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Does dollar have an intrinsic value? Actually, can you even define "intrinsic value" without going in circles or defining it simply as current value?

by ye 13y ago

plock 13y ago
If we take 'intrinsic value' to mean 'having some use other than to simply trade away again to someone else, or being backed by something with intrinsic value', then the dollar has intrinsic value in that it is backed by freedom from being prosecuted by the US government for non-payment of taxes.
- BlackDeath3 13y ago
  >If we take 'intrinsic value' to mean... being backed by something with intrinsic value Hypothetical situation: Water holds "intrinsic value" to me, for obvious reasons (in much the same way as your freedom from US government prosecution). I know a guy who will trade me some water from some snail tails. Therefore, snail tails are "intrinsically valuable". I reject your definition of "intrinsic value". Sounds sorta' like "regular value" to me.
  - plock 13y ago
    The degree to which you believe the guy will make good on his promise to always buy snail tails in exchange for water is the degree to which you believe snail tails are backed by water. We can be pretty sure the US government will generally make good on its promise to take US dollars in exchange for not prosecuting you for non-payment of taxes. >I reject your definition of "intrinsic value". Sounds sorta' like "regular value" to me. I don't like the term 'intrinsic value' at all, since it sounds like it's suggesting some type of absolute value, which I don't think very many people (at least, not the ones having these conversations) really believe exists. I think the way they mean it is more in line with the way I defined it, to distinguish between something some people buy for its own sake versus something people only buy so they can trade it away to someone else, who is in turn only buying it so he can again trade it away. The latter still clearly has value to those people who take it in trade, and 'intrinsic value' is a convenient term to distinguish between the two.
    - BlackDeath3 13y ago
      If I have a comparable amount of confidence in my snail tail guy as I do in the USG's hunger for USD, then snail tails are suddenly "intrinsically valuable"? I agree that intrinsic value is sort of a nebulous thing to begin with, and I'm not convinced that the idea even makes sense to at all (as you've suggested), but your definition just seems confusing at best, and perhaps even useless (though if it's useful to you, then have at it).
      - plock 13y ago
        >If I have a comparable amount of confidence in my snail tail guy as I do in the USG's hunger for USD, then snail tails are suddenly "intrinsically valuable"? According to the definition I gave, yes. If you're thinking of 'instrinsic value' as meaning 'absolute value', then yes it's just as absurd to say snail tails have intrinsic value as it is to say anything else has intrinsic value. It certainly sounds absurd to say "snail tails have intrinsic value" for any definition of "intrinsic value", but then, it's absurd to be as certain some guy is going to trade snail tails for water as you are that dollars will buy you freedom from prosecution for non-payment of taxes. >but your definition just seems confusing at best, and perhaps even useless (though if it's useful to you, then have at it). Ya, I have no idea if it's useful or not. There are certainly people who are suspicious of using goods as currencies if they don't have 'intrinsic value', according to that definition. I don't know if that suspicion is well placed or not, but it is there.
- ye 13y ago
  > the dollar has intrinsic value in that it is backed by freedom from being prosecuted by the US government for non-payment of taxes Do you realize how little sense you're making? It's like you wanted to insert meaningless buzzwords like "freedom", not to mention that there's no freedom from being prosecuted for non-payment of taxes. Well, in that case Bitcoin's intrinsic value is that it's backed by the freedom of storage, transfer, global acceptance and low fees, immunity to being counterfeited, immunity from inflation caused by printing, etc.
  - plock 13y ago
    >not to mention that there's no freedom from being prosecuted for non-payment of taxes. What? If I pay my taxes, I won't be prosecuted for non-payment of taxes. >in that case Bitcoin's intrinsic value is that it's backed by the freedom of storage Storage of what? >transfer, It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be seen as valuable for some other reason for anyone to care how easily it can be transferred. >global acceptance Who across the globe is guaranteeing they'll accept a certain number of bitcoins in exchange for a certain amount of something else? >immunity to being counterfeited If I generate a random RSA public key and use it to sign some randomly generated blobs of useless bits, do those blobs of bits and their signature have intrinsic value because it's hard to counterfeit them? >immunity from inflation caused by printing These things you're listing make bitcoin a more suitable currency than some other arbitrary thing that doesn't have those properties, all else equal. It doesn't mean bitcoin has intrinsic value, as I've defined it, and it certainly doesn't mean bitcoin is a good currency overall.
    - ye 13y ago
      First of all, I can pay taxes in Bitcoin. There's a company that handles it for me. Second of all, your dollar's "intrinsic value" being an American criminal law makes zero sense. It's geography-specific. Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition. > It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be seen as valuable for some other reason for anyone to care how easily it can be transferred There are multibillion global transportation industries out there, and they don't care what they transport (as long as it's legal). People pay them because they provide ease of transportation at a reasonable price per pound. I'd say ease of transportation is much more valuable to the majority of the world than some "freedom from prosecution" by some government that can't touch them.
- infinii 13y ago
  The topic of debate is whether bitcoins have intrinsic value. Taxes are not the deciding criteria here. If the government did away with taxes, currencies (whether it be USD, Euro, BTC, etc) would still have value as an instrument used in barter.
  - plock 13y ago
    The argument I'm putting forth is that: 'Intrinsic value' meaning 'objective value' is a useless concept because all value is subjective. What I think people generally mean when they say 'intrinsic value', especially when talking about currencies, is something more like 'having some uses other than to simply trade away again to someone else, or perhaps being backed by something which has intrinsic value'. Dollars have intrinsic value according to that definition, because they are backed by the fact that there are many people who must give the US government dollars in order to avoid being prosecuted for non-payment of taxes. That's where taxes come in. Without taxes, and perhaps some other things like legal tender laws, dollars would have no 'intrinsic value' according to this definition, just like BTC. Both USD and BTC could still have value, even if they don't have 'intrinsic value' according to that definition.
    - infinii 13y ago
      In that case, no currency has intrinsic value. If we went back to the days where I'd trade you 2 bags of rice for a fish, those things have value and other use. Why does everyone fall back to the default argument that the USD is "backed" by the US govt. It is in theory but what does it really mean? The USD is no longer backed by physical gold. If the world decided the USD was useless tomorrow, does "backed" mean you walk up to Capitol Hill and they will give you something in exchange for your dollars? Unlikely IMO. It's backed by debt that the Fed just creates out of thin air. All this talk about "intrinsic value" is nonsense.
      - plock 13y ago
        >In that case, no currency has intrinsic value. I just gave you my definition of intrinsic value and explained exactly why the dollar has intrinsic value according to that definition. If you want to argue that what I said was wrong, you can either prove my definition is contradictory or useless, or you can prove the dollar doesn't fit the definition that I gave. Simply stating 'no currency has intrinsic value' suggests to me you didn't read, or didn't comprehend, my comment. >If we went back to the days where I'd trade you 2 bags of rice for a fish, those things have value and other use. Yes, so according to the definition of 'intrinsic value' that I gave, they have intrinsic value. >If the world decided the USD was useless tomorrow, does "backed" mean you walk up to Capitol Hill and they will give you something in exchange for your dollars? Unlikely IMO. 'Backed' means the IRS is going to accept dollars in exchange for not prosecuting you for non-payment of taxes. That is the crucial point. People value not being prosecuted for non-payment of taxes. The state of being free from being prosecuted has 'intrinsic value' to people. The IRS, at least as of right now, guarantees people that if they pay the IRS the dollars the IRS says they owe the IRS, they will be free from being prosecuted for non-payment of taxes. If the IRS stopped taking dollars in exchange for guaranteeing people freedom from prosecution for non-payment of taxes, then dollars would cease to be backed by the US government. It is certainly true that not all people (like people living in foreign countries) have to worry about being prosecuted by the IRS in the first place. But there are millions upon millions of people who do have to worry about being prosecuted by the IRS. There are enough to establish that the dollar is backed by freedom from being prosecuted for non-payment of taxes. So are they giving you something in exchange for your dollars? That depends on how you look at it. Either they're giving you freedom from prosecution in exchange for your dollars, or they're not taking your freedom from prosecution away from you. Whichever way you look at it, the argument is the same. To the extent that you believe the US government will continue to accept dollars in exchange for not prosecuting people for non-payment of taxes, you believe the dollar is backed by the US government. >It's backed by debt that the Fed just creates out of thin air. What does it mean for something to be backed by debt? Am I guaranteed to be able to buy the debt someone owes someone else with my dollars, like when banks sell mortgages to other banks?
spaceman77 13y ago
My definition for intrinsic value is the same as my definition for reality. An agreement between two or more parties.
interstitial 13y ago
The dollar's value comes from the barrel of gun. I thought that was plain enough. Bitcoins not so much.
- dllthomas 13y ago
  While I wouldn't put it past the USG to use arms to prop up the dollar, I'm not sure if there are specific actions you're referring to.
  - oafitupa 13y ago
    Uh, every invasion of a country or coup/assassination in the last decades?
    - dllthomas 13y ago
      None of those that come to mind have anything to do with support of the currency, so far as I can tell. You will have to be substantially more specific.
      - oafitupa 13y ago
        Lybia, Iran and Iraq. This topic comes up every day, and every day someone who doesn't know history will show "skepticism". I don't have a copy/pasteable text in hand, and I'm not gonna write one from scratch. Just learn some history please, for the sake of mankind.
        dllthomas 13y ago
        Please explain how any of those were actions taken in support of a strong dollar, as opposed to in support of particular economic interests otherwise.
        VexXtreme 13y ago
        Petrodollar. Denominating oil prices in other currencies would cause oil producing countries to stop importing dollars (accepting payments in dollars), which would cause all those dollars to return back to the US and cause a hyperinflation. Furthermore, as if that wasn't bad enough, the Fed wouldn't be able to print dollars at the rate they currently do (the money would have nowhere to go), which would cause the country to default because the government wouldn't be able to repay its obligations. The war in Iraq and the coup in Libya were done purely out of economic self-preservation, and not because a few savages with AK47s would pose a serious threat to the western world.

Does dollar have an intrinsic value? Actually, can you even define "intrinsic value" without going in circles or defining it simply as current value?

by ye 13y ago

Does dollar have an intrinsic value? Actually, can you even define "intrinsic value" without going in circles or defining it simply as current value?

plock 13y ago

If we take 'intrinsic value' to mean 'having some use other than to simply trade away again to someone else, or being backed by something with intrinsic value', then the dollar has intrinsic value in that it is backed by freedom from being prosecuted by the US government for non-payment of taxes.

BlackDeath3 13y ago
>If we take 'intrinsic value' to mean... being backed by something with intrinsic value Hypothetical situation: Water holds "intrinsic value" to me, for obvious reasons (in much the same way as your freedom from US government prosecution). I know a guy who will trade me some water from some snail tails. Therefore, snail tails are "intrinsically valuable". I reject your definition of "intrinsic value". Sounds sorta' like "regular value" to me.
- plock 13y ago
  The degree to which you believe the guy will make good on his promise to always buy snail tails in exchange for water is the degree to which you believe snail tails are backed by water. We can be pretty sure the US government will generally make good on its promise to take US dollars in exchange for not prosecuting you for non-payment of taxes. >I reject your definition of "intrinsic value". Sounds sorta' like "regular value" to me. I don't like the term 'intrinsic value' at all, since it sounds like it's suggesting some type of absolute value, which I don't think very many people (at least, not the ones having these conversations) really believe exists. I think the way they mean it is more in line with the way I defined it, to distinguish between something some people buy for its own sake versus something people only buy so they can trade it away to someone else, who is in turn only buying it so he can again trade it away. The latter still clearly has value to those people who take it in trade, and 'intrinsic value' is a convenient term to distinguish between the two.
  - BlackDeath3 13y ago
    If I have a comparable amount of confidence in my snail tail guy as I do in the USG's hunger for USD, then snail tails are suddenly "intrinsically valuable"? I agree that intrinsic value is sort of a nebulous thing to begin with, and I'm not convinced that the idea even makes sense to at all (as you've suggested), but your definition just seems confusing at best, and perhaps even useless (though if it's useful to you, then have at it).
    - plock 13y ago
      >If I have a comparable amount of confidence in my snail tail guy as I do in the USG's hunger for USD, then snail tails are suddenly "intrinsically valuable"? According to the definition I gave, yes. If you're thinking of 'instrinsic value' as meaning 'absolute value', then yes it's just as absurd to say snail tails have intrinsic value as it is to say anything else has intrinsic value. It certainly sounds absurd to say "snail tails have intrinsic value" for any definition of "intrinsic value", but then, it's absurd to be as certain some guy is going to trade snail tails for water as you are that dollars will buy you freedom from prosecution for non-payment of taxes. >but your definition just seems confusing at best, and perhaps even useless (though if it's useful to you, then have at it). Ya, I have no idea if it's useful or not. There are certainly people who are suspicious of using goods as currencies if they don't have 'intrinsic value', according to that definition. I don't know if that suspicion is well placed or not, but it is there.
ye 13y ago
> the dollar has intrinsic value in that it is backed by freedom from being prosecuted by the US government for non-payment of taxes Do you realize how little sense you're making? It's like you wanted to insert meaningless buzzwords like "freedom", not to mention that there's no freedom from being prosecuted for non-payment of taxes. Well, in that case Bitcoin's intrinsic value is that it's backed by the freedom of storage, transfer, global acceptance and low fees, immunity to being counterfeited, immunity from inflation caused by printing, etc.
- plock 13y ago
  >not to mention that there's no freedom from being prosecuted for non-payment of taxes. What? If I pay my taxes, I won't be prosecuted for non-payment of taxes. >in that case Bitcoin's intrinsic value is that it's backed by the freedom of storage Storage of what? >transfer, It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be seen as valuable for some other reason for anyone to care how easily it can be transferred. >global acceptance Who across the globe is guaranteeing they'll accept a certain number of bitcoins in exchange for a certain amount of something else? >immunity to being counterfeited If I generate a random RSA public key and use it to sign some randomly generated blobs of useless bits, do those blobs of bits and their signature have intrinsic value because it's hard to counterfeit them? >immunity from inflation caused by printing These things you're listing make bitcoin a more suitable currency than some other arbitrary thing that doesn't have those properties, all else equal. It doesn't mean bitcoin has intrinsic value, as I've defined it, and it certainly doesn't mean bitcoin is a good currency overall.
  - ye 13y ago
    First of all, I can pay taxes in Bitcoin. There's a company that handles it for me. Second of all, your dollar's "intrinsic value" being an American criminal law makes zero sense. It's geography-specific. Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition. > It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be seen as valuable for some other reason for anyone to care how easily it can be transferred There are multibillion global transportation industries out there, and they don't care what they transport (as long as it's legal). People pay them because they provide ease of transportation at a reasonable price per pound. I'd say ease of transportation is much more valuable to the majority of the world than some "freedom from prosecution" by some government that can't touch them.
infinii 13y ago
The topic of debate is whether bitcoins have intrinsic value. Taxes are not the deciding criteria here. If the government did away with taxes, currencies (whether it be USD, Euro, BTC, etc) would still have value as an instrument used in barter.
- plock 13y ago
  The argument I'm putting forth is that: 'Intrinsic value' meaning 'objective value' is a useless concept because all value is subjective. What I think people generally mean when they say 'intrinsic value', especially when talking about currencies, is something more like 'having some uses other than to simply trade away again to someone else, or perhaps being backed by something which has intrinsic value'. Dollars have intrinsic value according to that definition, because they are backed by the fact that there are many people who must give the US government dollars in order to avoid being prosecuted for non-payment of taxes. That's where taxes come in. Without taxes, and perhaps some other things like legal tender laws, dollars would have no 'intrinsic value' according to this definition, just like BTC. Both USD and BTC could still have value, even if they don't have 'intrinsic value' according to that definition.
  - infinii 13y ago
    In that case, no currency has intrinsic value. If we went back to the days where I'd trade you 2 bags of rice for a fish, those things have value and other use. Why does everyone fall back to the default argument that the USD is "backed" by the US govt. It is in theory but what does it really mean? The USD is no longer backed by physical gold. If the world decided the USD was useless tomorrow, does "backed" mean you walk up to Capitol Hill and they will give you something in exchange for your dollars? Unlikely IMO. It's backed by debt that the Fed just creates out of thin air. All this talk about "intrinsic value" is nonsense.
    - plock 13y ago
      >In that case, no currency has intrinsic value. I just gave you my definition of intrinsic value and explained exactly why the dollar has intrinsic value according to that definition. If you want to argue that what I said was wrong, you can either prove my definition is contradictory or useless, or you can prove the dollar doesn't fit the definition that I gave. Simply stating 'no currency has intrinsic value' suggests to me you didn't read, or didn't comprehend, my comment. >If we went back to the days where I'd trade you 2 bags of rice for a fish, those things have value and other use. Yes, so according to the definition of 'intrinsic value' that I gave, they have intrinsic value. >If the world decided the USD was useless tomorrow, does "backed" mean you walk up to Capitol Hill and they will give you something in exchange for your dollars? Unlikely IMO. 'Backed' means the IRS is going to accept dollars in exchange for not prosecuting you for non-payment of taxes. That is the crucial point. People value not being prosecuted for non-payment of taxes. The state of being free from being prosecuted has 'intrinsic value' to people. The IRS, at least as of right now, guarantees people that if they pay the IRS the dollars the IRS says they owe the IRS, they will be free from being prosecuted for non-payment of taxes. If the IRS stopped taking dollars in exchange for guaranteeing people freedom from prosecution for non-payment of taxes, then dollars would cease to be backed by the US government. It is certainly true that not all people (like people living in foreign countries) have to worry about being prosecuted by the IRS in the first place. But there are millions upon millions of people who do have to worry about being prosecuted by the IRS. There are enough to establish that the dollar is backed by freedom from being prosecuted for non-payment of taxes. So are they giving you something in exchange for your dollars? That depends on how you look at it. Either they're giving you freedom from prosecution in exchange for your dollars, or they're not taking your freedom from prosecution away from you. Whichever way you look at it, the argument is the same. To the extent that you believe the US government will continue to accept dollars in exchange for not prosecuting people for non-payment of taxes, you believe the dollar is backed by the US government. >It's backed by debt that the Fed just creates out of thin air. What does it mean for something to be backed by debt? Am I guaranteed to be able to buy the debt someone owes someone else with my dollars, like when banks sell mortgages to other banks?

spaceman77 13y ago

My definition for intrinsic value is the same as my definition for reality. An agreement between two or more parties.

interstitial 13y ago

The dollar's value comes from the barrel of gun. I thought that was plain enough. Bitcoins not so much.

dllthomas 13y ago
While I wouldn't put it past the USG to use arms to prop up the dollar, I'm not sure if there are specific actions you're referring to.
- oafitupa 13y ago
  Uh, every invasion of a country or coup/assassination in the last decades?
  - dllthomas 13y ago
    None of those that come to mind have anything to do with support of the currency, so far as I can tell. You will have to be substantially more specific.
    - oafitupa 13y ago
      Lybia, Iran and Iraq. This topic comes up every day, and every day someone who doesn't know history will show "skepticism". I don't have a copy/pasteable text in hand, and I'm not gonna write one from scratch. Just learn some history please, for the sake of mankind.
      - dllthomas 13y ago
        Please explain how any of those were actions taken in support of a strong dollar, as opposed to in support of particular economic interests otherwise.
        VexXtreme 13y ago
        Petrodollar. Denominating oil prices in other currencies would cause oil producing countries to stop importing dollars (accepting payments in dollars), which would cause all those dollars to return back to the US and cause a hyperinflation. Furthermore, as if that wasn't bad enough, the Fed wouldn't be able to print dollars at the rate they currently do (the money would have nowhere to go), which would cause the country to default because the government wouldn't be able to repay its obligations. The war in Iraq and the coup in Libya were done purely out of economic self-preservation, and not because a few savages with AK47s would pose a serious threat to the western world.