The Gold Standard

[The Idler]

Dominic Frisby calls for return of the Gold Standard (http://dominicfrisby.net/writing/why-gold-is-the-currency-of-the-idle-and-free). Is it worth it?

[IcarusAngel]

According to liberals the gold standard caused the great depression.

I wish physicist didn't get banned as he had some good critiques on the gold standard and why we prob need the federal reserve.

[Dean]

Dominic Frisby calls for return of the Gold Standard (http://dominicfrisby.net/writing/why-gold-is-the-currency-of-the-idle-and-free). Is it worth it?

Nope. :)

[Dermezel]

You know there was a couple times in history where like 1 or 2 people almost completely cornered the gold market?

Also, why is Gold even a currency to begin with? It is because it is a "precious metal"- meaning a lot of labor goes into procuring it. But that's not a good thing.

I mean, the goal of rational economics isn't to make people work harder. This is the ridiculous, all too common practice of presenting the labor theory of value as a prescriptive in the modern era.

[LeftSideDown]

You know there was a couple times in history where like 1 or 2 people almost completely cornered the gold market?

The Federal reserve has the "dollar" market cornered (at least in terms of manufacturing/distributing). Whats your point?


Also, why is Gold even a currency to begin with? It is because it is a "precious metal"- meaning a lot of labor goes into procuring it. But that's not a good thing.

There are qualities of a "good" money or currency. Some precious metals are more qualified as currencies than others.

1)The first requisite in any commodity which is to serve as money is that it shall be something in unfailing demand, something having wide acceptability.
2)It must exist in sufficiently large quantities to meet the needs of exchange or trade, yet not so abundantly as to lose its desirability.
3)Money should be durable so that it will not lose its exchange power through decay or deterioration. The notes issued against tobacco in Virginia could not be kept safely for more than a year owing to the deterioration in the value of the stored tobacco.
4)The commodity to serve as money must admit of division into small units in order that it may be used in transactions involving small amounts.
5)Many commodities of varying values are constantly being offered in exchange for money. It must be able to accommodate itself equally to the purchase of a paper of pins and of a horse.
6)The medium of exchange should be homogeneous or uniform, that is, all parts or units of it should have uniform value.
7)It should also be portable; it should have large value in small bulk so that considerable amounts of it can be carried conveniently from place to place.


I mean, the goal of rational economics isn't to make people work harder. This is the ridiculous, all too common practice of presenting the labor theory of value as a prescriptive in the modern era.

Yes you're right, but I don't see your point. The point of economics is to eventually eliminate labor.

[Phased Out]

The Gold Standard is a nutty, Libertarian idea. Almost on par with the "dictatorship of the proletariat".

The Chairman of the Federal Reserve, gave a speech in 2004 explaining how the gold standard caused the Great Depression.

To make a long story short, under a gold standard, there’s no way to fight deflation. Bernanke says that cross-country studies show that the first countries to abandon the gold standard were the first countries to recover from the Great Depression.

At the moment, there just isn’t enough gold to back the U.S. dollar at the current gold price. The U.S. would have to engage in a massive gold buying program which would cause the value of the dollar to fall and the price of gold to rise until the United States had sufficient gold reserves. Once the world knew why the U.S. was buying, the price of gold would rise pretty quickly. This would amount to a massive transfer of wealth from the United States to those who own gold...mostly loser Muslim nations.

There would then be a huge investment in gold mining. But all that gold mining would be worthless activity that wouldn’t enhance the world’s actual productivity. Instead of investing in new computer chips or new factories, people would be investing in digging metal out of the ground. In fact, this activity is more than worthless, it harms the environment because large amounts of sodium cyanide are needed to extract gold from the ore.

How does that benefit the United States or any other nation with fiat currency? It doesn't. Not that communists here give a crap.

It seems like Communists and Ayn Rand cultists are both guilty of being equally nutty. You guys have much more in common than you think.

[Left-Reasoning]

Gold is the money of the people.

[LeftSideDown]

The Gold Standard is a nutty, Libertarian idea. Almost on par with the "dictatorship of the proletariat".

Really? Because the United States was on the Gold Standard until Nixon (Only about 40 years ago) and most countries used Gold until the early 19th century. Its not just a "nutty, Libertarian" idea it was a fact until very recently (relatively).


The Chairman of the Federal Reserve, gave a speech in 2004 explaining how the gold standard caused the Great Depression.

To make a long story short, under a gold standard, there’s no way to fight deflation. Bernanke says that cross-country studies show that the first countries to abandon the gold standard were the first countries to recover from the Great Depression.

Deflation isn't bad (so long as its part of natural market processes). All deflation is the relative raise of purchasing power in your money. Would it be bad if you could buy two cheeseburgers for a dollar rather than one for one dollar? Would it be bad if you could buy more stuff with the same amount of money you have? No, its silly. There were other factors that brought about the Great Depression (first time the Federal Reserve really tried to start running the economy through credit expansion), and it was FDR's/Hoover's programs that prolonged it for about a decade.


At the moment, there just isn’t enough gold to back the U.S. dollar at the current gold price. The U.S. would have to engage in a massive gold buying program which would cause the value of the dollar to fall and the price of gold to rise until the United States had sufficient gold reserves. Once the world knew why the U.S. was buying, the price of gold would rise pretty quickly. This would amount to a massive transfer of wealth from the United States to those who own gold...mostly loser Muslim nations.

The dollar is extremely over valued, and this bubble is going to pop just like the real estate bubble eventually. We are not making what we are taking, and the only reason we can do this is because we throw paper at the countries' supplying our consumption binge.


There would then be a huge investment in gold mining. But all that gold mining would be worthless activity that wouldn’t enhance the world’s actual productivity. Instead of investing in new computer chips or new factories, people would be investing in digging metal out of the ground. In fact, this activity is more than worthless, it harms the environment because large amounts of sodium cyanide are needed to extract gold from the ore.

How does that benefit the United States or any other nation with fiat currency? It doesn't. Not that communists here give a crap.

It seems like Communists and Ayn Rand cultists are both guilty of being equally nutty. You guys have much more in common than you think.

Ehhh, I don't really think there'd be that much gold mining going on. We've got most of it out of the ground (we've been working at it for most of our existence) and there are such a thing as costs. If there was a cache of one million dollars in the center of the earth it wouldn't be worth it to dig to the center of the earth to get it, the same goes for gold. Is it really plausible that we switch back to a gold standard? Not really, it might even be pretty unfeasible. Would it be better than the constant boom/bust cycles the Federal Reserve propagates through reckless credit expansion? Probably.

[Havet]

Gold is the money of the people.

And silver

[Argument]

As long as the money monopoly is removed, I don't really care much either way. I don't want a new gold monopoly, though.

[Jazzratt]

Gold is the money of the people.
And silver

BWAHAHAHAHAHAHAHAHAHAHA. :lol:

There is no "money of the people" - money implies markets, wages, price systems and so on: it is fundamentally not "of the people". Fuck me but market-drones are weird.

[LeftSideDown]

BWAHAHAHAHAHAHAHAHAHAHA. :lol:

There is no "money of the people" - money implies markets, wages, price systems and so on: it is fundamentally not "of the people". Fuck me but market-drones are weird.

I don't see how embracing a system that economizes transactions and allows for economic rationality to be weird. What is wrong with a common medium of exchange?

[Skooma Addict]

Cigarettes are the money of the POW.

[Left-Reasoning]

There is no "money of the people" - money implies markets,

Indeed it does. A group of men could organize to form a democratic worker co-op where they produced a certain product and they could exchange peacefully with other co-ops or individuals who do likewise thus procuring the benefit to everyone.

And money makes this system even better as it eliminated the necessity of the double coincidence of wants.


wages,

There was money long before capitalism.

[Havet]

Cigarettes are the money of the POW.

Wrong, cigarretes are the money of Ron Paul...

http://www.youtube.com/watch?v=xhSsmzS7RTI

[Dimentio]

I don't see how embracing a system that economizes transactions and allows for economic rationality to be weird. What is wrong with a common medium of exchange?

Because gold doesn't tell anything about real value for the survival and well-being of humans. Its only quality is that it is scarce. Moreover, today, gold has a technical function within the electronics industry.

What has real value is water, electricity, heating and food. Gold has a subsidiary value.

[LeftSideDown]

Because gold doesn't tell anything about real value for the survival and well-being of humans. Its only quality is that it is scarce. Moreover, today, gold has a technical function within the electronics industry.

What has real value is water, electricity, heating and food. Gold has a subsidiary value.

There is no such thing as "real value". To a drowning man water has negative value, to a man dying of thirst water could be worth millions of dollars to him. To someone who just drank a gallon of water, water could have no value at all. Value is all subjective, and mediums of exchange (not just gold), allow humans to reduce all transactions to a common denominator (namely, money) without which it would be impossible, or at least inefficient to measure costs and benefits and, therefore, be economic. Everything is scarce... so I don't see your point; value is derived from subjective valuations; there is no such thing as intrinsic value.

[Argument]

What has real value is water, electricity, heating and food. Gold has a subsidiary value.If people were to hoard water, electricity and food instead of using it, wouldn't that be bad? Isn't it better to eat food, drink water, use electricity and trade with money?

[LeftSideDown]

If people were to hoard water, electricity and food instead of using it, wouldn't that be bad? Isn't it better to eat food, drink water, use electricity and trade with money?

Is it bad to hoard water if you think there is going to be a drought?
Is it bad to hoard food if you think there is going to be a siege?
Is it bad to hoard electricity if you think you're going to get shut off?

Is it bad to hoard anything if you think the benefits of hoarding outweigh the costs? Can't we substitute hoarding for savings and have the same result?

I don't think hoarding is ever "bad" or "morally objectionable" as individual circumstances could merit such an action, and none of the things you listed make for very good mediums of exchange.

Anyway, I know you were supporting me, I just didn't want to let that slide.

[REVLEFT'S BIEGGST MATSER TROL]

There is no such thing as "real value". To a drowning man water has negative value, to a man dying of thirst water could be worth millions of dollars to him. To someone who just drank a gallon of water, water could have no value at all. Value is all subjective, and mediums of exchange (not just gold), allow humans to reduce all transactions to a common denominator (namely, money) without which it would be impossible, or at least inefficient to measure costs and benefits and, therefore, be economic. Everything is scarce... so I don't see your point; value is derived from subjective valuations; there is no such thing as intrinsic value.

Shut up, please.

Every one of your posts makes me think you have a mild form of autism combined with sociopathy.

[LeftSideDown]

Shut up, please.

Every one of your posts makes me think you have a mild form of autism combined with sociopathy.

Oh, your ad-hominem has shown me how smart you are. Thanks for showing me the way! So, from now on, instead of actually refuting what someone says attacking their person and implying they have a mental deficiency is the way to win arguments. Is your ignorance, Gangsterio, such that in the face of a relatively simple argument you resort to personal attacks?

[LeftSideDown]

Shut up, please.

Every one of your posts makes me think you have a mild form of autism combined with sociopathy.

And generally isn't autism characterized as an antisocial neural development? Well, I would say its much more antisocial to insult another individual outright rather than actually refute his claims. But hey, thats just me :thumbup1:.

[REVLEFT'S BIEGGST MATSER TROL]

Oh, your ad-hominem has shown me how smart you are. Thanks for showing me the way! So, from now on, instead of actually refuting what someone says attacking their person and implying they have a mental deficiency is the way to win arguments. Is your ignorance, Gangsterio, such that in the face of a relatively simple argument you resort to personal attacks?

Yeah, anyone who attacks you personally is clearly ignorant and can't respond to the wisdom displayed in your cookie cutter libertarianism (of the type everyone here has encountered and debated over and over again all across the internet.)

I suppose you invented this particular defense mechanism during your days as a Randian in high school - clearly anyone who has the nerve to insult you is just intimated by you!

Or it could be that they just think your an idiot. :cool:

[Havet]

Yeah, anyone who attacks you personally is clearly ignorant and can't respond to the wisdom displayed in your cookie cutter libertarianism (of the type everyone here has encountered and debated over and over again all across the internet.)

I suppose you invented this particular defense mechanism during your days as a Randian in high school - clearly anyone who has the nerve to insult you is just intimated by you!

Or it could be that they just think your an idiot. :cool:

Regardless if you think he is an idiot or not, you still commited a fallacy.

I think you forgot to read this (http://www.revleft.com/vb/read-first-t60522/index.html):


Here more than anywhere else on the board posters make a lot of fallacious posts. Avoid this if at all possible, although no actions will be taken against you it does make your argument a lot weaker. Starting with wikipedia or fallacy files is a good way of learning what to avoid.

[LeftSideDown]

Yeah, anyone who attacks you personally is clearly ignorant and can't respond to the wisdom displayed in your cookie cutter libertarianism (of the type everyone here has encountered and debated over and over again all across the internet.)

I suppose you invented this particular defense mechanism during your days as a Randian in high school - clearly anyone who has the nerve to insult you is just intimated by you!

Or it could be that they just think your an idiot. :cool:

Oh, sorry. Only libertarians dislike being insulted outright for putting forward a point? So why isn't this forum just a bunch of people calling each other "sh*theads" and other such things? If you do attack someone, instead of their point, I just assume that you either can't attack their point or that you don't want to take the time to. If you don't want to take the time, just don't say anything. What do you prove by calling me autistic other than your ignorance? I don't understand, I really don't.

[REVLEFT'S BIEGGST MATSER TROL]

Regardless if you think he is an idiot or not, you still commited a fallacy.

I think you forgot to read this (http://www.revleft.com/vb/read-first-t60522/index.html):


This is another thing that annoys me about you lot, is that you accuse everyone of committing an ad homimen without any idea of what one actually is.

What I said was an insult not an ad homimem.

And i'll be quiet now, as i've really wrecked this thread.

[LeftSideDown]

This is another thing that annoys me about you lot, is that you accuse everyone of committing an ad homimen without any idea of what one actually is.

What I said was an insult not an ad homimem.

And i'll be quiet now, as i've really wrecked this thread.

Ad hominem abusive
Ad hominem abusive usually involves insulting or belittling one's opponent, but can also involve pointing out factual but ostensible character flaws or actions which are irrelevant to the opponent's argument. This tactic is logically fallacious because insults and even true negative facts about the opponent's personal character have nothing to do with the logical merits of the opponent's arguments or assertions.

Do you know anything about, well, anything?

[REVLEFT'S BIEGGST MATSER TROL]

Ad hominem abusive
Ad hominem abusive usually involves insulting or belittling one's opponent, but can also involve pointing out factual but ostensible character flaws or actions which are irrelevant to the opponent's argument. This tactic is logically fallacious because insults and even true negative facts about the opponent's personal character have nothing to do with the logical merits of the opponent's arguments or assertions.

Do you know anything about, well, anything?

http://plover.net/~bonds/adhominem.html

"In reality, ad hominem is unrelated to sarcasm or personal abuse. Argumentum ad hominem is the logical fallacy of attempting to undermine a speaker's argument by attacking the speaker instead of addressing the argument. The mere presence of a personal attack does not indicate ad hominem: the attack must be used for the purpose of undermining the argument, or otherwise the logical fallacy isn't there. It is not a logical fallacy to attack someone; the fallacy comes from assuming that a personal attack is also necessarily an attack on that person's arguments. "

Oh dear, looks like you were wrong.

Anyway, look, it wasn't an ad homimen, so I suggest you stop trying to make out I had ulterior motives to insulting you than just finding you annoying, and get back to discussing the gold standard.

[ÑóẊîöʼn]

The Gold Standard? Don't be stupid. The problem is money itself.

[LeftSideDown]

The Gold Standard? Don't be stupid. The problem is money itself.

What you're really saying is "the problem is rational economics itself". I beg to disagree.

[LeftSideDown]

http://plover.net/~bonds/adhominem.html

"In reality, ad hominem is unrelated to sarcasm or personal abuse. Argumentum ad hominem is the logical fallacy of attempting to undermine a speaker's argument by attacking the speaker instead of addressing the argument. The mere presence of a personal attack does not indicate ad hominem: the attack must be used for the purpose of undermining the argument, or otherwise the logical fallacy isn't there. It is not a logical fallacy to attack someone; the fallacy comes from assuming that a personal attack is also necessarily an attack on that person's arguments. "

Oh dear, looks like you were wrong.

Anyway, look, it wasn't an ad homimen, so I suggest you stop trying to make out I had ulterior motives to insulting you than just finding you annoying, and get back to discussing the gold standard.

Have you read what you even said? Its provided below for your convenience. How is that not an attempt to undermine my arguments? You specifically mention my arguments ("posts") and, instead of actually responding, you imply I have a mental problem as if this is sufficient justification to ignore the points raised in a post. Its almost textbook dear chap.


Shut up, please.

Every one of your posts makes me think you have a mild form of autism combined with sociopathy.

Please remember that it was you who derailed the thread with your personal abuse, so, its your move.

[Dean]

What you're really saying is "the problem is rational economics itself". I beg to disagree.
This is a meaningless argument. Of course you think you ascribe to "rational" economics, so does NoXion, and so do I, about our own theories.

[LeftSideDown]

This is a meaningless argument. Of course you think you ascribe to "rational" economics, so does NoXion, and so do I, about our own theories.

How can you have rational economics unless you can reduce different different quantities and qualities of goods to a common denominators (i.e. money)?

[cska]

What we need is the labor standard.

[Dimentio]

The problem with money is exactly that people could hoard them and that they tend to decide who is going to sit on a scrapheap and dig for food while others are eating from gold platters and shitting in golden toilets. I don't think it is rational to adapt the national production capacity after the interests and needs of 1-20% of the population.

[LeftSideDown]

The problem with money is exactly that people could hoard them and that they tend to decide who is going to sit on a scrapheap and dig for food while others are eating from gold platters and shitting in golden toilets. I don't think it is rational to adapt the national production capacity after the interests and needs of 1-20% of the population.

Thats not the problem of money, that is the problem of people doing well in society. You can't imagine a situation where someone gets rich in a barter economy? I can, and it really isn't hard. The "problem" isn't money, its that some people make good economic decisions and other do not.

[Demogorgon]

This silly idea is just looking backwards for the sake of looking backwards. Even if we were to accept the notion of backing a currency with something tangible gold is no longer possible because its use in electronics means that its value has increased at a much greater rate than the rest of the economy has grown. People calling for the use of gold just want to pretend we can all live in the nineteenth century again.

However it isn't just the practical difficulty with going back to gold that matters now because any attempt at fiduciary-or worse-commodity money would be disastrous. History shows us what the gold standard did and the benefits of coming off it. To call for the very thing that deepened every recession to come back right in the middle of a recession indicates to me that some people are unaware of the real world.

To be sure of course we will hear plenty about how gold was actually great for the economy and that everyone has gotten it wrong in blaming it for depression and so on and so forth. But if this is the case then show us some real evidence. Show us your theories playing out in practice.

[Dimentio]

Thats not the problem of money, that is the problem of people doing well in society. You can't imagine a situation where someone gets rich in a barter economy? I can, and it really isn't hard. The "problem" isn't money, its that some people make good economic decisions and other do not.

A barter economy is clearly insufficient for a modern infrastructure, but in a barter economy of a stone age-type, the products to barter often had a use value which created a lot of movement. There wasn't much sense to hoard anything. While classes did exist and so on, there were actually quite usual in pre-monetary societies that even the king could help the farmers to plow, this for example in city-states in the fertile crescent during the copper and bronze ages.

The problem is not "people doing well" today, but that it is happening on the expense of others being forced to live on margins where they cannot do well. You are deluded if you think that people who've grown up in a trailer park or a trash-dump has the same opportunities as someone who has inherited a fortune or even your average middle class kid.

I mean, today, there's enough food to feed 12 billion people, yet 800-1000 million are undernourished on a global scale. Wealthy corporations do not hesitate to predate on impoverished farmers in the third world, using bribes to make authorities force the peasants to leave their homes.

There is enough resources to give all human beings a good quality of life. What economics is doing, through its five postulates, is to set up a model where scarcity (which in reality would legitimise rationing) is legitimising the never-ending appetite of those who control the resources to continue to expand their control at the expense of the access of all other human beings, in particular the poor.

Any rules in a game like that would only benefit the ruling minority, at the same time putting the blame on those who are losing.

Tell me one thing, if you one day found yourself as a loser, with no possibility of climbing up the hole, would you accept your lot in life, saying "I'm a loser and deserve this", put a barrel against your mouth or try to fight against the system which have put you there?

[LeftSideDown]

This silly idea is just looking backwards for the sake of looking backwards. Even if we were to accept the notion of backing a currency with something tangible gold is no longer possible because its use in electronics means that its value has increased at a much greater rate than the rest of the economy has grown. People calling for the use of gold just want to pretend we can all live in the nineteenth century again.

20th Century. The gold standard didn't disappear in the US until the 20th century, and not internationally until Nixon.

Doing some quick math: The GDP of the US was 14204 billion. There were approximately 158,000 tonnes of gold mined around the world. That amounts to each ton of gold = 89898734 dollars. So, per oz, assuming that dollar amounts are actually indicative of value and not just inflation we're looking at 2809 dollars per ounce of gold. Anyone know how much computer manufactures by gold for, per ounce?


However it isn't just the practical difficulty with going back to gold that matters now because any attempt at fiduciary-or worse-commodity money would be disastrous. History shows us what the gold standard did and the benefits of coming off it. To call for the very thing that deepened every recession to come back right in the middle of a recession indicates to me that some people are unaware of the real world.

What were the benefits of coming off it? A money that is constantly being devalued through government intervention? A rampant boom/bust cycle that was at least diminished but now can result in hyperinflation? Your assertion that it deepened recessions is unfounded.


To be sure of course we will hear plenty about how gold was actually great for the economy and that everyone has gotten it wrong in blaming it for depression and so on and so forth. But if this is the case then show us some real evidence. Show us your theories playing out in practice.

Show you evidence that with a currency that cannot easily be reproduced its value constantly increases as the size of the economy increases and everybody's real wages increases? Its fairly simple, just think about it.

[LeftSideDown]

A barter economy is clearly insufficient for a modern infrastructure, but in a barter economy of a stone age-type, the products to barter often had a use value which created a lot of movement. There wasn't much sense to hoard anything. While classes did exist and so on, there were actually quite usual in pre-monetary societies that even the king could help the farmers to plow, this for example in city-states in the fertile crescent during the copper and bronze ages.

Solutions:
1) Liquidate all capital, live high on the hog and then go back to subsistence farming and a barter economy.
2) Accept money as the means of doing rational economic calculation.

Your move.


The problem is not "people doing well" today, but that it is happening on the expense of others being forced to live on margins where they cannot do well. You are deluded if you think that people who've grown up in a trailer park or a trash-dump has the same opportunities as someone who has inherited a fortune or even your average middle class kid.

No, someone being rich doesn't not exclude anyone else from being rich. Wealth flows to those most capable of wielding it. It doesn't flow to people who gamble (in general) or people who are addicted to drugs (in general). I don't pretend to say that they have the same opportunities. But, inequalities are inherent in society. A beautiful person has a better opportunity than an ugly one at being a model, are you going to try and fix this too?


I mean, today, there's enough food to feed 12 billion people, yet 800-1000 million are undernourished on a global scale. Wealthy corporations do not hesitate to predate on impoverished farmers in the third world, using bribes to make authorities force the peasants to leave their homes.

So if the authorities weren't corrupt (as all governments are) there wouldn't be a problem?


There is enough resources to give all human beings a good quality of life. What economics is doing, through its five postulates, is to set up a model where scarcity (which in reality would legitimise rationing) is legitimising the never-ending appetite of those who control the resources to continue to expand their control at the expense of the access of all other human beings, in particular the poor.

So use up all resources we have now and enjoy a standard of living increase for a few generations? Think of scarcity as preserving resources. Economists are really environmentalists.


Any rules in a game like that would only benefit the ruling minority, at the same time putting the blame on those who are losing.

The rules of the game are this "Benefit society or you are not benefited".


Tell me one thing, if you one day found yourself as a loser, with no possibility of climbing up the hole, would you accept your lot in life, saying "I'm a loser and deserve this", put a barrel against your mouth or try to fight against the system which have put you there?

If I spent my life digging that hole for myself, then I wouldn't start complaining. Why should I fight against gravity?

[cska]

Solutions:
1) Liquidate all capital, live high on the hog and then go back to subsistence farming and a barter economy.
2) Accept money as the means of doing rational economic calculation.

Your move.

3) Tie money to labor


No, someone being rich doesn't not exclude anyone else from being rich. Wealth flows to those most capable of wielding it. It doesn't flow to people who gamble (in general) or people who are addicted to drugs (in general). I don't pretend to say that they have the same opportunities. But, inequalities are inherent in society. A beautiful person has a better opportunity than an ugly one at being a model, are you going to try and fix this too?

How can you be "more capable" at wielding wealth? What is that supposed to mean? Also, I would get rid of modeling altogether because it is not productive for society. :p

[Dimentio]

My move is energy accounting, a system where the entire production capacity of an economy is divided in consumption quotas, with an equal access to the fruits of production given to all human beings. Energy quotas could not be traded, bartered or saved longer than a production cycle. In short, distribution instead of market. The preferences of the consumers where they choose to allocate their energy credits determine what should be produced.

[Demogorgon]

20th Century. The gold standard didn't disappear in the US until the 20th century, and not internationally until Nixon. Most of the world came off the gold standard during the first world war, went back on in the twenties for a brief and disastrous run and then came off for good. This is a pre-twentieth century practice. Bretton Woods used gold as a means of stabilising international exchange rates and was not an example of the gold standard as it is being discussed here, though had some pretty serious problems itself.


What were the benefits of coming off it? A money that is constantly being devalued through government intervention? A rampant boom/bust cycle that was at least diminished but now can result in hyperinflation? Your assertion that it deepened recessions is unfounded.What developed economies have experienced hyper-inflation exactly?

At any rate there is a presumption in here that (ordinary) inflation is a bad thing. It isn't. A reasonable rate of inflation is more or less essential for a prosperous economy. Though it should be noted that Government intervention tends to keep inflation down, not increase it.


Show you evidence that with a currency that cannot easily be reproduced its value constantly increases as the size of the economy increases and everybody's real wages increases? Its fairly simple, just think about it.
I don't support the current system either, I simply think it is "less bad" than the gold standard. Like I say, some evidence that the views you are expressing are backed up by empirical evidence would be appreciated.

[inyourhouse]

My view is that the gold standard is a good way of automatically stabilizing nominal GDP growth and achieving long run price level stability. Keynes, despite opposing the gold standard, approvingly noted that "[a]pproximately the same level of price ruled [Britain] in or about the years 1826, 1841, 1855, 1862, 1867, 1871, and 1915".[1] The reason for this stability is that under a gold standard, if a country increases its money supply, domestic prices will increase and thus exports will decrease and imports will increase, leading to a balance of payments deficit. The deficit is paid for by other countries redeeming the countries notes for gold, leading to an outflow of gold and a contraction of the money supply, bringing the price level back down and eliminating the balance of payments deficit. In the long run, the price level will be stable, meaning that nominal GDP growth will tend to equal real GDP growth. However, a gold standard can still be manipulated by governments in the short run, which is why "free banking" is preferable.


According to liberals the gold standard caused the great depression.

Not quite true. Many economists correctly attribute part of the Depression to the gold-exchange standard, which operated from approximately 1926 to 1931[2]. Unlike the classical gold standard, the exchange standard does not have a price-specie-flow mechanism to stabilize economies. Under the exchange standard, only the US linked its currency to gold and allowed the public to redeem its note in gold. Other countries pegged their currency to the US dollar, and only the central banks of those countries were allowed to redeem dollars for gold. In short, the automatic mechanism of the classical gold standard was replaced by the discretionary actions of central banks. The result was that the world economy was unable to self-correct during the Depression.


The Chairman of the Federal Reserve, gave a speech in 2004 explaining how the gold standard caused the Great Depression.

To make a long story short, under a gold standard, there’s no way to fight deflation. Bernanke says that cross-country studies show that the first countries to abandon the gold standard were the first countries to recover from the Great Depression.

See my comments above. Bernanke's criticism is quite right when applied to the gold-exchange standard operational during the Great Depression, but quite incorrect when applied to the pre-WWI classical gold standard. If a country on a classical gold standard experiences deflation (due to a negative aggregate demand shock, for example), then its exports will increase and its imports will decrease. This will lead to a positive balance of payments and thus an inflow of gold, an increase in the money supply, and an increase in the price level (ie. inflation).


[1] Keynes, Essays in Persuasion (1932), pp. 88-89
[2] Ragnar Nurkse's "The gold exchange standard" (1944), reprinted in Eichengreen's The Gold Standard in Theory and History (1997), pp. 262-289, is a good overview of the system

[LeftSideDown]

3) Tie money to labor

Bohm-Bawerk disproved this idea over a century ago.

http://mises.org/books/karlmarx.pdf


How can you be "more capable" at wielding wealth? What is that supposed to mean? Also, I would get rid of modeling altogether because it is not productive for society. :p

Its easy. Its more productive to invest money in capital that creates goods that consumers desire than it is to burn money.

So suddenly you get to decide whats best for consumers and what is/isn't productive. Thats great.

[LeftSideDown]

Most of the world came off the gold standard during the first world war, went back on in the twenties for a brief and disastrous run and then came off for good. This is a pre-twentieth century practice. Bretton Woods used gold as a means of stabilising international exchange rates and was not an example of the gold standard as it is being discussed here, though had some pretty serious problems itself.
What developed economies have experienced hyper-inflation exactly?

Most countries flee sound money when they go to war. Why is that? Because confiscating through inflation is less easily perceived than confiscating through a tax collector coming to your door. Less people would allow a war to continue if they were directly feeling how much their money was being stolen to finance it. Developed economies: Weimar republic, and Zimbabwe are two examples that immediately come to mind. But if you want a larger list:

http://www.sjsu.edu/faculty/watkins/hyper.htm


At any rate there is a presumption in here that (ordinary) inflation is a bad thing. It isn't. A reasonable rate of inflation is more or less essential for a prosperous economy. Though it should be noted that Government intervention tends to keep inflation down, not increase it.

HAHAHAHAHAHA. Oh God, this is funny. That list alone should prove that Governments are the perpetrators of inflation. I mean paper-money is government enforced currency; you can't have inflation with something like gold or silver or any other substance thats not easily reproducible. Paper money (therefore the ability) to inflate came from the government. How is it essential that the government should routinely steal part of your purchasing power? Can you name anytime in history when an inflation problem wasn't largely propagated by government? Even the Romans for chrissake tried to inflate the economy by mixing their coins with less valuable metals and it still didn't work.


I don't support the current system either, I simply think it is "less bad" than the gold standard. Like I say, some evidence that the views you are expressing are backed up by empirical evidence would be appreciated.

I really don't want to have to explain the ABCT again.

The Austrian business cycle theory is an explanation of the phenomenon of business cycles held by the Austrian School of economics. The theory views business cycles (or, as some Austrians prefer, "credit cycles") as the inevitable consequence of excessive growth in bank credit, exacerbated by inherently damaging and ineffective central bank policies, which cause interest rates to remain too low for too long, resulting in excessive credit creation, speculative economic bubbles and lowered savings.[1]
The theory proposes that a sustained period of low interest rates and excessive credit creation results in a volatile and unstable imbalance between saving and investment.[2] According to the theory, the business cycle unfolds in the following way. Low interest rates tend to stimulate borrowing from the banking system. This expansion of credit causes an expansion of the supply of money, through the money creation process in a fractional reserve banking system. This in turn leads to an unsustainable credit-sourced boom during which the artificially stimulated borrowing seeks out diminishing investment opportunities. This credit-sourced boom results in widespread malinvestments, causing capital resources to be misallocated into areas that would not attract investment if the money supply remained stable. A correction or "credit crunch" – commonly called a "recession" or "bust" – occurs when exponential credit creation cannot be sustained. Then the money supply suddenly and sharply contracts when markets finally "clear", causing resources to be reallocated back towards more efficient uses. The main proponents of the Austrian business cycle theory historically were Ludwig von Mises and Friedrich Hayek. Hayek won a Nobel Prize in economics in 1974 (shared with Gunnar Myrdal) in part for his work on this theory.[3][4]

Empirical evidence? This past recession that happened around the world.

[Argument]

Is it bad to hoard anything if you think the benefits of hoarding outweigh the costs? Can't we substitute hoarding for savings and have the same result?No, hoarding in itself needs not to be bad. Hoarding food because it might be used as a commodity while people are starving, well... I'd rather people hoarded money and let the food be used for eating.


I don't think hoarding is ever "bad" or "morally objectionable" as individual circumstances could merit such an action, and none of the things you listed make for very good mediums of exchange.Certainly, though saving food to use it later is different from saving food to barter with it. It was Dimentio that brought up food, water and electricity, though.

I don't think money is the problem. People can be exploited from food as well, as they were. If I remember correctly, the peasants of the middle ages paid their taxes in food.

[Demogorgon]

Ah the joys of dealing with the ideologue. I have gone through this too many times to repeat the whole sordid process (though this is the first time I have been informed that Zimbabwe is a developed economy...) so let's cut to the heart of the issue.

We do not use much paper money these days. Most money is electronic and issued by banks. Governments pursue various policies to keep inflation at a rate they regard as desirable. Almost invariably this will be lower than what the inflation rate would be.

At any rate under the gold standard the situation would be identical, most money would continue to be bank issued electronic money due to the fractional reserve system, the difference being there would be no way to plug the gap when they over-lend. So the entire argument you just gave against inflation is completely and utterly irrelevant.

Of course you could go whole hog and suggest a ban on fiduciary money, but that would be some Government intervention.

[LeftSideDown]

Ah the joys of dealing with the ideologue. I have gone through this too many times to repeat the whole sordid process (though this is the first time I have been informed that Zimbabwe is a developed economy...) so let's cut to the heart of the issue.

That was the example that came to mind, but there is a whole list up there to peruse, surely one of them must meet your definition of a developed economy. And besides, Zimbabwe is developed enough to know the wonders of paper currency!


We do not use much paper money these days. Most money is electronic and issued by banks. Governments pursue various policies to keep inflation at a rate they regard as desirable. Almost invariably this will be lower than what the inflation rate would be.

Really? because in a system where gold is the standard it would be impossible or extremely difficult to inflate (or reduce purchasing power) of gold. So, in a system with sound money there won't be inflation (decreased purchasing power) there will be deflation (increased purchasing power) so government policy is ALWAYS higher than it would be given a system of sound money. Their criteria for "desirable inflation" is almost completely arbitrary.


At any rate under the gold standard the situation would be identical, most money would continue to be bank issued electronic money due to the fractional reserve system, the difference being there would be no way to plug the gap when they over-lend. So the entire argument you just gave against inflation is completely and utterly irrelevant.

So you agree that fractional reserve banking is flawed and should be done away with? I'm glad we agree. It seems to me, that you agree that overlending is bad, and yet your solution is to print more money to allow it. With 100% reserve system in banking there could be no overlending.


Of course you could go whole hog and suggest a ban on fiduciary money, but that would be some Government intervention.

Wait, you don't have to ban fiduciary money to have a gold standard- just lending practices where money (or the resources it represents) that don't exist can't be lent (i.e 100% reserve).

[Demogorgon]

So in fact what you want is an extreme level of Government intervention to ban most banking practices that exist in a free market?

You seem to have adopted a strange set of theories based on some stuff you have read without putting it into the context of how the economy actually works. For a start, like I say, most money is not coming into existence through it being printed. That only accounts for a small element of new money and it happens at a steady rate. Indeed most new banknotes are just printed to replace damaged old ones. As I say, the vast majority of new money is coming from banks and without the extraordinary Government curtailment of the market to enforce a hundred percent reserve banking (which would mean that banking became extremely expensive), the system under the gold standard would be identical, and indeed was identical (except then of course it was based on non-electronic money).

This is the extremely funny thing we get with Austrians here, most of whom I venture to say, have read a few wikipedia articles and think they are experts on economics. They simply don't understand what they are supposed to be criticising and don't understand their proposed solutions either. Indeed aren't Austrians supposed to be enthusiasts for free banking as a rule? Not exactly compatible with what you propose.

It is true that there would be periodic deflation under a gold standard, but do you not realise just hoe devastating that can be for an economy?

Anyway, you seem to be under the impression that I support the current system or some variance thereof. Nonsense. I am a Marxist after all. Obviously I wish to see money disappear eventually and in the meantime a totally new form of currency is needed. Getting rid of the gold standard was a very minor step along the way, but what is really needed is the abolition of private banking, the end of new currency being issued through debt and so forth.

[RGacky3]

How can you have rational economics unless you can reduce different different quantities and qualities of goods to a common denominators (i.e. money)?

Why do you need to?

[LeftSideDown]

Why do you need to?

Because without money as a common denominator there is no way to compare dissimilar goods?

[inyourhouse]

Following on from my earlier post, I looked up the figures for US real GDP growth and inflation from 1791 to the present in order to broadly evaluate the gold standard[1]. It's quite clear that the most successful monetary systems were the classical gold standard and free banking. Growth was significantly higher under these two systems than any other system, with free banking performing slightly better. It was also less volatile than under other systems, with the gold standard performing slightly better in this regard. Furthermore, inflation was extremely low under both systems (and during the national bank era), although interestingly it was the most volatile under the gold standard and least volatile under free banking. For that reason, free banking probably edges the classical gold standard as the best monetary system, but either would be an improvement over the current system.

[1] img52.imageshack.us/img52/8650/usstats.png

[Havet]

Following on from my earlier post, I looked up the figures for US real GDP growth and inflation from 1791 to the present in order to broadly evaluate the gold standard[1]. It's quite clear that the most successful monetary systems were the classical gold standard and free banking. Growth was significantly higher under these two systems than any other system, with free banking performing slightly better. It was also less volatile than under other systems, with the gold standard performing slightly better in this regard. Furthermore, inflation was extremely low under both systems (and during the national bank era), although interestingly it was the most volatile under the gold standard and least volatile under free banking. For that reason, free banking probably edges the classical gold standard as the best monetary system, but either would be an improvement over the current system.

[1] img52.imageshack.us/img52/8650/usstats.png

I can antecipate a reply by most communists: How do you know GDP growth is a good parameter to measure the performance of a society?

What would you say to that?

[inyourhouse]

I can antecipate a reply by most communists: How do you know GDP growth is a good parameter to measure the performance of a society?

What would you say to that?

There is no way to objectively determine what is and is not a "good parameter to measure the performance of a society", but GDP growth is commonly accepted. If any communists dispute its usefulness, then I suppose I would simply ask what measure they would use as an alternative and for what reason. We could then evaluate various monetary systems against that measure, providing that the statistics are available.

[Demogorgon]

I can antecipate a reply by most communists: How do you know GDP growth is a good parameter to measure the performance of a society?

What would you say to that?
Another answer is that small economies grow faster than bigger ones for obvious reasons. An agricultural economy becoming an industrial one will grow extremely quickly. An already developed one will grow more slowly even if there is a greater increase in economic activity in raw terms each year.

[LeftSideDown]

Another answer is that small economies grow faster than bigger ones for obvious reasons. An agricultural economy becoming an industrial one will grow extremely quickly. An already developed one will grow more slowly even if there is a greater increase in economic activity in raw terms each year.

What you're implying is that we or are reaching the peak of progress and, in general, are doubtful that there can be another revolution like the industrial one. I don't think there is a point to which an economy can stop growing.

[anticap]

Bohm-Bawerk disproved this idea over a century ago.

http://mises.org/books/karlmarx.pdf

And this is why I proposed this (http://www.revleft.org/vb/showthread.php?t=132215).

If we're going to allow these people to go on declaring that the Emperor is wearing fine clothes, even after we've long since shown him to be naked (I, for one, would just as soon see them insta-banned for such intellectual dishonesty), then we're going to need an accumulated resource that we can point them to, rather than allow them to go on trolling/derailing every single fucking thread in an attempt to rehash the same old fucking debates. When one of these capitalist sycophants begins spouting the glories of his masters, we should not chase him, lemming-like, down his rabbit hole, again, and again, and again. We should simply slap him down with a jaw-cracking blow from the wiki, lock the thread, and ban that person if they ever dare raise the issue again. But in order to do this, we need the wiki to work, and then we need to work together to make it the ultimate anti-capitalist FAQ on the Internet.

As for the gold standard, here's a liberal/Keynesian critique, FWIW: http://www.huppi.com/kangaroo/L-ausgold.htm

[LeftSideDown]

And this is why I proposed this (http://www.revleft.org/vb/showthread.php?t=132215).

If we're going to allow these people to go on declaring that the Emperor is wearing fine clothes, even after we've long since shown him to be naked (I, for one, would just as soon see them insta-banned for such intellectual dishonesty), then we're going to need an accumulated resource that we can point them to, rather than allow them to go on trolling/derailing every single fucking thread in an attempt to rehash the same old fucking debates. When one of these capitalist sycophants begins spouting the glories of his masters, we should not chase him, lemming-like, down his rabbit hole, again, and again, and again. We should simply slap him down with a jaw-cracking blow from the wiki, lock the thread, and ban that person if they ever dare raise the issue again. But in order to do this, we need the wiki to work, and then we need to work together to make it the ultimate anti-capitalist FAQ on the Internet.

So you advocate violence and censorship for those who disagree with you? Okay.

[Demogorgon]

What you're implying is that we or are reaching the peak of progress and, in general, are doubtful that there can be another revolution like the industrial one. I don't think there is a point to which an economy can stop growing.
I don't see how it can be concluded I am saying that. What I am saying is that if your starting point is very low, growth will be necessarily higher in percentage terms than if your starting point is much higher.

To use a silly example, if you add a thousand words to a pre-schoolers book, you vastly increase the length in percentage terms. If you add a thousand words to the Bible, you make a much smaller difference.

[LeftSideDown]

I don't see how it can be concluded I am saying that. What I am saying is that if your starting point is very low, growth will be necessarily higher in percentage terms than if your starting point is much higher.

To use a silly example, if you add a thousand words to a pre-schoolers book, you vastly increase the length in percentage terms. If you add a thousand words to the Bible, you make a much smaller difference.

Low and high are both relative. Extremely relative. We could be at a low in comparison to one thousand years from, so your view that our starting point (from this moment) I assume is objectively "high" is false. We are higher than we were, but there is no way to know how "high" our actual starting point is. You're right to be relative, and who says the book we're writing (i.e. the human economy) isn't still a childs book in comparison to what it could be?

[Dean]

How can you have rational economics unless you can reduce different different quantities and qualities of goods to a common denominators (i.e. money)?

Do you realize what a preposterous claim this is? You're talking about trade, pure and simple, and there is nothing about "rationalism" that necessarily indicates a system of trade to control production and distribution.

I don't know why you're so lost in these silly assumptions. But it is just as unconvincing as objectivism, where Randroids claim the be the only "objective" thinkers.

Its not meaningful, and its nothing short of academic slander / ad hominem.

[LeftSideDown]

Do you realize what a preposterous claim this is? You're talking about trade, pure and simple, and there is nothing about "rationalism" that necessarily indicates a system of trade to control production and distribution.

I don't know why you're so lost in these silly assumptions. But it is just as unconvincing as objectivism, where Randroids claim the be the only "objective" thinkers.

Its not meaningful, and its nothing short of academic slander / ad hominem.

Copy Pasta incoming.

But computation demands units. And there can be no unit of the subjective use-value of commodities. Marginal utility provides no unit of value. The worth of two units of a given commodity is not twice as great as one—although it is necessarily greater or smaller than one. Judgments of value do not measure: they arrange, they grade.[6] If he relies only on subjective valuation, even isolated man cannot arrive at a decision based on more or less exact computations in cases where the solution is not immediately evident. To aid his calculations he must assume substitution relations between commodities. As a rule he will not be able to reduce all to a common unit. But he may succeed in reducing all elements in the computation to such commodities as he can evaluate immediately, that is to say, to goods ready for consumption and the disutility of labour and then he is able to base his decision upon this evidence. It is obvious that even this is possible only in very simple cases. For complicated and long processes of production it would be quite out of the question.

In an exchange economy, the objective exchange value of commodities becomes the unit of calculation. This involves a threefold advantage. In the first place we are able to take as the basis of calculation the valuation of all individuals participating in trade. The subjective valuation of one individual is not directly comparable with the subjective valuation of others. It only becomes so as an exchange value arising from the interplay of the subjective valuations of all who take part in buying and selling. Secondly, calculations of this sort provide a control upon the appropriate use of the means of production. They enable those who desire to calculate the cost of complicated processes of production to see at once whether they are working as economically as others. If, under prevailing market prices, they cannot carry through the process at a profit, it is a clear proof that others are better able to turn to good account the instrumental goods in question. Finally, calculations based upon exchange values enable us to reduce values to a common unit. And since the higgling of the market establishes substitution relations between commodities, any commodity desired can be chosen for this purpose. In a money economy, money is the commodity chosen.

Money calculations have their limits. Money is neither a yardstick of value nor of prices. Money does not measure value. Nor are prices measured in money: they are amounts of money. And, although those who describe money as a "standard of deferred payments" naively assume it to be so, as a commodity it is not stable in value. The relation between money and goods perpetually fluctuates not only on the "goods side," but on the "money side" also. As a rule, indeed, these fluctuations are not too violent. They do not too much impair the economic calculus, because under a state of continuous change of all economic conditions, this calculus takes in view only comparatively short periods, in which "sound money" at least does not change its purchasing power to any very great extent.

The deficiencies of money calculations arise for the most part, not because they are made in terms of a general medium of exchange, money, but because they are based on exchange values rather than on subjective use-values. For this reason all elements of value which are not the subject of exchange elude such computations. If, for example, we are considering whether a hydraulic power-works would be profitable we cannot include in the computation the damage which will be done to the beauty of the waterfalls unless the fall in values due to a fall in tourist traffic is taken into account. Yet we must certainly take such considerations into account when deciding whether the undertaking shall be carried out.

Considerations such as these are often termed "non-economic." And we may permit the expression for disputes about terminology gain nothing. But not all such considerations should be called irrational. The beauty of a place or of a building, the health of the race, the honour of individuals or nations, even if (because they are not dealt with on the market) they do not enter into exchange relations, are just as much motives of rational action, provided people think them significant, as those normally called economic. That they cannot enter into money calculations arises from the very nature of these calculations. But this does not in the least lessen the value of money calculations in ordinary economic matters. For all such moral goods are goods of the first order. We can value them directly; and therefore have no difficulty in taking them into account, even though they lie outside the sphere of money computations. That they elude such computations does not make it any more difficult to bear them in mind. If we know precisely how much we have to pay for beauty, health, honour, pride, and the like, nothing need hinder us from giving them due consideration. Sensitive people may be pained to have to choose between the ideal and the material. But that is not the fault of a money economy. It is in the nature of things. For even where we can make judgments of value without money computations we cannot avoid this choice. Both isolated man and socialist communities would have to do likewise, and truly sensitive natures will never find it painful. Called upon to choose between bread and honour, they will never be at a loss how to act. If honour cannot be eaten, eating can at least be forgone for honour. Only such as fear the agony of choice because they secretly know that they could not forgo the material, will regard the necessity of choice as a profanation.

Money computations are only significant for purposes of economic calculation. Here they are used in order that the disposal of commodities may conform to the criterion of economy. And such calculations take account of commodities only in the proportions in which, under given conditions, they exchange for money. Every extension of the sphere of money calculation is misleading. It is misleading when in historical researches, it is employed as a measure of past commodity values. It is misleading when it is employed to evaluate the capital or national income of nations. It is misleading when it is employed to estimate the value of things which are not exchangeable as, for instance, when people attempt to estimate the loss due to emigration or war. [7] All these are dilettantisms—even when they are undertaken by the most competent economists.

But within these limits—and in practical life they are not overstepped—money calculation does all that we are entitled to ask of it. It provides a guide amid the bewildering throng of economic possibilities. It enables us to extend judgments of value which apply directly only to consumption goods—or at best to production goods of the lowest order—to all goods of higher orders. Without it, all production by lengthy and roundabout processes would be so many steps in the dark.

Two things are necessary if computations of value in terms of money are to take place. First, not only goods ready for consumption but also goods of higher orders must be exchangeable. If this were not so, a system of exchange relationships could not emerge. It is true that if an isolated man is "exchanging" labour and flour for bread within his own house, the considerations he has to take into account are not different from those which would govern his actions if he were to exchange bread for clothes on the market. And it is, therefore, quite correct to regard all economic activity, even the economic activity of isolated man, as exchange. But no single man, be he the greatest genius ever born, has an intellect capable of deciding the relative importance of each one of an infinite number of goods of higher orders. No individual could so discriminate between the infinite number of alternative methods of production that he could make direct judgments of their relative value without auxiliary calculations. In societies based on the division of labour, the distribution of property rights effects a kind of mental division of labour, without which neither economy nor systematic production would be possible.

In the second place, there must be a general medium of exchange, a money, in use. And this must serve as an intermediary in the exchange of production goods equally with the rest. If this were not so, it would be impossible to reduce all exchange relationships to a common denominator.

Only under very simple conditions is it possible to dispense with money calculations. In the narrow circle of a closed household, where the father is able to supervise everything, he may be able to evaluate alterations in methods of production without having recourse to money reckoning. For, in such circumstances, production is carried on with relatively little capital. Few roundabout methods of production are employed. As a rule production is concerned with consumption goods, or goods of higher orders not too far removed from consumption goods. Division of labour is still in its earliest stages. The labourer carries through the production of a commodity from beginning to end. In an advanced society all this is changed. It is impossible to argue from the experience of primitive societies that under modern conditions we can dispense with money.

In the simple conditions of a closed household, it is possible to survey the whole process of production from beginning to end. It is possible to judge whether one particular process gives more consumption goods than another. But, in the incomparably more complicated conditions of our own day, this is no longer possible. True, a socialistic society could see that 1000 litres of wine were better than 800 litres. It could decide whether or not 1000 litres of wine were to be preferred to 500 litres of oil. Such a decision would involve no calculation. The will of some man would decide. But the real business of economic administration, the adaptation of means to ends only begins when such a decision is taken. And only economic calculation makes this adaptation possible. Without such assistance, in the bewildering chaos of alternative materials and processes the human mind would be at a complete loss. Whenever we had to decide between different processes or different centres of production, we would be entirely at sea.[8]

To suppose that a socialist community could substitute calculations in kind for calculations in terms of money is an illusion. In a community that does not practice exchange, calculations in kind can never cover more than consumption goods. They break down completely where goods of higher order are concerned. Once society abandons free pricing of production goods rational production becomes impossible. Every step that leads away from private ownership of the means of production and the use of money is a step away from rational economic activity.

[inyourhouse]

Another answer is that small economies grow faster than bigger ones for obvious reasons. An agricultural economy becoming an industrial one will grow extremely quickly. An already developed one will grow more slowly even if there is a greater increase in economic activity in raw terms each year.

That is likely a significant cause of the differences in real GDP growth because money is "neutral" (ie. has no effect on real growth) in the long run. However, the way that the monetary system can affect growth is through the stabilization of expectations. Due to the phenomenon of sticky prices and sticky wages (prices/wages are slow to adjust to changes in real variables), stable expectations can increase real growth. Note that real growth was less volatile under free banking and the gold standard and the price level was extremely stable in the long run (although it was most volatile under the gold standard and least volatile under free banking). That would result in much more stable expectations than the current system and as a result it would reduce the problems of wage and price stickiness, thus increasing real growth.

This also seems to have eliminated business cycles, because there was not a single year of negative real GDP growth under the gold standard or free banking. Admittedly, older figures will never be as accurate as current figures, but it seems unlikely that they would miss these apparent depressions that some people say occurred under the gold standard. My main point is that I don't think any factor other than the monetary system itself can explain the stability of real GDP growth and the long run price level or the absence of negative real GDP growth, but I'm open to debate on this.


As for the gold standard, here's a liberal/Keynesian critique, FWIW: huppi.com/kangaroo/L-ausgold.htm

That "critique" is terrible, with all due respect. I followed the link to his main arguments against the gold standard, and they're not much better. He says that there were depressions/recessions under the gold standard. In terms of negative real GDP growth, this is false; real GDP growth did not decline in any year from 1790-1863 (the gold standard and the free banking era). During the national banks era (a quasi-gold standard) and under the gold-exchange standard, there were a number of recessions, but these systems were significantly different to the classical gold standard. You can read my earlier post on the difference between the gold standard and the gold-exchange standard for a summary.

He also says that the gold standard prevents governments from "fighting" inflation and unemployment. This is technically correct (under the gold standard, governments have much less power to do these things due to gold outflows), but his wider point seems to be that the gold standard lacks any mechanism for dealing with inflation and unemployment, which is incorrect. See my earlier post on the "price-specie-flow mechanism" for how the gold standard stabilizes the price level and real growth (and thus unemployment).

[Dean]

To suppose that a socialist community could substitute calculations in kind for calculations in terms of money is an illusion. In a community that does not practice exchange, calculations in kind can never cover more than consumption goods. They break down completely where goods of higher order are concerned. Once society abandons free pricing of production goods rational production becomes impossible. Every step that leads away from private ownership of the means of production and the use of money is a step away from rational economic activity.

The summation of this is "I don't have a socialist theory to attack, so therefore they have no means to make decisions on economic terms." Its completely meaningless; he may as well be arguing against a unicorn.

Additionally, there is nothing in this article that supports your claim on rationality. I think this is in part because you didn't read this / don't understand it. Which is probably why you didn't even provide your own opinion, which seems to happen every time a critical issue is being discussed.

[ÑóẊîöʼn]

Because without money as a common denominator there is no way to compare dissimilar goods?

If you want to compare dissimilar goods and services, why use money when the value of money is what it is because some parasitic financial sector (I'm including governments and central banks as well as private companies under this rubric) says so, rather than use actual objective measurements such as the amount of energy used to provide said good/service?

Clearly, if a system produces such absurd situations as people being unable to afford food when agricultural output remains static or even increases, then there is a fundamental flaw.

[Dimentio]

If you want to compare dissimilar goods and services, why use money when the value of money is what it is because some parasitic financial sector (I'm including governments and central banks as well as private companies under this rubric) says so, rather than use actual objective measurements such as the amount of energy used to provide said good/service?

Clearly, if a system produces such absurd situations as people being unable to afford food when agricultural output remains static or even increases, then there is a fundamental flaw.

He don't see it as a flaw. If the people in the third world are impoverished and starving, that is because they are too lazy to work, that is why they are impoverished and starve...

[LeftSideDown]

If you want to compare dissimilar goods and services, why use money when the value of money is what it is because some parasitic financial sector (I'm including governments and central banks as well as private companies under this rubric) says so, rather than use actual objective measurements such as the amount of energy used to provide said good/service?

Clearly, if a system produces such absurd situations as people being unable to afford food when agricultural output remains static or even increases, then there is a fundamental flaw.

Because more power can go into something that consumers value more. Or more less can go into something that consumer's value more. If you value them at power consumption there will always be shortages and surpluses.

[LeftSideDown]

If you want to compare dissimilar goods and services, why use money when the value of money is what it is because some parasitic financial sector (I'm including governments and central banks as well as private companies under this rubric) says so, rather than use actual objective measurements such as the amount of energy used to provide said good/service?

Clearly, if a system produces such absurd situations as people being unable to afford food when agricultural output remains static or even increases, then there is a fundamental flaw.

If 99% of our GDP was made up of agriculture there would still be people who are starving because they go out and gamble, do drugs, or buy a new car every two years instead of keeping themselves adequately provided for.

[LeftSideDown]

The summation of this is "I don't have a socialist theory to attack, so therefore they have no means to make decisions on economic terms." Its completely meaningless; he may as well be arguing against a unicorn.

Additionally, there is nothing in this article that supports your claim on rationality. I think this is in part because you didn't read this / don't understand it. Which is probably why you didn't even provide your own opinion, which seems to happen every time a critical issue is being discussed.

The common habit of economists of distinguishing between "economic" or "purely economic" and "non-economic" action is just as unsatisfactory as the old distinction between ideal and material goods. For willing and acting are unitary. All ends conflict among themselves and it is this conflict which ranges them in one scale. Not only the satisfaction of wishes, desires and impulses that can be attained through interaction with the external world, but the satisfaction also of ideal needs must be judged by one criterion. In life we have to choose between the "ideal" and the "material." It is, therefore, just as essential to make the former subject to a unitary criterion of values as the latter. In choosing between bread and honour, faith and wealth, love and money, we submit both alternatives to one test.

It is, therefore, illegitimate to regard the "economic" as a definite sphere of human action which can be sharply delimited from other spheres of action. Economic activity is rational activity. And since complete satisfaction is impossible, the sphere of economic activity is coterminous with the sphere of rational action. It consists firstly in valuation of ends, and then in the valuation of the means leading to these ends. All economic activity depends, therefore, upon the existence of ends. Ends dominate economy and alone give it meaning.

Since the economic principle applies to all human action, it is necessary to be very careful when distinguishing, within its sphere, between "purely economic" and other kinds of action. Such a division is indeed indispensable for many scientifc purposes. It singles out one particular end and contrasts it with all others. This end—at this point we need not discuss whether it is ultimate or not—is the attainment of the greatest possible product measured in money. It is, therefore, impossible to assign it a specially delimited sphere of action. It is true that for each individual it has such a delimited sphere, but this varies in extent according to the general outlook of the individual concerned. It is one thing for the man to whom honour is dear. It is another for him who sells his friend for gold. Neither the nature of the end nor the peculiarity of the means is what justifies the distinction, but merely the special nature of the methods employed. Only the fact that it uses exact calculation distinguishes "purely economic" from other action.

The sphere of the "purely economic" is nothing more and nothing less than the sphere of money calculation. The fact that in a certain field of action it enables us to compare means with minute exactitude down to the smallest detail means so much both for thought and action that we tend to invest this kind of action with special importance. It is easy to overlook the fact that such a distinction is only a distinction in the technique of thought and action and in no way a distinction in the ultimate end of action—which is unitary. The failure of all attempts to exhibit the "economic" as a special department of the rational and within that to discover still another sharply defined department, the "purely economic," is no fault of the analytical apparatus employed. There can be no doubt that great subtlety of analysis has been concentrated on this problem, and the fact that it has not been solved clearly indicates that the question is one to which no satisfactory answer can be given. The sphere of the "economic" is plainly the same as the sphere of the rational: and the sphere of the "purely economic" is nothing but the sphere in which money calculation is possible.

In the last resort the individual can acknowledge one end, and one end only: the attainment of the greatest satisfaction. This expression includes the satisfying of all kinds of human wants and desires, regardless of whether they are "material" or immaterial (moral). In the place of the word "satisfaction" we could employ the word "happiness," had we not to fear the misunderstandings, for which the controversy on Hedonism and Eudaemonism was responsible.

Satisfaction is subjective. Modern social philosophy has emphasized this so sharply in contrast to former theories that there is a tendency to forget that the physiological structure of mankind and the unity of outlook and emotion arising from tradition create a far-reaching similarity of views regarding wants and the means to satisfy them. It is precisely this similarity of views which makes society possible. Because they have common aims, men are able to live together. Against this fact that the majority of ends (and those the most important) are common to the great mass of mankind, the fact that some ends are only entertained by a few is of subordinate importance.

The customary division between economic and non-economic motives is, therefore, invalidated by the fact that on the one hand, the end of economic activity lies outside the range of economics, and on the other, that all rational activity is economic. Nevertheless, there is good justification for separating "purely economic" activities (that is to say, activity susceptible of valuation in money) from all other forms of activity. For, as we have already seen, outside the sphere of money calculation there remain only intermediate ends which are capable of evaluation by immediate inspection: and once this sphere is left, it is necessary to have recourse to such judgments. It is the recognition of this necessity which provides the occasion for the distinction we have been discussing.

If, for example, a nation desires to make war, it is illegitimate to regard the desire as necessarily irrational because the motive for making war lies outside those customarily considered as "economic"—as might be the case, e.g. with wars of religion. If the nation decides on the war with complete knowledge of all the facts because it judges that the end in view is more important than the sacrifice involved, and because it regards war as the most suitable means of obtaining it, then war cannot be regarded as irrational. It is not necessary at this point to decide whether this supposition is ever true or if it ever can be true. It is precisely this which has to be examined when one comes to choose between war and peace. And it is precisely with a view to introducing clarity into such an examination that the distinction we have been discussing has been introduced.

It is only necessary to remember how often wars or tariffs are recommended as being "good business" from the "economic" point of view to realize how often this is forgotten. How much clearer would have been the political discussions of the last century if the distinction between the "purely economic" and the "non-economic" grounds of action had been kept in mind.

Sorry, I thought that quote included the discussion of economic/non-economic. My opinion is: He is right.

[anticap]

That "critique" is terrible, with all due respect.

No respect is due, since I didn't write it, and since "FWIW" means "for what it's worth," which implies that it might not be worth anything at all. :) It's just another straw on the golden camel's back.

[LeftSideDown]

The summation of this is "I don't have a socialist theory to attack, so therefore they have no means to make decisions on economic terms." Its completely meaningless; he may as well be arguing against a unicorn.

Socialism is about as mystical as a unicorn, so I guess you're right, he was arguing against a "unicorn".

[ÑóẊîöʼn]

Because more power can go into something that consumers value more. Or more less can go into something that consumer's value more. If you value them at power consumption there will always be shortages and surpluses.

Why? Because you say so? It is a matter of record that energy production has been steadily increasing, even if it hasn't always been acquired or used wisely.

On the other hand, markets are a casino. And like all casinos, the house always wins.


If 99% of our GDP was made up of agriculture there would still be people who are starving because they go out and gamble, do drugs, or buy a new car every two years instead of keeping themselves adequately provided for.

Who said anything about GDP or returning to rural idiocy? GDP is a measure of monetary turnover, not actual wealth, and agricultural societies are low-energy societies and are thus poorer in an absolute sense compared to industrialised societies.

[LeftSideDown]

Why? Because you say so? It is a matter of record that energy production has been steadily increasing, even if it hasn't always been acquired or used wisely.

On the other hand, markets are a casino. And like all casinos, the house always wins.

Wait, did you read what I said at all? Did I deny we were increasing our energy production? I was saying energy required to manufacture consumer goods =\= the value consumer's place on those manufactured items.


Who said anything about GDP or returning to rural idiocy? GDP is a measure of monetary turnover, not actual wealth, and agricultural societies are low-energy societies and are thus poorer in an absolute sense compared to industrialised societies.

I was setting up a hypothetical. Perhaps you've heard of them? They're often used to illustrate a point (such as I was doing). Nor was I discussing the various pros/cons of GDP, I was merely stating that no matter how much food you produce some people will always starve because some people are unable to care for themselves. For caring for these people the United States has 973,354 private/public charities and an overburdening paternalistic state.

[Dean]

Sorry, I thought that quote included the discussion of economic/non-economic. My opinion is: He is right.

He may or may not be right in the above, but he is not making a distinction between yours and my theory in terms of "rataionality." Specifically, there is no clear linkage between currency and rationalism, besides his implied assertion to this end.

I could quote Marx saying "from each according to ability..." all day long, but in and of itself it would have no meaning. The same is true for you that is true for communist idealists: you have no basis in material analysis or criticism for your ideology; rather, you have sought out quotes in order to prove an ideal that you already hold as self-evident, apparently lacking any evidence for those ideals.

You can't put into simple terms why rationalism necessitates a system of currency, and your quotes further underlines your inability to understand Mises or the issues your ideology hinges on.

[LeftSideDown]

He may or may not be right in the above, but he is not making a distinction between yours and my theory in terms of "rataionality." Specifically, there is no clear linkage between currency and rationalism, besides his implied assertion to this end.

Yes he is, are you joking? Socialism seeks to destroy the institution of money, and therefore rationality. As unlike goods are no longer reduced to a common denominator there is no rational way to compare costs and benefits. If I trade you three pigs for 4 dogs and then trade 2 dogs for a dozen eggs and 4 eggs for a piece of chocolate how do I know if I profited as much as I could've? I may have made those deals with the knowledge that each one benefited me, but what if for 3 pigs I could've gotten 3 dozen eggs 5 pieces of chocolate and a dog? What is the "socially necessary labor time" for raising a pig? The idea of basing value off some arbitrary standard such as power consumption, labor time, or the particular temperature on the day that a finished product goes to market are equally ludicrous as they ignore individual preferences and how these preferences affect the price of a good (and therefore the prices of the inputs) on the market.


I could quote Marx saying "from each according to ability..." all day long, but in and of itself it would have no meaning. The same is true for you that is true for communist idealists: you have no basis in material analysis or criticism for your ideology; rather, you have sought out quotes in order to prove an ideal that you already hold as self-evident, apparently lacking any evidence for those ideals.

The problem with the "from each according to ability" is its an ideal not a fact. Rational, economic, purely economic, and non economic are all facts. What does "you have no basis in material analysis or criticism for your ideology" even mean? I do not need evidence for 2+2=4.


You can't put into simple terms why rationalism necessitates a system of currency, and your quotes further underlines your inability to understand Mises or the issues your ideology hinges on.

I put it into simple terms with that illustration above. Theres no way of determining how much one is profiting as your exchanges take place completely separate from other's exchanges (money allows all exchanges to be connected, at least very loosely). If you have money you know how much Pig's are worth to others vs dogs, vs eggs, vs chocolate and you can make decisions accordingly. You would have a system where all engineers use different measurements of length (feet, inches, centimeters, miles, kilometers, yards, etc etc) and then ask them to make a coherent plan for a structure without changing all of those units to one common unit.

[Dean]

Yes he is, are you joking? Socialism seeks to destroy the institution of money, and therefore rationality. As unlike goods are no longer reduced to a common denominator there is no rational way to compare costs and benefits. If I trade you three pigs for 4 dogs and then trade 2 dogs for a dozen eggs and 4 eggs for a piece of chocolate how do I know if I profited as much as I could've? I may have made those deals with the knowledge that each one benefited me, but what if for 3 pigs I could've gotten 3 dozen eggs 5 pieces of chocolate and a dog? What is the "socially necessary labor time" for raising a pig? The idea of basing value off some arbitrary standard such as power consumption, labor time, or the particular temperature on the day that a finished product goes to market are equally ludicrous as they ignore individual preferences and how these preferences affect the price of a good (and therefore the prices of the inputs) on the market.

Energy consumption, labor time, and consumer needs and wants are all factors which explicitly define the cost and benefits of economic activity. In the context of a democratic function of control, these values can be analyzed and defined along the lines of consumer and labor interests.

Again, you're acting in the context of an extant system - that is currency - and assuming that, since there is no explicit alternate system of valuation that there is no alternative, and subsequently that you can define currency as uniquely rational without knowing from what other paradigm it is unique.

This is patently ridiculous. Its not ridiculous to say that there is some rationality to a system of currency - after all, all material phenomena have basis in physical and chemical properties. You start to lose any integrity in your argument when you attack an undefined system as "irrational" and then back up this preposterous claim with quotes that are at best marginally relevant, but of which you show absolutely no understanding.

[LeftSideDown]

Energy consumption, labor time, and consumer needs and wants are all factors which explicitly define the cost and benefits of economic activity. In the context of a democratic function of control, these values can be analyzed and defined along the lines of consumer and labor interests.

"explicitly define the cost and benefits of economic activity". Okay, now compare them. It cost 12000 mHz of electricity, and it gave us 3 utils of consumer satisfaction, but it cost us 5 hours of "socially necessary"(:laugh:) labor time so this is a _____ investment (good or bad)?


Again, you're acting in the context of an extant system - that is currency - and assuming that, since there is no explicit alternate system of valuation that there is no alternative, and subsequently that you can define currency as uniquely rational without knowing from what other paradigm it is unique.

There is no alternative to humans living in this universe (at least with our present knowledge) so is it wrong to say that we can only be rational with this "extant" system of living in this universe?


This is patently ridiculous. Its not ridiculous to say that there is some rationality to a system of currency - after all, all material phenomena have basis in physical and chemical properties. You start to lose any integrity in your argument when you attack an undefined system as "irrational" and then back up this preposterous claim with quotes that are at best marginally relevant, but of which you show absolutely no understanding.

The fact that the system that socialism uses to replaces currency is an "undefined" one brings up issues of its own, does it not?

[ÑóẊîöʼn]

Wait, did you read what I said at all? Did I deny we were increasing our energy production? I was saying energy required to manufacture consumer goods =\= the value consumer's place on those manufactured items.

The problem is that "what consumers value" is not the product of a reasoned decision. Market economies assume that "consumers" are inherently rational actors, when simple psychological experiments will tell you this simply isn't the case. We're all too easily bamboozled by our evolutionary heritage, and marketing companies exploit this to the hilt instead of teaching us to make rational choices. Why? Because it's easier to turn a profit, the overriding goal of any commercial venture you care to imagine. Sure, companies can act more ethically (but not too much, or they'll go bust), but they'll be overtaken by those who are willing to act unethically, who are willing to bend the rules to breaking point and appeal to our baser instincts instead of our finer senses of reason, so they come to dominate. And since money is intrinsically tied to political power (professional politicians need funding for their popularity contests- I mean, election campaigns, as well as for backhanders and bribes), these unethical money-grubbing companies get to change the rules in their favour.


I was setting up a hypothetical. Perhaps you've heard of them? They're often used to illustrate a point (such as I was doing). Nor was I discussing the various pros/cons of GDP, I was merely stating that no matter how much food you produce some people will always starve because some people are unable to care for themselves.

If people are unable to care for themselves, the decent thing to do is to help them.


For caring for these people the United States has 973,354 private/public charities and an overburdening paternalistic state.

You have got to be fucking joshing me. You guys don't even have a National Health Service - and no, compulsory health insurance is not the same thing, whatever the Teabaggers say.

[Dean]

There is no alternative to humans living in this universe (at least with our present knowledge) so is it wrong to say that we can only be rational with this "extant" system of living in this universe?
How can you type this shit out and take it seriously? I've never met somebody so obtuse in my life.

I shouldn't have to explain it, but here goes: the universe is a necessary physical characteristic of life on earth. Currency, like feudalism or slavery is not.

This is some simple shit, and you fail even approaching these concepts. No wonder you support Mises (but cant understand him!).


The fact that the system that socialism uses to replaces currency is an "undefined" one brings up issues of its own, does it not?
Yes it does, but those issues are your flaws since you're arguing against an undefined concept.

[Dimentio]

Yes he is, are you joking? Socialism seeks to destroy the institution of money, and therefore rationality. As unlike goods are no longer reduced to a common denominator there is no rational way to compare costs and benefits. If I trade you three pigs for 4 dogs and then trade 2 dogs for a dozen eggs and 4 eggs for a piece of chocolate how do I know if I profited as much as I could've? I may have made those deals with the knowledge that each one benefited me, but what if for 3 pigs I could've gotten 3 dozen eggs 5 pieces of chocolate and a dog? What is the "socially necessary labor time" for raising a pig? The idea of basing value off some arbitrary standard such as power consumption, labor time, or the particular temperature on the day that a finished product goes to market are equally ludicrous as they ignore individual preferences and how these preferences affect the price of a good (and therefore the prices of the inputs) on the market.



The problem with the "from each according to ability" is its an ideal not a fact. Rational, economic, purely economic, and non economic are all facts. What does "you have no basis in material analysis or criticism for your ideology" even mean? I do not need evidence for 2+2=4.



I put it into simple terms with that illustration above. Theres no way of determining how much one is profiting as your exchanges take place completely separate from other's exchanges (money allows all exchanges to be connected, at least very loosely). If you have money you know how much Pig's are worth to others vs dogs, vs eggs, vs chocolate and you can make decisions accordingly. You would have a system where all engineers use different measurements of length (feet, inches, centimeters, miles, kilometers, yards, etc etc) and then ask them to make a coherent plan for a structure without changing all of those units to one common unit.

Why only abolish currency? Why not abolish trade between individuals, or at least render it redundant?

[Havet]

Why only abolish currency? Why not abolish trade between individuals, or at least render it redundant?

If that's your opinion, you can kiss goodbye my pokemon card collection. No way i'm going to trade with you now.

[LeftSideDown]

The problem is that "what consumers value" is not the product of a reasoned decision. Market economies assume that "consumers" are inherently rational actors, when simple psychological experiments will tell you this simply isn't the case. We're all too easily bamboozled by our evolutionary heritage, and marketing companies exploit this to the hilt instead of teaching us to make rational choices. Why? Because it's easier to turn a profit, the overriding goal of any commercial venture you care to imagine. Sure, companies can act more ethically (but not too much, or they'll go bust), but they'll be overtaken by those who are willing to act unethically, who are willing to bend the rules to breaking point and appeal to our baser instincts instead of our finer senses of reason, so they come to dominate. And since money is intrinsically tied to political power (professional politicians need funding for their popularity contests- I mean, election campaigns, as well as for backhanders and bribes), these unethical money-grubbing companies get to change the rules in their favour.

How do you know its not the product of a reasoned decision? Because its not the choice you would make? Because you find faults with it? Everyone is rational are you joking? They just have different value scales than yours and not ones that are inherently worse or better. If they value you a prostitute more than a meal at a 5 Star restaurant, can you say that they are not "reasonable" or "rational" just because its not the choice you would make? So your solution is to make all consumer decisions... for the consumers? You won't have a market reflective of consumer wishes if one person at the top gets to decide, or even a committee. All choices are rational; if I'm infuriated at someone for calling me a name and I punch them, this is still rational (the benefits of hitting this person (satisfaction of my need for revenge) out weigh the cost (perhaps jail time or getting hit myself)). Just because you wouldn't make the choice doesn't mean its not rational. I'm not going to debate whether or not corporations have politicians in their back pocket because frankly they do; your solution is to take away power from the productive sector mine is to take it away from the unproductive one.


If people are unable to care for themselves, the decent thing to do is to help them.

It is the "decent" thing to do (by most standards, it is by no means an "objectively decent" thing (Calvinists viewed poor as not part of the "elect" so obviously helping them was out of the picture) but it should not be the legally obligatory thing to do.


You have got to be fucking joshing me. You guys don't even have a National Health Service - and no, compulsory health insurance is not the same thing, whatever the Teabaggers say.

You're comparing an 11 foot tall man to a 10 foot tall one and calling the 10 foot tall man short. I'm glad we don't have the things we don't have (although I would like real reform for healthcare, but this isn't the place for that discussion), but my conclusion isn't that our 10foot man is short, but rather that he is too large, while you're comparing to an even more giant monster and concluding he is too short. I'm reading Charles Murray's Losing Ground and it isn't an inaccurate statement to say that increases in the federal budget for welfare and employment have led to a stagnation in the percentage of people considered impoverished.

[LeftSideDown]

How can you type this shit out and take it seriously? I've never met somebody so obtuse in my life.

I shouldn't have to explain it, but here goes: the universe is a necessary physical characteristic of life on earth. Currency, like feudalism or slavery is not.

This is some simple shit, and you fail even approaching these concepts. No wonder you support Mises (but cant understand him!).

Its very easy, especially when you can find flaws on an attack on an undefined system. If someone wrote something saying the only way we can be rational (in this universe) is to say this is the only universe we can exist in (rationally) and we must base our decisions on this fact, even though this universe has problems, would you have a problem with this? Or would you be upset because he is attacking an undefined theory that we can teleport to other universes?

Did I ever say that currency was necessary? I don't remember saying so, but if I did I made a mistake. I meant to (and I'm pretty sure I did) say it was necessary for making rational economic choices especially in fields that are considered purely economic.


Yes it does, but those issues are your flaws since you're arguing against an undefined concept.

I'd be arguing against an undefined concept if I said that in order to make rational assumptions about mankind we must assume that men use walking/running as their primary means of transportation when they are not assisted by outside forces (an automobile, people carrying them, etc etc). Why would I be arguing against an undefined concept? Because someone could argue that we could also make assumptions about men using swimming or flying as their primary means of transportation even though these arguments have not been clearly defined or argued for at all.

[LeftSideDown]

Why only abolish currency? Why not abolish trade between individuals, or at least render it redundant?

Why give individuals choice at all? Why not just create all their schedules for them? I mean, its not like trade serves any useful purposes like showing consumer preference, right? Besides those dumb consumers probably aren't rational (Noxion's attack) and need to be taken care of by a nanny state. Why don't we just abolish free will while we are at it? It only raises issues for the government/the majority.

[Klaatu]

Dominic Frisby calls for return of the Gold Standard. Is it worth it?

Returning to the gold standard would be just about the stupidest thing in the world. Rather than "returning
a control on the money supply," [GS] would do the exact opposite: a gold standard would actually cause the
government to LOSE control of it. That is due to the fact that there is only a finite amount of gold available,
thus [GS] would act as an enormous brake on an expanding money supply, thus causing economic stagnation,
or at best extremely slow growth.

Those who argue that inflation can be eliminated by restoring a [GS]do not understand that a nation's money
supply MUST slowly expand to accommodate growing population. This means more gold must be mined,
in order to keep up with new money demand. What happens if not enough gold is mined? Then the coinage
constituent itself must be debased (cheapened with less-expensive or less-rare metals such as copper and zinc)

But if we are going to take that step (which had been thought of centuries ago!) why not just print the currency
on paper? Originally paper money was just a receipt a bank gave a depositor who left his coins at the bank.
Interestingly, older bills were called "silver certificates" ($1 bill) and "gold certificate" ($20 bill) Was this
to restore Americans' faith in banks during the depression? A lot of people did not trust banks during the
depression, having lost their savings after the crash, thus to get them to deposit again - that is, trust banks
again - remind them that the paper is a "certificate" - a reminder that the paper is equivalent to gold?
This seems to contradict the fact that the people could not own gold anyway (at that point, only the
government could)

After the (domestic) gold standard was stopped in 1933 (internationally in 1971) a means for controlling the
money supply was needed: at first fixed exchange rates were tried (Bretton Woods) but it was determined
that floating exchange rates were better-suited, since the rates are based on participating countries' economic
output, which is variable, so fixed rates did not work. But floating rates did, which are still in use today.

The reason gold was abandoned in 1933 was that there was a deflation (rising value of money, dropping
prices) people were already holding on to their gold, (those who had it at all) knowing it would rise in
price - (the one commodity that rose in price was the money itself - gold & silver) So it became illegal
to own gold in the U.S. (You could own small amounts, such as in jewelry) If this had not been done,
a few rich people might have cornered the market on precious metals, and could have potentially owned
almost all of the country's money supply - could this have happened? Possibly so. For this and other
reasons, domestic gold ownership was prohibited.

In 1971, Nixon stopped using gold for balance-of-payments due to the fixed exchange rates and foreign
trade deficits. In 1973, it became legal to own gold once again, since the entire disengagement of gold to
the U.S. monetary system was complete.

From time to time someone pops up claiming that "a return to the gold standard" is "good for the economy."
These opinions always come from people who have very little knowledge of how a monetary system works.
(Frisby is a comedian - could his article just be a joke?)

How Americans Lost Their Right To Own Gold And Became Criminals in the Process
http://users.rcn.com/mgfree/Economics/goldHistory.html

Suspension of the Gold Standard
http://www.unitedstateslegalinfo.com/goldstandard.htm

What Was The Gold Standard?
http://economics.about.com/cs/money/a/gold_standard.htm

[Klaatu]

There would then be a huge investment in gold mining. But all that gold mining would be worthless activity that wouldn’t enhance the world’s actual productivity. Instead of investing in new computer chips or new factories, people would be investing in digging metal out of the ground. In fact, this activity is more than worthless, it harms the environment because large amounts of sodium cyanide are needed to extract gold from the ore.


Good point.

Gold might be good for jewelry and electrical contacts (it never corrodes) but useless and unnecessary as a basis for a monetary system.

[Klaatu]

Deflation isn't bad (so long as its part of natural market processes). All deflation is the relative raise of purchasing power
in your money. Would it be bad if you could buy two cheeseburgers for a dollar rather than one for one dollar?
Would it be bad if you could buy more stuff with the same amount of money you have? No, its silly. There were other
factors that brought about the Great Depression (first time the Federal Reserve really tried to start running the economy
through credit expansion), and it was FDR's/Hoover's programs that prolonged it for about a decade.

Oh yes it is bad. Deflation (a shrinking money supply) is a direct cause of unemployment. There is less money available
(usually in terms of credit) so there are fewer purchases of big-ticket goods (houses and cars) When people don't buy
things, workers get laid off, and business even goes bankrupt. And that may even be well-run businesses. Through
no fault of their own, workers are cast into the street. I for example, have been through this process several times
during the past 30 years. It's no fun not being able to pay the bills.

[Klaatu]

Regardless if you think he is an idiot or not, you still commited a fallacy.

I think you forgot to read this (http://www.revleft.com/vb/read-first-t60522/index.html):

Although you are correct, I would agree that LeftSideDown does seem to have some sort of obsession with "getting the last word" in his debates.

And he will never admit when he is wrong (and he is often wrong)

That IS a sign of a sociopathic condition...

[Havet]

Although you are correct, I would agree that LeftSideDown does seem to have some sort of obsession with "getting the last word" in his debates.

And he will never admit when he is wrong (and he is often wrong)

That IS a sign of a sociopathic condition...

He just said in another thread that he admited being wrong when talking with you

[Klaatu]

What we need is the labor standard.

Interesting idea. How would it work?

[Klaatu]

He just said in another thread that he admited being wrong when talking with you

Fair enough. I stand corrected. :)

[LeftSideDown]

Good point.

Gold might be good for jewelry and electrical contacts (it never corrodes) but useless and unnecessary as a basis for a monetary system.

Could you be more wrong? (Not about jewelery and electrical contacts, but your final point).

Scarcely less important are the physical characteristics which a good money should possess. Five such characteristics may properly be examined at this point: (1) durability, (2) portability, (3) homogeneity, (4) divisibility, and (5) cognizability.

Any commodity that is to serve well as money should possess durability to a high degree. Otherwise it would wear quickly in its passage from hand to hand, and even deteriorate while in the possession of its owner. Consequently, perishable goodsj such as cattle, furs, tobacco, and even wheat and corn, have never proved satisfactory as mediums of exchange. Clearly, durability is a great aid to stability of value, since the new supply of a durable commodity for a reasonably short period of time is likely to be small compared to the entire stock of that commodity already in the possession of society. If wheat, for example, were used as a medium of exchange, it is obvious that its value would fall greatly with the harvesting of each new crop and rise as each crop was gradually consumed.

The second physical characteristic of a good money is portability. The commodity that serves as money must be moved from point to point, among the members of the society that uses it. Otherwise it is not money. This movement involves labor and expense. Hence, the commodity that combines greatest value in the smallest bulk, if we consider portability alone, is the most desirable as a medium of exchange.

Characteristics of Good Money

This section is from the book "Elementary Economics", by Charles Manfred Thompson.

Scarcely less important are the physical characteristics which a good money should possess. Five such characteristics may properly be examined at this point: (1) durability [Gold Never Corrodes like you said], (2) portability [It can be carried around easily, its not like Helium or something that could escape into the air], (3) homogeneity [Do I need to convince you of the homogeneity of an element???], (4) divisibility [Gold can be divided into coins, bars, nuggets, pyramids, and just about any other shape you can conceive], and (5) cognizability [When you see something with a yellow luster (the color of gold) the first thing you probably think is gold].

A good money must also be homogeneous - that is, the commodity from which it is made must be of the same quality wherever it is found. Obviously, cattle possess this characteristic to a very low degree, for scarcely any two of them are alike. Divisibility, which is closely related to homogeneity, simply means the capability of a commodity to be divided without destroying its value. Here again, cattle do not possess this characteristic. Neither do furs or diamonds. Either loses value by being divided. The total value of the parts of a split diamond never equals the value of the original stone.

Any commodity that is to pass current as money must be capable of being easily recognized. Otherwise it could be counterfeited, which fact in itself would tend to destroy its value as a money by destroying its acceptability.

[LeftSideDown]

Oh yes it is bad. Deflation (a shrinking money supply) is a direct cause of unemployment. There is less money available
(usually in terms of credit) so there are fewer purchases of big-ticket goods (houses and cars) When people don't buy
things, workers get laid off, and business even goes bankrupt. And that may even be well-run businesses. Through
no fault of their own, workers are cast into the street. I for example, have been through this process several times
during the past 30 years. It's no fun not being able to pay the bills.

No, you're confusing cause and effect. Historically rapid deflation causes employment because credit has been expanded beyond the point it would've naturally. Companies that are not actually meeting consumer demand (or meeting it at a slimmer margin) and staying in business because of interest rates that are lower (normal profit becomes lower, more businesses look profitable) begin to go out of business as the expansion of money is recognized as not correlating to any amount of real growth. Keep in mind, unless you're a money-fetishist, money is not valued for itself but for the goods it represents. So saying because there is less money is silly: we could burn all the paper money in the United States and we'd still have the goods. Sure banking would be screwy for a bit because there would be no common medium of exchange but everything that was there still exists; the destruction of money =\= the destruction of actual goods.

But what we are talking about, or at least what I'm talking about, is deflation caused by the market (which is part of the natural processes the market undergoes). Rapid deflation caused by central bank inflation = bad, and I don't think the cure is to inflate more but rather to stop inflation. Only in a non inflationary environment is it possible to know whether or not a company is meeting consumer demand because revenues (taking place in current dollars (that are inflated)) seem higher than the costs (which took place in past dollars (which was "relatively deflated)). For instance, in an economy with a money that could not be inflated loans between entrepreneur and a bank would factor in a rate of "deflation" into loans, so that it is not necessarily based on money when the loan is being made, but the purchasing power of the money. (For instance I take a loan that can buy 100 cars today with 10% interest for a year, next year I pay the bank back the cost of 110 cars that next year).

[Klaatu]

Originally Posted by EnviroWhacko
Good point.

Gold might be good for jewelry and electrical contacts (it never corrodes) but useless and unnecessary as a basis for a monetary system.


Could you be more wrong? (Not about jewelery and electrical contacts, but your final point).

I stand by what I've said. Your analysis of money is a good one, but is archaic. Your ideas for money would have applied
back in the times before the late 20th century's era of instant communications. And now, electronic money is beginning
to become widespread. And if you like efficiency, you must like the speed and productivity of online banking, etc.



No, you're confusing cause and effect.

OK it "has the effect" of causing massive unemployment. (Semantics.)



So saying because there is less money is silly: we could burn all the paper money in the United States and we'd still have
the goods. Sure banking would be screwy for a bit because there would be no common medium of exchange but everything
that was there still exists; the destruction of money =\= the destruction of actual goods.

That's like saying we can drain all of the fuel out of our car, when we are stranded in the desert, but we still have a car!



But what we are talking about, or at least what I'm talking about, is deflation caused by the market (which is part of the
natural processes the market undergoes).

I am talking about the gold standard's braking effect on the normal expansion of credit.

[LeftSideDown]

I stand by what I've said. Your analysis of money is a good one, but is archaic. Your ideas for money would have applied
back in the times before the late 20th century's era of instant communications. And now, electronic money is beginning
to become widespread. And if you like efficiency, you must like the speed and productivity of online banking, etc.

I am not advocating we go back to everyone carrying around cold coins or anything like that (although it would be very similar to carrying around cash). You could have a system of a gold backed currency and still be electronic, indeed, there is no reason why it would be any different at all. Besides those things that make a good currency aren't archaic; 4/5 are met by paper money, and its not my analysis its the analysis of economists.


OK it "has the effect" of causing massive unemployment. (Semantics.)

No, deflation does not. Rapid deflation caused by credit inflation from the central bank does, but that is because capital must be liquidated and reinvested in areas that are actually meeting consumer demand. Increased purchasing power in money doesn't affect employment.


That's like saying we can drain all of the fuel out of our car, when we are stranded in the desert, but we still have a car!

Notice, I did not say the economy would keep working smoothly or at all. I just said the destruction of money =\= destruction of goods. So a more apt analogy is to take all the seats and steering wheel out of a car; it still works its just uncomfortable and hard to control; or all the parts are still there, it just needs to find a new way of being controlled (i.e. a new means of exchange since the old one was destroyed).


I am talking about the gold standard's braking effect on the normal expansion of credit.

Woah woah woah. The natural market tendency is deflation, what "normal expansion of credit" are you talking about? The states??!? As Rothbard has said, "rather than a problem to be dreaded and combated, falling prices through increased production is a wonderful long-run tendency of untrammeled capitalism. The trend of the Industrial Revolution in the West was falling prices, which spread an increased standard of living to every person; falling costs, which maintained general profitability of business; and stable monetary wage rates—which reflected steadily increasing real wages in terms of purchasing power. This is a process to be hailed and welcomed rather than to be stamped out."

[ÑóẊîöʼn]

How do you know its not the product of a reasoned decision? Because its not the choice you would make? Because you find faults with it? Everyone is rational are you joking?

My point is precisely that most people are not rational most of the time. People are easily swayed into making purchasing decisions against their own self-interest, whatever they may be.


They just have different value scales than yours and not ones that are inherently worse or better. If they value you a prostitute more than a meal at a 5 Star restaurant, can you say that they are not "reasonable" or "rational" just because its not the choice you would make? So your solution is to make all consumer decisions... for the consumers?

Whatever gave you that idea?


You won't have a market reflective of consumer wishes if one person at the top gets to decide, or even a committee.

It seems you're suffering from a distinct lack of imagination; I'm saying there shouldn't be markets at all.


All choices are rational; if I'm infuriated at someone for calling me a name and I punch them, this is still rational (the benefits of hitting this person (satisfaction of my need for revenge) out weigh the cost (perhaps jail time or getting hit myself)). Just because you wouldn't make the choice doesn't mean its not rational.

Do you realise how stupid you sound? You are simply re-defining "rational" to mean "whatever I want", which is not the same thing. In fact your scenario is a prime example of what I'm talking about - people's emotions can be easily overridden, leading them to make choices that are actually detrimental to their well-being. Money and markets encourage this for reasons I have already stated.


I'm not going to debate whether or not corporations have politicians in their back pocket because frankly they do; your solution is to take away power from the productive sector mine is to take it away from the unproductive one.

By "unproductive sector" you mean "government", right? A typical Randroid canard, which is simply untrue. Government run healthcare results in a healthier, more solvent and therefore more productive workforce.

Anyway, part of my solution is for money and markets to be abolished and replaced with energy accounting, and for the industries thus converted to be effectively self-governing.


It is the "decent" thing to do (by most standards, it is by no means an "objectively decent" thing (Calvinists viewed poor as not part of the "elect" so obviously helping them was out of the picture) but it should not be the legally obligatory thing to do.

Why not? Charity isn't enough, and having sick and dying people everywhere has serious consequences for the whole of society.


You're comparing an 11 foot tall man to a 10 foot tall one and calling the 10 foot tall man short. I'm glad we don't have the things we don't have (although I would like real reform for healthcare, but this isn't the place for that discussion), but my conclusion isn't that our 10foot man is short, but rather that he is too large, while you're comparing to an even more giant monster and concluding he is too short.

If I were to have an accident or fall ill, I would be able to get treatment in short order and the cost would be met by the taxpayer. That's it! - this is completely different to the American system, which is fucked up and needlessly convoluted on so many fucking levels, thanks to the insistence on having the private sector pay for it through insurance contributions, which not everyone can really afford.


I'm reading Charles Murray's Losing Ground and it isn't an inaccurate statement to say that increases in the federal budget for welfare and employment have led to a stagnation in the percentage of people considered impoverished.

The American "welfare" system is fucked up beyond all recognition. No wonder you have urban wastelands like Detroit, which are as bad if not worse than those found in developing countries.

[Klaatu]

You could have a system of a gold backed currency and still be electronic

FOR WHAT??? There is NO NEED for it. No need whatsoever! A gold standard would SERVE NO PURPOSE



No, deflation does not. Rapid deflation caused by credit inflation from the central bank does, but that is because capital must be liquidated and reinvested in areas that are actually meeting consumer demand.

Deflation: a shrinking of a country's money supply in circulation. Less money available = fewer purchases = unemployment.



Increased purchasing power in money doesn't affect employment.

The HELL it doesn't. (see above and below)



Notice, I did not say the economy would keep working smoothly or at all. I just said the destruction of money =\= destruction of goods. So a more apt analogy is to take all the seats and steering wheel out of a car; it still works its just uncomfortable and hard to control; or all the parts are still there, it just needs to find a new way of being controlled (i.e. a new means of exchange since the old one was destroyed).

Stop playing this silly game of one-upmanship. My analogy is far better than yours is.



As Rothbard has said, "rather than a problem to be dreaded and combated, falling prices through increased production is a wonderful long-run tendency of untrammeled capitalism. The trend of the Industrial Revolution in the West was falling prices, which spread an increased standard of living to every person; falling costs, which maintained general profitability of business; and stable monetary wage rates—which reflected steadily increasing real wages in terms of purchasing power. This is a process to be hailed and welcomed rather than to be stamped out."

I am talking about the Great Depression's deflation on the money supply, which was NOT a normal thing.

That deflation was the result of the gold-standard's "rubber band effect" of pulling back the mountain of paper money
which was in circulation (especially credit) in the early 1930s.The price of gold was fixed at $35/ounce, and there was
no way to reconcile the difference between (a) the amount of gold the government held and (b) the amount of money
and credit in circulation. Hence: SNAP! the dollars in circulation dropped off (banks failed as reserves dried up) and by
law of supply and demand, the value of the dollar rose - a lot - by means of their increased scarcity. (money itself
obeys the law of supply and demand)

This is the reason for the falling prices during the depression. And a MAJOR reason for the massive unemployment.

This is NOT the same thing as falling prices due to industrial productivity gains.

[LeftSideDown]

My point is precisely that most people are not rational most of the time. People are easily swayed into making purchasing decisions against their own self-interest, whatever they may be.

How can you prove this at all? You're arbitrarily defining whats in someone's "self-interest". I can make a rational decision thats not in my best interest; its very easy. I can make a rational (rationality - the quality of being consistent with or based on logic) decision to crash my car into a tree.
1) I think that I will be happier if I crash my car
2) I don't think that the cost of crashing the car (having to replace the car, probably going to the hospital) is greater than the happiness I will receive from crashing a car.

This is a rational decision. No matter how irrational it seems to you, it is very possible that the happiness I would get from this outweighed the costs. Self-interest is as subjective as "need".


Whatever gave you that idea?

1) You imply consumer's can't make decisions for themselves (apparently you think they're too dumb to do this hence your "they are influenced into acting against themselves)
2) You obviously do not see yourself as a victim of this (you are so much smarter)
3) Someone who is smart (i.e. You) should make decisions for these consumers (dumb people) because your ambivalent heart knows whats best for everybody.

Thats what gave you that idea.


It seems you're suffering from a distinct lack of imagination; I'm saying there shouldn't be markets at all.

So you'll just give people what you think they want and tell them to smile about it? Where else can consumer's show preference but a market? A poll? Hhahaha

[QUOTE=NoXion;1719001]Do you realise how stupid you sound? You are simply re-defining "rational" to mean "whatever I want", which is not the same thing. In fact your scenario is a prime example of what I'm talking about - people's emotions can be easily overridden, leading them to make choices that are actually detrimental to their well-being. Money and markets encourage this for reasons I have already stated.

I'm not, I defined it above pretty clearly. Rationality is subjective too; an act you do might not be rational to someone else (for instance, eating meat doesn't seem rational to a vegan (its gross, the animals are cruelly treated and you're supporting it, its unhealthy, etc etc) whereas to you it can seem very rational.


By "unproductive sector" you mean "government", right? A typical Randroid canard, which is simply untrue. Government run healthcare results in a healthier, more solvent and therefore more productive workforce.

Honestly, why don't you people refrain from name calling and actually attack points? I'm not a Randroid and the civility of this debate cannot be maintained while you're openly hostile. What does it achieve? Besides poisoning the well all it serves is your clearly large ego.

But you are right about Government run healthcare. I mean, if we look at the first country to get this kind of healthcare, the Soviet Union, their system was great!

"In 1918, the Soviet Union became the first country to promise universal "cradle-to-grave" healthcare coverage, to be accomplished through the complete socialization of medicine. The "right to health" became a "constitutional right" of Soviet citizens.

The system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.

Irresponsibility, expressed by the popular Russian saying "They pretend they are paying us and we pretend we are working," resulted in appalling quality of service, widespread corruption, and extensive loss of life. My friend, a famous neurosurgeon in today's Russia, received a monthly salary of 150 rubles — one third of the average bus driver's salary.

In order to receive minimal attention by doctors and nursing personnel, patients had to pay bribes. I even witnessed a case of a "nonpaying" patient who died trying to reach a lavatory at the end of the long corridor after brain surgery. Anesthesia was usually "not available" for abortions or minor ear, nose, throat, and skin surgeries. This was used as a means of extortion by unscrupulous medical bureaucrats.

"Slavery certainly 'reduced costs' of labor, 'eliminated the waste' of bargaining for wages, and avoided 'unnecessary duplication and parallelism'."

Being a People's Deputy in the Moscow region from 1987 to 1989, I received many complaints about criminal negligence, bribes taken by medical apparatchiks, drunken ambulance crews, and food poisoning in hospitals and child-care facilities. I recall the case of a fourteen-year-old girl from my district who died of acute nephritis in a Moscow hospital. She died because a doctor decided that it was better to save "precious" X-ray film (imported by the Soviets for hard currency) instead of double-checking his diagnosis. These X-rays would have disproven his diagnosis of neuropathic pain.

Anyway, part of my solution is for money and markets to be abolished and replaced with energy accounting, and for the industries thus converted to be effectively self-governing.

So, as in all countries with socialized medicine, a two-tier system was created: one for the "gray masses" and the other, with a completely different level of service, for the bureaucrats and their intellectual servants. In the USSR, it was often the case that while workers and peasants were dying in the state hospitals, the medicine and equipment that could save their lives was sitting unused in the nomenklatura system.

At the end of the socialist experiment, the official infant-mortality rate in Russia was more than 2.5 times as high as in the United States and more than five times that of Japan. The rate of 24.5 deaths per 1,000 live births was questioned recently by several deputies to the Russian Parliament, who claim that it is seven times higher than in the United States. This would make the Russian death rate 55 compared to the US rate of 8.1 per 1,000 live births.

But I digress, we were discussing how wonderful government is and how we should enlarge it as much as humanely possible :cool:


Why not? Charity isn't enough, and having sick and dying people everywhere has serious consequences for the whole of society.

So why are you living in all this opulence? I don't know much about your situation, but you at least have a computer and free time to use it. Why aren't you out all the time helping poor? Why do you have all this stuff? If you really cared than you would be doing these things (otherwise there are problems with performative contradiction); if you just like spending other people's money for causes you consider just, but not just enough for you to sacrifice for than I can draw just about any conclusion I want (you're jealous of their wealth, you have a complex where you don't like be reminded of other peoples success, etc etc).


If I were to have an accident or fall ill, I would be able to get treatment in short order and the cost would be met by the taxpayer. That's it! - this is completely different to the American system, which is fucked up and needlessly convoluted on so many fucking levels, thanks to the insistence on having the private sector pay for it through insurance contributions, which not everyone can really afford.

So whats your incentive to "not fall ill" all the time? There are numerous studies (I mean even you'll know this) that show that outlook and effort into getting better (even if its just thinking positive thoughts, or actively trying to feel better) speed up recovery time. But if you don't believe that guaranteed health care creates these incentives, I would just direct you to:

Swedes are among the healthiest people in the world according to the World Health Organization. And yet 13% of working-age Swedes live on some type of disability benefit — the highest proportion on the globe. To explain this, many Swedish policy makers, doctors and economists blame a welfare system that is too lax and does little to verify individual claims. … [G]overnments from Finland to Portugal are trying to cut back and get more people to work. Sweden’s bloated sick bay, which includes roughly 744,000 people on extended leave, has caused soul-searching about whether the system coddles Swedes and encourages them to feel sick. … During the 2002 monthlong World Cup soccer finals, short-term sick leave among Swedish men suspiciously rose by 55%. Earlier this year, police in Sweden’s capital city Stockholm investigated the local chapter of the Hell’s Angels biker gang for suspected benefit fraud, because 70% of the gang were on extended sickness benefits. The same doctor had certified them all as suffering from depression. … In Europe, roughly 20% of the working-age population — or 60 million people — depend on various government benefits as their sole or main income, compared with 13% in the U.S. That’s a major economic handicap. … Assar Lindbeck, one of Sweden’s best-known economists, says the lenient welfare state has changed the country over the past generation. In place of the old Protestant work ethic, it has become acceptable to feel unable to work and to live on benefits, he says. “I would not call it cheating,” Prof. Lindbeck says. “I would call it a drift in attitudes and social norms.”

Source: http://www.cato-at-liberty.org/2007/05/09/the-welfare-state-causes-sickness/


The American "welfare" system is fucked up beyond all recognition. No wonder you have urban wastelands like Detroit, which are as bad if not worse than those found in developing countries.

And yet you support the extension of the state that has created this system?

[LeftSideDown]

FOR WHAT??? There is NO NEED for it. No need whatsoever! A gold standard would SERVE NO PURPOSE

Prevents arbitrary inflation by a central bank.


Deflation: a shrinking of a country's money supply in circulation. Less money available = fewer purchases = unemployment.

What happens to something when its supply is reduced? I would draw graphs for you, but I'm sure you can figure it out. Its price goes up. Money is now worth more so more can be purchased with it. No change.


The HELL it doesn't. (see above and below)

My 10 dollar bill now being able to buy 11 Big macs instead of 10 affects nothing except it makes revenues SEEM smaller.


Stop playing this silly game of one-upmanship. My analogy is far better than yours is.

I rejected your analogy. I didn't believe it was accurate. I'm not trying to one up your, or if your definition of "one up" is to contest something you don't believe is true or accurate, than we are both playing this game. To use an analogy (I know your favorite) its like a baseball player yelling at another baseball player to stop playing baseball. The whole point of a debate, in some sense, is to "one up" the other guy to a point where he can't one up you (you bring up an irrefutable fact that destroys his case, or something). So you think without money the entire economy would just stop? No one would even try to barter, they would just die because "we dont' have any paper to buy this stuff with!"?

I am talking about the Great Depression's deflation on the money supply, which was NOT a normal thing.


That deflation was the result of the gold-standard's "rubber band effect" of pulling back the mountain of paper money
which was in circulation (especially credit) in the early 1930s.The price of gold was fixed at $35/ounce, and there was
no way to reconcile the difference between (a) the amount of gold the government held and (b) the amount of money
and credit in circulation. Hence: SNAP! the dollars in circulation dropped off (banks failed as reserves dried up) and by
law of supply and demand, the value of the dollar rose - a lot - by means of their increased scarcity. (money itself
obeys the law of supply and demand)

So you blame the gold standard for the government injecting credit into the economy in an effort to make it bigger, but which in reality just creates an unsustainable boom? You honestly think the problem was that they couldn't keep just throwing more dollars at the economy and telling it to grow? Even you recognize the fact that decreasing supply increases value, so why would purchases stop? The people who had money could buy more.
a) Why was the government spending more gold than it had?
b) Why was there lots of credit in circulation (I'll give you a hint, it starts with "G")


This is the reason for the falling prices during the depression. And a MAJOR reason for the massive unemployment.

Really? I thought a major cause of unemployment was that FDR/Hoover wouldn't let wages drop to reflect the raise in the currencies purchasing power? Oh, but that must just be me...

"The maintenance of wage rates in the face of steadily declining prices (wholesale prices fell by 10 percent in 1930, by 15 percent in 1931), meant that the real wage rates of the employed were sharply increasing, thereby greatly aggravating the unemployment problem as time went on. "

"Until the end of 1931, most businesses, and particularly the large firms, staunchly resisted wage cuts. Some small firms in textiles and coal reduced their wage rates, but the large firms in the basic steel, public utility, and construction industries "publicly announced their adherence to a policy of high wages and their unwillingness to reduce prevailing standards." Wolman concluded that "it is indeed impossible to recall any past depression of similar intensity and duration in which the wages of prosperity were maintained as long as they have been during the depression of 1930-31."[13] He noted, however, that pressures to cut wage rates were building up almost irresistibly, and that some construction labor had been able to maintain their employment by accepting sub rosa wage cuts. Wage cuts responding to severe losses at the end of 1931 took place secretly for fear of the disapproval of the Hoover administration."

"What of wage rates? We saw that the Hoover policies managed to keep wage rates very high during the first two years of the depression. By 1932, however, with profits wiped out, the pressure became too great, and wage rates fell considerably. Total fall over the 1929-1933 period, however, was only 23 percent—less than the decline in wholesale prices. Therefore, real wage rates, for the workers still remaining employed, actually increased. An excellent inquiry into the wage-employment problem during the depression has been conducted by Mr. Sol Shaviro, in an unpublished essay.[14] Shaviro shows that in 25 leading manufacturing industries, the following was the record of monetary, and real, average hourly earnings during these years."

From America's Great Depression, by Murray Rothbard


This is NOT the same thing as falling prices due to industrial productivity gains.

Inflation prevents this raise in purchasing power, and it is just another way the government takes money from its civilians and lowers its standard of living.

[ÑóẊîöʼn]

How can you prove this at all? You're arbitrarily defining whats in someone's "self-interest". I can make a rational decision thats not in my best interest; its very easy. I can make a rational (rationality - the quality of being consistent with or based on logic) decision to crash my car into a tree.
1) I think that I will be happier if I crash my car
2) I don't think that the cost of crashing the car (having to replace the car, probably going to the hospital) is greater than the happiness I will receive from crashing a car.

This is a rational decision.

It may be "rational" in that your argument adheres to the rules of logic, but it is based on flawed premises. You may think that crashing your car will make you happier, but you would be wrong. Furthermore, crashing your car will have consequences for people other than yourself. You seem to forget that society does not revolve around you.


No matter how irrational it seems to you, it is very possible that the happiness I would get from this outweighed the costs. Self-interest is as subjective as "need".

Well, I suppose that by crashing your car you may be able to claim insurance, but that's the distorting effect of money at work again.


1) You imply consumer's can't make decisions for themselves (apparently you think they're too dumb to do this hence your "they are influenced into acting against themselves)

Being persuadable by psychological techniques that take advantage of naturally evolved mental levers does not make one stupid, it makes one human. Even the cleverest of people can be persuaded to do things they would not do otherwise.


2) You obviously do not see yourself as a victim of this (you are so much smarter)

Everybody gets conned at some point in their life, myself included, since I am a human being, after all.


3) Someone who is smart (i.e. You) should make decisions for these consumers (dumb people) because your ambivalent heart knows whats best for everybody.

What bollocks. Your problem is that you think being able to choose is synonymous with markets and money, which shows a distinct lack of imagination on your part. If energy accounting (http://www.technocracy.ca/modules.php?op=modload&name=Sections&file=index&req=viewarticle&artid=6&page=1) is used instead, then people can choose what they want to do and have without having to use money or markets, and without being unduly influenced by greedy corporations.


So you'll just give people what you think they want and tell them to smile about it? Where else can consumer's show preference but a market? A poll? Hhahaha

Actually, people have less choice now than they would under an energy-based system - there are certain goods and services they simply cannot afford, no matter how much or how little energy is used to produce them.


I'm not, I defined it above pretty clearly. Rationality is subjective too; an act you do might not be rational to someone else (for instance, eating meat doesn't seem rational to a vegan (its gross, the animals are cruelly treated and you're supporting it, its unhealthy, etc etc) whereas to you it can seem very rational.

Like I said, logic may be sound but based on false premises, and money and markets create false premises in abundance.


Honestly, why don't you people refrain from name calling and actually attack points? I'm not a Randroid

Then why the fuck do you sound like one? The constant and unrelenting focus solely on the individual, the whinging about big government, the worship of markets and the private sector, and above all the sociopathic "fuck you I've got mine, it's your fault for being poor or ill"?


and the civility of this debate cannot be maintained while you're openly hostile. What does it achieve? Besides poisoning the well all it serves is your clearly large ego.

I'm excoriating you because your ideas on how society should be run are based on selfishness and greed, dressed up to sound respectable. Why should I not show contempt for those who think society should shit on those who are unfortunate?


But you are right about Government run healthcare. I mean, if we look at the first country to get this kind of healthcare, the Soviet Union, their system was great!

It was certainly a hell of a lot better than what came afterwards.


But I digress, we were discussing how wonderful government is and how we should enlarge it as much as humanely possible :cool:

That reminds me, how is that libertarian paradise Somalia doing?


So why are you living in all this opulence? I don't know much about your situation, but you at least have a computer and free time to use it.

My own computer is currently broken and I do not have an internet connection at home. I'm using the library computers which are provided free of charge at the point of use.


Why aren't you out all the time helping poor?

Because I'm fucking poor myself.


Why do you have all this stuff?

What stuff? My computer is not only broken, but a Christmas gift from several years ago. My flat is uncarpeted and only partly furnished, the sofas I recovered from the street and the bed is second-hand. I only have a microwave to cook with.

You were saying?


If you really cared than you would be doing these things (otherwise there are problems with performative contradiction);

I can barely afford to feed myself on my current income; I'm actually classed as underweight, which I know thanks to the NHS walk-in centre. If I had the money and the time (because I'm jobhunting) to spare then I would give it.


if you just like spending other people's money for causes you consider just, but not just enough for you to sacrifice for than I can draw just about any conclusion I want (you're jealous of their wealth, you have a complex where you don't like be reminded of other peoples success, etc etc).

Or maybe you're just assuming that everyone is as spoilt and self-centred as yourself.


So whats your incentive to "not fall ill" all the time? There are numerous studies (I mean even you'll know this) that show that outlook and effort into getting better (even if its just thinking positive thoughts, or actively trying to feel better) speed up recovery time.

Positive thinking doesn't change the fact that shit happens


But if you don't believe that guaranteed health care creates these incentives, I would just direct you to:

Swedes are among the healthiest people in the world according to the World Health Organization. And yet 13% of working-age Swedes live on some type of disability benefit...

Source: http://www.cato-at-liberty.org/2007/05/09/the-welfare-state-causes-sickness/

You're not asking me to take the Cato Institute seriously, are you? Right off the bat they mention that Sweden has one of the healthiest populations in the world, yet the URL states that "the welfare state causes sickness".

It goes to show that ideologues like you don't give a shit about people, they only care for money - so fucking what if 13% of Swedes are on disability benefits? They are healthy and Sweden can afford it.


And yet you support the extension of the state that has created this system?

No, I'm for the abolishment of the money and markets that abandoned Detroit to its fate, and their replacement with an egalitarian distribution system based on the real wealth of technological civilisation - energy - and not fiat currency or shiny metals with specialised applications.

[LeftSideDown]

It may be "rational" in that your argument adheres to the rules of logic, but it is based on flawed premises. You may think that crashing your car will make you happier, but you would be wrong. Furthermore, crashing your car will have consequences for people other than yourself. You seem to forget that society does not revolve around you.

Really? It won't make me happy, ever? You can't prove whether or not something will make someone happy. It could be that I hate that car so much that I want to personally destroy it. Are you going to say this wouldn't make me happy? You come from the flawed premise that you can decide what can and cannot make others happy.


Well, I suppose that by crashing your car you may be able to claim insurance, but that's the distorting effect of money at work again.

Or, as I said above, I could loathe the car. Or maybe I loathe the tree. Maybe I loathe myself and want to hurt myself and doing this would bring me happy. It doesn't have to be money and there is no way you can even close to scientifically say that something will or will not make someone else happy. You can make generalizations (killing you won't make you happy), but even then there are contradictions (killing someone who is depressed/suicidal/wants to die may make them happy for an instant before they die). There can be no objective standard or anything close to an objective standard for deciding what can/does make people happy, or even a standard for what "should" make people happy.


Being persuadable by psychological techniques that take advantage of naturally evolved mental levers does not make one stupid, it makes one human. Even the cleverest of people can be persuaded to do things they would not do otherwise.

So why should anyone make decisions for anyone else regarding what they should and should not do, especially if they themselves can be "conned"? What makes one person's position so vastly superior that it gives him the right to decide for others what others should do?


Everybody gets conned at some point in their life, myself included, since I am a human being, after all.

More reason to not give power to an individual to decide whats best for others since he himself can be "conned", and then affect the lives of thousands (if hes given that power.


What bollocks. Your problem is that you think being able to choose is synonymous with markets and money, which shows a distinct lack of imagination on your part. If energy accounting (http://www.technocracy.ca/modules.php?op=modload&name=Sections&file=index&req=viewarticle&artid=6&page=1) is used instead, then people can choose what they want to do and have without having to use money or markets, and without being unduly influenced by greedy corporations.

I don't have time to read the article right now, but I'll peruse it later.


Actually, people have less choice now than they would under an energy-based system - there are certain goods and services they simply cannot afford, no matter how much or how little energy is used to produce them.

And yet if all goods were produced at cost we would have shortages everywhere. I've debated this with another socialist on this forums (if HD Tv's were suddenly being sold at cost they would all be gone in less than a week) and there simply isn't the productive capacity to give everybody a mansion, a yacht, two cars, 3 good meals a day, and a cat.


Like I said, logic may be sound but based on false premises, and money and markets create false premises in abundance.

There doesn't have to be a market for rationality to still be subjective. How can you not see this?


Then why the fuck do you sound like one? The constant and unrelenting focus solely on the individual, the whinging about big government, the worship of markets and the private sector, and above all the sociopathic "fuck you I've got mine, it's your fault for being poor or ill"?

You sound really angry. Perhaps you should take a deep breath?


I'm excoriating you because your ideas on how society should be run are based on selfishness and greed, dressed up to sound respectable. Why should I not show contempt for those who think society should shit on those who are unfortunate?

Self-interest is different than selfishness. The "greedy" have done more for this world than the mightiest philanthropists. I never said people should shit on those who are unfortunate, merely that there isn't/shouldn't be any innate positive obligation to help them. If there is you're guilty of perfomative contradiction by having a computer and all the other stuff I imagine you have.


It was certainly a hell of a lot better than what came afterwards.

Lol?


That reminds me, how is that libertarian paradise Somalia doing?

Better than it was doing under the genocidal central government... would you like statistics? I wouldn't want ot live there but its ignorant to say its worse off.


My own computer is currently broken and I do not have an internet connection at home. I'm using the library computers which are provided free of charge at the point of use.

A-ha! You have a home! What are you doing living in luxury you greedy greedy man?


Because I'm fucking poor myself.

Compared to the rich? Maybe. Compared to people a century ago? Your standard of living is probably twice as high. Compared to people in africa? You're a king. Poor is subjective, and you're rich in comparison to others, so what gives you the right to this stuff, Mister?


What stuff? My computer is not only broken, but a Christmas gift from several years ago. My flat is uncarpeted and only partly furnished, the sofas I recovered from the street and the bed is second-hand. I only have a microwave to cook with.

Still sounds better than how most of the world is living. Honestly, always thinking about what you don't have. Think of the millions who have less that deserve your stuff. Come on man, get choppin' and start craigslisting that junk.


You were saying?

Still am saying, you're comparatively rich.



I can barely afford to feed myself on my current income; I'm actually classed as underweight, which I know thanks to the NHS walk-in centre. If I had the money and the time (because I'm jobhunting) to spare then I would give it.

Some people cannot afford to feed themselves, you're living high on the hog Mister. What gives you the right to this comparatively opulent lifestyle? You have plenty if you compare yourself to people other than BIll gates.


Or maybe you're just assuming that everyone is as spoilt and self-centred as yourself.

I don't think myself spoilt, but I think I've proven you're just as self-centered, or at least thats what your actions (or maybe your lack of actions) seem to indicate.

I'm proving that either you have goods and services lacked by most of the world and don't feel an obligation to give them up to help others because you're poorer than Bill Gates. However, almost any amount of material wealth you have in the United States is so much higher than most of the world its ridiculous that you are complaining at all.


Positive thinking doesn't change the fact that shit happens

Does make shit clear up faster.


You're not asking me to take the Cato Institute seriously, are you? Right off the bat they mention that Sweden has one of the healthiest populations in the world, yet the URL states that "the welfare state causes sickness".

It was a Cato institute article linking to a Wall Street Journal article, so yes I'm asking you to take it seriously. And the World Health Organization sites them as the among the healthiest, but 13% (the highest proportion in the world) are receiving disability benefits.


It goes to show that ideologues like you don't give a shit about people, they only care for money - so fucking what if 13% of Swedes are on disability benefits? They are healthy and Sweden can afford it.

Do you know understand the problem? They ARE healthy and yet are defrauding a system thats meant to help those that are actually healthy and taking funds that could be used for sick people. But I guess its okay, they can afford it; nothing is ever wrong if someone can afford it. "What? I broke your arm? Well you have savings that can get you through this, you can afford it, therefore its okay that I broke your arm".

"During the 2002 monthlong World Cup soccer finals, short-term sick leave among Swedish men suspiciously rose by 55%. Earlier this year, police in Sweden’s capital city Stockholm investigated the local chapter of the Hell’s Angels biker gang for suspected benefit fraud, because 70% of the gang were on extended sickness benefits. The same doctor had certified them all as suffering from depression."

This is okay though... yep.


No, I'm for the abolishment of the money and markets that abandoned Detroit to its fate, and their replacement with an egalitarian distribution system based on the real wealth of technological civilisation - energy - and not fiat currency or shiny metals with specialised applications.

It couldn't have been Detroits fault at all, right? Capitalists just decided to arbitrarily (and no doubt expensively) relocate for no reason, right? Hey! At least they aren't being exploited anymore, right?

[Klaatu]

Prevents arbitrary inflation by a central bank.

I KNEW you would say that. Money is not "arbitrarily" inflated, nor would a gold standard prevent it from being inflated
in the first place (which had happened many times before, while the gold standard existed)

And as I've said before, a nation's money supply must be slowly increased, in order to accommodate an increasing population.
It's quite simple: more people need to have money, so more money must be "manufactured." And this is entirely constitutional.

U.S. Constitution - Article 1 Section 8
http://www.usconstitution.net/xconst_A1Sec8.html
"The Congress shall have Power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"



What happens to something when its supply is reduced? I would draw graphs for you, but I'm sure you can figure it out.
Its price goes up. Money is now worth more so more can be purchased with it. No change.

If only it were that simple. How convenient: drop the money supply and we all get richer. :confused:

Money is NOT wealth. It is a medium of exchange only. You stated so yourself.

"Money is now worth more so more can be purchased with it."

This is so stupid that I almost fell off my chair. You cannot increase wealth of a nation by manipulating the currency.
Again, you stated so yourself. Do you realize how often you contradict yourself?



I am talking about the Great Depression's deflation on the money supply, which was NOT a normal thing.

Then why do you quote Rothbeard on productivity-gained VALUE? (Did you misunderstand the question?)



So you blame the gold standard for the government injecting credit into the economy in an effort to make it bigger, but which in reality just creates an unsustainable boom? You honestly think the problem was that they couldn't keep just throwing more dollars at the economy and telling it to grow? Even you recognize the fact that decreasing supply increases value, so why would purchases stop? The people who had money could buy more.
a) Why was the government spending more gold than it had?
b) Why was there lots of credit in circulation (I'll give you a hint, it starts with "G")

So then it follows that we should shrink the money supply? Less and less money, until there is only one dollar
left in the entire economy. And this is supposed to foster economic growth?

Why not think logically for a change. Your theories make absolutely NO SENSE. They are contradictory, in fact.



Really? I thought a major cause of unemployment was that FDR/Hoover wouldn't let wages drop to reflect the raise in the currencies purchasing power? Oh, but that must just be me...

Would YOU want your wages to DROP? Would YOU let THE GOVERNMENT tell you that your income must be taken away
in order that "capitalism could survive" or some other lame excuse? WOULD YOU? I doubt it. No one would allow this to happen.
No one is going to give up their hard-earned wages (especially not poor people) This would be seen as a form of tax.
And you, libbie, are against that kind of thing, aren't you?



Inflation prevents this raise in purchasing power, and it is just another way the government takes money from its civilians and lowers its standard of living.

You just said that the government has no right to take money, nor allow it to be taken: "FDR/Hoover wouldn't let wages drop..."

AH OO GA (contradiction alert!)

__________________________________________________ ____________________________
See folks, how Libertarians try to twist facts, spin and distort history, conjure up fantastic scenarios
of how "the government" is taking over your lives, yada yada yada. The FACTS ARE that it is the
capitalist who is ripping you off and ruining your lives. Consider health insurance, credit cards,
pharmaceuticals, real estate, etc. Who in America has not noticed the sky-high price increases?

Perhaps young, naive, live-at-home college students on their parents' health plan, who are studying Mises
and other Libertarian Liars? Get with it, people, and see through their smoke screen and hot air machine.

What is that saying... "What a tangled web we weave, when we practice to deceive..."

[LeftSideDown]

I KNEW you would say that. Money is not "arbitrarily" inflated, nor would a gold standard prevent it from being inflated
in the first place (which had happened many times before, while the gold standard existed)

How is it inflated? Why is 3% better than 2% or why is 1% better than 2%? The inflations of the gold standard (most notably in Spain after the plundering of the new world) aren't going to happen that much anymore. Aren't any real gold deposits left to discover.


And as I've said before, a nation's money supply must be slowly increased, in order to accommodate an increasing population.
It's quite simple: more people need to have money, so more money must be "manufactured." And this is entirely constitutional.

You've said it, you've not proven it. Why does it need to be improved as the population grows? Its just a medium of exchange. If its amount stays constant, than, as a medium of exchange, it comes to represent more and more possible goods (I shortened this to value you found funny for some reason). People don't need to hold more 1 dollar bills. I would be more than happy holding two quarters if they bought the same thing as a dollar bill, why do we need to keep the amount (not the value) of money in people's pockets constant?


If only it were that simple. How convenient: drop the money supply and we all get richer. :confused:

We're using different definitions of deflation. I use increase in purchasing power, you use reduction in the supply of money. We do all get richer when our money represents a larger amount and higher quality of goods. Yes.


Money is NOT wealth. It is a medium of exchange only. You stated so yourself.

There is no subjective measure of wealth. But if the medium of exchange increases in value in this function more, at least, material wealth can be purchased.


This is so stupid that I almost fell off my chair. You cannot increase wealth of a nation by manipulating the currency.
Again, you stated so yourself. Do you realize how often you contradict yourself?

I'm not talking about manipulating currency. I'm talking about maintaining its quality while productivity increases. The medium of exchange necessarily becomes more valuable, as it is representing more goods.


Then why do you quote Rothbeard on productivity-gained VALUE? (Did you misunderstand the question?)

What question? I quoted Rothbard to show you why the Great Depression lasted so long (state interference).


So then it follows that we should shrink the money supply? Less and less money, until there is only one dollar
left in the entire economy. And this is supposed to foster economic growth?

NONONONONONONO! Any amount of money (or a medium of exchange) is optimal, changing amounts are not. Our definitions of deflation are different. I advocate keeping the money supply constant, because reducing the money supply (artificially) trying to increase value causes just as mean problems as increasing money supply to decrease value. Keeping the money supply constant allows entrepreneurs to predict future demand and profits more readily.


Why not think logically for a change. Your theories make absolutely NO SENSE. They are contradictory, in fact.

Contradiction, where?


Would YOU want your wages to DROP? Would YOU let THE GOVERNMENT tell you that your income must be taken away
in order that "capitalism could survive" or some other lame excuse? WOULD YOU? I doubt it. No one would allow this to happen.
No one is going to give up their hard-earned wages (especially not poor people) This would be seen as a form of tax.
And you, libbie, are against that kind of thing, aren't you?

I can honestly tell you that I would not care one lick if my wages were one cent an hour if one cent an hour had the same purchasing power as being paid several dollars an hour. Nominal sums of money do not matter. As the Weimar republic will show you, barrels of money make no one rich (the alternative you are advocating, it seems).


You just said that the government has no right to take money, nor allow it to be taken: "FDR/Hoover wouldn't let wages drop..."

AH OO GA (contradiction alert!)

They don't have the right, but thats different than having the power and the will. Me saying thieves don't have the right to steal and then showing that thieves do isn't a contradiction. Perhaps you should look it up in the dictionary, or point out, more clearly, what you claim my contradiction is?


See folks, how Libertarians try to twist facts, spin and distort history, conjure up fantastic scenarios
of how "the government" is taking over your lives, yada yada yada. The FACTS ARE that it is the
capitalist who is ripping you off and ruining your lives. Consider health insurance, credit cards,
pharmaceuticals, real estate, etc. Who in America has not noticed the sky-high price increases?

Thank you for poisoning the well. I'd love more ad hominems they show how smart you are!

Notice how unregulated (relatively) industries like plastic surgery have been consistently dropping in price and raising in quality. But, nevermind, ignore it and set up more strawmans.

[ÑóẊîöʼn]

Really? It won't make me happy, ever?

Not in and of itself, no. Not unless you somehow derive pleasure from being (possibly fatally) injured and damaging your own stuff as well as the health, lives and posessions of others, in which case it seems most likely you would have mental health issues.


You can't prove whether or not something will make someone happy.

Individual tastes vary, but we human beings all like the same general things. We like being secure, we like being well-fed, we all like company to varying degrees. The generalities are more important than the particulars, and money and markets have proved themselves to be very bad at providing such generalities for everyone.


It could be that I hate that car so much that I want to personally destroy it. Are you going to say this wouldn't make me happy?

So you hate the car, and want to trash it, fine. But why risk life and limb to do so? Why potentially drag others into it by deliberately crashing it? What's wrong with just taking a sledgehammer to it if the destruction of the car is so important to you?


You come from the flawed premise that you can decide what can and cannot make others happy.

No I don't.


Or, as I said above, I could loathe the car. Or maybe I loathe the tree. Maybe I loathe myself and want to hurt myself and doing this would bring me happy.

Sounds like in this scenario, your judgement is greatly affected by mental health problems, possibly suicidal depression. I'm no doctor, but I'm pretty sure that healthy human beings have no desire to hurt themselves and possibly others.


It doesn't have to be money and there is no way you can even close to scientifically say that something will or will not make someone else happy. You can make generalizations (killing you won't make you happy), but even then there are contradictions (killing someone who is depressed/suicidal/wants to die may make them happy for an instant before they die).

A person who wants to kill or hurt themselves and possibly others in the process of doing so sounds not like someone making a reasoned choice, but someone who is ill and needs treatment, for their own safety.


There can be no objective standard or anything close to an objective standard for deciding what can/does make people happy, or even a standard for what "should" make people happy.

It depends on how particular one wants to be, don't you think? Obviously I can't decide for you whether you prefer shepherd's pie or chicken vindaloo for dinner, but I'd be willing to bet the rent money that you along with other people prefer having a home rather than being homeless, having food to eat rather than not having any, and having the opportunity to choose their own career path rather than having it dictated to them by economic circumstance. Because that's the reality of the system of money and markets that you espouse.


So why should anyone make decisions for anyone else regarding what they should and should not do, especially if they themselves can be "conned"? What makes one person's position so vastly superior that it gives him the right to decide for others what others should do?

Because money provides a direct incentive to mislead others. Money is political and economic power, and the cut-throat competitive nature of markets means that it makes to put profit margins before people. I want such a callously psychopathic system to be replaced with one that focuses on human welfare, respects intelligence and directly incentivises environmental and material sustainability. Money and markets manifestly do not achieve this.


More reason to not give power to an individual to decide whats best for others since he himself can be "conned", and then affect the lives of thousands (if hes given that power.

I'm not proposing a dictatorship. Besides, individuals' power to decide for themselves is presently circumscribed for reasons I have already mentioned. Your ideas, put into practice, have and will make a bad situation worse.


I don't have time to read the article right now, but I'll peruse it later.

I encourage you to read it at the earliest opportunity. I hope you will find it an eye-opener.


And yet if all goods were produced at cost we would have shortages everywhere. I've debated this with another socialist on this forums (if HD Tv's were suddenly being sold at cost they would all be gone in less than a week)

Under the system I'm proposing, goods would be produced "for use" rather than "for sale". Money would not change hands as it would not exist. You're still operating under the paradigm of scarcity economics.


and there simply isn't the productive capacity to give everybody a mansion, a yacht, two cars, 3 good meals a day, and a cat.

Hang on, I thought you said that people wanted different things?

Besides, you are confusing posession of material objects with quality of life. There are more efficient ways of providing people with plentiful living space than giving everyone mansions. Yachts and cars can be kept in a communal motorpool for anyone to take out when they feel like it, and at the end of use can be returned for maintenance and repairs, after which they would be free for someone else to use. We already produce food enough for everyone (money and markets just cannot distribute them based on need), and not everyone likes cats.


There doesn't have to be a market for rationality to still be subjective. How can you not see this?

Because it's irrelevant. The rules of logic are certainly not subjective, but logic is like a computer - garbage in, garbage out.


You sound really angry. Perhaps you should take a deep breath?

It's justified anger.


Self-interest is different than selfishness. The "greedy" have done more for this world than the mightiest philanthropists.

Bullshit.


I never said people should shit on those who are unfortunate, merely that there isn't/shouldn't be any innate positive obligation to help them. If there is you're guilty of perfomative contradiction by having a computer and all the other stuff I imagine you have.

"Shitting on other people" is what your proposal that charity should be the main or only force for providing for the less fortunate is tantamount to. As for "performative contradiction" I've already explained to you that I can barely afford to feed myself. I may be better off materially speaking than some "third-world" subsistence farmer, but my living costs are correspondingly higher.


Lol?

It's not a laughing matter according to Russians who aren't rich and powerful.


Better than it was doing under the genocidal central government... would you like statistics? I wouldn't want ot live there but its ignorant to say its worse off.

Body armour is recommended fashion on the streets of Mogadishu, which wasn't the case before. Piracy is nice little earner, but it's hard to do much else if you can't fish.


A-ha! You have a home! What are you doing living in luxury you greedy greedy man?

I'm lucky to even have one. I want everyone, and I mean, everyone on this tortured little planet, to have the homes they need. You want to perpetuate the system that maintains this deplorable state of affairs. I want to replace it with something better with the specific aim of lifting the vast majority of people up to my level, preferably better. Who's greedy now?


Compared to the rich? Maybe. Compared to people a century ago? Your standard of living is probably twice as high. Compared to people in africa? You're a king. Poor is subjective, and you're rich in comparison to others, so what gives you the right to this stuff, Mister?

The same things that give everyone else the "right" to a decent standard of living. Besides, I don't have the de facto "right" to any of my posessions, whatever the law says.


Still sounds better than how most of the world is living. Honestly, always thinking about what you don't have. Think of the millions who have less that deserve your stuff. Come on man, get choppin' and start craigslisting that junk.

I told you that charity alone isn't enough. If I were to beggar myself even further helping others, it would do nothing to change an economic system that creates beggars out of the vast majority of the people on this planet. I can do far more if I were to actually earn enough to feed myself properly.


Still am saying, you're comparatively rich.

Yes, if I were living in Sub-Saharan Africa then I could use my comparitively vast wealth to help others. But I can't do that in a country where it costs me an arm and a leg to feed myself and heat the flat in winter.


Some people cannot afford to feed themselves, you're living high on the hog Mister. What gives you the right to this comparatively opulent lifestyle? You have plenty if you compare yourself to people other than BIll gates.

Yes, compared to a lot of people I am rich and have a better quality of life. But I want the situation to be improved not just for myself, but for everyone else as well. Whereas you want it to be easier for the rich to get richer and the poor to get poorer.


I don't think myself spoilt, but I think I've proven you're just as self-centered, or at least thats what your actions (or maybe your lack of actions) seem to indicate.

You asked questions and made assumptions about my personal situation, so I answered and elaborated thusly. My time and money is currently extremely limited, and I'm working on that.


I'm proving that either you have goods and services lacked by most of the world and don't feel an obligation to give them up to help others because you're poorer than Bill Gates. However, almost any amount of material wealth you have in the United States is so much higher than most of the world its ridiculous that you are complaining at all.

My primary concern is not there's not enough charity (even if there isn't, especially on the part of the obscenely wealthy). The problem is precisely that charity - giving up one's time and resources to give to others - doesn't address the fundamental problems that require charity in the first place.


Does make shit clear up faster.

Doesn't change the fact it does. Positive thinking exercises may be attractive to those of a New Age bent, but they can't change the bank balance of a family that has been ruined with medical expenses.


It was a Cato institute article linking to a Wall Street Journal article, so yes I'm asking you to take it seriously. And the World Health Organization sites them as the among the healthiest, but 13% (the highest proportion in the world) are receiving disability benefits.

Considering an awful lot of countries can barely afford a social safety net, it doesn't surprise me that Sweden is among the most generous.


Do you know understand the problem? They ARE healthy and yet are defrauding a system thats meant to help those that are actually healthy and taking funds that could be used for sick people.

They are "of working age" that is not the same thing as "fit to work".


But I guess its okay, they can afford it; nothing is ever wrong if someone can afford it. "What? I broke your arm? Well you have savings that can get you through this, you can afford it, therefore its okay that I broke your arm".

Asinine comparison. Are the majority of claims fraudulent? You have not proved this. Even if they are, that is an argument for tightening up means testing, not throwing the baby out with the bathwater and thus hanging out genuine claimants to dry.


"During the 2002 monthlong World Cup soccer finals, short-term sick leave among Swedish men suspiciously rose by 55%. Earlier this year, police in Sweden’s capital city Stockholm investigated the local chapter of the Hell’s Angels biker gang for suspected benefit fraud, because 70% of the gang were on extended sickness benefits. The same doctor had certified them all as suffering from depression."

This is okay though... yep.

OK, so benefit fraud happens. But if there was a guaranteed high standard of living, there would be no need for benefits and thus no benefit fraud.


It couldn't have been Detroits fault at all, right? Capitalists just decided to arbitrarily (and no doubt expensively) relocate for no reason, right? Hey! At least they aren't being exploited anymore, right?

Economic necessity may have motivated the move, but the result was misery nonetheless.

[Klaatu]

Originally Posted by EnviroWhacko View Post
And as I've said before, a nation's money supply must be slowly increased, in order to accommodate an increasing population.
It's quite simple: more people need to have money, so more money must be "manufactured." And this is entirely constitutional.
U.S. Constitution - Article 1 Section 8
http://www.anonym.to/?http://www.usconstitution.net/xconst_A1Sec8.html
"The Congress shall have Power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"



You've said it, you've not proven it. Why does it need to be improved as the population grows? Its just a medium of exchange. If its amount stays constant, than, as a medium of exchange, it comes to represent more and more possible goods (I shortened this to value you found funny for some reason). People don't need to hold more 1 dollar bills. I would be more than happy holding two quarters if they bought the same thing as a dollar bill, why do we need to keep the amount (not the value) of money in people's pockets constant?

I am going to provide you an analogy (free of charge!)

Imagine there is a small island of ten inhabitants. Each has their talent. One is a teacher, one is a baker, one is a carpenter, etc.
They must set up a monetary system. Each citizen has one dollar. (divisible into 100 units: cents)

Things are going well. They trade with each other, and are happy with their socialistic community. Then one day, a newcomer
joins the town (he floated in on a raft from the high seas) These kind-hearted socialists take in this starving, wretched soul into
their group. He has a talent, and begins to produce work; and the others buy from his output (clay pots).

But since there is only ten dollars in this entire "economy," everyone must sacrifice 10% of their income, in order to share
with the new pottery expert. (each then has only 91 cents.) Now, rather than give up 10%, a better solution is proposed:
Why not just create an extra "dollar" in the economy, so that this newcomer can be efficiently accommodated? (this way
everyone still has one dollar.) In short, money supply must be increased, by one dollar, in order to blend the newcomer
into the society.

[LeftSideDown]

Not in and of itself, no. Not unless you somehow derive pleasure from being (possibly fatally) injured and damaging your own stuff as well as the health, lives and posessions of others, in which case it seems most likely you would have mental health issues.

If your definition of "mental health issues" is "partaking in dangerous activities or doing things that could harm your body. Than almost everyone has mental health issues. I have consumed alcohol (self destructive), I have consumed sugary candy's (self destructive), I have done martial arts (self destructive), I have driven a car (self destructive (40,000 people die on the roads a year (50000 died in Vietnam in 7-8 years)). Where do you draw the line, and how can you say at all that its not arbitrary? In and of itself, the car crasher might not have enjoyed driving the vehicle, but enjoyment of the means does not determine the enjoyment of the ends. For instance, I do not enjoy working, however I enjoy money (or the goods it represents). So he does not have to enjoy it "in and of itself" (the act of driving that is, he could very well enjoy the act of smashing his car "in and of itself")


Individual tastes vary, but we human beings all like the same general things. We like being secure, we like being well-fed, we all like company to varying degrees. The generalities are more important than the particulars, and money and markets have proved themselves to be very bad at providing such generalities for everyone.

So if someone likes rock climbing (unsecure), being a survivalist (not well-fed), camping alone (not liking company) they have mental health issues? Because it seems to me that the particulars matter very much and they are what give variety to an otherwise dull and routine life (the life of no risk you seem to be describing).


So you hate the car, and want to trash it, fine. But why risk life and limb to do so? Why potentially drag others into it by deliberately crashing it? What's wrong with just taking a sledgehammer to it if the destruction of the car is so important to you?

Because I would get more pleasure by crashing it myself? Who are you to judge the rationality of an action other than your own?


No I don't.

Really? Because it seems to me anyone that doesn't do normal things has mental health issues.


Sounds like in this scenario, your judgement is greatly affected by mental health problems, possibly suicidal depression. I'm no doctor, but I'm pretty sure that healthy human beings have no desire to hurt themselves and possibly others.

But if everyone did these things would they considered healthy? Its so subjective. It used to be normal to constrict women's feet in China in order to make them smaller. Did all of them have mental health issues? Maybe from our standpoint today they may have looked like they did, but do you not see the cultural bias/egotism? I don't think anyone back then thought it was a mental health issue. Values change, and I'd rather not be stuck in one.


A person who wants to kill or hurt themselves and possibly others in the process of doing so sounds not like someone making a reasoned choice, but someone who is ill and needs treatment, for their own safety.

So you advocate a nanny state/society? Or what? Making everybody think the same, or "normally"? Haha, I can't imagine anything but negative reductio ad absurdums from your statement, but the worse I can think of from mine is suicidal committing suicide and people who are into BDSM doing BDSM. However, if they start harming others (who are unwilling) with their actions (and not emotionally, but physically) than they should be restrained and punished, but individual actions only involving the individual should be up to the individual.


It depends on how particular one wants to be, don't you think? Obviously I can't decide for you whether you prefer shepherd's pie or chicken vindaloo for dinner, but I'd be willing to bet the rent money that you along with other people prefer having a home rather than being homeless, having food to eat rather than not having any, and having the opportunity to choose their own career path rather than having it dictated to them by economic circumstance. Because that's the reality of the system of money and markets that you espouse.

Why can't you? You can decide that people shouldn't like BDSM ("They have mental health issues") but its okay if they like "normal" copulation. And I'm sure people would prefer mansions to apartments, steak to hamburger, and champagne instead of box wine, but how far do you go in destroying wealth producers to achieve these ends? Who decides what the minimum is? The minimum has changed so much, poverty today was how kings used to live. Everyone, I'm sure, wants to be writers. Are you going to make a society of writers?


Because money provides a direct incentive to mislead others. Money is political and economic power, and the cut-throat competitive nature of markets means that it makes to put profit margins before people. I want such a callously psychopathic system to be replaced with one that focuses on human welfare, respects intelligence and directly incentivises environmental and material sustainability. Money and markets manifestly do not achieve this.

Profit = how well you are meeting consumer's (This is a big word for peoples) demands. All of these things you are attributing to capitalism are just opinions (and wrong ones at this). But let me do this for communism. I want a system that focuses on the individual, respects hard work and drive, incentivizes progress, and creates a higher standard of living for everyone, not one that recklessly consumes capital, misallocates resources, reduces everyone to be robots to be used by others/the state, and has created such things as a nomenklatura under the guise of equality.


I'm not proposing a dictatorship. Besides, individuals' power to decide for themselves is presently circumscribed for reasons I have already mentioned. Your ideas, put into practice, have and will make a bad situation worse.

You're right, everyone is much worse off than they were 500 years ago. Individuals would decide to give themselves mansions of gold, rolls royces, movie theaters to play video games on, and other such things. All capitalism does is make them produce these things before they can get them.


I encourage you to read it at the earliest opportunity. I hope you will find it an eye-opener.

I did and I wrote a refutation: http://mises.org/Community/forums/t/15948.aspx
here.


Under the system I'm proposing, goods would be produced "for use" rather than "for sale". Money would not change hands as it would not exist. You're still operating under the paradigm of scarcity economics.

Because economics only works under scarcity? And you cannot eliminate scarcity at all. There is a limited amount of stuff in the universe so there is an ultimate scarcity, and I don't think you realize abundant is relative. Kings lived in abundance compared to peasants, but they live in abject poverty compared to even the middle class of today.


Hang on, I thought you said that people wanted different things?

They do, I chose random goods that are expensive.


Besides, you are confusing posession of material objects with quality of life. There are more efficient ways of providing people with plentiful living space than giving everyone mansions. Yachts and cars can be kept in a communal motorpool for anyone to take out when they feel like it, and at the end of use can be returned for maintenance and repairs, after which they would be free for someone else to use. We already produce food enough for everyone (money and markets just cannot distribute them based on need), and not everyone likes cats.

And if people do not want the plentiful living space that you provide they can just go screw themselves? And what about on friday nights, or something, when everyone wants to go out in cars? First come, first serve? Thats fair I guess, its the same way it will work with just about everything else that IS still scarce (which is everything, but to varying degrees).


Because it's irrelevant. The rules of logic are certainly not subjective, but logic is like a computer - garbage in, garbage out.

I think its very relevant that an action for one person can be rational while, for an outsider considering it, it could look very irrational.


It's justified anger.

And, I'm sure, when the revolution comes and everyone who differs with the majority's opinion is up against the wall it will be "justified" murder.


Bullshit.

Really? Because I thought it was people motivated by profit (for the most part) who spend all their time trying to make things that consumer's want (dumb things really, like cars, steam engines, the telegram) and finding a market for them. But I guess the philanthropists are all busy doing this.


"Shitting on other people" is what your proposal that charity should be the main or only force for providing for the less fortunate is tantamount to. As for "performative contradiction" I've already explained to you that I can barely afford to feed myself. I may be better off materially speaking than some "third-world" subsistence farmer, but my living costs are correspondingly higher.

But you can afford to feed yourself, others cannot and are starving. What gives you the right to live and denies them the right?


It's not a laughing matter according to Russians who aren't rich and powerful.

Your support of that healthcare system is a laughing matter, however.


Body armour is recommended fashion on the streets of Mogadishu, which wasn't the case before. Piracy is nice little earner, but it's hard to do much else if you can't fish.

But you don't contest that it has improved? Just because there aren't unicorns shitting rainbows doesn't mean that it hasn't improved. Honestly, people site Somalia so often when they don't even know what it was like before.

"In 1970, under the influence of the Soviet Union, Barre (the dictator, I doubt you've heard of him) transformed his military dictatorship into a socialist one. Full-scale central planning pursued under the government's policy of "scientific socialism" brutalized the Somali people. The government slaughtered civilians who posed threats to the government's plans or political power, used coercive intimidation to create artificial support for its activities, and forcibly relocated others to further the political or economic ends of Barre and his cronies. "Both the urban and nomads living in the countryside [were] subjected to summary killings, arbitrary arrest, detention in squalid conditions, torture, rape, crippling constraints on freedom of movement and expression and a pattern of psychological intimidation" (Africa Watch Committee 1990: 9)."

Gossip was a capital offense. 20 basic civil liberties, including free speech, association, and organization, also carried the death penalty.

Source:(http://www.peterleeson.com/Better_Off_Stateless.pdf)

in case its tl;dr
http://hphotos-snc3.fbcdn.net/hs483.snc3/26455_1428836046433_1398782459_31990890_5528850_n. jpg


I'm lucky to even have one. I want everyone, and I mean, everyone on this tortured little planet, to have the homes they need. You want to perpetuate the system that maintains this deplorable state of affairs. I want to replace it with something better with the specific aim of lifting the vast majority of people up to my level, preferably better. Who's greedy now?

You are. You feel you have an obligation to help all those who are worse off and yet you are not fulfilling your obligation. You're being greedy, I"m just being realistic.


The same things that give everyone else the "right" to a decent standard of living. Besides, I don't have the de facto "right" to any of my posessions, whatever the law says.

Whats a decent standard of living? It changes; it is subjective. You have the right to control your body; all property rights stem form this.


I told you that charity alone isn't enough. If I were to beggar myself even further helping others, it would do nothing to change an economic system that creates beggars out of the vast majority of the people on this planet. I can do far more if I were to actually earn enough to feed myself properly.

It doesn't matter how much or little it would do. You have an obligation to them. If you don't fulfill it you're being hypocritical.


Yes, if I were living in Sub-Saharan Africa then I could use my comparitively vast wealth to help others. But I can't do that in a country where it costs me an arm and a leg to feed myself and heat the flat in winter.

But you can still feed and your flat whereas some people have neither heat, nor food, nor a flat. If there is an obligation to help these people you are guilty of performative contradiction. If there is not than all I recognize is that my richness (or poorness) isn't what makes others rich (or poor) and that while is is laudable to donate to charity you are by no means obligated to.


Yes, compared to a lot of people I am rich and have a better quality of life. But I want the situation to be improved not just for myself, but for everyone else as well. Whereas you want it to be easier for the rich to get richer and the poor to get poorer.

The poor have not gotten poorer (at least not in the US), as almost any indicator will show you. Besides, poor is relative. If you use comparisons to rich today, than yeah, tons are poor. If you use comparisons to 500 years ago tons are rich. The whole point is that socialism won't improve anybody. It certainly didn't improve Somalia.


You asked questions and made assumptions about my personal situation, so I answered and elaborated thusly. My time and money is currently extremely limited, and I'm working on that.

For your own gain, doubtless. You are a greedy man who furthers the capitalist system. I think you should be restricted :rolleyes:


My primary concern is not there's not enough charity (even if there isn't, especially on the part of the obscenely wealthy). The problem is precisely that charity - giving up one's time and resources to give to others - doesn't address the fundamental problems that require charity in the first place.

Oh yes, what produces poverty is not enough equality of wealth, even though, when I did the math, if we distributed all of the forbes 400 wealth to everyone we would get about 700 dollars. There goes poverty!


Doesn't change the fact it does. Positive thinking exercises may be attractive to those of a New Age bent, but they can't change the bank balance of a family that has been ruined with medical expenses.

I don't support the system we have, or had, because government had gotten itself involved and ruined everything. There was a problem in the early 1900's with healthcare; it was too cheap. Don't worry, the government fixed that.

[/URL]

[URL="http://libertariannation.org/a/f12l3.html"] (http://www.associatedcontent.com/article/2490471/time_to_discharge_the_state_from_our.html?cat=9)

Or, if you want to read something humorous written by a doctor in 1910
http://query.nytimes.com/mem/archive-free/pdf?_r=2&res=9507E2D71F39E333A25755C0A9679D946196D6CF


They are "of working age" that is not the same thing as "fit to work".

THEY ARE SOME OF THE HEALTHIEST PEOPLE IN THE WORLD.


Asinine comparison. Are the majority of claims fraudulent? You have not proved this. Even if they are, that is an argument for tightening up means testing, not throwing the baby out with the bathwater and thus hanging out genuine claimants to dry.

THE POINT IS THE MAJORITY OF THE CLAIMS ARE FRAUDULENT BECAUSE THE SWEDES ARE SOME OF THE HEALTHIEST PEOPLE IN THE WORLD.


OK, so benefit fraud happens. But if there was a guaranteed high standard of living, there would be no need for benefits and thus no benefit fraud.

"IF we lived in utopia we wouldn't have problems".


Economic necessity may have motivated the move, but the result was misery nonetheless.

If I do something out of necessity is it wrong? If I kill someone in the necessity of self defense is it bad? If I relocate my company because I would go out of business because unions are charging too much and at least I'll be able to employ someone gainfully if I move rather than no one if I go out of business is this bad?

[LeftSideDown]

Originally Posted by EnviroWhacko View Post
And as I've said before, a nation's money supply must be slowly increased, in order to accommodate an increasing population.
It's quite simple: more people need to have money, so more money must be "manufactured." And this is entirely constitutional.
U.S. Constitution - Article 1 Section 8
http://www.anonym.to/?http://www.usconstitution.net/xconst_A1Sec8.html
"The Congress shall have Power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"


Slavery and hanging were both accepted as okay when the Constitution was passed, does that make these institutions okay? The constitution, while an overall good, is not infallible.


I am going to provide you an analogy (free of charge!)

Imagine there is a small island of ten inhabitants. Each has their talent. One is a teacher, one is a baker, one is a carpenter, etc.
They must set up a monetary system. Each citizen has one dollar. (divisible into 100 units: cents)

Things are going well. They trade with each other, and are happy with their socialistic community. Then one day, a newcomer
joins the town (he floated in on a raft from the high seas) These kind-hearted socialists take in this starving, wretched soul into
their group. He has a talent, and begins to produce work; and the others buy from his output (clay pots).

But since there is only ten dollars in this entire "economy," everyone must sacrifice 10% of their income, in order to share
with the new pottery expert. (each then has only 91 cents.) Now, rather than give up 10%, a better solution is proposed:
Why not just create an extra "dollar" in the economy, so that this newcomer can be efficiently accommodated? (this way
everyone still has one dollar.) In short, money supply must be increased, by one dollar, in order to blend the newcomer
into the society.

What are you trying to avoid by inflating a dollar? Price changes? The FEELING that everyone is poor?
1) Creating an extra dollar would waste resources (no matter how cheap it is, this is true)
2) 91 cents means nothing. 91 cents now = 1 dollar then. Prices will adjust so this is true.
3) Inflating a dollar would cause distortions (at least for a time). Do you think if the united states added 10% to the current amount of money circulating (lets say directly deposited 10% of the money circulating in the economy into everyone's bank account, divided evenly by the population) would not cause massive distortions?
4) The clay pots themselves will change the balance (the thing you're trying to maintain through your inflation) because some people might demand pots more than other goods.
5) His introduction will cause issues no matter what you do, why waste resources to make everyone think they're richer? IF they just gave 10% of their income to him (lets say hes already produced enough to add one dollar in value (old value, not new) to the economy) they would lose nothing. It only looks like they are losing nominally, not in reality.

[Klaatu]

Slavery and hanging were both accepted as okay when the Constitution was passed, does that make these institutions okay?
The constitution, while an overall good, is not infallible.

1)Holy shit. A Libertarian admitting that the U.S. Constitution is "not infallible?" (priceless)

2)Slavery was NOT IN the Constitution (until the 13th amendment was passed, prohibiting and abolishing it)

I am sorry you do not comprehend this simple island model, and your attempt to pick it apart is extraordinarily weak.

1) Creating an extra dollar would waste resources (no matter how cheap it is, this is true)

On the contrary it would PROVIDE a job (to the metalworker) or the "dollar" can just be a rare sea shell or something.

2) 91 cents means nothing. 91 cents now = 1 dollar then. Prices will adjust so this is true.

Prices adjust? In this small community, no one is going to drop their price nor wage, when the alternative
of "creating" another dollar preserves the status quo (which would be perceived as being the more desirable alternative)

3) Inflating a dollar would cause distortions (at least for a time). Do you think if the united states added
10% to the current amount of money circulating (lets say directly deposited 10% of the money circulating
in the economy into everyone's bank account, divided evenly by the population) would not cause massive distortions?

First off, this is about this island, not a large country. Keep the model simple.

Why don't you see that "the distortion" itself was the entry of new inhabitant? The new dollar itself
is put into place in order to offset this distortion. Your suggestion would be true only if we put TWO
dollars into circulation. Yes, then there might be distortions (rising prices, net loss to money lenders, etc)
So we keep it at ONE dollar only.

4) The clay pots themselves will change the balance (the thing you're trying to maintain through your inflation)
because some people might demand pots more than other goods.

(might?) If so, then the clay pot manufacturer becomes richer. (I should have said that he made dope.
That would have REALLY made him richer!!!)

5) His introduction will cause issues no matter what you do, why waste resources to make everyone think they're richer?
IF they just gave 10% of their income to him (lets say hes already produced enough to add one dollar in value (old
value, not new) to the economy) they would lose nothing. It only looks like they are losing nominally, not in reality.

The whole point is NOT to make the people "feel richer," the point is to NOT make them feel poorer.
(which they would feel like if they were forced to drop their prices and wages - make sense now???)

[LeftSideDown]

1)Holy shit. A Libertarian admitting that the U.S. Constitution is "not infallible?" (priceless)

You are silly if you think libertarians base their philosophy off the Constitution. It is not our bible. Honestly perhaps you should do some research on this opposing ideology.


2)Slavery was NOT IN the Constitution (until the 13th amendment was passed, prohibiting and abolishing it)

Really? Because there is a provision that allows the slave trade to continue until 1808.


On the contrary it would PROVIDE a job (to the metalworker) or the "dollar" can just be a rare sea shell or something.

Its an unproductive job. Unless the medium of exchange has uses (like Gold has) than it is a waste of time to get more of it. You may as well advocate digging holes and then filling them back in; this is about how productive the job of creating money is. Besides you said it was one dollar (inferring paper) and it was made up of 100 cents. I don't think you can just change your situation like this.


Prices adjust? In this small community, no one is going to drop their price nor wage, when the alternative
of "creating" another dollar preserves the status quo (which would be perceived as being the more desirable alternative)

Why not? You're assuming all of these people are dumb (which I guess they are if they're socialist, but I digress), however even they will recognize that their old prices are unsustainable at the current money supply. And you're right about it maintaining the status quo. Thats why Keynes advocated it, because deflation necessarily weeds out old wealth and new people come on that are not of the gentry. Keynes was very much an inflationist because he wanted there to be a constant ruling class.


First off, this is about this island, not a large country. Keep the model simple.

It still changes behavior, surely you will recognize this?


Why don't you see that "the distortion" itself was the entry of new inhabitant? The new dollar itself
is put into place in order to offset this distortion. Your suggestion would be true only if we put TWO
dollars into circulation. Yes, then there might be distortions (rising prices, net loss to money lenders, etc)
So we keep it at ONE dollar only.

Its a distortion because it doesn't occur often. In a large country people are constantly moving in and out so it is not a very apt analogy, but i will continue to attack it. So, the guy comes in and you give him a dollar. No new wealth has been created. So when he tries to buy things at the price (since they have not changed and he has not yet worked) there will be a shortage.

If you give everyone 10% more money that does not mean you can buy 10% more. The amount of goods in the economy is constant and you gave him the money before he produced anything. So either prices will have to raise or there will be a shortage. Either way there is no way to "soften" the distoriton.


(might?) If so, then the clay pot manufacturer becomes richer. (I should have said that he made dope.
That would have REALLY made him richer!!!)

Whats the point of this? His good might not be demanded more than any other good in which case distortion in this way would not be very significant.


The whole point is NOT to make the people "feel richer," the point is to NOT make them feel poorer.
(which they would feel like if they were forced to drop their prices and wages - make sense now???)

No it doesn't make sense. Why don't we just throw dollars at all people who are impoverished? Make them feel like they're not poorer, this will solve all our problems! Anyway the introduction of new money does not create more goods, and giving him a dollar when there aren't a dollars worth of new goods will cause problems, can you not see this? Let me make it larger so you will see.

If everyone (at the current price) was given a million extra dollars and told to spend it all would there be enough goods at the current price? Of course not. This would happen (albeit on a smaller but still noticeable (10%) scale on the island.) I would not feel poor at all if I had only 1 dollar but I knew that dollar could buy a hummer.

[Klaatu]

You are silly if you think libertarians base their philosophy off the Constitution. It is not our bible. Honestly perhaps you should do some research on this opposing ideology.

I HAVE read all of your half-ass literature, and rejected every premise of it. So I know exactly how YOU think.

And if you do not "base your philosophy off the Constitution," why don't you pack up and leave.
Go form your own thirteen colonies out there in the jungle somewhere. Oh and don't cheat the
natives with your capitalist tricks (they might eat you in retaliation) ;)



Really? Because there is a provision that allows the slave trade to continue until 1808.

citation needed



Its an unproductive job. Unless the medium of exchange has uses (like Gold has) than it is a waste of time to get more of it. You may as well advocate digging holes and then filling them back in; this is about how productive the job of creating money is. Besides you said it was one dollar (inferring paper) and it was made up of 100 cents. I don't think you can just change your situation like this.

So fucking what? You said yourself that money can take many forms, as long as people accept it.
http://www.revleft.com/vb/showpost.php?p=1718350&postcount=93

I did NOT "infer paper." A "dollar" can be anything. The word "dollar" is a NAME only. Let's call their currency unit "Rubles." OK now?



Why not? You're assuming all of these people are dumb (which I guess they are if they're socialist, but I digress),
however even they will recognize that their old prices are unsustainable at the current money supply. And you're
right about it maintaining the status quo. Thats why Keynes advocated it, because deflation necessarily weeds out
old wealth and new people come on that are not of the gentry. Keynes was very much an inflationist because he
wanted there to be a constant ruling class.

So it is "right," yet "dumb," to maintain the status quo? What are you smoking, mister?

On the other hand, maybe it is DUMB to be on the "right" wing of American politics...



It still changes behavior, surely you will recognize this?

???



So, the guy comes in and you give him a dollar. No new wealth has been created. So when he tries to buy
things at the price (since they have not changed and he has not yet worked) there will be a shortage.

He makes CLAY POTS (do you have short-term memory loss?)



If you give everyone 10% more money that does not mean you can buy 10% more. The amount of goods in the
economy is constant and you gave him the money before he produced anything. So either prices will have to raise
or there will be a shortage. Either way there is no way to "soften" the distoriton.

Now, what didn't I just say?



Whats the point of this? His good might not be demanded more than any other good in which case distortion
in this way would not be very significant.

You just said in your last post that the demand could be very high :"4) The clay pots themselves will change the balance (the thing you're trying to maintain through your inflation) because some people might demand pots more than other goods."

(or is it YOU that is "high?")



No it doesn't make sense. Why don't we just throw dollars at all people who are impoverished? Make them feel like they're
not poorer, this will solve all our problems! Anyway the introduction of new money does not create more goods, and giving
him a dollar when there aren't a dollars worth of new goods will cause problems, can you not see this? Let me make it larger
so you will see.

If everyone (at the current price) was given a million extra dollars and told to spend it all would there be enough goods at
the current price? Of course not. This would happen (albeit on a smaller but still noticeable (10%) scale on the island.)
I would not feel poor at all if I had only 1 dollar but I knew that dollar could buy a hummer.

Talk about circular reasoning. Please go back and re-read this thread from the beginning, to see how often you
contradict yourself (something which Libertarians are awfully good at doing - and you call Socialists "stupid")
Seems to me that you have a bad case of foot-in-mouth disease) :p

[LeftSideDown]

I HAVE read all of your half-ass literature, and rejected every premise of it. So I know exactly how YOU think.

And if you do not "base your philosophy off the Constitution," why don't you pack up and leave.
Go form your own thirteen colonies out there in the jungle somewhere. Oh and don't cheat the
natives with your capitalist tricks (they might eat you in retaliation) ;)

So, if I do not agree with every facet of the Constitution I should leave? If my philosophy is not based off the Constitution, but the Constitution very much agrees with much of my philosophy I need to go start another country? Honestly, do you see how silly you're getting?

"In Article 1, Section 9, Congress is limited, expressly, from prohibiting the "Importation" of slaves, before 1808. The slave trade was a bone of contention for many, with some who supported slavery abhorring the slave trade. The 1808 date, a compromise of 20 years, allowed the slave trade to continue, but placed a date-certain on its survival. Congress eventually passed a law outlawing the slave trade that became effective on January 1, 1808."


So fucking what? You said yourself that money can take many forms, as long as people accept it.
http://www.revleft.com/vb/showpost.php?p=1718350&postcount=93

I did NOT "infer paper." A "dollar" can be anything. The word "dollar" is a NAME only. Let's call their currency unit "Rubles." OK now?

Yes it can take many forms. I assumed the form it was taking was the form of a dollar (Since the islanders already had them when they crashed on the island... be kinda silly if they were all carrying shells or whatever). But okay. I will accept that it is a precious seashell which fulfills no consumer need other than as a medium of exchange. Do you think the society becomes richer by making more of these shells?


So it is "right," yet "dumb," to maintain the status quo? What are you smoking, mister?

I don't see how I said this at all. It isn't right to maintain status quo, unless the status quo is the best at meeting consumer demand. I am smoking nothing; I think it is a rather gross habit although I respect other's right to do it.


???

Giving a society the idea that they have more wealth than they do changes behavior, no? Maybe because of all the "profits" brought about by this man they go on vacation, get back and realize that they are going to have to without food for a few days because while they were gone prices rose.


He makes CLAY POTS (do you have short-term memory loss?)

But he hadn't yet. You gave him a dollar because he was a human that you wanted to help. He hadn't created anything yet (he was still recovering from being shipwrecked I guess), but you still gave him the money that was supposed to redeem him 1 dollar's worth of goods while he had not yet (and may never) contribute 1 dollar's worth to the economy (one dollar being one eleventh of the economy).


Now, what didn't I just say?

I do not know what you are going to say before you say it, so attacking me because I asserted the same thing twice that you feel you need only refute once is silly.


You just said in your last post that the demand could be very high :"4) The clay pots themselves will change the balance (the thing you're trying to maintain through your inflation) because some people might demand pots more than other goods."

(or is it YOU that is "high?")

I said demand "could" be very high. I was responding to your (might?) comment by saying it could be anything. It will change the balance, you haven't refuted this at all. Demand could be high, low, or anything in between.


Talk about circular reasoning. Please go back and re-read this thread from the beginning, to see how often you
contradict yourself (something which Libertarians are awfully good at doing - and you call Socialists "stupid")
Seems to me that you have a bad case of foot-in-mouth disease) :p

I do not feel as if I have contradicted myself, but if you would like to point them out for me I'd be happy to review these instances you speak of.

[Klaatu]

This polemic is silly. And your reasoning is flawed.

You are asking citizens to accept a drop in their (already-minuscule) wages, in order to accommodate an influx of
new immigrants. Good luck with that. It is safer to inject the appropriate amount of new money. That way people
will never know the difference.

[LeftSideDown]

This polemic is silly. And your reasoning is flawed.

You are asking citizens to accept a drop in their (already-minuscule) wages, in order to accommodate an influx of
new immigrants. Good luck with that. It is safer to inject the appropriate amount of new money. That way people
will never know the difference.

So some knowing bureaucrat will just protect the presumably dumb population from facing economic reality by decreasing the purchasing power of the money they do have but keeping it the same in nominal terms?

You realize you are advocating going behind people's backs and stealing from them money that they think they have just to keep them from "knowing the difference"? What kind of monster are you?

[Klaatu]

So some knowing bureaucrat will just protect the presumably dumb population from facing economic reality by decreasing the purchasing power of the money they do have but keeping it the same in nominal terms?

You realize you are advocating going behind people's backs and stealing from them money that they think they have just to keep them from "knowing the difference"? What kind of monster are you?
According to your profile, you are a freshman in college. You probably flip burgers at the local grease pit.
Now assume that you work hard all week. Your boss informs you that you will be getting a pay cut (from
minimum wage, down to $4 per hour) This is so that immigrants (and illegals too) can have money to spend.
Will you take the pay cut for your brothers?

The pay cut will involve your coworkers too. Surely you can explain to them your economic theories?
Surely they will follow you and rally behind you - in fact they will demand pay cuts?

Now suppose that, on the other hand, your boss does not do this after all. Will you offer to have your
hard-earned wages cut? That is, in order to support massive immigration? Will you do this???

[LeftSideDown]

According to your profile, you are a freshman in college. You probably flip burgers at the local grease pit.
Now assume that you work hard all week. Your boss informs you that you will be getting a pay cut (from
minimum wage, down to $4 per hour) This is so that immigrants (and illegals too) can have money to spend.
Will you take the pay cut for your brothers?

The pay cut will involve your coworkers too. Surely you can explain to them your economic theories?
Surely they will follow you and rally behind you - in fact they will demand pay cuts?

Now suppose that, on the other hand, your boss does not do this after all. Will you offer to have your
hard-earned wages cut? That is, in order to support massive immigration? Will you do this???

This is the dumbest most unrealistic thing ever. I'm sorry, I cannot respond; I am laughing too hard.

[RGacky3]

is it more rediculous than claiming that a community would democratically enslave red haired people?

[Bud Struggle]

is it more rediculous than claiming that a community would democratically enslave red haired people?

Well as illogical as it may seem they've done that with dark skinned people.

[RGacky3]

Well as illogical as it may seem they've done that with dark skinned people.

Was that done demoratically? No. I don't seem to recall a vote in which black people were included that stated allowed dark people tobe enslaved, slavery was instituted before political democracy, and claiming it was a democratic institution is rediculous.

[Havet]

Was that done demoratically? No. I don't seem to recall a vote in which black people were included that stated allowed dark people tobe enslaved, slavery was instituted before political democracy, and claiming it was a democratic institution is rediculous.

Of course they are not going to allow black people to vote against their enslavement...

[vyborg]

Gold standard is no more and will never come back exactly as the steam engine or the windmills. Those who speak about reintroducing it are comically naive.

What strikes about this guys is that they criticize central bankers as fool or inept people. basically they are saying that the bourgeoisie is putting in the most delicate position of the whole system crazy persons. this is simply untenable.

Milton Friedman explained with the same idea the 1929 depression: central bankers gone mad. Of course this is not an explanation more than stating a theory like this: an earthquake is the result of god becoming annoyed with human behaviour. and yet Friedman took a Nobel prize....

[LeftSideDown]

Gold standard is no more and will never come back exactly as the steam engine or the windmills. Those who speak about reintroducing it are comically naive.

What strikes about this guys is that they criticize central bankers as fool or inept people. basically they are saying that the bourgeoisie is putting in the most delicate position of the whole system crazy persons. this is simply untenable.

Milton Friedman explained with the same idea the 1929 depression: central bankers gone mad. Of course this is not an explanation more than stating a theory like this: an earthquake is the result of god becoming annoyed with human behaviour. and yet Friedman took a Nobel prize....

The difference is that the steam engine and windmills are inefficient compared to modern system of generating/using energy. Fiat currency is only more efficient at causing boom and busts.

I don't really necessarily advocate a gold standard; this is just the best way of making sure central banks cannot inflate the supply of money. If there were absolute guarantees that there would be absolutely no inflation of a paper money I wouldn't really care whether it represented gold or not.

[LeftSideDown]

Was that done demoratically? No. I don't seem to recall a vote in which black people were included that stated allowed dark people tobe enslaved, slavery was instituted before political democracy, and claiming it was a democratic institution is rediculous.

Even if they had been allowed to vote they would've been a minority. Majority would say "enslave them" and thats justice (apparently).

[Klaatu]

This is the dumbest most unrealistic thing ever. I'm sorry, I cannot respond; I am laughing too hard.

Why are you laughing? It is YOUR IDEA to drop wages to allow new people "to enter the island!"

[Klaatu]

Fiat currency is only more efficient at causing boom and busts.


Actually, the opposite is true. There have been more numerous "booms and busts" when the world was on the gold standard.

Gold itself had been, in a sense, the fiat, or the inhibitor, of economic growth.

[LeftSideDown]

Why are you laughing? It is YOUR IDEA to drop wages to allow new people "to enter the island!"

The real wages (if you give them money before they produce) drops no matter what. Better to know how much you're making than not.

[LeftSideDown]

Actually, the opposite is true. There have been more numerous "booms and busts" when the world was on the gold standard.

Gold itself had been, in a sense, the fiat, or the inhibitor, of economic growth.

Proof? I mean, we were on the gold century for millenia before paper money, so the number is going to be higher, but the severity? The length? The number per century?

[Klaatu]

The real wages (if you give them money before they produce) drops no matter what. Better to know how much you're making than not.

Why are we "giving them money before they produce?"

The ten natives BUY this man's POTTERY. They PAY for it. From a bank loan or "credit card" or whatever.

[Klaatu]

Proof? I mean, we were on the gold century for millenia before paper money, so the number is going to be higher, but the severity? The length? The number per century?

Give this book a read:

"Rethinking The Great Depression" by Gene Smiley
ISBN 1-56663-472-5

There was not an official "gold standard" until the 19th century.

[LeftSideDown]

Why are we "giving them money before they produce?"

The ten natives BUY this man's POTTERY. They PAY for it. From a bank loan or "credit card" or whatever.

You said he was shipwrecked on the island and out of the goodness of your collective socialist hearts you gave him a dollar. This is what you said.

[LeftSideDown]

Why are we "giving them money before they produce?"

The ten natives BUY this man's POTTERY. They PAY for it. From a bank loan or "credit card" or whatever.

So you're basing your assertion off the one depression we did have on it?

[Klaatu]

You said he was shipwrecked on the island and out of the goodness of your collective socialist hearts you gave him a dollar. This is what you said.

You would not help someone who is shipwrecked and starving? Perhaps also suffering from snake bite or malaria? Of course you wouldn't

(and you call ME a monster...) :thumbdown:

[LeftSideDown]

You would not help someone who is shipwrecked and starving? Perhaps also suffering from snake bite or malaria? Of course you wouldn't

(and you call ME a monster...) :thumbdown:

You're ignoring what I'm saying. You gave him money before he produced anything. You inflated the supply of money so if people go out and try and buy stuff (at the old prices) there will be a shortage of goods.

Way to avoid an argument of substance and substitute it for an appeal to emotion.

[LeftSideDown]

According to your profile, you are a freshman in college. You probably flip burgers at the local grease pit.
Now assume that you work hard all week. Your boss informs you that you will be getting a pay cut (from
minimum wage, down to $4 per hour) This is so that immigrants (and illegals too) can have money to spend.
Will you take the pay cut for your brothers?

1) Are nation is constantly inflating the supply of money, it is inconceivable that we would have deflation (decrease in the supply of money)
2) Why would I get a pay cut? America isn't socialist (yet) so its not like we are fully stealing all the wealth of those who produce and giving it to those who haven't/haven't yet.
3) There would never be a paycut that occurred that drastically, and prices would fall before wages (whereas inflation has the opposite effect (prices raise before wages).

You honestly do not understand what you are talking about.

[Dean]

1) Are nation is constantly inflating the supply of money, it is inconceivable that we would have deflation (decrease in the supply of money)

What you seem to forget is that fractional reserve banking (http://en.wikipedia.org/wiki/Fractional-reserve_banking) is a critical system to our capitalist financial system - I don't see how an economy would do anything but flounder with a restrictive gold standard, or expand the credit system.

Both of which would - assuming society maintained their system but adopted gold - maintain inflation, and in the case of debt, actually increase inter-dependency and economic poverty. Resting ourselves to a gold standard would make the elastic financial system unnecessarily top-heavily and cumbersome.

[LeftSideDown]

What you seem to forget is that fractional reserve banking (http://en.wikipedia.org/wiki/Fractional-reserve_banking) is a critical system to our capitalist financial system - I don't see how an economy would do anything but flounder with a restrictive gold standard, or expand the credit system.

Both of which would - assuming society maintained their system but adopted gold - maintain inflation, and in the case of debt, actually increase inter-dependency and economic poverty. Resting ourselves to a gold standard would make the elastic financial system unnecessarily top-heavily and cumbersome.

I know what fractional reserve banking is, and thank you for the link, but no I do not need to get wikipedia's insight into the matter. Also, that "are" is supposed to be an "our".

A free market wouldn't necessarily abolish a fractional reserve banking system, but consumers would have a choice:
1) You deposit your money in a 100% reserve bank (they basically store your money and charge you a fee)
2) You put it in an investment bank where you will not have access to all your money at any given point (its wrapped up in investments), but you can withdraw it over time.
3) I guess a fractional reserve bank? I don't know how many people would use this, but conceivably a bank could engage in this kind of activity, I just don't think I would put my money in that bank.

Are you saying that on a gold standard an economy cannot grow?

[Klaatu]

You're ignoring what I'm saying. You gave him money before he produced anything. You inflated the supply of money so if people go out and try and buy stuff (at the old prices) there will be a shortage of goods.

Way to avoid an argument of substance and substitute it for an appeal to emotion.


YOU brought up the man's condition, (which is ship-wrecked) and asked WHY I gave him some money.
Then you attack the response. What do you expect? I did answer the question. I said he is almost certainly starving,
and may be sick as well. It is perfectly logical that someone who is ship-wrecked in a tropical place would be starving.
It is perfectly logical that he might have dangerous insect bites. It is perfectly logical that I would help him by feeding
him, caring for his illness, and donating money. THAT is why I gave him some money.

That is what a Socialist does: He gives a helping hand to those in need.

On the other hand, a Capitalist would do things differently. A Capitalist would find a devious way to PROFIT from
this man's misfortune. He would force the starving man to WORK for his gruel before he was allowed to be fed.
He must become "a productive member of society" before he can be accepted into the group, to participate in the
dog-eat-dog, keep-up-with-the-Joneses, winner-take-all world of the bourgeoisie.

That is what a Capitalist does: He must work or he doesn't eat. (even though he has a debilitating tropical disease)

Is this the answer you expected? An exposure of the naked, bitter truth of capitalism?

[Klaatu]

1) Are nation is constantly inflating the supply of money, it is inconceivable that we would have deflation (decrease in the supply of money)
2) Why would I get a pay cut? America isn't socialist (yet) so its not like we are fully stealing all the wealth of those who produce and giving it to those who haven't/haven't yet.
3) There would never be a paycut that occurred that drastically, and prices would fall before wages (whereas inflation has the opposite effect (prices raise before wages).

You honestly do not understand what you are talking about.

NO YOU FOOL it is YOU who does not understand what he is talking about.

YOU brought up the fact that wages and prices must fall if there is a deflation (which certainly could happen
even under a gold-free system) all the government has to do is "shut off the printing press" so to speak
(it's actually a bit more complicated than that - they might raise bank reserve ratios for example)



"Why would I get a pay cut? America isn't socialist (yet) so its not like we are fully stealing all the wealth
of those who produce and giving it to those who haven't/haven't yet."

I am pointing out the fact that you would not practice what you preach (drop your own wages) and you
have proven me right. Thank you.

Wage /price declines from deflation have happened all through the 19th and early 20th centuries. This is
a parameter of capitalism, not socialism.



1) You deposit your money in a 100% reserve bank (they basically store your money and charge you a fee)

Why would anyone do this??? And a "100% reserve bank" could not lend money at all (how would it profit?)



I guess a fractional reserve bank? I don't know how many people would use this,

Your money is sitting in a fractional reserve bank right now !!!

I thought you said you are a student of economics???

[LeftSideDown]

YOU brought up the man's condition, (which is ship-wrecked) and asked WHY I gave him some money.
Then you attack the response. What do you expect? I did answer the question. I said he is almost certainly starving,
and may be sick as well. It is perfectly logical that someone who is ship-wrecked in a tropical place would be starving.
It is perfectly logical that he might have dangerous insect bites. It is perfectly logical that I would help him by feeding
him, caring for his illness, and donating money. THAT is why I gave him some money.

So you admit that by giving him a dollar before he produces a dollars worth causes a shortage of goods (at the old prices)?


That is what a Socialist does: He gives a helping hand to those in need.

Except for those who disagree with the party. They get sent to siberia, but this is a strawman; feel free to ignore it.


On the other hand, a Capitalist would do things differently. A Capitalist would find a devious way to PROFIT from
this man's misfortune. He would force the starving man to WORK for his gruel before he was allowed to be fed.
He must become "a productive member of society" before he can be accepted into the group, to participate in the
dog-eat-dog, keep-up-with-the-Joneses, winner-take-all world of the bourgeoisie.

You're right. No one in a capitalist economy cares about anyone else. There are no charitable organizations whatsoever. The second you enter a capitalist society all that matters is the self. Honestly your whole paragraph is the strawman. The capitalist might make a loan to the man (the man says hes a pot maker and can be useful, the capitalist sees potential and decides to loan the man money (not inflate the money supply) in hopes that his investment will pay off) or perhaps another person would just take the man in and care for him.

Anyway, its just a strawman.


That is what a Capitalist does: He must work or he doesn't eat. (even though he has a debilitating tropical disease)

Is this the answer you expected? An exposure of the naked, bitter truth of capitalism?

He now has a debilitating tropical disease? Keep throwing more things that you didn't include in the original in, that will show me! We're not debating capitalism or socialism (right now) we're debating whether or not giving this man a newly created dollar (before he has produced anything) will
a) cause a shortage
b) cause a raise in prices

I'm saying it will cause both if they do not preemptively raise prices and thereby reduce all their wages.

[Dean]

I know what fractional reserve banking is, and thank you for the link, but no I do not need to get wikipedia's insight into the matter. Also, that "are" is supposed to be an "our".
Not to nitpick your nitpicking (hah!) but I don't see where I used the word "are" anywhere in that post!


A free market wouldn't necessarily abolish a fractional reserve banking system, but consumers would have a choice:
1) You deposit your money in a 100% reserve bank (they basically store your money and charge you a fee)
2) You put it in an investment bank where you will not have access to all your money at any given point (its wrapped up in investments), but you can withdraw it over time.
3) I guess a fractional reserve bank? I don't know how many people would use this, but conceivably a bank could engage in this kind of activity, I just don't think I would put my money in that bank.

Are you saying that on a gold standard an economy cannot grow?
You don't think fractional reserve banking would occur in a free-market system? I find that unfathomable. Whichever banks engaged in fractional reserve banking would instantly expand their potential market, and having an unlimited fractional reserve system would be incredibly lucrative (only a few states have this atm, due to attempts to stifle inflation).

With the expansion of such systems, why would consumer interests - if consumers even did have this knowledge - matter? Within such a paradigm, fractional-reserve loans would be incredibly pervasive, and it would be incredibly hard to get a loan from a bank which didn't practice this.

The point is twofold (and this is why I linked to the article):

A) Fractional reserve banking creates more currency
B) This expansion of currency is inflation. Interestingly (assuming banks voluntarily limited themselves) it would still be "based" on the gold standard currency, assuming that was taken up. But the gold reserves would only be a base, and their limits wouldn't really limit this inflation much, if at all.

Clearly, this is a kind of inflation for which you have no real solution via the gold standard.

[Klaatu]

So you admit that by giving him a dollar before he produces a dollars worth causes a shortage of goods (at the old prices)?

Why would it? Shortages are produced by drop in supply, but not necessarily rise in demand. In fact, rise in demand
is GOOD for the economy (the others can sell all of their yet - unsold goods to him)



Except for those who disagree with the party. They get sent to siberia, but this is a strawman; feel free to ignore it.

Yes it is a fantastic straw man. But you just had to throw that in, didn't you?



You're right. No one in a capitalist economy cares about anyone else. There are no charitable organizations whatsoever. The second you enter a capitalist society all that matters is the self. Honestly your whole paragraph is the strawman. The capitalist might make a loan to the man (the man says hes a pot maker and can be useful, the capitalist sees potential and decides to loan the man money (not inflate the money supply) in hopes that his investment will pay off) or perhaps another person would just take the man in and care for him.

Anyway, its just a strawman.

Do you not think that money is loaned/invested in a socialist system?



He now has a debilitating tropical disease? Keep throwing more things that you didn't include in the original in, that will show me!

I said that in the beginning. Yes it is strawman, but a very small one.



we're debating whether or not giving this man a newly created dollar (before he has produced anything) will
a) cause a shortage
b) cause a raise in prices

See point #1 (above)
__________________________________________________ ______
More reasons to give the island newcomer money. Consider that:

1 You pay first when you mail-order from a store, and expect delivery

2 You pay first when you order a new car to be built to your specifications

3 You pay first to enter a football stadium, anticipating to be entertained

4 You pay first when you start a semester at college, expecting to be educated

For #1, the product is already there. But for #2,3,4, the products or services
(an intangible) are not yet there.

At the football game, you "expect" to be entertained, future tense. The service
(the game itself) is performed upon payment. This is customary. A lot of things
are done this way. And as I've said before, giving a starving man some money
first hand, starts the process of his working for a living within the island group.

[vyborg]

The difference is that the steam engine and windmills are inefficient compared to modern system of generating/using energy. Fiat currency is only more efficient at causing boom and busts.

I don't really necessarily advocate a gold standard; this is just the best way of making sure central banks cannot inflate the supply of money. If there were absolute guarantees that there would be absolutely no inflation of a paper money I wouldn't really care whether it represented gold or not.

If gold standard is no more we must conclude it is inefficient and useless exactly as the steam engine. The idea that this is dead because central banker are very ugly people is not science: it is a farce.

Central bankers are the best well trained bourgeois officers. And they, in the idea of Friedman and other idiots like him, are crazy and do whatever they can to damage capitalism.

So we must conclude that big business, that control everything, accept that central bankers inflate economy damaging the profits for the sake of it....

What a farcical position...

Inflation is only a tool to sustain profitability as we learned in the 20s and in the 30s. Since then, inflation is used to depress wages. During gold sandard deflation was the tool to do the job. Nowadays bourgeois uses inflation. Different tools, same target

[Klaatu]

The point is twofold (and this is why I linked to the article):

A) Fractional reserve banking creates more currency
B) This expansion of currency is inflation. Interestingly (assuming banks voluntarily limited themselves) it would still be "based" on the gold standard currency, assuming that was taken up. But the gold reserves would only be a base, and their limits wouldn't really limit this inflation much, if at all.

Clearly, this is a kind of inflation for which you have no real solution via the gold standard.

Dean, it is clear to me that LeftSideDown is still quite ignorant of how our monetary system works.
Perhaps when he finishes his degree, he will know more.

So why not spend more time studying, mr L.S.D. and less time trying to tell off people here who know a lot more about economics than you do.

[LeftSideDown]

Why would it? Shortages are produced by drop in supply, but not necessarily rise in demand. In fact, rise in demand
is GOOD for the economy (the others can sell all of their yet - unsold goods to him)

Shortages can be caused by that. They can also be caused by a supply that doesn't change and a demand that increases without sellers raising the price to allow all people who really want the good to buy it. If it is good for the economy, why don't they just make 100 shells and give it to everyone... they will all be rich! It is the same thing except at a smaller scale (although 10% of the economy is a pretty large amount to inflate all at once (and again, he was given the money before he produced anything, and if prices do not change that means that there will be a shortage (sellers have 10 dollars worth of goods, and now there is another dollar but there hasn't been another dollars worth of goods created so now there 11 dollars representing ten dollars worth of goods. If everyone goes out and buys a full dollars worth of goods, one person's dollar will have no worth, i.e. it can buy no goods as they've already been bought).


Do you not think that money is loaned/invested in a socialist system?

I don't know, is it? You seem to think pretty badly of interest (a necessary factor in knowing the worth of future goods vs present goods) so without this there would be no incentive to save. I guess you could force people to save, or just take their money, but then you would be exploiting them!


I said that in the beginning. Yes it is strawman, but a very small one.

So is he able to produce with the disease or not?


See point #1 (above)
__________________________________________________ ______
More reasons to give the island newcomer money. Consider that:

1 You pay first when you mail-order from a store, and expect delivery

2 You pay first when you order a new car to be built to your specifications

3 You pay first to enter a football stadium, anticipating to be entertained

4 You pay first when you start a semester at college, expecting to be educated

For #1, the product is already there. But for #2,3,4, the products or services
(an intangible) are not yet there.

At the football game, you "expect" to be entertained, future tense. The service
(the game itself) is performed upon payment. This is customary. A lot of things
are done this way. And as I've said before, giving a starving man some money
first hand, starts the process of his working for a living within the island group.

But before he starts producing there will be a shortage unless prices raise! We don't create money every time we want to buy a football ticket, or repair a car, or anything, we exchange already existing money. Do you realize the problems if we created money everytime we wanted to buy stuff? Weimar republic status dog. All of your "reasons to give him money" are reasons to loan him money, but not create it.

[Klaatu]

If it is good for the economy, why don't they just make 100 shells and give it to everyone...
they will all be rich! It is the same thing except at a smaller scale (although 10% of the
economy is a pretty large amount to inflate all at once

(a) because money is not wealth, it is just a medium of exchange (everyone already
knows how this works - and your feeble attempt at building straw men is getting boorish)

(b) what if he is given a penny at a time - total of ten per day - a gradual increase.
Would this satisfy you then? (Unless his one-day pottery output = one dollar, of course.)

(c) if the country's population rises 10% (which might take ten or twenty years) we would
increase the country's money supply by the same amount, over time. And it would increase
gradually, naturally. The country's money supply usually increases by bank loans from the
fractional reserve banking process, not the proverbial "printing press."



I don't know, is it? You seem to think pretty badly of interest (a necessary factor in knowing
the worth of future goods vs present goods) so without this there would be no incentive to save.
I guess you could force people to save, or just take their money, but then you would be exploiting them!

And I thought you knew everything. That is how you usually come across.

Where do I say that interest is not allowed in a socialist system? I do not know the "official rules"
on this from Marx himself. But consider that the Islam religion does not allow interest on loans.
I hope you're not planning on attacking them on this...



So is he able to produce with the disease or not?

Why the fuck should he have to, if he is sick in bed? Do YOU "produce" when you are home in bed,
half-dead with the flu? Or do you go to your restaurant job anyway and sneeze all over the patrons' food???



But before he starts producing there will be a shortage unless prices raise! We don't create money every
time we want to buy a football ticket, or repair a car, or anything, we exchange already existing money.
Do you realize the problems if we created money everytime we wanted to buy stuff? Weimar republic
status dog. All of your "reasons to give him money" are reasons to loan him money, but not create it.

This has nothing to do with births/arrival of aliens/exchange students, etc. Of course we do not
increase the nation's money supply when someone goes to a football game (that's silly - sorry you
missed my point here) I am talking about "pay-first," as an example of things where the product/service
does not yet exist. This is only intended to be adjunct to the topic at hand, that is all.

[LeftSideDown]

(a) because money is not wealth, it is just a medium of exchange (everyone already
knows how this works - and your feeble attempt at building straw men is getting boorish)

But why not? You seem to think it better to make a whole new shell rather than let prices adjust to reflect reality, so why not make everybody feel rich (or not feel poor (which you already said was the whole point of it)) for a while (and you can only make people not feel poor for awhile)? Apply your logic consistently or not at all. Inflation is either good (no matter the amount) or bad (no matter the amount).


(b) what if he is given a penny at a time - total of ten per day - a gradual increase.
Would this satisfy you then? (Unless his one-day pottery output = one dollar, of course.)

Why don't you just give him a penny a day of peoples already existing funds? Than they will know how much money they've lost, rather than having to guess. I don't see why you insist on inflating the supply of money. The only reason you've given thus far is to make them think they have the same amount of wealth.


(c) if the country's population rises 10% (which might take ten or twenty years) we would
increase the country's money supply by the same amount, over time. And it would increase
gradually, naturally. The country's money supply usually increases by bank loans from the
fractional reserve banking process, not the proverbial "printing press."

And this, all this effort and all these complex systems, are merely to keep the public uninformed? Thus far this is the only reason you have really given, and I don't think it justifies shortages or the boom-bust cycle.


And I thought you knew everything. That is how you usually come across.

Where do I say that interest is not allowed in a socialist system? I do not know the "official rules"
on this from Marx himself. But consider that the Islam religion does not allow interest on loans.
I hope you're not planning on attacking them on this...

I know what I know and no more. You're the socialist, not me. Would there be a price on future goods vs present goods, or not?


Why the fuck should he have to, if he is sick in bed? Do YOU "produce" when you are home in bed,
half-dead with the flu? Or do you go to your restaurant job anyway and sneeze all over the patrons' food???

So he cannot? Or can he? Could you stop the appeals to emotion and answer the question? If he is not able to produce and you give him a made up dollar then there will be a shortage if he spends it at the old prices. IF you give him the dollar but tell him not to spend all of it, you're restricting his freedom. If If you give him the dollar but raise all prices by whatever % the creation of the dollar merits, then why go through the process of making a dollar at all?


This has nothing to do with births/arrival of aliens/exchange students, etc. Of course we do not
increase the nation's money supply when someone goes to a football game (that's silly - sorry you
missed my point here) I am talking about "pay-first," as an example of things where the product/service
does not yet exist. This is only intended to be adjunct to the topic at hand, that is all.

How can you know what your return will be on the increase in the money supply to accommodate new people? What if they come, you inflate the economy by whatever percentage they represent, and the they never contribute that much to the economy back? Why would you go through all of this JUST to keep people from knowing what their money can actually buy and what it can't?

Your point wasn't accurate at all. You know when you pay for a ticket to a football game there will be football (barring the apocalypse), you know when you pay for your car to be repaired (lets say for something repairable) that it will be prepared. When you arbitrarily inflate the supply of money to keep people from knowing how much purchasing power they have in order to accommodate some stranger who may or may not recover from his illness and may or may not be able to make pottery and may or may not want to make pots or may or may not be a murderer or any other hundreds of possibilities that could happen. If you want to be charitable, then take money from your pockets and give it to him (which is what you're doing anyway when you inflate the supply of money) don't try to delude yourself into thinking you're richer than you are. I think your whole argument rests on the philosophy that "ignorance is bliss".

[Klaatu]

You are asking me to provide a lot of answers. I have. But you cannot (actually, WILL NOT) see the reasoning
behind the abandonment of the gold standard, and its replacement: a managed fractional-reserve monetary system.
Either you have (a) not studied that part of monetary theory yet, or (b) wish to continue to believe in, and
support, an archaic, trouble-ridden system (gold/silver) So here is some suggested reading for you:

Milton Friedman and Monetarism
http://en.wikipedia.org/wiki/Monetarism

[LeftSideDown]

You are asking me to provide a lot of answers. I have. But you cannot (actually, WILL NOT) see the reasoning
behind the abandonment of the gold standard, and its replacement: a managed fractional-reserve monetary system.
Either you have (a) not studied that part of monetary theory yet, or (b) wish to continue to believe in, and
support, an archaic, trouble-ridden system (gold/silver) So here is some suggested reading for you:

Milton Friedman and Monetarism
http://en.wikipedia.org/wiki/Monetarism

Ultimately this: You are asking citizens to accept a drop in their (already-minuscule) wages, in order to accommodate an influx of
new immigrants. Good luck with that. It is safer to inject the appropriate amount of new money. That way people
will never know the difference.

is your reasoning. I think that reasoning is thoroughly flawed.

[Klaatu]

Ultimately this: You are asking citizens to accept a drop in their (already-minuscule) wages, in order to accommodate an influx of
new immigrants. Good luck with that. It is safer to inject the appropriate amount of new money. That way people
will never know the difference.

is your reasoning. I think that reasoning is thoroughly flawed.

Too bad, isn't it. That is the way they have been running the country since the depression ended.
And we have had pretty good prosperity ever since.

If you don't like the present monetary system, why don't you run for public office and go cry wolf.

[LeftSideDown]

Too bad, isn't it. That is the way they have been running the country since the depression ended.
And we have had pretty good prosperity ever since.

If you don't like the present monetary system, why don't you run for public office and go cry wolf.

But you've given no other reasons. I looked through all your arguments. Disregarding our debate of the condition under which the shipwrecked man gets paid, the only reason you've given is to maintain the illusion that nothing has changed when, in fact, things have changed. What other reasons do you have?

[LeftSideDown]

NO YOU FOOL it is YOU who does not understand what he is talking about.

YOU brought up the fact that wages and prices must fall if there is a deflation (which certainly could happen
even under a gold-free system) all the government has to do is "shut off the printing press" so to speak
(it's actually a bit more complicated than that - they might raise bank reserve ratios for example)

Yes, but you didn't answer any of my questions. How would wages drop like that? Did the government take money out of supply? This would be just as bad as increasing the money supply. I don't approve of this either. I just want the supply of money to stay constant, as any amount of money is optimal, so long as it is infinitely divisible (or at least close enough so that it doesn't matter).


I am pointing out the fact that you would not practice what you preach (drop your own wages) and you
have proven me right. Thank you.

Prices would fall before wages. Your hypothetical has no bearing on real life as it was not explained how this rapid deflation came about.


Why would anyone do this??? And a "100% reserve bank" could not lend money at all (how would it profit?)

I can tell you're not reading what I said. I stated that they would charge a fee (much like if you store your stuff somewhere they charge you a fee).


Your money is sitting in a fractional reserve bank right now !!!

Its actually sitting in a credit union.


I thought you said you are a student of economics???

Given the other options I think people would a) go for investment banks b) opt to just store their gold and have it raise in value through the natural increase in purchasing power capitalism brings.

[LeftSideDown]

Not to nitpick your nitpicking (hah!) but I don't see where I used the word "are" anywhere in that post!

I was nitpicking my post, if you look there should be an "our" instead of an are. I made a mistake (and here people say I never admit my mistakes :rolleyes:)

[QUOTE=Dean;1730103]You don't think fractional reserve banking would occur in a free-market system? I find that unfathomable. Whichever banks engaged in fractional reserve banking would instantly expand their potential market, and having an unlimited fractional reserve system would be incredibly lucrative (only a few states have this atm, due to attempts to stifle inflation).

I think, in libertarian philosophy, it would be illegal (fraudulent) to loan out funds that do not in reality exist. So I guess it wouldn't be a problem. Do you think it would be okay for me to try and lend out double the money I actually have? Seems fraudulent to me.


With the expansion of such systems, why would consumer interests - if consumers even did have this knowledge - matter? Within such a paradigm, fractional-reserve loans would be incredibly pervasive, and it would be incredibly hard to get a loan from a bank which didn't practice this.

They'd also be illegal. Its fraudulent. I was wrong in asserting that they would exist in a true free market.

[MMIKEYJ]

Yay for the Gold Standard...

Gold is the currency of Kings
Silver is the currency of Free Men.
Debt is the currency of slaves.

[vyborg]

By the way, the business cycle was there with the gold standard as now. It is how capitalism works. The explanation of the '29 depression made by Friedman and the like is comical as it reduces historical and social process developing for decades to the "mistakes" of central bankers.

[Dean]

[QUOTE=Dean;1730103]Not to nitpick your nitpicking (hah!) but I don't see where I used the word "are" anywhere in that post!

I was nitpicking my post, if you look there should be an "our" instead of an are. I made a mistake (and here people say I never admit my mistakes :rolleyes:)
Oh, ok - didn't notice :P




I think, in libertarian philosophy, it would be illegal (fraudulent) to loan out funds that do not in reality exist. So I guess it wouldn't be a problem. Do you think it would be okay for me to try and lend out double the money I actually have? Seems fraudulent to me.



They'd also be illegal. Its fraudulent. I was wrong in asserting that they would exist in a true free market.
Wait - why would fractional reserve banking be "illegal"? Who would impost this mandate? I don't see any indication as to how fractional reserve banking would not be considered lucrative in a free capitalist market. The banks have eagerly taken opportunities to lend against fractional reserves, and the consumer population has endorsed this practice - it allow much more lending and is ultimately necessary for an economy with frequent investments - critical finance for production.

In addition, I don't see how you would enforce this ultamatum. If fractional reserve banking is "fraudulent," I find it incredibly contrary that the contemporary economic milieu actively endorses and backs these firms. If nothing else, banning this practice would serve as an incredible obstacle for growth, particularly of production and GDP in general.

[Klaatu]

I just want the supply of money to stay constant, as any amount of money is optimal, so long as it is
infinitely divisible (or at least close enough so that it doesn't matter).

So you are going to divide a gold coin into millions of pieces? People are to carry around a speck of dust
as their weekly pay? This is not practical.

YOU promote the discredited gold standard monetary policy: Fixed, unchanging money supply with variable wages/prices.

I promote the presently-used monetarist monetary policy: Variable money supply with stable wages/prices.

Holding prices constant, vs holding money constant, is a matter of public opinion. That is, people would rather
see their incomes remain constant, (under a monetarist system) than their monetary incomes go DOWN,
(under a gold standard) as money consolidates from deflation. Even you said that you would not accept a wage cut.
Merchants dislike dropping prices and shrinking profit margins. And money borrowers would be hit hardest of all.
So much for that new car or house! Gold standards can thus tend to act as a brake on economic activity.

[Left-Reasoning]

Gold standards can thus tend to act as a brake on economic activity.

Your proposed solution is to fool people into thinking that they are just as wealthy as before when in fact they are less so. The gold standard, at least, is honest.

[Klaatu]

Your proposed solution is to fool people into thinking that they are just as wealthy as before when in fact they are less so. The gold standard, at least, is honest.

Neither the gold standard system nor the monetarist system changes anyone's actual wealth (home, car, property, etc)

There are differences in these two systems. But one thing they have in common: either can rip people off and "fool people."
Gold standard can do this by deflation, Monetarism can do this by inflation. But it is far easier to control inflation (by monetarist
accounting means) than it is to control deflation. (via actual international gold shipments to offset balance of trade)

As paper money replaced coinage (it is easier to carry) fractional reserves, and now electronics, are replacing paper, and
certainly gold (these are easier to trade with, especially internationally)

Gold has a chaotic nature of being a rigid, inflexible system. It is especially problematic, as I have already pointed out,
when there are increases of population (which is almost always)

That is why we now use the Monetarist system. It is far easier to manage than gold.
Thus it has replaced the defunct, difficult-to-manage gold system.

[LeftSideDown]

So you are going to divide a gold coin into millions of pieces? People are to carry around a speck of dust
as their weekly pay? This is not practical.

It would not get to this point. Even before we inflated the dollar away there was never anything like .0005 cents. Maybe in electronic banking, but not in regular commerce.


Holding prices constant, vs holding money constant, is a matter of public opinion. That is, people would rather
see their incomes remain constant, (under a monetarist system) than their monetary incomes go DOWN,
(under a gold standard) as money consolidates from deflation. Even you said that you would not accept a wage cut.
Merchants dislike dropping prices and shrinking profit margins. And money borrowers would be hit hardest of all.
So much for that new car or house! Gold standards can thus tend to act as a brake on economic activity.

Too bad wages do not stay constant. Wages are the last thing to raise under inflation, prices of commodities and other goods and services raise first. And the way our fractional reserve banking system works bankers and investers get to use the new money first (it is closer to the old value) and then the places the invest in get to use them and then the prices uses them and then people get the dollar thats value is less because the inflation has been made apparent through the other transactions.

You're right, I did say I wouldn't take a half paycheck cut, but as I've said time and time again wages fall last in deflation, prices go first. IF i'm makign 8 dollars na hour and 3 dollars can buy a car, I would rather get 4 dollars an hour then get laid off (which is what would happen as the value of my services had stayed constant but the money I was being paid with increased in value).

[LeftSideDown]

Neither the gold standard system nor the monetarist system changes anyone's actual wealth (home, car, property, etc)

Yeah it does. Prices raise before wages. You are making less money.


There are differences in these two systems. But one thing they have in common: either can rip people off and "fool people."
Gold standard can do this by deflation, Monetarism can do this by inflation. But it is far easier to control inflation (by monetarist
accounting means) than it is to control deflation. (via actual international gold shipments to offset balance of trade)

Deflation "rips off" businessmen who weren't wise enough to anticipate it, inflation gives them a wider profit margin so they can grow larger than they would (even though they are not meeting consumer demand) and can be inefficient. Deflation helps consumers because their savings can purchase more. I guess you like big corporations getting help, then?


Gold has a chaotic nature of being a rigid, inflexible system. It is especially problematic, as I have already pointed out,
when there are increases of population (which is almost always)

How is it "chaotic" to be "rigid, inflexible"? Thats like calling a steel cube chaotic because... its unchanging? Honestly your caricatures are just silly. You know whats another "rigid, inflexible system"? Humanity. They 'need' all these things that they must have (food, water, shelter). Honestly its CHAOTIC! We should do away with them, no?

[synthesis]

http://chicksinthehuddle.com/wp-content/uploads/2008/09/south-park-dead-horse.jpg

Sorry, I was compelled by an unknown force.

[Klaatu]

It would not get to this point. Even before we inflated the dollar away there was never anything like .0005 cents. Maybe in electronic banking, but not in regular commerce.

Then don't use words like "infinitely."



Too bad wages do not stay constant. Wages are the last thing to raise under inflation, prices of commodities and other goods and services raise first. And the way our fractional reserve banking system works bankers and investers get to use the new money first (it is closer to the old value) and then the places the invest in get to use them and then the prices uses them and then people get the dollar thats value is less because the inflation has been made apparent through the other transactions.

In the monetarist system, inflation is a possibility, but not a certainty. You are assuming that
inflation is a certainty. It is not. It is not, as long as the monetary targets are carefully managed.
This is the job of guys like Alan Greenspan, who hold the line on monetary growth, in order to
match economic growth (again, mostly due to population growth)

EnviroWhacko
"Neither the gold standard system nor the monetarist system changes anyone's actual wealth (home, car, property, etc)"
LeftSideDown
"Yeah it does. Prices raise before wages. You are making less money."

MONEY IS NOT WEALTH (duh)



Deflation "rips off" businessmen who weren't wise enough to anticipate it, inflation gives them a wider profit margin so they
can grow larger than they would (even though they are not meeting consumer demand) and can be inefficient. Deflation
helps consumers because their savings can purchase more. I guess you like big corporations getting help, then?

Let's settle this once and for all: BOTH deflation AND inflation are bad. But this point is lost on you.



How is it "chaotic" to be "rigid, inflexible"? Thats like calling a steel cube chaotic because... its unchanging?
Honestly your caricatures are just silly.

"Rigid and inflexible," as in lack of dynamic and efficacy. (not entropy and bulk modulus.)

Whose caricatures are silly? (Do you own a dictionary?)



You know whats another "rigid, inflexible system"? Humanity. They 'need' all these things that they must have (food, water, shelter). Honestly its CHAOTIC! We should do away with them, no?

Nazi

[Klaatu]

Sorry, I was compelled by an unknown force.

Well I guess LeftSideDown is the one "beating the dead horse" here, eh?

I try to explain things to him, but he still has a lot to learn. :blink: I recall a lyric by the band U2: "No one is blinder, than he, who will not see..."

[LeftSideDown]

Then don't use words like "infinitely."

The reason that you have given so far is that there is not enough money (it is not divisible enough) so you inflate it. Its not approaching infinity, so whats the point? Infinitely is just a tool used to illustrate it. You cannot divide any finite amount by infinity so your reason for inflating the money supply is both illogical and harmful


In the monetarist system, inflation is a possibility, but not a certainty. You are assuming that
inflation is a certainty. It is not. It is not, as long as the monetary targets are carefully managed.
This is the job of guys like Alan Greenspan, who hold the line on monetary growth, in order to
match economic growth (again, mostly due to population growth)

Yet they inflate the most when economic growth is down.


MONEY IS NOT WEALTH (duh)

We can nitpick all day, but surely you must see that if prices raise before wages you cannot buy as much stuff?


Let's settle this once and for all: BOTH deflation AND inflation are bad. But this point is lost on you.

That depends on your definition.
If by inflation you mean increasing the money supply, then yes
if by deflation you mean decreasing the money supply, then yes





Nazi

Is all humor lost on your, or just most?

[LeftSideDown]

Is all humor lost on your, or just most?

I realize the irony of my statement.

[LeftSideDown]

Well I guess LeftSideDown is the one "beating the dead horse" here, eh?

I try to explain things to him, but he still has a lot to learn. :blink: I recall a lyric by the band U2: "No one is blinder, than he, who will not see..."

Come now, its not like I cannot read things that you write for the eyes of other people. You're just being plain hurtful! Anyway, you should check out the research paper I wrote on Hoover; I don't know if you think he was a laissez faire president but any conception that he was is pretty much shattered both by an analysis of his writings and his actions.

[Klaatu]

Hoover was not laissez faire. For example, he signed the Smoot-Hawley tariff act, which is contrary to free trade, eh?

http://en.wikipedia.org/wiki/Smoot-Hawley_Tariff_Act

[LeftSideDown]

Hoover was not laissez faire. For example, he signed the Smoot-Hawley tariff act, which is contrary to free trade, eh?

http://en.wikipedia.org/wiki/Smoot-Hawley_Tariff_Act

He is still viewed as laissez faire because historians say he "didn't do enough" during the Great Depression. Its malarky.

[Klaatu]

What do you mean? What was he supposed to "DO?" If he were to "DO" anything, he would be "socialist," eh? Yet, he will forever be blamed for "not doing enough."

As Nixon, the last great Republican, will only be remembered for Watergate, not for his great accomplishments of ending the Vietnam War, ending the nuclear arms race, starting the Environmental Protection Agency, etc...

[LeftSideDown]

What do you mean? What was he supposed to "DO?" If he were to "DO" anything, he would be "socialist," eh? Yet, he will forever be blamed for "not doing enough."

As Nixon, the last great Republican, will only be remembered for Watergate, not for his great accomplishments of ending the Vietnam War, ending the nuclear arms race, starting the Environmental Protection Agency, etc...

Wait, whats your point? My point is that he is not laissez faire and he tried lots of things to end the depression. Whether or not hes socialist never came up.

[synthesis]

Well I guess LeftSideDown is the one "beating the dead horse" here, eh?

I suppose, but that was intended to characterize this entire thread, not any particular one of its participants. I admire the tenacity of everyone involved, I suppose, but anyone could have stopped halfway and just as much would have been accomplished.