I was messaged was in response to me asking him if he thought money was debt: "Money is simply a representation of our promissory obligations (which represents our labor and production that we *owe to each other*) So if we did not *owe* our labor and production to another person, if someone else wasnt entitled to our production, then there would be no need for money... Its the exchange that is the debt, money is created to pay a debt, but it is not the debt itself." Why is this incorrect? I think that the institution of fiat currency and its manipulation are the chief causes of large debts and money is the opposite of debt, but this person keeps asserting this point. Can anyone intellectually eviscerate it? Should I use the law of comparative advantage?
Did this come from David Graeber?
It's just... Wrong. Money is a medium of exchange , it's a convenient way of performing a transaction rather than directly giving people what they want, which would destroy a modern economy. If I give you money, then realistically I have given you whatever you have chosen to buy with that money. It is in no way a debt. You could indeed argue that "money is created to pay a debt" but that's because people require something to exchange for in order to exchange. Phrasing money as debt, as he is attempting to do is just awkward and irrelevant. Any relevant insight he has is simply that exchanges aren't one sided... Hooray.
lol, no. Thankfully the person with whom I am arguing knows less-propaganda.
The money-as-debt video has done a great deal of damage on this point and has further muddied already muddy waters.
The conflation of money with debt is a modern device used as a blind by the central banking establishment to obfuscate what they're really doing: printing money. They claim that the Federal Reserve is not printing money, it's giving loans. Once all the loans are repaid, there would be no additional money in the system, so there is no actual creation of money occurring at any point in the system.
The conflation of these concepts is evidence of deep confusion on the part of whoever is conflating them. In a word, it is sophistry.
Clayton -
My own definitions: Money is simply a commodity that is valued, in part, for it's ability to act as a medium of exchange. So if we did not value holding a commodity to use for later exchange, if someone else did not value receiving a commodity to use for later exchange, then there would be no money... a commodity's monetary value emerges from the intertemporal valuations made by market participants. Money arises to alleviate the uncertainty of utilizing a barter system of non-denominated debts, but it is not debt based itself. Currencies consists of tokens, paper, and notations that are debts to money created by the issuer(notational "bank money" is debt to money or a debt to currency that is a debt to money). Currencies become fiat when the issuer ceases to honor the debt to money. I see bitcoins as a commodity valued for their exchange anonymity and novelty that has become money.
Focus on why the state shifted it's currency monopoly to fiat and the consequences of it, as whether or not the person defines money as debt is irrelevant to this more important area of discussion.
I really, really hate the system this forum uses for composing posts.
Learn Liberty perpetuates this nonsense (much to my disappointment). I was really pissed off with this otherwise really useful video after it was ruined about halfway through when this moron claims that "money is simply an i.o.u."
Now I "simply" can't send their video to anyone because it leads to a misinformed viewer, and confusion that is the main focus of this thread.
"Money is simply a representation of our promissory obligations (which represents our labor and production that we *owe to each other*) So if we did not *owe* our labor and production to another person, if someone else wasnt entitled to our production, then there would be no need for money... Its the exchange that is the debt, money is created to pay a debt, but it is not the debt itself."
That is pure nonsense.
But anyway, debt may be used as money, but money is not necessary debt.
I think the safest way to describe money would be to say it is a unit of account that facilitates economic calculation, and that a good unit of account provides a common language between people for cooperative calculations.
See p.39 of Graeber's Debt: the first 5000 years, and he says the Sumerians had accountancy(economic calculation) first, then followed by the silver shekel.
It empirically refutes Menger's theory of monetary history, but I don't think it invalidates Mises' implications of economic calculation.
We can use anything as a unit of account(yes, even IOUs) as long as its socially accepted, but it does not mean money has to be debt
>>accountancy (economic calculation)
what am I missing? unless there is a unit of account there is no economic calculation of the sort Mises wrote about. By 'accountancy' , must surely be meant keeping a count of how many donkeys you sold that year, and how many bushels of hay you took in as inputs from your neighbour the farmer. This is not money.
I think everyone is comfortable with the concept that barter precedes monetary economies... so what is unique about Graebers thesis? Is it just a footnote to say that Sumerians kept a track of how much bartering they had done over various heterogenous stocks? and so what follows from that?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
He refutes the theory that barter precedes money with anthropoligical evidence.
It's in his book: http://www.4shared.com/office/zrLeeBYI/david_graeber_-_debt__the_firs.html
2nd Chapter: the myth of barter. About 22 pages.
It seems to be the main thrust for the left libertarian movement against money, which I don't agree with, but I had to revise my view of money, that it may possibly have came into being first as an accounting concept, prior to having physical representation.
Thanks, didn't notice Murphy's 2nd refutation at that time.
After some searching, found some more recent pummeling of Graeber on Murphy's blog.
http://consultingbyrpm.com/blog/2012/04/murphy-vs.-graeber-on-money-round-2.html