The Concept of Currency

[Indifference]

currency is essential. can you imagine a practical alternative?

alasdair

No society? All that needs to happen is a natural disaster that wipes all of us out and leaves ideal conditions for bacterial evolution. Give it 600 million years, and they'll be having this exact same conversation on Redlight

 

[Obyron]

The fiat system we have now is there because of the creation of the International Monetary Fund in 1944. Before this, countries would manipulate their own currency value through buy/sell orders for gold/silver to wage economic warfare against other nations such as what France did to Germany to cause the Weimar Republic's bank failure - a pivotal cause of the 1929 depression. The fund fixed the price of gold to prevent this type of manipulation and the US under Nixon found their money supply running out - there was not enough gold at those prices to back any more dollars even though the economy was strong.

Yeah, I understand the historical underpinnings, from Jekyll Island to the Bretton Woods Agreement, etc. I just don't get why people think Managed Float is any BETTER than the Gold Standard. Look at the Chinese manipulation of the value of the yuan to bolster their economy (and maintain a really egregious trade imbalance). Consider things like the 97 Financial Crisis in Southeast Asia. If currencies were backed instead of floated, the baht and the rupiah wouldn't have collapsed. Even 11 years later, the Indonesian Rupiah is still trading 5 times lower than it was before the crisis started.

Precious metal-backed currencies have their problems, but as I see it fiat currency has just as many pitfalls that are just as bad, if not worse.

 

[The Is]

Hey all, first post, registered just to respond to this thread .

My problem with currency lies in the fundamental psychology behind it, most aptly put in the phrase "every man has his price". The concept of currency relies on the assumption that anything, no matter what, can be quanitifed and subsequently bought, sold, or otherwise manipulated or destroyed for a price. In doing this we strip every thing or action of its intrinsic, "sentimental" value, and reduce it to a number (preceded by dollar signs, pounds, etc.). While it may serve the use of connecting people to each other economically, what it really does at a general level is unify our states of mind. It is no coincidence that this unified state of mind tends to think of things only in terms of their benefit to humans. It at once gives something worth by defining it in terms of the limit of its value to us. How, then, can anything be defined otherwise and be taken seriously, when money is the "bottom line"?

Money, for example, is worthless for any practical function besides facilitating the wider system of currency or acting as a paperweight; it is worth a great deal only because it serves humans so well. A tree or mountain, on the other hand, is worth much less because it holds little value within this system. It all points to the shared idea that we as humans have the right to decide what lives and what dies, what is good and what is evil. The dollar is (one of) the physical representation(s) of this anthropocentric superiority complex.

I can't imagine who you are to actually think like this. My guess is that you must be so spoiled that you have never really had to deal with money 'in real life'

 

[Kul69]

I can't imagine who you are to actually think like this. My guess is that you must be so spoiled that you have never really had to deal with money 'in real life'

Why do you think that?

 

[HoneyRoastedPeanut]

I can't imagine who you are to actually think like this. My guess is that you must be so spoiled that you have never really had to deal with money 'in real life'

Okay... no. I think like this because, unlike Warren Buffet, I can't look at money and ignore the greater infrastructure that it has spawned, the affects it has on human thought, nor the process by which it has come to dominate societies across the globe. Money is a big deal because of its role in the world, and if you can't see that, maybe you should try looking beyond your everyday dealings with it "in real life".

 

[swilow]

^Good posts man

I can't imagine who you are to actually think like this. My guess is that you must be so spoiled that you have never really had to deal with money 'in real life'

What? Chill out on judging a person for one post mate.

 

[neonads]

HoneyRoastedPeanut - The reason why I'm comparing economics to biology is because, like our evolutionary adaptations such as bi-focal sight, opposable thumb etc., currency and all it's predecessors have also evolved naturally due to selection pressure. I understand your nostalgia, but where do you draw the line? Do you wish we didn't have opposable thumbs that can grip weapons with to bash skulls in? Or hairless bodies that must be clothed with the skins of animals?

I believe that looking to the past for solutions to the present is an impediment to solving those problems.

 

[neonads]

Precious metal-backed currencies have their problems, but as I see it fiat currency has just as many pitfalls that are just as bad, if not worse.

I think we'll see an electricity-backed currency in our lifetimes. We'll need to phase out fossil fuels and switch to more and more electric motorisation. If we can grid the world and use renewable energy sources it would be quite stable and have a lot of room for future growth while giving incentives for more efficient production.

 

[Obyron]

^^ That's all very true, but I don't see how that would make electricity any good for backing a currency. When I say "backing" I'm using a very specific definition. See the wiki article on "Representative Currency" (as opposed to "Fiat Currency").

I most certainly would NOT want to take a certain amount of money to the bank, and have them given me 50,000 volts in exchange!

 

[neonads]

Batteries

Current technology is a bit lacking tho..

 

[HoneyRoastedPeanut]

neonads - I think it's hard to draw the line regarding human culture and evolution. While certainly human culture in a broad sense is the result of biological evolution, I don't think that implies that all culture can be described as such. Is everything humans do "natural" because we are a product of nature? I don't think so, but the answer to that is more a matter of semantics to me than anything. I tend to define things as "natural" or not by their role in the local and wider ecosystem they inhabit, in which case much of human technology, including currency, is unnatural because it either serves no purpose within this or is designed to replace it.

Also, the idea that looking to the past as an impediment to the future is in itself an impediment to thought, as it supposes the imperative of a lineal impression of time and a goal of "progress" (i.e. growth in practical application). While we cannot simply "go back" to Stone-Age subsistence economies, because we (well, 99% of us) are not at all equipped for it, I believe that if we are to keep from turning this planet into a giant trashheap that it is not an undesirable goal to work towards.

 

[neonads]

It supposes that each and every snapshot of the world in history only arose out of the conditions in the previous snapshot and that we can never hope to recreate those conditions. Sure you can take concepts/ideas/themes from the past, but we're talking about currency and can assume that every adaptation to the problem of money was a sound solution at the time and will most likely not be an ideal solution in the future.

I tend to define things as "natural" or not by their role in the local and wider ecosystem they inhabit, in which case much of human technology, including currency, is unnatural because it either serves no purpose within this or is designed to replace it.

Try to look at things in economic terms. We have an 'econosphere' in which corporations live. These corporations exhibit many life-like qualities such as self-preservation, reproduction, growth, competition, death, sensation, and intelligence. They have these qualities because they are composed of people just like people are composed of cells which we know, as bacteria, show the classic signs of life (MRS GREN). Money is energy, food. Without an adequate supply of food, the corporation goes into panic mode and people will find ways of supplying their corporations with the energy they need.

Given these similarities, I honestly believe that this econosphere is a natural phenomenon and a force much greater than one person to arrest, let alone a movement of people.

 

[HoneyRoastedPeanut]

I see your points in all of that except calling the econosphere natural, because its goals and actions are in direct opposition with nearly every other life form and ecosystem on Earth (humans and civilization being the exceptions). While it exhibits lifelike characteristics, these are artificial creations of human thought, and have no biological or ecological basis. A plastic Disneyland tree is not a tree, even though it looks like one and we call it one.

 

[MyDoorsAreOpen]

I can't imagine who you are to actually think like this. My guess is that you must be so spoiled that you have never really had to deal with money 'in real life'

Hey, do you mind dropping the attitude?

 

[thujone]

currency is essential. can you imagine a practical alternative?

alasdair

gold-plated rice. it's not that hard to store 40 thousand of those, just might be a bit difficult to count out at the register when you're buying the groceries.

as far as i'm concerned, fiat is the way to go. i don't see what the big fuss is about the gold standard. so it's backed by "physical" this and that. so bloody what? the only thing that sets gold apart from a piece of nickel is that it's harder to find. is there really any compelling reason to value a piece of stone over a piece of pressed cotton? as mentioned, there is a lot of collective trust in the fiat system. that trust alone makes it the most valuable commodity.

and personally, warren buffett is full of shit. you'd have to be a pretty dim millionaire to not figure out at one point in your life that money is far more than just a bloody coupon. there's a reason they refer to sums of money as purchasing power.

ninja edit

 

[neonads]

because its goals and actions are in direct opposition with nearly every other life form and ecosystem on Earth (humans and civilization being the exceptions).

So are humans. We either destroy, dominate, or subjugate. All life is in competition with others, the more successful ones just have wider ranges of opposition.

Besides, what is unnatural about human creations? Where is the divide between natural human and unnatural human? Is a bird's nest unnatural? A beaver's dam? Overarching domination that disregards the balance of existing life is still a natural phenomenon. We see it all the time in ecology when the existing species provides the substrate for the establishment of another which itself goes through the same process. This is how rainforests evolved. This is how corporations evolved.

 

[MyDoorsAreOpen]

^ In that case, a system other than unrestrained capitalism is also just as natural. It can be seen as an ecological response by one population, to a former survival and propagation strategy that no longer works

I don't think 'natural' and 'unnatural' are helpful words to use to either defend OR disparage any practice. (I believe this is even a formal logical fallacy called the Naturalistic Fallacy: 'Because it's natural, it's good/bad').

A better way to frame an argument against capitalism is that it's a threat to our world's homeostasis.

 

[Outta Pocket]

currency is essential. can you imagine a practical alternative?

alasdair

Exactly. Fiat currency is just as "nutty" as any other store of value, or the fact that posters on opposite sides of the world can debate this from our faceless positions behind PC screens. The posts in this thread are drenched with lysergic acid, heh...

Fiat currency is just an extension of capitalism. Currency is a standardized way to create (and distribute) material wealth beyond human essentials, e.g. food, water, etc. Currency is necessary in a capitalist system or otherwise to relegate resources. Yes, there are many downsides of such a system; one day not too far from now, all currency will be electronic...

In my opinion, many of the problems we are experiencing now after moving away from the gold standard are a consequence of burgeoning populations all struggling to get a piece of the pie, while the pie is way too small to accommodate everyone... Herein lies the future contracts and their associated problems, previously mentioned by another poster. One of the problems with the gold standard is that there is a limited amount of gold and a world population that is steadily growing, whereas there is an unlimited amount of fiat currency (obviously a potential problem!!!)...

I often ponder this question while in altered states, with my debit card and all cash save for $40 hidden away...

 

[GoddessLSD-XTC]

Faith in money, an unnecessary evil.

Jesus (if he existed) said, "U can't serve God & Money, u'll either love the one and hate the other or hold to the one and despise the other." . . . "but the Pharisees, who loved money heard all this and scoffed." -- Luke 16.

The Gospel of Eliminating Money.

 

[Too many doses]

IMO money is just the easiest way to buy a service or goods thats why we have adopted this method over the barter/trade of our forefathers. Real wealth isnt held in cash its in properties, bonds, mutual funds and other investments, which are at the whim of the economy. As a USA resident I trust that our economy will straighten itself out in time so I trust my money and my investments. Do you not trust your country's economy(assuming you are not a US resident)? this is the question that goes hand and hand with faith in currency.