Isn't deflation theft, too?

[bcearl]

Just think of this simple example:

Maybe you start with 100 units of currency (e.g. bitcoins) and 100 units of goods (e.g. pizzas). Then you get one pizza for one bitcoin.

Now, these 100 bitcoins are owned by 10 users with the following distribution:

user 1: 20
user 2: 20
user 3: 20
user 4: 20
user 5: 5
user 6: 5
user 7: 5
user 8: 2
user 9: 2
user 10: 1

Now user number 10 makes a pizza. this means we have 100 bitcoins and 101 pizzas. This means, for one bitcoin you now get 1.01 pizzas.

What does this mean? This means, that every user gets extra pizza. And the users with more coins get more extra pizza, although it was only user 10 who made the pizza.

And even when he wants to sell the pizza: He will not get 1 bitcoin for it. He will get about 0.99, because that's the pizza price when there are 100 bitcoins and 101 pizzas on the market.

[hugolp]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

[bcearl]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

This is a special case, while my example is true for any kind of produced goods at any time.

[hugolp]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

This is a special case, while my example is true for any kind of produced goods at any time.

Why is money a special product?

[bcearl]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

This is a special case, while my example is true for any kind of produced goods at any time.

Why is money a special product?

I haven't said that.

[Basiley]

no, isn't.
isn't war is murder ?
isn't censorship is crime ?
isn't oppression is right ? to be left?

[billyjoeallen]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

This is a special case, while my example is true for any kind of produced goods at any time.

http://en.wikipedia.org/wiki/Special_pleading

[Anonymous]

Choosing to spend currency that always goes up in value is not theft in the same sense of saving money and have it DECREASE in value while it sits on your person. I can see how one could argue this is theft but the change of value lies in other people's goods. Not your own. A Macbook Pro might be $2500 when you bought it but you aren't going to be able to resell it for full price. Is that really theft? Heh, it's really an interesting argument though. I'll give you that.

[bitcredit]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

So inflation isn't theft either, right? After all, if people choose to use an expensive cable my company makes that's their choice. If my company is able to dramatically decrease production costs and therefore reduce the price that ought to be a good thing.

[Anonymous]

Let me answer with a question:

I decide to store some type of computer cable, and suddenly the manufacturers stop making it. Now there is a lot of people that want that cable replacement and a very reduced supply, therefore the price goes up. Am I stealing from someone?

So inflation isn't theft either, right? After all, if people choose to use an expensive cable my company makes that's their choice. If my company is able to dramatically decrease production costs and therefore reduce the price that ought to be a good thing.

I don't even know this could even be remotely considered a good analogy.

[realnowhereman]

If I stole minus five dollars from you would that be theft?

Deflation isn't theft in the same way that surgeons taking a knife out of you isn't murder.

[digdugg67]

I think that the real answer lies in how much are people willing to pay for the pizza.

BTW there is only one pizza around when #10 makes his pizza. All the other pizzas have been consumed unless the owners of said pizzas are gluten intolerant.

Pizzas are Consumables
BitCoins are not.

Just saying

[Anonymous]

People aren't entitled to pay you for goods you want to sell. It's as simple as that. If you can't get the value you want, you don't. As with inflation, you have property in your hands and the gentlemen in the Federal Reserve are degrading it directly with more printing. You are being denied of your own property in one case and being denied others property in the other. It isn't the same.

[SgtSpike]

Deflationary currency is theft from holders of assets, the same way inflationary currency is theft from holders of money.

This is one reason why I'm not 100% onboard with the deflationary currency thing.  In my mind, a currency that is neither deflationary or inflationary would be ideal, and could easily be accomplished with a fixed-rate output of coins.

For example, say we used a similar strategy as bitcoins, but based it off of world population.  We have the software release 1 coin per 100 million people of world population per block.  For 7B people, that would be 70 coins per block.

Also assume that 0.02% of coins, on average, are lost every day.

We can then come up with an equation (based on current world population) of 10,080 = 0.0002X, where X is the number of coins that the currency would eventually reach as a stabilized, permanent number.  Which would be just over 50M coins, interestingly enough.  And that number would slowly grow along with world population, leaving us with a currency that neither inflates or deflates.

[Anonymous]

Deflationary currency is theft from holders of assets.

No it's not. People are not entitled to other people's money.

[realnowhereman]

Deflationary currency is theft from holders of assets, the same way inflationary currency is theft from holders of money.

That's nonsense.  Assets are unchanged under inflation or deflation of currency.  One loaf of bread is still one loaf of bread.

You're also mixing up inflation and deflation of monetary supply with inflation and deflation of prices.  Bitcoin "deflation" is not comparable with central bank inflation of the money supply.  Inflation we experience today happens when the government prints money -- that is theft, they are removing a little percentage of the money in your pocket and putting it in their own.  The so-called Bitcoin deflation is not the converse were money is burned by a central authority, or by anyone else (ignoring the negligible coins lost deflation).  No, the deflation from bitcoin is price deflation, which comes about because the economy has grown and so the same number of coins is divided over a larger economy.

If we had price inflation without money supply inflation with our fiat currencies, that wouldn't be theft.  It wouldn't make us happy, but no one would be getting the benefit any more than any one else.  Therefore Bitcoin's (eventual) price deflation is not stealing from anyone.

[Anonymous]

Deflationary currency is theft from holders of assets, the same way inflationary currency is theft from holders of money.

One loaf of bread is still one loaf of bread.

Well said. Kudos.

[SgtSpike]

I am not confusing price deflation with supply deflation.  I fully expect bitcoins to continue to be deflationary with regards to supply per user if it continues to grow, and eventually becomes widely adopted.

Ok, one loaf of bread is still one loaf of bread.  Isn't one dollar still one dollar?

The difference is in how much currency can a loaf of bread buy, or how many loaves of bread can a currency buy.  With a deflationary currency (i.e., a currency that inflates in price or value), it is theft from the holder of loaves of bread.  It moves value from the holder of loaves of bread to the holder of currency.  With an inflationary currency, (i.e., a currency that deflates in price or value), it is theft from the holder of currency.  It moves value from the holder of currency to the holder of loaves of bread.

[cointrepreneur]

How about this example

Person A and person B both have 100 bitcoins.

Person A just holds theirs and does nothing with them.

Person B goes into business. Person B buys a widget at wholesale prices, in order to be a widget retailer.
So say B buys a widget for 100 bitcoins in order to sell it to someone else. By the time B sells his widget the bitcoin has deflated and it takes less bitcoins to buy a widget. So he sells it for 99 bitcoins.

On the one hand, B has the same (or greater) amount of WEALTH but compared to A (who did nothing) he has fewer bitcoins.

A is the winner for doing nothing. Isn't this a problem for an economy when people who do nothing fair better than people who go into business?

(note: I am a huge supporter of bitcoins and their future, I'm just posting this as a philosophical question out of curiosity for good answers).

[Anonymous]

Eh, I think B just failed to make a viable business plan. You can make a business that turns more profit than 100 Bitcoins sitting incubated.