Economics Questions

Re: Libertarian Monetary Crank

MaikU — Thu, 25 Nov 2010 15:22:05 GMT

JohnnyFive:

I would like to live in a society using sex as money. I might well go and 'print' some money right now.

that's counterfeiting! It's illegal!

Re: Libertarian Monetary Crank

JohnnyFive — Thu, 25 Nov 2010 13:56:58 GMT

I would like to live in a society using sex as money. I might well go and 'print' some money right now.

Re: Libertarian Monetary Crank

Clayton — Thu, 25 Nov 2010 05:21:07 GMT

Gold is simply one of an almost infinite number of commodities we could very well base our monetary system on (as EdmundCarlisle said).

As z noted, your friend is stuck in collectivist thinking. Challenge him to rephrase his position without using the words "we" "us" or "our."

Clayton -

Re: Libertarian Monetary Crank

James — Thu, 25 Nov 2010 04:21:25 GMT

The only reason legal tender exists - fiat or otherwise - is so that those with political power over it can manipulate it to their advantage when the need arises.

Re: Libertarian Monetary Crank

MrSchnapps — Thu, 25 Nov 2010 03:45:48 GMT

The problem with fiat money is that its supply is (partially) arbitrarily controlled by central authorities that are not bound by the market, i.e., profit/loss and do not engage in rational economic calculation.

I wouldn't act as though gold or silver are unsusceptible to so-called 'coin-clipping', however it would be much more difficult than simply authorizing quantitiative easing on the scale that the Federal Reserve has.

Now just imagine the government trying to clip enough coins to generate another 600 billion. QUICK, BRING IN MORE MEXICANS.

Re: Libertarian Monetary Crank

z1235 — Thu, 25 Nov 2010 03:27:42 GMT

"Fiat money, well run" is not a scheme. It's wishful thinking. His whole text you quoted is just a bunch of "my dad can beat your dad, sometimes" assertions. There are lost cases out there.

Re: Libertarian Monetary Crank

Esuric — Thu, 25 Nov 2010 03:23:48 GMT

He's basically right. There's nothing intrinsic to gold that makes it the optimal monetary unit. It's merely the commodity that was chosen by the market to serve as the common medium of exchange, and potentially will be once again. The problem with fiat money is that its supply is (partially) arbitrarily controlled by central authorities that are not bound by the market, i.e., profit/loss and do not engage in rational economic calculation.

I don't understand his point in the second paragraph: a barter economy with money is not a barter economy. Ideally, you want a single and unified international monetary unit.

Re: Libertarian Monetary Crank

James — Thu, 25 Nov 2010 03:20:29 GMT

perhaps with an impartial computer

Is that like an apolitical government?

I struggle to imagine how an economy is supposed to work without money... If you're a lawyer, and you need to get some urgent dental work done, you'd better hope to high heaven you can find a dentist who is in need of some urgent legal drafting...? It's silly. These people don't think things through.

Re: Libertarian Monetary Crank

Edmund Carlyle — Thu, 25 Nov 2010 03:07:32 GMT

Yeah, I think he was confused even about my initial position (and Rothbards, whom he says he has read). He asks me why do I trust the government to back currency, to which I replied I don't trust them with anything. But my point was that, voluntary or otherwise, his little scheme wouldn't work because 1) it does not allow economic calculation and 2) people are going to find a generally accepted medium of exchange which will then become money.

Re: Libertarian Monetary Crank

z1235 — Thu, 25 Nov 2010 03:04:30 GMT

"We" don't need to base "our" monetary system on anything. Simply remove legal tender laws and capital gains taxes on commodities, grab a beer and observe free market participants voluntarily exchanging goods and services. The goods (even services!) most frequently used in those exchanges will, by definition, become "money". It really is as simple as that.

As usual, no need for a genius central planner (like your friend here) to worry his little head about the "right" levers to pull for maximal benefit of all.

Libertarian Monetary Crank

Edmund Carlyle — Thu, 25 Nov 2010 02:20:09 GMT

Gold is simply one of an almost infinite number of commodities we could very well base our monetary system on (as EdmundCarlisle said). Yet each of these has to function as money[1st year economics textbooks to see the requirements of money.] Fiat money, well run (perhaps with an impartial computer), is no worse than that, and in some ways better, but others worse.

If pushed I would argue for a barter based economy but where each product/industry/company[if big enough] has its own currency. That way people could pick and choose and yet still be able to trade. The real problem is that the current system is so ingrained it is hard to imagine how it could be otherwise.

Pick this apart for me. The first thing that came to my mind was 1) this person doesn't understand the problem of fiat money and 2) you need a unit of account for money to be money. But I thought I'd throw this to you piranhas so I can make the retort utterly devastating.