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Author Topic: Economic history question  (Read 654 times)
blogospheroid
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June 15, 2011, 09:42:15 AM
 #1

Hi everyone, A micro economic history question here.

When  a government hyperinflates its currency, has anyone done a study on how the government continues to maintain the loyalty of its police and military? Are they paid in hard currency or land? Are only those tribally related to the leader left with him at the end?

Relevance to bitcoin - some history can give an insight on the mechanisms of the hyperinflation endgame.

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BarsMonster
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June 15, 2011, 09:49:59 AM
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In case of hyperinflation, there is usually not much jobs available. So noone is going to quit the job no matter how small is the pay, that's including military/police. But if pay is inadequate, they will try to use force to earn some money (by selling govt. equipment on black market, or 'covering' business).

This is what we've seen in exUSSR.

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dr.bitcoin
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June 15, 2011, 12:48:54 PM
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During such times the police and the military have significat advantages simply by being the police and the military. Thay can (and will) take bribes, protection fees (mob-style) etc. or simply put abuse their position in order to get rich or simply make ends meet (former or later depending on rank). Usually it ends when the police and the military realise that they would be better of with a new government/dictator than the one in power - that's when you get a revolution in which they no longer defend the government/dictator. It is recent history - Estern Europe, Middle East etc.
caveden
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June 15, 2011, 12:53:38 PM
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They can be payed with newly created money, in large quantities.

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dr.bitcoin
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June 15, 2011, 01:25:06 PM
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If you find such a study, please post it here. It would be a very interesting read. Thanks in advance!
Fireball
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June 15, 2011, 01:30:06 PM
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Police and military have not only financial interest but "power" too, and their have a hierarchy. So unless a large amount of lower employees gets out of control, the higher part will use all possible means to fix the problem. Including physical power.

So I don't think this really applies to bitcoin in any way.

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