting the act - which remains very controversial.
- keiferski 3y agoBy what, 0.00001%? I think the quoted sentence is obviously talking about the symbolic power of money – and burning a million pounds certainly has a lot of that.
- api 3y agoGood podcast about the KLF: https://thenonsensebazaar.com/listen/119-the-klf/ https://thenonsensebazaar.com/listen/119-the-klf/
- CraigJPerry 3y agoThe Bank of England destroys between 10-30 billion pounds worth of notes per year (no longer fit for circulation). Sterling has other issuing banks too beyond BoE. I don’t think it’s possible to measure 1m notes going absent by any observable metric. Even if it were possible, the purchasing power wouldn’t change - you coffee shop wouldn’t reduce their prices but they might adjust staffing levels in an extreme case (not remotely likely to happen with £1mm diff in circulation)
- rich_sasha 3y agoAs a nitpick, presumably the banknotes destroyed by BoE are then replaced by other banknotes. But I agree this is likely unmeasurable.
- ttoinou 3y agoCorrect, it's the rarety of all others bank notes that is increased, increasing purchasing power is only one consequence possible but not the only one. By the way, being hard to measure doesn't mean it doesn't exist. And there are plenty of things easy to measure that are meaningless
- CraigJPerry 3y agoBank notes are not re-issued 1:1 with destroyed notes. >> being hard to measure doesn't mean it doesn't exist No in this context it does. Either you can measure the increase purchasing power or you can’t. And if you can’t measure it, it doesn’t exist in this specific case.
- ttoinou 3y agoMost economics consequences will never be measured ever
- CraigJPerry 3y agoI think we’d be getting into something akin to “homeopathic” monetary theory with that line of reasoning…!
- amelius 3y agoAnd the purchasing power of any pound still to be printed by the government.
- hasty_pudding 3y agoThis is just rich people flexing under the BS guise of sticking it to the man.
- timruffles 3y agoNot so - it was the majority of their music industry earnings, and they are apparently quite haunted by it to this day!
- hasty_pudding 3y agoThey sound to me like astronomical idiots the likes of which will rarely be approached in the past, present, and future of the human race.
- ascorbic 3y agoIt was their entire remaining royalty earnings. They also deleted their back catalogue so they couldn't earn any more. I remember having to buy Japanese imports when I wanted CD copies of the White Room and Chill Out as a teenager. It was only a couple of years ago when they finally reissued any of their work.
- furyofantares 3y agoYou might argue they distributed the money amongst all existing money-havers, with each getting a microscopic share in proportion to how much money they already have. In that case it's a donation primarily to the rich. But it's also no different than if they stuck it under a mattress for 10 years, at least until the 10 years is up. So that's also sort of a donation primarily to the rich. Of course when the 10 years is up and they spend money, more of it will wind up in rich people's accounts than in anyone else's, if not immediately then eventually (otherwise they wouldn't stay rich.)
- ProllyInfamous 3y ago>In that case it's a donation primarily to the rich. [laughs, in disappearing bitcoin]
- deleted 3y ago[deleted]