5 ms·

Doesn't have to be gold. We could have many competing currencies. Some stable, some more speculative. Use your imagination.

rayiner 14y ago
I'm not saying there aren't alternative structures. I'm saying there is no one correct structure you can label "pure capitalism." The monetary system is an engineering problem. The goal is to keep enough new money flowing into the system, but not too much, and make it robust in terms of political pressures, etc. Unfortunately, the debate over the issue is always reduced to ideological handwaving. That's not how engineering problems are solved.
- ahallock 14y ago
  I disagree that it's an engineering problem. How are you going to model the supply & demand, the wants and desires, and complex transactions occurring among hundreds of millions of people? It just seems like hubris to me, but I'm open to the possibilities.
  - po 14y ago
    The same way we predict how the trillions of trillions of air molecules behave when we predict the weather: we build models of aggregate behavior, try to understand relationships, run simulations and test our predictions. We're not 100% right all of the time, but we now have the ability to prepare for disasters days in advance and re-route airplanes around storms before they hit. Weather prediction and the activity around it was once an intractable problem but now is a huge, huge benefit to society. The things you bring up are not even the hard part… The difficulty is that the system is dominated by feedback loops. I still think it's within the realm of 'engineering can improve this'.
  - HCIdivision17 14y ago
    The field of Economics has been attempting to answer that for a rather long time. I don't mean to be glib - it turns out to be a damnably hard problem that's been battled by thousands for centuries. There's easily enough modeling, math, and intellectual know-how going into it to make it a fine engineering discipline (albeit ununified). Heck, the quants basically weaponized it into a science. Of couse, the real problem is which model(s) to use, since that affects the system. The answer to that is probably "all of them", picking whichever one seems more appropriate. I'm thinking like a physicist here: sometimes you ignore gravity, and sometimes you ignore wave-partical duality.
philwelch 14y ago
The entire concept of currency is that there's a single shared medium of value used for exchange. "Competing currencies" is an oxymoron. Plus, once the government decides which currency is used to pay taxes or to pay damages after a civil suit, you're pretty much set.
- dredmorbius 14y ago
  Not true. Bimetallic, and other multiple-basis monetary systems have and do exist. British currency was initially tri metallic: copper (pennies), silver (pounds), and gold (guineas).
  - philwelch 14y ago
    Bimetallism was fundamentally unworkable because it presupposed a fixed ratio between gold and silver that didn't account for changes in their respective market values. In any case, both metals were pegged to the U.S. Dollar, which was the currency. There were no competing currencies, but rather the fiction of bimetallism. If you are seriously proposing bimetallism as a workable system in the year 2012, you are a total and complete kook and have no business discussing the matter because you clearly have no fucking idea what you are talking about.
    - dredmorbius 14y ago
      You made a blanket statement that multiple-basis currencies cannot and haven't existed. I showed two counterexamples. I'm not sufficiently versed in contemporary currency matters to discuss the feasibility or actuality of significant currency bases presently. But that wasn't the question. With regards to governments deciding on currencies: it's not that alternate payment methods cannot be considered. It's that a payment in the legal tender for a debt cannot be refused (without prior arrangement) without voiding the debt. If you make a credible offer to pay in legal tender and the payee refuses, the debt is void. Doesn't mean you can't make payment in gold or cowrie shells, so long as you both agree to that. Including to the IRS (e.g.: property seizures to pay back taxes).

rayiner 14y ago

I'm not saying there aren't alternative structures. I'm saying there is no one correct structure you can label "pure capitalism." The monetary system is an engineering problem. The goal is to keep enough new money flowing into the system, but not too much, and make it robust in terms of political pressures, etc. Unfortunately, the debate over the issue is always reduced to ideological handwaving. That's not how engineering problems are solved.

ahallock 14y ago
I disagree that it's an engineering problem. How are you going to model the supply & demand, the wants and desires, and complex transactions occurring among hundreds of millions of people? It just seems like hubris to me, but I'm open to the possibilities.
- po 14y ago
  The same way we predict how the trillions of trillions of air molecules behave when we predict the weather: we build models of aggregate behavior, try to understand relationships, run simulations and test our predictions. We're not 100% right all of the time, but we now have the ability to prepare for disasters days in advance and re-route airplanes around storms before they hit. Weather prediction and the activity around it was once an intractable problem but now is a huge, huge benefit to society. The things you bring up are not even the hard part… The difficulty is that the system is dominated by feedback loops. I still think it's within the realm of 'engineering can improve this'.
- HCIdivision17 14y ago
  The field of Economics has been attempting to answer that for a rather long time. I don't mean to be glib - it turns out to be a damnably hard problem that's been battled by thousands for centuries. There's easily enough modeling, math, and intellectual know-how going into it to make it a fine engineering discipline (albeit ununified). Heck, the quants basically weaponized it into a science. Of couse, the real problem is which model(s) to use, since that affects the system. The answer to that is probably "all of them", picking whichever one seems more appropriate. I'm thinking like a physicist here: sometimes you ignore gravity, and sometimes you ignore wave-partical duality.

philwelch 14y ago

The entire concept of currency is that there's a single shared medium of value used for exchange. "Competing currencies" is an oxymoron. Plus, once the government decides which currency is used to pay taxes or to pay damages after a civil suit, you're pretty much set.

dredmorbius 14y ago
Not true. Bimetallic, and other multiple-basis monetary systems have and do exist. British currency was initially tri metallic: copper (pennies), silver (pounds), and gold (guineas).
- philwelch 14y ago
  Bimetallism was fundamentally unworkable because it presupposed a fixed ratio between gold and silver that didn't account for changes in their respective market values. In any case, both metals were pegged to the U.S. Dollar, which was the currency. There were no competing currencies, but rather the fiction of bimetallism. If you are seriously proposing bimetallism as a workable system in the year 2012, you are a total and complete kook and have no business discussing the matter because you clearly have no fucking idea what you are talking about.
  - dredmorbius 14y ago
    You made a blanket statement that multiple-basis currencies cannot and haven't existed. I showed two counterexamples. I'm not sufficiently versed in contemporary currency matters to discuss the feasibility or actuality of significant currency bases presently. But that wasn't the question. With regards to governments deciding on currencies: it's not that alternate payment methods cannot be considered. It's that a payment in the legal tender for a debt cannot be refused (without prior arrangement) without voiding the debt. If you make a credible offer to pay in legal tender and the payee refuses, the debt is void. Doesn't mean you can't make payment in gold or cowrie shells, so long as you both agree to that. Including to the IRS (e.g.: property seizures to pay back taxes).