The value of one particular currency may not be near the value of another. You could move to a new town and the currency that you have would then be worth very little. It would be extremely difficult for people to live, and for the economy to work. How will multiple currencies be able to be managed and maintained in the economy? There would be value disparity. This would cause a fractured economy that just wouldn't function.
/thread
But in case you want further discussion, do note that this would be a reason for businesses to, I don't know, accept one or a few types of money everywhere?
You seem to misunderstand the reason for competing currencies. It allows the market to choose the best money. There's a good chance that if legal tender laws were repealed, the FED was abolished, and fractional reserve banking was considered fraud, the markets may very well choose gold- or silver-backed currency. Meaning that it would matter little if a man from Topeka held a local Topeka bank's notes (that were backed by gold) and all of the sudden moved to Indianapolis, as the dominating currency there would be a gold-backed currency as well. The Indianapolis bank would likely exchange his Topeka notes for Indianapolis notes, possibly for no charge if the Topeka bank was a well-trusted bank. It also would matter none if Topeka notes were backed by wheat and Indianapolis notes were backed by corn. If one bushel of corn is valued twice as much as a bushel of wheat, the man could exchange his wheat-backed notes for half as many corn-backed notes, but he is no poorer or richer. His money can still buy the same amount of goods.
Hi Kylio!
The only one worth following is the one who leads... not the one who pulls; for it is not the direction that condemns the puller, it is the rope that he holds.
@Phi: Careful. Hans Hoppe:
What about the-Friedmanite-idea of freely fluctuating "na- tional monies" or of "optimal currency area? It must be regarded as absurd, except as an intermediate step in the development of an inter-national money. Strictly speaking, a monetary system with rival monies of freely fluctuating exchange rates is still a system of partial barter, riddled with the problem of requiring double coinci- dence of wants in order for exchanges to take place. The lasting existence of such a system is dysfunctional of the very purpose of money: of facilitating exchange (instead of making it more difficult) and of expanding one's market (rather than restricting it). There are no more "optimal"-local, regional, national or multi-national-mo- nies or currency areas than there are "optimal trading areas." In- stead, a s long as more wealth is preferred to less and under conditions of uncertainty, just a s the only "optimal" trading area is the whole world market, so the only "optimal" money is one money and the only "optimal" currency area the entire globe.
Clayton -
To give an example of what Wheylous is talking about, consider that most businesses accept besides cash: Visa, MasterCard, American Express, and in many cases Discover, personal checks, money orders.
So Kylio, does the market cease to function because of competing credit cards?
Currency is not the same as credit cards.
Credit is debt to a person.
And debts must be payed in a currency. Usually denoted before you enter into debt.
Phi, i think your argument is flawed since those credit companies want to be repayed back in dollars- the legal tender of united states.
Iit is not necessary to have 1 type of money in an economy. The economy wont be crazy since multiple currencies will have exchange rates between them. Eventually 1 money will arise through market competition or multiple moneys will be accepted.
Remember that as a currency is more widely accepted, its value increases, hence it will be rare to have multiple currencies, most probably 1 or 2 will dominate the market ex- Gold and Silver.
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Even if your answer is well placed, there's still the rest of the thread to consider.
Now that i think about it, your argument wasnt that bad. It does hold truth that the economy works with competition of medium of exchange (or in this case a medium medium of exchange (visa, america card, mastercard etc, to dollars)), since businesses accept a wide variety of credit cards, so i guess you can contrast that between gold and silver etc, etc.
What the original post actually says is that competing currencies might not work for HER. As with any other choices in life, you have to do your research and make good ones. Some currency only has local or limited value, like accepting an i.o.u. -that doesn't make it worthless, it just makes it a bigger risk. Larger and riskier investments can pay off better, if you're smart about it. And when a bank fails, it's not going to take the whole region with it. The damage is limited. Communities can recover easier.
I don't believe there would be that many currencies. Nobody wants confusion, so there wouldn't be.
Competing currencies aren't good enough because the state, especially a non confederal one! will distort the market anyway. What about when they want to spend? The Federalists didnt give us a form of govt that was compatible with no centralized monetary policy. Even the articles of confederation Sucked on money because it provided for the circulation of centrally created money. If the state creates or collects money then the market will distort it. That said, I think rothbard was a lot better on this because he pointed out that govs can't create money and shouldnt even try to exist because revenue collection will distort the market...I really wonder about Milton and fa Hayek sometimes as they got people thinking, but they couldn't really put it together like rothbard could who was even more principled than dr. Paul.