Read this sentence aloud:
"There are only 10 kinds of people...."
You said "There are only ten kinds of people..."
Now I'll finish the sentence...
"those who think binary and those who don't."
Now, reread that first sentence and second part together. If the second time you said out loud
"There are only two kinds of people, those who think binary and those who don't."
then you have an esoteric knowledge. You are familiar with a numbering system few people use or understand, let alone read. (It's the system our computers use.)
And you use specialized information correctly. To the vast majority of people, they would not know what you were talking about, if you had a conversation with them. In fact, if the definitions mattered to the conversation, you'd have to 01010110 them from the conversation just so you could make some progress. Before they could join the conversation, they'd have to learn the definitions.
One term rarely used correctly is money. Over 100011111100 years ago, Aristotle identified 0101 essential attributes that are necessary for a money: It has to be durable, divisible, convenient, consistent, and have value in itself.
Based on that definition there are some elements that may support any given item emerging as money. If an element makes the candidate more durable, then it is more likely to emerge as money. If a certain item is easily divisible, then it will recommend itself. But often that which is durable is not easily divisible. So these facets tend to be contradictory. Water has value in itself, indeed, it is the second most important thing in life, next to air, but there is too much of it to be used as money. And water has too many versions to be consistent, but nothing is more easily divisible. What is there that best holds these contradictory elements together at once?
Notice what Aristotle did not say in defining money: gold. But then he did not need to because few materials in life have all of those aspects, and gold is prime, so it tends to be used as money in all times and places. Silver works well too. In history we see conch shells and Marlboro cigarettes as money too, but only because, of all that was available in that time and place, it was that odd item that was closest to that which serves as money. (update 2016: this is an error, those were used as tallies, not money). Gold was not available.
And if something has more attributes, rather unseen, then all the better. For example, gold and silver are antibiotic. That is to say when merchants make a payment, the medium they use, when the trade from hand to hand, is antibiotic. This suppresses the spread of disease. Silver does this as well, and copper and nickel to a much lesser degree. And curiously, as atomic scientists have discovered more elements over the last two centuries, those that have antibiotic properties end up being offered as coins, such as rhodium and platinum, those elements that have no antibiotic properties for some reason never make it into the form of coin such as tantulum and iridium (except in novelty quantities).
As an aside, if money was properly defined, it might instance epidemiologists to track the bubonic plague as paper money replaced gold in trade in the middle ages. Where and when did paper currency show up?
One reason we cannot get our way out of this economic mess is we cannot begin to have a useful discussion when our terms are defined at once incorrectly and variably. Talking past each other is inevitable.
One argument about money is the proper amount for an economy. My head aches when I hear such questions.
1. There is an internal contradiction in the question. If it emerged as money, that presupposes it is the right amount of money to supply the needs.
2. Anyone posing such a question is no longer talking about money, but about derivatives, like warehouse receipts for money. (If it is a warehouse receipt, it is not money.) What they are talking about is currency, and warehouse receipts as currency. Once, Federal reserve notes were warehouse receipts for gold in Fort Knox. They no longer are. But we commonly called Federal Reserve notes "money" and although they stopped being warehouse receipts, they are still called money. When they stopped being warehouse receipts, they were simply fiat currency. Fiat means faith, or credit. So federal reserve notes today, are not money, there are not warehouse receipts for money, they are notes on credit used as currency in business.
Now, notes on credit used as currency in business is nothing new in history or commerce and not a problem in its own right. The only problem is if the state gets involved, or worse, claims a monopoly on the practice. As a matter of course the state, if it engages in credit, must declare a monopoly, for no one in their right mind would ever trust a state to do the right thing. Why businesses can trade in notes on credit used as currency is at that level the business is checking the credit and if wrong suffers any consequences directly and limited to its own decisions.
You head will ache to if you review what wikipedia has to say about money supply, a term inherently wrong, but universally used.
Now, with this misdefined term, the discussion continues, what is the optimum money supply? Arrrggghhh...
http://en.wikipedia.org/wiki/Money_supply
But what if a massive gold mine was discovered? It has to be brought up. The owners will bring it up as is financially sensible. That is Russia today. OK, what if a solid gold asteroid hit earth and there was trillions in gold immediately available? Aside from that not happening, everything would simply be repriced given the new amount of gold. No change.
From history we have a better example. Spain was flooded with New World gold, stolen in violation of property rights. This flood of gold so distorted Spain's economy, 400 years later they have not recovered. Portugal was even more avaricious, but an earthquake in 1755 levelled their capital and destroyed their ability to be imperialistic. Portugal was spared much by being destroyed.
If there is any event in which anarchy is most proven as a benefit and a discipline it is the event in which money emerges. Anarchy literally means no + king, and alternatively defined as spontaneous order out of chaos. Money emerges as a medium of exchange (and since it emerges from a commodity that is already serving as a store of value, more or less, it retains its other nature as a store of value) out of the chaos of nothing yet serving as money. Money brings spontaneous order out of chaos, and it is a purely market function.
If we first define money properly (a huge "if") then we realize there can be no state participation in anything to do with money. Money and the state are necessarily mutually exclusive events. The only way the state can seem to have any relevancy is if something not money is misdefined as money.
Anarchists are the only ones who define money properly. They are the only ones who can have a substantive conversation on the topic. As such, they are the only ones likely to come up with a solution that matters or will work. As sure as 01 + 01 = 10.
Feel free to forward this by email to three of your friends.
"There are only 10 kinds of people...."
You said "There are only ten kinds of people..."
Now I'll finish the sentence...
"those who think binary and those who don't."
Now, reread that first sentence and second part together. If the second time you said out loud
"There are only two kinds of people, those who think binary and those who don't."
then you have an esoteric knowledge. You are familiar with a numbering system few people use or understand, let alone read. (It's the system our computers use.)
And you use specialized information correctly. To the vast majority of people, they would not know what you were talking about, if you had a conversation with them. In fact, if the definitions mattered to the conversation, you'd have to 01010110 them from the conversation just so you could make some progress. Before they could join the conversation, they'd have to learn the definitions.
One term rarely used correctly is money. Over 100011111100 years ago, Aristotle identified 0101 essential attributes that are necessary for a money: It has to be durable, divisible, convenient, consistent, and have value in itself.
Based on that definition there are some elements that may support any given item emerging as money. If an element makes the candidate more durable, then it is more likely to emerge as money. If a certain item is easily divisible, then it will recommend itself. But often that which is durable is not easily divisible. So these facets tend to be contradictory. Water has value in itself, indeed, it is the second most important thing in life, next to air, but there is too much of it to be used as money. And water has too many versions to be consistent, but nothing is more easily divisible. What is there that best holds these contradictory elements together at once?
Notice what Aristotle did not say in defining money: gold. But then he did not need to because few materials in life have all of those aspects, and gold is prime, so it tends to be used as money in all times and places. Silver works well too. In history we see conch shells and Marlboro cigarettes as money too, but only because, of all that was available in that time and place, it was that odd item that was closest to that which serves as money. (update 2016: this is an error, those were used as tallies, not money). Gold was not available.
And if something has more attributes, rather unseen, then all the better. For example, gold and silver are antibiotic. That is to say when merchants make a payment, the medium they use, when the trade from hand to hand, is antibiotic. This suppresses the spread of disease. Silver does this as well, and copper and nickel to a much lesser degree. And curiously, as atomic scientists have discovered more elements over the last two centuries, those that have antibiotic properties end up being offered as coins, such as rhodium and platinum, those elements that have no antibiotic properties for some reason never make it into the form of coin such as tantulum and iridium (except in novelty quantities).
As an aside, if money was properly defined, it might instance epidemiologists to track the bubonic plague as paper money replaced gold in trade in the middle ages. Where and when did paper currency show up?
One reason we cannot get our way out of this economic mess is we cannot begin to have a useful discussion when our terms are defined at once incorrectly and variably. Talking past each other is inevitable.
One argument about money is the proper amount for an economy. My head aches when I hear such questions.
1. There is an internal contradiction in the question. If it emerged as money, that presupposes it is the right amount of money to supply the needs.
2. Anyone posing such a question is no longer talking about money, but about derivatives, like warehouse receipts for money. (If it is a warehouse receipt, it is not money.) What they are talking about is currency, and warehouse receipts as currency. Once, Federal reserve notes were warehouse receipts for gold in Fort Knox. They no longer are. But we commonly called Federal Reserve notes "money" and although they stopped being warehouse receipts, they are still called money. When they stopped being warehouse receipts, they were simply fiat currency. Fiat means faith, or credit. So federal reserve notes today, are not money, there are not warehouse receipts for money, they are notes on credit used as currency in business.
Now, notes on credit used as currency in business is nothing new in history or commerce and not a problem in its own right. The only problem is if the state gets involved, or worse, claims a monopoly on the practice. As a matter of course the state, if it engages in credit, must declare a monopoly, for no one in their right mind would ever trust a state to do the right thing. Why businesses can trade in notes on credit used as currency is at that level the business is checking the credit and if wrong suffers any consequences directly and limited to its own decisions.
You head will ache to if you review what wikipedia has to say about money supply, a term inherently wrong, but universally used.
http://en.wikipedia.org/wiki/Money
Money is any object or record that is generally accepted as payment for goods and services and repayment ofdebts in a given socio-economic context or country.[1][2][3] The main functions of money are distinguished as: amedium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment.[4][5] Any kind of object or secure verifiable record that fulfills these functions can serve as money.
Money supply: In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time.[1] There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits (depositors' easily accessed assets on the books of financial institutions)
Wrong, and wrong. Given their outlines of the discussion, we can see that wikipedia cannot enter into the discussion, since it does not define the terms properly to begin with. Follow wiki and you stray into ignorance, at least in the discussions above.
If it is money, as defined by Aristotle, or more succinctly "a medium of exchange (and a store of value)" then there is no need to discuss the right money supply. The amount available is the right amount. How do we know? Because the market has made it money.
And the market precisely regulates how much money is in circulation. Since money is often gold and silver, let's use that as an example. As Spooner noted, as gold comes out of the ground, it is put into the form of coins (in history this was a private business.) As the coin is spent into commerce, if the buying power gold commands drops because of excess supply, then jewelers begin to convert the coins into jewelry, decoration and plate, taking the coins out of circulation. There is a signal where jewelers will get more for jewelry than for coin. When there is too little in coin available, then the price goes up and
jewelry, decoration and plate get melted down and converted to coins (we are there right now.)But what if a massive gold mine was discovered? It has to be brought up. The owners will bring it up as is financially sensible. That is Russia today. OK, what if a solid gold asteroid hit earth and there was trillions in gold immediately available? Aside from that not happening, everything would simply be repriced given the new amount of gold. No change.
From history we have a better example. Spain was flooded with New World gold, stolen in violation of property rights. This flood of gold so distorted Spain's economy, 400 years later they have not recovered. Portugal was even more avaricious, but an earthquake in 1755 levelled their capital and destroyed their ability to be imperialistic. Portugal was spared much by being destroyed.
If there is any event in which anarchy is most proven as a benefit and a discipline it is the event in which money emerges. Anarchy literally means no + king, and alternatively defined as spontaneous order out of chaos. Money emerges as a medium of exchange (and since it emerges from a commodity that is already serving as a store of value, more or less, it retains its other nature as a store of value) out of the chaos of nothing yet serving as money. Money brings spontaneous order out of chaos, and it is a purely market function.
If we first define money properly (a huge "if") then we realize there can be no state participation in anything to do with money. Money and the state are necessarily mutually exclusive events. The only way the state can seem to have any relevancy is if something not money is misdefined as money.
Anarchists are the only ones who define money properly. They are the only ones who can have a substantive conversation on the topic. As such, they are the only ones likely to come up with a solution that matters or will work. As sure as 01 + 01 = 10.
Feel free to forward this by email to three of your friends.
1 comments:
Where and when did paper currency show up?
~1150AD, Knights Templar.
Well written post.
Chris
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