Productivity is not a virtue that brings entitlements to wealth, productivity is a zero sum game within the pareto boundary, for one to produce more some one else needs to produce less, therefore increasing ones productivity comes with a cost to someone else. so it should be increasingly harder to produce more just in par with the increasing justification of the need to be more productive. Claiming that just because one is productive should be entitled to more, is like claiming that people prefer not to be productive,and also denying that healthy humans have a basic need of self actualization...
This sounds awfully close to the ideas promoted by Communism. Productivity is not a virtue that brings entitlements to wealth? Enforcing that would seem to require nothing less then the total abolishment of private property along with some form of totalitarian government to enforce the redistribution. We should not say that one man's hour is worth another man's hour, but rather that one man during an hour is worth just as much as another man during an hour. Time is everything, man is nothing
From each according to his ability, to each according to his needs
The production of too many useful things results in too many useless people.
The theory of Communism may be summed up in one sentence: Abolish all private property.
Communism has been tried. In every attempt to date it failed and killed millions. |
|
|
|
|
Melt it into the shape of metal barbell weights then paint it and package it up with exercise gear.
|
|
|
|
On 1) Roman empire is not counter-evidence, their fall was as you have quoted because the "citizens did not want to save the state" pretty much the reason the eastern part failed eventually. It was only after magna carta the french revolution and the dawn of national states that states regained their "legitimacy". Btw why also Eurozone will eventually fail too, it is increasingly perceived as an oppressor. The economic unsustainablility of oppressor states is self evident I think in history. But on to the point now sound money for a state means constant surpluses, that means money taken out of the economy by taxation for what? to keep it idle? why tax it in the first place then? It also means trade surpluses which if not allowed to be balanced back by the currency channel they will balance by other channels but they will balance On a side-note Getting cash inflows is not always a good thing as the French indemnity of 1871 has shown. France the payer issued bond and later did much better, while Germany on the receiving end did much worse by getting caught in a speculative bubble. More here http://blog.mpettis.com/2014/05/why-a-savings-glut-does-not-increase-savings/2) Its the penalty for not being economically active over a period of a single generation 30 years, but in the short term I wouldn't call it major. 3) Well if done right, cannot blame inflation for the failings of banks. Obviously something is missing from the equation to account for the Minsky moments 4) But thats what funding does it allows you to first have education and work after with all the benefits of education, what is better paying tuition fees grilling burgers or writing software? Having your parents pay for your education is not equalizing the playing field. 5) Taxation is lacking in "resolution" as a redistribution, it is too intrusive, too costly, to enforce it and needs too much management also taxation targets the cash flows not the accumulation. As a Redistribution mechanism Inflation is like pouring champagne over a pyramid of glasses until all glasses are full, Taxation is like going over every glass and filling them one by one 6) Cooperation is not always moral, which is why we have antirust laws. The core of your arguments above appear to be the following. 1) Inflation is a better tool than taxation for redistributing wealth because it simultaneously targets "all champaign glasses" efficiently guaranteeing funding of government priorities without the overhead of intrusive taxes, and costly enforcement. 2) Education is valuable and thus it is the duty of the state to provide guaranteed funding for individuals seeking higher education. Such funding is necessary to equalize the economic playing field. In regards to your first argument I entirely agree. Inflation is both a more efficient and hidden way of siphoning wealth from the population. I disagree that this is in any way desirable. Both inflation and taxation involve taking from those who produce in order to fund some centralized priority. Such activity by its very nature is top down management of the economy therefore inefficient. The goal should be to shrink this inefficiency to the minimum necessary to maintain social stability and guarantee a well functioning state. Unlike inflation taxation is not hidden and thus is subject to far more public scrutiny. Taxation also allows the taxed to make a case against new taxes. Taxation as a method of funding will thus result in lower levels of overall government spending and thus less waste. In regards to your second argument, I agree that education is valuable. Whether it is valuable enough that we should guarantee funding for all those who seek higher education regardless of the cost or their future earnings potential is debatable. However, if you believe that education is a critical public need (like national defense) and the need will not be met by the free market then the proper course of action is to petition the government to directly fund the needed expense and pay for it with taxation. The true cost will then not be hidden. As was mentioned above the advent of cryptocurrency means that governments have categorically lost their monopoly on coinage and will thus eventually lose the power to inflate. Given the freedom to choose people will vote with their feet and leave inflationary currencies for others that better approximate ideal money. Governments can slow this competition by using force much like the late Roman Empire did when it required merchants to accept its copper tokens under penalty of death. However, we agree that the economic unsustainablility of an oppressor state is self evident. It follows that inflation as a tool of redistribution is likewise unsustainable. |
|
|
|
 lol If anyone is going extinct due to low birth rates, it's Russia You need to upgrade your firmware, it's outdated. Nope. Russia is dying. Its demographics are poor. Its economy is royally screwed. Putin is a crappy leader with no understanding of how economies work and instead tries to suppress freedom of speech thinking that silencing dissent will save his country. He is also anti Bitcoin. It's funny but also pitiful really... In 2015 Russia's per capita GDP fell to $8447 a year. That's below the world average and less than $200 more than China. Russia is finished. Russian demographics are better than its surrounding areas and improving. https://en.wikipedia.org/wiki/Demographics_of_RussiaAs of 2014, Russian TFR of 1.750 children per woman[8] was the highest in Eastern, Southern and Central Europe. In 2013, Russia experienced the first natural population growth since 1990 at 22,700 people. Taking into account immigration, the population grew by 294,500 people |
|
|
|
In my opinion the beginnings of the fall of the Rome can be traced back all the way to 133 BC From: https://en.m.wikipedia.org/wiki/GracchusTiberius was elected to the office of tribune of the plebeians in 133 BC. He immediately began pushing for a programme of land reform, partly by invoking the 240-year-old Sextian-Licinian law that limited the amount of land that could be owned by a single individual.
Central to the Gracchi reforms was an attempt to address economic distress and its military consequences. Much public land had been divided among large landholders and speculators who further expanded their estates by driving peasants off their farms. While their old lands were being worked by slaves, the peasants were often forced into idleness in Rome where they had to subsist on handouts due to a scarcity of paid work.
The senators obstructed his re-election. They also gathered an ad hoc force, with several of them personally marching to the Forum, and had Tiberius and some 300 of his supporters clubbed to death. This was the first open bloodshed in Roman politics for nearly four centuries. Note the crisis was caused by the widespread expansion of slavery undermining the ability of the middle class to productively work small farms or find gainful employment essentially forcing them into the ancient equivalent of welfare. Attempts to rectify the situation politically led to the first instance of violence over compromise in Roman politics. From here follows the later death of the republic, the inevitable rise of men like Caracalla and eventually the masses welcoming the barbarians as liberators. |
|
|
|
Politics as the bastion of morality makes me chuckle, I hope thats not our last chance. Not sure if its mentioned, here is misses institute lecture on the decline of the Roman standard primarly silver based originally and then just a mirror of a chaotic empire. Audio link on there, I wish all history was this well transcribed https://mises.org/library/inflation-and-fall-roman-empireThanks for the link it was a very interesting read. I have selected a couple of highlights from it below which really showcase the decay of the late Roman Empire. To look at the mentality of the Roman emperors, we can look just at the advice that the Emperor Septimius Severus gave to his two sons, Caracalla and Geta. This is supposed to be his final words to his heirs. He said, "live in harmony; enrich the troops; ignore everyone else."
His (Caracallas) sense of priorities was made more explicit when he remarked, "nobody should have any money but I, so that I may bestow it upon the soldiers." And he was as good as his word. He raised the pay of the soldiers by 50 percent, and to achieve this he doubled the inheritance taxes paid by Roman citizens. When this was not sufficient to meet his needs, he admitted almost every inhabitant of the empire to Roman citizenship.
The Roman state was not destroyed by inflation — what was destroyed by inflation was the freedom of the Roman people. Particularly, the first victim was their economic freedom. Merchants ... came under government pressure because the government could not obtain enough material for the war machine through regular channels — people didn't want all that token coinage. So merchants and artisans were now compelled to make deliveries of goods.
So that if you had a factory for making garments, you now had to deliver so many garments to the government requisitions. If you had ships, you had to carry government goods in your ships. When people tried to get out of this they were then, by law, compelled to remain in the occupation that they were in. In other words, you couldn't change your job or your business.
This was not sufficient because, after all, death is a relief from taxes. So the occupations were now made hereditary. When you died, your son had to take up your profession. If your father was a shoemaker, you had to be a shoemaker. These laws started by being restricted to the defense-oriented industries but, of course, gradually it was realized that everything is defense-oriented.
The peasantry, known as the coloni, were leaseholders on both imperial and private estates. They too were formerly a free class. Now under the same kinds of pressures that all smallholders were in in this situation, they began to drift away, trying to find better opportunities, better leases, or better occupations. So under Diocletian the coloni were now bound to the soil. Anyone who had a lease on a particular piece of land could not give that lease up. More than that, they had to stay on the land and work it.
The economy of the West was perhaps more fatally weakened than that of the East. The early 5th century Christian priest Salvian of Marseille wrote an account of why the Roman state was collapsing in the West — he was writing from France (Gaul). Salvian says that the Roman state is collapsing because it deserves collapse; because it had denied the first premise of good government, which is justice to the people.
By justice he meant a just system of taxation. Salvian tells us, and I don't think he's exaggerating, that one of the reasons why the Roman state collapsed in the 5th century was that the Roman people, the mass of the population, had but one wish after being captured by the barbarians: to never again fall under the rule of the Roman bureaucracy.
In other words, the Roman state was the enemy; the barbarians were the liberators
|
|
|
|
The only economically optimal solution is one in which there is no redistribution. This only occurs in a currency that approximates the ideal of no inflation and no deflation. Such a currency or multiple currencies would maximize the incentive to invest without resulting in a redistributive decline in purchasing power if one chooses not to consume or invest.
(Argument for inflation) ..snip.. Thaaanos we have profound differences in opinion. I have broken your post down into its core arguments below. 1) Sound money does not generalize on the macroscale.This is a claim unsupported by the historical record. Societies including our own have lived under a gold standard in the past. Rome's currency was sound for more or less the entire history of the Roman republic. It was not until the Roman republic failed and Rome became empire that the currency was debased in earnest  2) Slight inflation targeted at 2% does not have major redistributive effects.An inflation rate of 2% will result in a loss of almost 50% percent of purchasing power over a period of a single generation 30 years. I would call that a major redistributive effect. 3) The redistributive effects from inflation are "equalizing effects".I completely disagree inflation primarily benefits first movers those granted the authority to debase the currency. Banks and those with political connections are the prime beneficiaries. Inflation redistributes from bottom and especially the middle class to the financial elite. Rather then an equalizing effect it worsens inequality. 4) Knowledge does not come cheap... So funding will always be needed to equalize the playing field...a slight inflation guaranties the availability of funding. There is nothing wrong with working to finance an education. Indeed this used to be how it was normally done until we decided to sell out our children's future with government guaranteed non dischargeable student loans. The "guaranteed" of funding you speak up results in ballooning out of control costs malinvestments in non productive fields and lifetimes of debt servitude. 5) It is necessity that at least one equalizing and redistributive force will exist. Redistribution in form of diffusion of wealth is a stability requirement.To the degree this is true this is what taxation is for. Taxation, however, is much more transparent and thus requires both public justification and also allows for opposition to develop. 6) There is no such thing as morality in macroeconomics, morality comes in politics.Cooperative rather than predatory behavior develops naturally over time in transparent systems composed of repeatedly interacting agents able to choose between cooperation and defection. Immoral behavior in economic interactions is not sustainable over the long run as victims either go extinct or learn to protect themselves. For the group cooperation is the superior economic choice. Subgroups with rule systems that facilitate cooperation aka morality will therefore outcompete and eventually replace those without such rules. The fact that Macroeconomics devotes little attention to long term sustainability of systems or the role of morality in maintaining this stability says more about the infancy and incompleteness of macroeconomics then it does about morality. |
|
|
|
|
Always a good idea to learn how to secure your communications.
I need to spend some time myself one of these days and familiarize myself with PGP encryption.
I look forward to your upcoming webpage OROBTC sounds interesting.
|
|
|
|
So the gold coin I bought just arrived in the mail. Looks like this.   It is a Titan Bitcoin https://www.titanbtc.com/Interestingly they are totally sold out of their copper and silver physical bitcoins but their still have a few left of their rarest run the pure gold physical bitcoins. Only 150 of these made and to my knowledge only the second pure gold physical bitcoin ever made. The first was the 1000 BTC gold casascius coin. |
|
|
|
well I disagree on the negative content you give to debtors as they are the ones that create innovation and mobilize capital.
Also in a deflationary currency there is no such thing as Investors but Hoarders. Hoarders are turned into investors because of inflation. There should be no rest for investors they should always look for profitable opportunities, never let them become hoarders. And as I mentioned before once the capital is commited investors will too prefer inflation as they have turned capital into asset one way or another.
A cash cow can simply be any company that dominates a market with high entry costs and has reached maximum efficiency, not necessary by dubious means but simply by maturing of its market.
The individuals who create innovation and mobilize capital may or may not be debtors. Debtors are simply those who pull consumption forward from the future to the present. One of the more interesting ideas from The Rise of Knowledge is the concept that future innovators will be increasingly dependent on knowledge production and that knowledge production is increasingly non financeable. If this premise is correct the relevance of debt to innovators and growth generators will likewise decline. I have nothing against debtors per say, I am one, I took out debt for my student loans as well as for my house. However, the simple reality is that under our current system debt is intrinsically tied to theft. When I took out my loans I devalued everyone else's money in the economy by some small fraction. The biggest beneficiary of those loans is the bank who now get a very reliable payment directly from my salary. Whether I am a beneficiary remains to be seen. Those who lost out in the transaction include everyone holding cash or bank deposits as they experienced a real if imperceptible decline in the purchasing power of their savings. This simple act of theft is the only way to do business or create new money in our economy and as such it is accepted as normal and justified. We are told it is necessary for "liquidity" or to "keep the economy going" and told that reverting to sound money would cause "economic collapse." If we could travel back in time and talk with the educated Roman elite we would probably find them fielding very similar arguments in favor of their system of latifundium. http://ic.galegroup.com/ic/whic/ReferenceDetailsPage/ReferenceDetailsWindow?zid=6fae6d8fdf9d15a41cc6febe529b8a4e&action=2&catId=&documentId=GALE%7CBT2350051324&userGroupName=lith7757&jsid=25f368963f5c91938e51a396aec21fb2The combination of abundant slaves, cheap land, and borrowed expertise led by the second century B.C.E. to the development of latifundia, estates worked by newly imported slaves who labored under brutal conditions and were kept locked in ergastula, or barracks. Most of these slave plantations were concentrated in south-central Italy and Sicily, where large tracts of land were available and the conditions were well-suited to the development of latifundia.
Investment in latifundia seemed a secure way for the elite to obtain a guaranteed income at a time when growing cities increased the demand for agricultural products The ancient Roman elite would probably argue that slave labor was required to keep food production going. They would report it as uneconomical to produce food any other way. They would justify any evils of their system as necessary to keep Rome strong and feed its large population. They would belittle reform and warn that abolishing latifundia would lead to famine, starvation and perhaps the collapse of the empire itself. The sad thing is that those ancient Romans may have been correct. Their system was by that point perhaps dependent on slave labor and sudden reform may have led to catastrophe. However, the dependence of Rome on slavery rather then a defense of slavery is simply a sign of the systemic corruption of Rome. At its heart slavery is a system of theft and is thus fundamentally inefficient. As such it is a system doomed to eventual replacement either externally or internally. Humans have always sought guaranteed income and the theft of another's labor is lucrative especially if it is legalized and enforced. Because of this profit it was not until very recent times that the practice was abolished. The last country to abolish slavery was Mauritania which "officially" abolished slavery in 1981 but did not actually make it a crime to own slaves until 2007. As a human race that is where we stand. We finally made slavery illegal everywhere 8 years ago. Our economic system like that of the Romans is hopelessly dependent on theft. The entire economy is wrapped and warped by the ebb and flow of debt and fiat currency leaving us in a constant battle to be the fastest to debase everyone else's savings and be the fastest to deploy debt and grab the "income producing assets". Transitioning to any form of sound money seems impossible for it would result in widespread economic collapse with its accompanying high probability of famine, and war. However, like the Romans our dependence on theft is no defense of our status quo. Rather it is simply a indication of systemic rot. Your description of those who use deflationary currency as hoarders is an oversimplification. It is true that a deflationary currency in an era of growth is redistributive. It allows for the owners of such a currency to claim a portion growth of the economy and its labor without actually contributing to that growth. However, transitioning to an inflationary currency does not necessarily transform hoarders into investors. Instead it simply transforms them from the beneficiary of redistribution to its victims and creates a new class of elite that consists of those who control that newly created currency. The only economically optimal solution is one in which there is no redistribution. This only occurs in a currency that approximates the ideal of no inflation and no deflation. Such a currency or multiple currencies would maximize the incentive to invest without resulting in a redistributive decline in purchasing power if one chooses not to consume or invest. |
|
|
|
Individuals primarily tend interact with a currency system in one of two ways
1) Producers: Providing good and or services in exchange for the currency unit
2) Consumers: Exchanging the currency unit for goods and or services
Those 2 just cancel each other out effectively converge to a 0% inflation rate and the fact that there are no net consumers or net producers but a combination makes the convergence faster. However we tend to prefer to keep consumer side happier ie have a demand driven economy. But imo the money supply is determined mainly by the next 3 actors 1 Credit seekers (business creators) 2 Investors 3 "farmers" owning a cash cow the first would prefer inflation so that the debt underperforms the equity created the second would also prefer inflation as they too will prefer their stake in the business to outperform the money burned or any collateral to appreciate to ensure repayment and steady cash flow the 3rd is everyones dream to own a business that generates cash with no re-investment they would prefer deflation as it will give them increasing value. but cash cows are not usefull or wanted in an economy so their preference is not taken into account. We want to keep the first 2 happy, as above because the main concern of a society is unemployment not wealth retention. Credit demand is imo the best index to measure if an economy grows or shrinks, therefore I find no fault in the current system that expands the supply when a loan applicant needs funds Your first actor credit seekers simplify down into simple consumers once you look at them in more depth. Credit seekers are those who seek to pull consumption from the future into the present. Once they obtain credit they may use that on pure consumption, or they may redeploy that purchasing power into an activity that they believe will generate returns but in either case they are approaching the market as any consumer would and thus as you said would prefer inflationary currencies. Your third actor "farmers" which you describe as owning a true cash cow can exist in only one a select few circumstances. 1) Investment in industries protected from competition by political influence aka laws. 2) Direct beneficiaries of government largess and redistribution aka pork. 3) Those able to debase the money supply directly for their own gain aka banks. It may be a common dream to own a business that generates ever increasing returns with no re-investment of time,effort, or capital but the only way such a business can exist is via some form of political suppression or indirect theft. Such "farmers" or potential "farmers" are essentially direct or indirect seekers of the government dole and large scale government largess of this kind is facilitated by inflationary currency. It is only your second actor the true investor who would prefer a non inflationary currency. The investor is an individual with some form of capital to deploy. Such an individual would logically prefer: A) Not be forced to prematurely invest or invest in sup optimal opportunities because the value of his capital was rapidly depreciating. B) To be paid for his time and effort in a currency that holds its value and does not need to be immediately redeployed. Thus if individuals are able to move freely between competing currencies the debtor and the government mooch will happily stay in the inflationary currency but actual growth generators are strongly incentivized to move to non inflationary options. I will leave it as an exercise for the reader to predict the long term future of a currency system which attracts debtors and government parasites while whenever possible being abandoned by the productive growth generators of society. |
|
|
|
...
Actually, IMO, allowing competing currencies (that really DO compete), would solve many of the problems cited above re "money". Money has a slippery definition, almost everyone has their own ideas of what it is.
They guy I follow re "money" is a gold guy (FOFOA), but NOT in favor of a "gold standard" or similar. He is in the camp that money ideally has the three below attributes all functioning well (but as he points out, NONE do):
1) Unit of Account (how much wealth you have, what things are worth to a tax collector, ect.). A measure.
2) Means of Exchange (give some US$, euros, shekels, rupees, etc.) to buy stuff. To make transactions convenient.
3) Store of Value (the money in your wallet will be worth next year what it is today). <--- Almost always fails given enough time.
Currencies essentially ALWAYS fail at Number Three. The dollar's time will almost surely come...
why 3? what if 3 is not important or even better not wanted. If you want to store value buy gold!  I would also add 4. credit creation without it there is no money Individuals primarily tend interact with a currency system in one of two ways 1) Producers: Providing good and or services in exchange for the currency unit 2) Consumers: Exchanging the currency unit for goods and or services Net producers would be happy to sell their goods and services for in exchange for a deflationary currency. Receiving payment in deflationary currency results in a future purchasing power that grows without the need to productively work or deploy/risk capital. Net consumers would for the opposite reasons prefer to pay with inflationary currencies. Inflation allows for the maximization of today's purchasing power, minimizes the burden of debt repayments and transfers the problem of how to quickly deploy depreciating capital to someone else. If individuals are able to freely move between competing currencies one would expect producers to minimize their involvement in inflationary currencies and consumers to likewise minimize their involvement in deflationary ones (to the degree possible). Market interactions require each producer be matched to a consumer you need a buyer for every seller. If we assume minimal costs in transitioning between currency options one would expect rapid convergence to the choice that results in the largest possible sustainable market. Only at the the currency choice that most closely approximated 0% change over time (aka 0% inflation and 0% deflation in terms of purchasing power) would there be no economic incentive for market participants to transition to a competing currency. At that level a producer would still love to accept payments or give robustly secured and enforced loans in a deflationary currency but he will find few customers willing to buy his goods or take on such liabilities. Similarly, consumer would love to pay for or take on debt in an inflationary currencies but will find producers prefer to sell in more stable currencies. Network effects, such as the current network effects which favor fiat currency increase the cost of transitioning to a superior alternative but unless the cost is prohibitive as to entirely prohibit any transition one would expect an existing network effect to only slow not stop such a transition. I believe the optimal rate of debasement is a one that equals or approximates the underlying growth rate of the economy it services. Any other debasement turns into an ultimately unjustifiable redistributive mechanism.
Bitcoin represents an extreme essentially a currency with no ultimate debasement. If bitcoin ever gains traction as a world currency it would be massively redistributive. In the hypothetical where it became the dominant currency simply holding bitcoin would guarantee a return equal to the aggregate growth of the economy. As no work is needed to achieve this return bitcoin would essentially act as a tax on growth and idea generators siphoning off a portion of their work to benefit those hording bitcoin. This scenario would create profound disincentive against risk suppress overall investment and thus suppress growth...
Similarly, an excessive debasement rate (one exceeding the overall growth rate in the economy) is redistributive in the opposite direction. In this scenario saved money does not maintain purchasing power. Wealth is siphoned from savers to those who are generating growth right this second. The scenario is one that encourages excess risk and a sort of desperate use it now or lose it mentality. If long term debasement exceeds the rate of economic growth it will introduce inefficiencies into economic decision making. Claims on real capital that optimally should have been delayed will instead be invested/spent. Society as a whole suffers. Savers and retirees would see their wealth and purchasing power continuously eroded giving them a profound incentive to move to an alternative currency that maintains their purchasing power.
The only scenario that is not redistributive is one where the currency is debased at a rate equal to the aggregate economic growth in the economy. This is the point of equilibrium where idle savings maintain purchasing power but do not grow or decline.
That said just because a currency system is not ideal money does not mean it may not grow substantially or perhaps even replace the status quo as a superior solution that is closer to ideal money than our existing system. Also bitcoin may be ideal if the future involves one of stable population levels and a future technological plateau. |
|
|
|
Where did you get no inflation is ideal? The problem is centeal authority and non interest rate targetting which he says is the best we got right now.
From http://sites.stat.psu.edu/~babu/nash/money.pdfThe paper called "Ideal Money" that was recently published in the Southern Economic Journal presented a possible conventional basis for money of the "ideal" type. This variety of money would be intrinsically free of "inflationary decadence" similarly to how money would be free from that on a true "gold standard", bot the proposed basis for that was not the proposal of a linkage to gold Our observation, based on thinking in terms of "the long term" rather than in terms of "short range expediency", was simply that there is no ideal rate of inflation that should be selected and chosen as the target but rather that the ideal concept would necessarily be that of a zero rate for what is called inflation ...
However, if we assume Nash is correct on all of his posits it does lead to some interesting conclusions. Namely if Nash posits 1-4 are assumed to all be true then we can infer the following:
A) Ideal money has both zero inflation and zero deflation over time. Only a currency that neither gained or lost purchasing power would meet the criteria of a standard of measurement comparable to a watt, the hour, or a degree of temperature. Deflationary currencies would fail this test just as inflationary currencies do.
B) Money that is not ideal, but better then the existing system would be expected to thrive and supplant that system until a superior solution even closer to the ideal is discovered
C) For Bitcoin to meet the criteria of a true ideal currency the the human population would need to stabilize at a fixed number and technological progress would have to plateau or the bitcoin protocol would need to be modified to modify the supply of coins in existence in response to technological improvements and or population changes.
A can never be because markets are fractals, their size differs with the unit used, What is the ideal measure to measure a coastline?. Also they are unpredictable, ideal money will always be a step or more behind. B money is not just a thing to discard for something better, money is first and foremost participation in a network, and choice of adoption follows network effect laws. ... Regarding A) I would agree that the best that can be achieved in the foreseeable future is to approximate such an ideal. I believe Nash acknowledged that as well which is why he referred to this concept as asymptotically ideal. Regarding B) Nash's argument appears to be that when individuals are able to participate in multiple networks simultaneously the network operating with a currency unit that is closer to ideal money will eventually win out as individuals gradually migrate over to the monetary unit that is closer to the ideal. That is my gross impression anyway from the lecture summary posted above. Having not read his actual paper my understanding of his argument may be flawed. But i think Nash is wrong on a more basic level
To better assess this it would be helpful to see the arguments he uses to make his case. If anyone has access to the Southern Economic Journal I would be interested in getting a copy of this article http://econpapers.repec.org/article/sejancoec/v_3a69_3a1_3ay_3a2002_3ap_3a4-11.htm |
|
|
|
Can you expand on the nash concept of ideal money. I am unfamiliar with his theory. The wikipedia page is not helpful. https://en.wikipedia.org/wiki/Ideal_moneyIt says only "In John Nash’s lecture he mentioned "Good money’,is money that is expected to maintain its value over time. ‘Bad money’ is expected to lose value over time, as under conditions of inflation" and "John Nash mentioned in his lecture that Euro might become an ideal money in the future, because Euro is used in a large range of places and has a good stability" Stating that ideal money is money that maintains value over time forces you to define "value" and address why money that maintains "value" is superior to money that increases or declines over time. asymptotically ideal is what I believe he refers to as something like bitcoin. Note we will never have perfect money, where inflation is tied to a real economic indicator that is easily auditable and one that cant be tampered with, but bitcoins falls under the curve closer to infinity than inflation targetted currencies today. Notable quote which would make sense to most here : "money should have the function of a standard of measurement and thus that it should become comparable to the watt" Btw i believe nash was satoshi. Interesting read thanks. The critical postulates from the the Nash lecture above are the following: 1) Money should ideally have the function of a standard of measurement and this should ideally be comparable to the watt or the hour or a degree of temperature. 2) Ideal money should be free of "inflationary decadence" and the ideal rate of inflation over the long term is a zero rate of inflation 3) Currencies are in competition with each other and over time and individuals are increasingly able to "vote with their feet" leaving inflationary currencies for those that are more stable. 4) Over time competitive pressure will result in natural selection and lead us ever closer to ideal money. This process is referred to as asymptotically ideal money Unfortunately, these ideas are essentially left as unsupported posits in the lecture linked above with little in the way of supporting framework. I would have liked to read the actual publication referenced in the lecture to see if Nash has developed deeper justifications supporting these ideas. The referenced paper in the lecture does not seem to be be available online. Its abstract is here. http://econpapers.repec.org/article/sejancoec/v_3a69_3a1_3ay_3a2002_3ap_3a4-11.htmHowever, if we assume Nash is correct on all of his posits it does lead to some interesting conclusions. Namely if Nash posits 1-4 are assumed to all be true then we can infer the following: A) Ideal money has both zero inflation and zero deflation over time. Only a currency that neither gained or lost purchasing power would meet the criteria of a standard of measurement comparable to a watt, the hour, or a degree of temperature. Deflationary currencies would fail this test just as inflationary currencies do. B) Money that is not ideal, but better then the existing system would be expected to thrive and supplant that system until a superior solution even closer to the ideal is discovered C) For Bitcoin to meet the criteria of a true ideal currency the the human population would need to stabilize at a fixed number and technological progress would have to plateau or the bitcoin protocol would need to be modified to modify the supply of coins in existence in response to technological improvements and or population changes. |
|
|
|
Thus the solution is to remove from government the power of currency creation (via the development of superior competitors) and force it to eventually live only through taxation? Without this power banks would be forced to raise capital through legitimate means (investors and depositors) rather then just borrow newly created fiat from the FED. Governments would be likewise be unable to realistically backstop banks. When there is limited free wealth to go around the share that can go to "friends" would plummet.
Thats the million dollar question.. Inflation targetting is the best we had before bitcoin, and if bitcoin classifies closer to what nash termed ideal money then yea it will win themarket over due to increases in efficiency by moving out the middlemen who tend to be dishonest Can you expand on the nash concept of ideal money. I am unfamiliar with his theory. The wikipedia page is not helpful. https://en.wikipedia.org/wiki/Ideal_moneyIt says only "In John Nash’s lecture he mentioned "Good money’,is money that is expected to maintain its value over time. ‘Bad money’ is expected to lose value over time, as under conditions of inflation" and "John Nash mentioned in his lecture that Euro might become an ideal money in the future, because Euro is used in a large range of places and has a good stability" Stating that ideal money is money that maintains value over time forces you to define "value" and address why money that maintains "value" is superior to money that increases or declines over time. |
|
|
|
Yes.
They come out the winners no matter what happens. The bankers are always hedged.
If the economy goes on: They give out more loans (out of thin air) and get leveraged interest payments
If the economy collapses: They confiscate the assets from those that cant pay the debt, because they lost their jobs, and now the bank have real assets, which they can give in rent to the same person they stole from just so that he doesnt get in the street.
The same with bitcoin: If bitcoin never goes mainstream (which I doubt) they will remain the elite
If bitcoin goes mainstream: They will quickly buy up bitcoin with their fictitious paper, and still remain the elite.
They will remain the elite.
Not so! answer = Public infrastructure on account managing and payment system + Banks only get to broker investment between credit seekers and investors (Do their real job: *risk assesment* ). Have faith banks will not escape uberization, they are about to be disrupted ie P2P Lending In an economy where a decentralized cryptocurrency became dominant the current economic elite would only be able to buy a powerful opening position. To maintain elite status thereafter would require those individuals to compete and produce. Otherwise their share of the pie would shrink progressively every time they consumed and/or choose to reproduce beyond replacement levels. This is drastically different from the economic situation of today which allows connected individual to essentially debase the money supply on demand (at very little cost) and buy up or corner economic opportunity while having the government bail them out (further debasing the money supply) in the event of investment error. P2P lending can only only dominate once it becomes cost competitive. That necessitates the end of fiat currency. I got an offer to refinance my student loans the other day at 2.3% variable with payments over 5 years. I have a great job and good credit. However, the reality is that only someone with access to FED funding would probably be willing to make a loan like this. A bank can borrow at 0.36% (current federal funds rate) make a loan to me at 2.3% and pocket the spread. P2P cannot match that because they do not have access to easy funds at 0.36% |
|
|
|
The banks are not the deep problem, it is about who controls the banks, who controls the productions mediums, money gets value because you can get things with it, and is the seller who says what is money and what is not
The problem is as always the "Privilege" to quote Hagbard Celine(1) With banks the privilege of having the backing of the state , and (2) With "friends" having the privileged access to funding ie large loans without collateral, early loans in the business cycle. But I think that the 2nd is the most damaging and creates the need for the 1st You got it.. The govt trusts them to make good decisions for everyone and the banks inr eturn get favourable rates to make money, that and im sure they are family/buddies who share a piece of the free wealth. Thus the solution is to remove from government the power of currency creation (via the development of superior competitors) and force it to eventually live only through taxation? Without this power banks would be forced to raise capital through legitimate means (investors and depositors) rather then just borrow newly created fiat from the FED. Governments would be likewise be unable to realistically backstop banks. When there is limited free wealth to go around the share that can go to "friends" would plummet. |
|
|
|
|
First Amendment to the United States Constitution:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances
|
|
|
|
From Zerohedge http://www.zerohedge.com/news/2015-12-17/america-its-over-yale-students-sign-petition-repeal-first-amendmentWithin an hour on the Yale campus, Horowitz collected over 50 signatures from student who wanted to repeal a significant part of the Constitution.
The petition to “blow up” the First Amendment (which protects freedom of speech, freedom of religion, freedom of assembly, freedom of the press, and freedom of petition), was met with such comments as "I think this is fantastic, I absolutely agree," and "excellent," or "I love it."
And as DailyCaller noted, one female student ironically agreed with Horowitz when he suggested, "I think the Constitution should be one big safe space." Perhaps as interesting as the event itself is the current very distinct pattern in media coverage. As of the time of this post if you google Yale and First Amendment this story fills the main search page. Top Results In Order Of Appearance: (Main Google Searchpage) 1) Fox News 2) Reason 3) NationalReview 4) TheBlaze 5) WashingtonExaminer 6) DailyCaller 7) Meditate.com 8 ) TheCollegeFix Now cross reference this with the top 50 online news sites by number of viewers: http://www.journalism.org/media-indicators/digital-top-50-online-news-entities-2015/And we see the top online news sites by volume are 1) ABC 2) CNN 3) NBC 4) Huffington Post 5) CBS 6) USA Today 7) Buzzfeed 8 ) New York Times Interesting that there is no overlap between these two lists. |
|
|
|
|
Show Posts
