On May 10, 2011, at 10:13 AM, Richard wrote:
Quick question---money as a medium of exchange and a store of value: could that be a different way of saying "exchange demand" and "reserve demand?"
O dear... it is under the fog of definitions that the evil slips by.... by calling things money that are not money the bad guys are able to fund a system that can drop bombs that blow the hands off little girls in afghanistan... Since Osama bin Laden, Saddam Hussein and Gaddafi's children, all killed, are not safe because of USA economic power, neither are my daughters... it is critical to me that we be relentlessly clear.
Money is a medium of exchange. It emerged out of all commodities to serve as such. Usually it is gold, silver, copper... normally it has among all other attributes, an antibiotic aspect. I like this because when new metals are discovered, the ones that also become "money" are also antibiotic (palladium, platinum). This is a nice predictive point, but I digress.
When in reserve, what is money is a mere commodity. It behaves as such: it goes up and down in value, less so than others, but it does. Those who clutch to the perceived apodictic go apoplectic if one refers to money as a store of value. But it is, as much as a grain silo stuffed is to the farmer. But grain blows up both in price and silo far more often than gold in a coffee can.
When gold is presented in payment it is a medium of exchange. As it rests in the coffee can it is a store of value, like the coffee on top of it. I know I need to get stoned on coffee in the morning, so I store some up. I know I need rent next month, so I store some medium of exchange. While in storage, it behaves like any other commodity.
Love of money is the root of all evil. The bad guys begin by lying about what it is. And what it can do. And then proceed to trap people in agreements they do not understand. And use the violence of the state to enforce these agreements. Students loans cannot be bankrupted. Our universities enslave our youth for their first, most productive decade. Austrians analysis shows this. Austrians expose this.
I like austrian economics because the modern adherents were as good as marxists in getting the facts straight, but without the non-sequitor policy prescriptions. Like marx, most of the leading lights see anarchy as the goal and the raison d'etre of the explication.
It does not bother me that legitimate followers of the austrian school cannot agree on a definition of money, labor, management, entrepreneur, interest, profit, the firm or property, or where the economy is at a given time. In fact, the more pseudo-economics a system is, say keynesianism, the more exact and settled the definitions. What does bother me is the idea that economics is science as opposed to an ethical system, that is it value neutral. The very theological terms apodictic and moral hazard, terms used when down to the brass tacks in analysis, rather give away the game.
I'd rather say what I mean, which is enough of a challenge, than find another way of expressing it which is higher-falutin. Exchange demand and reserve demand sound like factors in a formula, which can be plugged in census data to begin to get an idea of the overall economy, with a view to planning and policing for better results. Fog. And besides, it is no one's business how much gold in in how many coffee cans, and why. It is just no one's business.
0 comments:
Post a Comment