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Author Topic: Should money have intrisic value ?  (Read 10440 times)
grondilu
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December 02, 2010, 09:51:14 PM
 #1

The thread about "money as debt" from P. Grignon makes me think about this old debate concerning the intrisic value of money.

It's a debate I had many times with people having contempt for gold, describing it as a "useless soft metal" or a "barbarous relic".  I also think that gold is mainly useless, or more precisely, that its use is only based on the fact that it is ideal as a money, due to its remarquable properties.

However, I confess I'd have some difficulties explaining why money doesn't need intrisic value.  I have ideas about this but it's still quite confuse.

What do you think about that and can you elaborate ?

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December 02, 2010, 11:02:49 PM
 #2

It helps in case of an economic collapse to have a currency with value beyond being an accepted unit of exchange.
Paper money is useless as soon as the central bank collapses or hyperinflation happens.
Gold/silver/etc will always have at least a base value due to its uses as a commodity.
Another advantage is that it is hard to produce, you cannot simply print it or update some database record. This limits inflation.

Disadvantage of using a commodity as money is that it is generally heavy, expensive to protect, and you need to continuously verify that a certain unit still matches a certain number of grams of commodity. For example, it used to be quite popular to scrape off a bit of each coin and sell the remaining gold once in a while.

So yeah... no approach is perfect.

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December 02, 2010, 11:09:59 PM
 #3

I know that I'm being anal here, but money and currency are not the same thing.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
grondilu
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December 03, 2010, 12:06:46 AM
 #4

Another advantage is that it is hard to produce, you cannot simply print it or update some database record. This limits inflation.

Well, this is not characteristic to physical commodities.  It's the whole point of bitcoin.  It is hard to produce, though it has no intrisic value.
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December 03, 2010, 12:07:54 AM
 #5

Gold is very useful. If it were more plentiful, people would use gold.

Gold have medicine, electronic, and decorative use.

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December 03, 2010, 12:08:17 AM
 #6

I know that I'm being anal here, but money and currency are not the same thing.

Well, unless I'm wrong about the difference between those concepts, I'm currently talking about money.
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December 03, 2010, 12:12:51 AM
 #7

Gold is very useful. If it were more plentiful, people would use gold.

Gold have medicine, electronic, and decorative use.

Sure, but it's quite marginal.  I think we can, for the sake of the argumentation, consider it has no value.

Anyway I'm just realizing how futile is this debate, considering that fiat currencies ARE money with no intrisic value.


Somehow it's amazing people accuse gold of not having any value when they don't do the same to fiat money.
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December 03, 2010, 12:26:23 AM
 #8

Mass, temperature, color are some properties of objects that exist with or without humans. Value only exists contingent on the existence of humans who have certain preferences. Nothing has value to you once you die and nothing has value to "us" once we're all gone. Value is completely dependent on us. Nothing has value in and of itself.

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grondilu
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December 03, 2010, 12:32:17 AM
 #9

Mass, temperature, color are some properties of objects that exist with or without humans. Value only exists contingent on the existence of humans who have certain preferences. Nothing has value to you once you die and nothing has value to "us" once we're all gone. Value is completely dependent on us. Nothing has value in and of itself.


By "intrisic", I didn't mean beyond human judgment or anything.

It was rather as opposed to "conventionnal" or "arbitrary".

Value is the faculty for something to be desired by a human being.  Now, someone can desire something because he thinks someone else will desire it and thus it will be possible to trade it.

Therefore, I think we can say that something has intrisic value when there is at least one human being who can desire to possess it without ever giving it away to someone else.
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December 03, 2010, 12:48:22 AM
 #10

Mass, temperature, color are some properties of objects that exist with or without humans. Value only exists contingent on the existence of humans who have certain preferences. Nothing has value to you once you die and nothing has value to "us" once we're all gone. Value is completely dependent on us. Nothing has value in and of itself.


By "intrisic", I didn't mean beyond human judgment or anything.

It was rather as opposed to "conventionnal" or "arbitrary".

Value is the faculty for something to be desired by a human being.  Now, someone can desire something because he thinks someone else will desire it and thus it will be possible to trade it.

Therefore, I think we can say that something has intrisic value when there is at least one human being who can desire to possess it without ever giving it away to someone else.


Okay. Are we sure there is not one person who enjoys a good bitcoin? Or prefers the feel of the USD to toilet paper?  Smiley

Also someone might think "I just need to get a lot of dollars to show people my huge bank statement" then later trade them away, but for a while he wanted them for their own sake. Or maybe he even dies still thinking this before trading.

But I'm just being picky now, I understand what you mean.
 

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December 03, 2010, 02:11:22 AM
 #11

I know that I'm being anal here, but money and currency are not the same thing.

Well, unless I'm wrong about the difference between those concepts, I'm currently talking about money.


Then I'm really confused, because money requires an intrinsic value by definition.  However, it might be lost in translation because based on this thread, many don't understand the word "intrinsic".  It's a tough one to explain, but gold has intrinsic value because it is valued outside of the context of an orginized intent to support it.  Fiat currencies have negligble intrinsic value because most of their value (as a medium of exchange) is directly related to the support of a third party institution, in this case a functioning government.  If said government's future existance is put into question, the fiat currency's value is also.  Likewise, a currency issued by a bank, whether backed or not, is tied to the public's trust in that bank.  Something has intrinsic value if it is generally valued regardless of the issuing institution; such as the case of gold coins minted by long dead governments.  Commodities have intrinsic value because they can be used to build, fuel or eat.  I wouldn't say that bitcoins have any intrinsic value, because they have no usefulness outside of the context of a medium of exchange, and fundamentally depend upon the trustworthiness of the blockchain for their base value.  Bitcoins are, therefore, not money and not a commodity.  Bitcoins are only a currency, but an intentionally designed "natural" currency because they are only accepted by choice and have no artificial support from legal tender or tax payment laws.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 03, 2010, 03:28:06 AM
 #12

I know that I'm being anal here, but money and currency are not the same thing.

Currency = small physical money tokens (coins & notes).
Money = more general concept of spendable stuff including currency and credit.
(My summary based on http://en.wikipedia.org/wiki/Currency and http://en.wikipedia.org/wiki/Money )

Then I'm really confused, because money requires an intrinsic value by definition.

I'm not sure about that.  Which definition?

I thought money's main necessary properties were
  • Mostly conserved.  Sure you might lose some if careless, but you can't duplicate it (double spend, shaving the edge off gold coins, counterfeits).
  • Like currency, needs to be transferred around in useful-size easy-to-validate denominations without too much inconvenience (= cost).
  • Scarce.  Hence, in part, the Hitchhiker's Guide joke about using leaves off trees as money?  I put it last, but I suspect it is of primary importance.

Various forms of money have problems,
  • Consider diamonds & rubies as currency.  Now they can be made (some would say counterfeited) industrially it is very difficult to justify or enforce a high price for the ones coming out of mines.
  • Consider the popular electronic fiat money forms - credit cards and paypal.  The inconvenience here seems to me to be running quite high (~5% per transfer).  How this compares with the old days of shipping gold coins on horseback, I don't know.
  • Gold is nicely scarce.  Fiat money less so?  Of course some people have not enough to live, but others make (!!) oodles of it.
Quote
However, it might be lost in translation because based on this thread, many don't understand the word "intrinsic".

Actually I'm skeptical about "intrinsic value" of any object, it seems to be an oxymoron; but grondilu tweaked the question.

Does money need to be useful for something else?  I suspect not, but back when money was just currency the options were more limited.

As kiba said, gold is good for decoration & its physical properties.  If it wasn't useful, we wouldn't work so hard to dig it out; but if it's not hard work to get some more, the "scarce" property is absent.
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December 03, 2010, 03:49:40 AM
 #13

Intrinsic value is required for money to arise in a barter economy.

Once we get beyond that, we can now bootstrap a currency like bitcoin.

Now we have information by which we can perform economic calculation.

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December 03, 2010, 05:17:43 AM
 #14

Then I'm really confused, because money requires an intrinsic value by definition.

I'm not sure about that.  Which definition?

I thought money's main necessary properties were
  • Mostly conserved.  Sure you might lose some if careless, but you can't duplicate it (double spend, shaving the edge off gold coins, counterfeits).
  • Like currency, needs to be transferred around in useful-size easy-to-validate denominations without too much inconvenience (= cost).
  • Scarce.  Hence, in part, the Hitchhiker's Guide joke about using leaves off trees as money?  I put it last, but I suspect it is of primary importance.
Agreed.  It has to be indestrucible, divisable and scarce.
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December 03, 2010, 06:12:02 AM
 #15


There are so many things wrong with this post, I may have trouble untangling it, but I will try.


Currency = small physical money tokens (coins & notes).
Money = more general concept of spendable stuff including currency and credit.
(My summary based on http://en.wikipedia.org/wiki/Currency and http://en.wikipedia.org/wiki/Money )


Wikipedia is nice, but is sometimes a poor reference.  This is one of those times.

Currency is a commonly accepted unit of exchange.  It does not need to be more, but is often 'backed' by some promise from it's issuing agency, such as a gold standard.  It is best when it is very difficult (read expensive) to fake, which is why paper currencies are ever increasing the 'security measures' in their notes.  Also, a currency is an arbitrary mathmatical unit of measurement, in much the same vein that both an inch and a meter are arbitrary units of length.  Both measure the same thing, just as the US $ and the Euro both measure an elusive concept of quantifications of value, but the units themselves are simply a matter of convention.

Money, in the other hand, isn't a unit.  An ideal money has several characteristics that lend to it's suitability as a natural currency, but it does not need to be a currency.

Those characteristics are...

Durability - It cannot rust or rot.  Nor should it require a container to either protect it from harm or it's user, one reason that mercury was never used as a money as far as I know.

Divisability - The ability to 'make change' without impacting the value of the money.  Cattle have a definable value, but are a terrible way to pay one's mortgage.

Fungibility - This basicly means that the quality is uniform, so that one measure of the money is equal to any other.

Transportability - This should be self evident, but the money should be valuable enough that carrying it shouldn't be a burden.

Congizability - Which means that money should be easily recognizable as probably being authentic by normal human senses, without the need to trust testing devices or experts.

The above conditions, historicly, have only been met by material classes that we commonly refer to as commodities, but the closest naturally occurring commodity to the ideal money has always been refined gold.

Quote

Then I'm really confused, because money requires an intrinsic value by definition.

I'm not sure about that.  Which definition?

I thought money's main necessary properties were
  • Mostly conserved.  Sure you might lose some if careless, but you can't duplicate it (double spend, shaving the edge off gold coins, counterfeits).
  • Like currency, needs to be transferred around in useful-size easy-to-validate denominations without too much inconvenience (= cost).
  • Scarce.  Hence, in part, the Hitchhiker's Guide joke about using leaves off trees as money?  I put it last, but I suspect it is of primary importance.
Scarcity is not a requirement of money, and can be a detriment.  Historic case, platinum is much more rare than gold in nature, but also rare enough that most people had no experience with it (this was also somewhat true with gold, which is why nations traded in gold but the citizens traded mostly in silver or copper) so the Spanish made cannons out of platinum that was mined in central America.  Also, scarcity doesn't always equate to concentration of value.  Although silver is about 17 times more abundant in nature than gold, there is much more gold in a refined state than silver today.  This is mostly due to the fact that silver is an industrial commodity in our modern world, with little to no monetary value, so most of the silver mined has been consumed in industry; whereas gold's monetary value has always priced it out of it's industrial uses, so nearly all of the gold that has ever been mined in recorded human history can still be accounted for.

Quote

Various forms of money have problems,
  • Consider diamonds & rubies as currency.  Now they can be made (some would say counterfeited) industrially it is very difficult to justify or enforce a high price for the ones coming out of mines.
Jewels might have a high unit value, but they still make a poor money because they are neither fungible (two diamonds may both be the same carrot rating, but one be more valuable for some other characteristic, such as cut, color or clarity) nor are they congizabile (it's an expert skill to be able to judge the value of a diamond).  They don't always have a high unit value, either.

Quote


  • Consider the popular electronic fiat money forms - credit cards and paypal.  The inconvenience here seems to me to be running quite high (~5% per transfer).  How this compares with the old days of shipping gold coins on horseback, I don't know.
I'm not sure of your point here, paper currencies were originally receipts of gold on deposit at a goldmonger or bank, and were traded as a symbol of that gold.  The improved portability of paper over metal is not a new concept, and neither is the improved portability of electronic forms of credit, but neither is an example of a money.

Quote

Does money need to be useful for something else?  I suspect not, but back when money was just currency the options were more limited.


Again, you seem to be conflating the two concepts.  They are related, but still distinct.

Quote

As kiba said, gold is good for decoration & its physical properties.  If it wasn't useful, we wouldn't work so hard to dig it out; but if it's not hard work to get some more, the "scarce" property is absent.


The scarcity of gold, relative to many other comparable commodities, is absent.  You need to get past the idea that scarcity is a condition of value, it's not.  Your fingerprints are rare, but I would say you would be suspicious of anyone who valued them.  Water is the most abundant molecule on the planet, but has a quantifiable value almost everywhere.  The difference is that water has common utility, whereas your fingerprints do not.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 03, 2010, 06:18:49 AM
 #16

Intrinsic value is required for money to arise in a barter economy.

Once we get beyond that, we can now bootstrap a currency like bitcoin.

Now we have information by which we can perform economic calculation.

The introduction of money into a barter economy only serves as a 'unknown third party' barter, it doesn't otherwise alter the basis of the exchange.  I don't otherwise understand your statement.  What have we 'gotten beyond' in order to bootstrap, and why is it a prerequisite?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 03, 2010, 06:23:57 AM
 #17

Intrinsic value is required for money to arise in a barter economy.

Once we get beyond that, we can now bootstrap a currency like bitcoin.

Now we have information by which we can perform economic calculation.

The introduction of money into a barter economy only serves as a 'unknown third party' barter, it doesn't otherwise alter the basis of the exchange.  I don't otherwise understand your statement.  What have we 'gotten beyond' in order to bootstrap, and why is it a prerequisite?

http://bitcointalk.org/index.php?topic=583.0

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December 03, 2010, 06:27:28 AM
 #18

Intrinsic value is required for money to arise in a barter economy.

Once we get beyond that, we can now bootstrap a currency like bitcoin.

Now we have information by which we can perform economic calculation.

The introduction of money into a barter economy only serves as a 'unknown third party' barter, it doesn't otherwise alter the basis of the exchange.  I don't otherwise understand your statement.  What have we 'gotten beyond' in order to bootstrap, and why is it a prerequisite?

http://bitcointalk.org/index.php?topic=583.0

That's not an answer.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 03, 2010, 06:34:25 AM
 #19


That's not an answer.

Fair enough. Let me try an answer.

Mises' Regression Theorem shows us how money's value is established.

The reason why gold arise as the money of choice is because it is a useful commodity under barter(intrinsic value). In other words, gold got its start because it is valuable in an a barter economy, not because it was a good medium of exchange. That come later.

Does bitcoin have any value in a barter economy? Nope.

But if you can exchange bitcoin in term of gold, than you seed a way for price estimation.

Thus...

Sheeps -> Gold -> paper money -> unbacked FR notes -> Bitcoins. <- Gold again.

IF our economy were to crash and the bitcoin network is wiped out, we have to start with gold again before we can start using bitcoins.

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December 03, 2010, 06:57:08 AM
 #20


That's not an answer.

Fair enough. Let me try an answer.

Mises' Regression Theorem shows us how money's value is established.

The reason why gold arise as the money of choice is because it is a useful commodity under barter(intrinsic value). In other words, gold got its start because it is valuable in an a barter economy, not because it was a good medium of exchange. That come later.

Does bitcoin have any value in a barter economy? Nope.

But if you can exchange bitcoin in term of gold, than you seed a way for price estimation.

Thus...

Sheeps -> Gold -> paper money -> unbacked FR notes -> Bitcoins. <- Gold again.

IF our economy were to crash and the bitcoin network is wiped out, we have to start with gold again before we can start using bitcoins.

Okay, I understand your point, and agree.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 03, 2010, 08:18:27 AM
 #21

Only now that I saw this topic.

Please, memorize: There is no such a thing as intrinsic value.

Value is an opinion people have on stuff. It is not a characteristic of stuff themselves. It is important to remember it. If you say the value of something is intrinsic to this something, changing the value of this something would be changing the thing itself. So, for example, if somebody mines tones of new gold which eventually drop the value of your gold, you could accuse this person of violating your property rights, by changing it without your permission. This is nonsense.
Understanding that value is not intrinsic was the main achievement of the austrian economics, which set them aside the "rest". Smiley

What you may claim is that things have inherent characteristics that make them useful for certain purposes. For example, cotton has inherent characteristics that make it useful for making clothes.

Now, if you ask, must money have some other utility than being a good means of exchange and store of value?
My answer would be: what for? Isn't the specialization in resource usage one of the main features of capitalism?

Gold is useful as money and for making jewelry and other industrial uses.
Bitcoins are even more useful as money and.... that's it.
So, why keep using gold as money, if we have something even better, and by using something else, more gold could be liberated for other uses where it has none or few substitutes?
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December 03, 2010, 08:30:40 AM
 #22

Only now that I saw this topic.

Please, memorize: There is no such a thing as intrinsic value.

Oh please. It's a very specific definition.

An object is said to have an intrinsic value if humans can find ways to use it other then...money.

So cows, cars, houses, etc have intrinsic value. It's not in conflict with subjective theory of value at all.

Now, why gold? Well, because gold is the mean of starting over from a barter economy. Bitcoins have no value in a barter economy and cannot arose as money until gold or some other form of money emerge.

Therefore, gold is the best form for storing your wealth over the long term. We also see that gold have thousand years of experience as money, while bitcoin...is only 2 years old at best.

People trust gold coins more than they trust some new fanged thing called bitcoins.

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December 03, 2010, 09:24:21 AM
 #23

Only now that I saw this topic.

Please, memorize: There is no such a thing as intrinsic value.

Oh please. It's a very specific definition.

An object is said to have an intrinsic value if humans can find ways to use it other then...money.

That's not value. Utility if you will. But not value... The fallacy of intrinsic value is what allowed stupid theories like marxist labor-value to remain alive until present days. It is important to understand it, value is not intrinsic.

The fallacy of intrinsic value, by Gary North.
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December 03, 2010, 09:39:02 AM
 #24

That's not value. Utility if you will. But not value... The fallacy of intrinsic value is what allowed stupid theories like marxist labor-value to remain alive until present days. It is important to understand it, value is not intrinsic.


Ah maybe intrinsic is not a correct word, but still, it has some meaning.

To me, value is a mesure of desire.  And I think desire is a bit different when it is only motivated by the belief in someone else's desire.  Maybe I should have talked about "real" value as opposed to "speculative" value.
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December 03, 2010, 09:44:23 AM
 #25

Please, memorize: There is no such a thing as intrinsic value.

"Intrinsic value" means something. Otherwise the label would be pointless; a synonym for "nothing".

What you may claim is that things have inherent characteristics that make them useful for certain purposes. For example, cotton has inherent characteristics that make it useful for making clothes.

Perhaps this is what is meant by "intrinsic value"
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December 03, 2010, 10:51:55 AM
 #26

Please, memorize: There is no such a thing as intrinsic value.

"Intrinsic value" means something. Otherwise the label would be pointless; a synonym for "nothing".

It's worse than pointless, it's misleading. Intrinsic value is a fallacy. This fallacious concept has been used to justify horrible economic theories. We should understand why value exist, and why it is not intrinsic to the valued stuff.
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December 03, 2010, 10:54:59 AM
 #27

What you may claim is that things have inherent characteristics that make them useful for certain purposes. For example, cotton has inherent characteristics that make it useful for making clothes.

Perhaps this is what is meant by "intrinsic value"

If you mean intrinsic attributes that make a particular thing useful for some particular usage, than bitcoins do have inherent attributes that make them useful as means of exchange.
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December 03, 2010, 02:10:52 PM
 #28

This is merely a semantic game.

I don't believe each objects have an inherent value of its own.

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December 03, 2010, 02:31:19 PM
 #29

I don't believe each objects have an inherent value of its own.

And yet, they do.

I mean :  the value of an ice cream is obviously more "intrinsic" that the value of a 1$ bank note.    Don't you get it ?

I can eat and enjoy the former, while I need to trade the latter against something if I want to get any benefit from it.
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December 03, 2010, 02:38:29 PM
 #30


I mean :  the value of an ice cream is obviously more "intrinsic" that the value of a 1$ bank note.    Don't you get ?

I can eat and enjoy the former, while I need to trade the latter against something if I want to get any benefit from it.


It's a human valuation and human use that determine the usefulness of an object. That's subjective theory of value.

Perhaps say, humanity don't value or use gold at all. That automatically make gold worthless.

Intrinsic theory of value say that each object have an objective value that can be determined without the need of human judgement.

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December 03, 2010, 02:50:12 PM
 #31

The phrase 'intrinsic value' doesn't mean that something has value as an intrinsic characteristic, but that it is valued because of some characteristic intrinsic to the thing, as opposed to value due to derived from the promises of a third party.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 03, 2010, 02:53:39 PM
 #32

It's a human valuation and human use that determine the usefulness of an object. That's subjective theory of value.

Perhaps say, humanity don't value or use gold at all. That automatically make gold worthless.

Intrinsic theory of value say that each object have an objective value that can be determined without the need of human judgement.

Then opposite to "subjective" is "objective", not "intrinsic".

I've been defending subjective theory of value for a long time now, and yet I consider that "intrinsic" value keeps a meaning even in subjective theory of value.  Exeamples have been given.

In subjective theory of value, I can value an object because I desire it.  But if I desire it for itself, i.e. I don't intend to trade it for something else, then I say this value is intrinsic.  It's an intrinsic subjective value.  There is no paradox here.
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December 03, 2010, 03:00:36 PM
 #33

The phrase 'intrinsic value' doesn't mean that something has value as an intrinsic characteristic, but that it is valued because of some characteristic intrinsic to the thing, as opposed to value due to derived from the promises of a third party.

Exactly.
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December 03, 2010, 03:02:45 PM
 #34


Exactly.


I think we all agree here. It's just that....

Intrinsic and intrinsic value of theory  got confused together.

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December 03, 2010, 05:22:45 PM
 #35

Then I'm really confused, because money requires an intrinsic value by definition.

I'm not sure about that.  Which definition?

I thought money's main necessary properties were
  • Mostly conserved.  Sure you might lose some if careless, but you can't duplicate it (double spend, shaving the edge off gold coins, counterfeits).
  • Like currency, needs to be transferred around in useful-size easy-to-validate denominations without too much inconvenience (= cost).
  • Scarce.  Hence, in part, the Hitchhiker's Guide joke about using leaves off trees as money?  I put it last, but I suspect it is of primary importance.
Agreed.  It has to be indestrucible, divisable and scarce.


Bitcoin isn't indestructible. The reason why gold is good is because its a molecule. its hard to change/destroy molecules.
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December 03, 2010, 05:31:34 PM
 #36

Bitcoin isn't indestructible. The reason why gold is good is because its a molecule. its hard to change/destroy molecules.


IMO the bitcoin chain is probably the most indestructible piece of Data on the Internet.

(and gold is not a molecule)
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December 03, 2010, 05:33:03 PM
 #37

IMO the bitcoin chain is probably the most indestructible piece of Data on the Internet.

But wallets are, until you back them up multiple time and encrypted all of them...

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December 03, 2010, 05:35:54 PM
 #38

Bitcoin isn't indestructible. The reason why gold is good is because its a molecule. its hard to change/destroy molecules.


IMO the bitcoin chain is probably the most indestructible piece of Data on the Internet.

(and gold is not a molecule)


Ok its an atom... which only furthers my point, even less destructable
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January 11, 2011, 03:12:25 AM
 #39

I've noticed that, at least in the U.S.A., the lack of intrinsic value to our is an increasing cause of concern to those of us who participate in the economy (which would be almost all of us). it concerns me personally that when (at this rate it's not an if) our economy fails my penny jar will be my only currency of value (based on commodity copper alloy prices) other than the size of my food and ammo stock piles. I'm not suggesting that a distributed currency has to be composed of a commodity, or even tangible, but it should at least have some legitimate positive equity backing it.

This is not necessarily my best suggestion, but perhaps the currency could be based on some average of labor equity. Years ago the Akron Friends Service Committee (a local branch of a Quaker based social association) put forward a local alternative (to the exiting national one) economy, the standard currency was called the "Summit hour" (after their county of operation). The "Summit hour" was based on the contemporary average hourly wage in the county which, if I remember right, around $5 and some change American. Primarily the currency was used between members of the AFSC, for private sales and services, but some area businesses participated in the program too. Given the mission of Wirtland, a labor equity based economy might be a good way to go. Perhaps the base unit of currency could be valued as a combination of the average wage of Witizens (converted to I.U.C.s) and the tangible (investments and donations, converted to I.U.C.s) assets of Wirtland. I'm not really sure how to do it exactly, these are issues for the banking geeks to hammer out the particulars of.   
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January 11, 2011, 03:44:27 AM
 #40

Ok its an atom... which only furthers my point, even less destructable

Nuclear fusion reaction?

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January 11, 2011, 04:49:07 AM
 #41

I've noticed that, at least in the U.S.A., the lack of intrinsic value to our is an increasing cause of concern to those of us who participate in the economy (which would be almost all of us). it concerns me personally that when (at this rate it's not an if) our economy fails my penny jar will be my only currency of value (based on commodity copper alloy prices) 

The penny is copper plated zinc, and the nickel is nickel plated steel.  There is no intrinsic value, of any significance, to any part of the US monetary system.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 11, 2011, 11:28:03 AM
 #42

Money/currency has intrinsic value because people need and value the abilities to:

1.Trade in something that is widely accepted for almost any other good/service.
2.Highly divisible.
3.Non perishable
4.Could act as a store of value. (Though this is somewhat optional)

Even ZimDollars had intrinsic value while in use if we look at what money is useful for. Although it's relative value compared to other goods and services was in continuous decline.

BitCoin fully fulfills these requirements even adding more features and therefore has "intrinsic" value. Saying that money has no intrinsic value is an existential observation akin to saying food has no value since you will die anyway. Money is an crucial means to a desired end.

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January 11, 2011, 08:49:34 PM
 #43

Money/currency has intrinsic value because people need and value the abilities to:

1.Trade in something that is widely accepted for almost any other good/service.
2.Highly divisible.
3.Non perishable
4.Could act as a store of value. (Though this is somewhat optional)

That's not intrinsic value, that's monetary value. Very different thing.

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January 11, 2011, 09:22:06 PM
 #44

Money/currency has intrinsic value because people need and value the abilities to:

1.Trade in something that is widely accepted for almost any other good/service.
2.Highly divisible.
3.Non perishable
4.Could act as a store of value. (Though this is somewhat optional)

That's not intrinsic value, that's monetary value. Very different thing.

It is necessary for people to have a highly liquid means of trade same as it is necessary for them to sleep comfortably or have comfortable shelter. A house or a bed can then be said to have no intrinsic value but "shelter value" and "sleep value". The discussion is semantic. We need money, else trade is going to be laborious and inefficient. It is filling these needs that grants money its usefulness to us, its 'value'.

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January 11, 2011, 09:30:43 PM
 #45

Money/currency has intrinsic value because people need and value the abilities to:

1.Trade in something that is widely accepted for almost any other good/service.
2.Highly divisible.
3.Non perishable
4.Could act as a store of value. (Though this is somewhat optional)

That's not intrinsic value, that's monetary value. Very different thing.

It is necessary for people to have a highly liquid means of trade same as it is necessary for them to sleep comfortably or have comfortable shelter. A house or a bed can then be said to have no intrinsic value but "shelter value" and "sleep value". The discussion is semantic. We need money, else trade is going to be laborious and inefficient. It is filling these needs that grants money its usefulness to us, its 'value'.

"Intrinsic value" is a value beyond what the object has as a medium of exchange.  For example, a peanut farmer cannot eat all his crop (perhaps he doesn't even like peanuts), so his crop has no intrinisc value for himself.  However, he sells his products to people who, presumedly, do have a use for said peanuts.  To the farmer, the peanut crop has little or no intrinsic value, but to the general population it does.  As a result, the crop has a real market value that is independent of it's trade value (to the farmer) and independent of speculative value.  Said another way, even if peanuts were used as a medium of exchange in his twon, the farmer's crop value would not drop to zero with the introduction of a better medium of exchange, such as silver coins.  Likewise, a mattress or shelter also has a definable value outside of the context of their trade value.

Thus, a paper currency has little intrinisc value.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 11, 2011, 10:14:49 PM
 #46

"Intrinsic value" is a value beyond what the object has as a medium of exchange.  For example, a peanut farmer cannot eat all his crop (perhaps he doesn't even like peanuts), so his crop has no intrinisc value for himself.  However, he sells his products to people who, presumedly, do have a use for said peanuts.  To the farmer, the peanut crop has little or no intrinsic value, but to the general population it does.  As a result, the crop has a real market value that is independent of it's trade value (to the farmer) and independent of speculative value.  Said another way, even if peanuts were used as a medium of exchange in his twon, the farmer's crop value would not drop to zero with the introduction of a better medium of exchange, such as silver coins.  Likewise, a mattress or shelter also has a definable value outside of the context of their trade value.

Thus, a paper currency has little intrinisc value.

Very, very well stated.

However, I still think it is semantic, if peanuts were used as trade but also as food that could also be said to give them "alternative" value. If they were no longer money, they could still be food, but a better peanut-variety could supplant them as a desirable food source and then they'd be back to square one. Perhaps they could then be used in a bio fuel plant. The fact that a peanut is more versatile than a bitcoin and from a semantic POV has more "intrinsic value" does not make it more valuable as a currency.

Bitcoin lacks "alternative value" as something else outside maybe an experiment in cryptography. This is somewhat unimportant since all the qualities it does have makes it a pretty decent form of money.

If "alternative value" == "intrinisc value" then I'd have to answer the question "Should money have intrisic value?" with a resounding no. Both bitcoin and gold prove this.

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January 11, 2011, 10:51:29 PM
 #47

"Intrinsic value" is a value beyond what the object has as a medium of exchange.  For example, a peanut farmer cannot eat all his crop (perhaps he doesn't even like peanuts), so his crop has no intrinisc value for himself.  However, he sells his products to people who, presumedly, do have a use for said peanuts.  To the farmer, the peanut crop has little or no intrinsic value, but to the general population it does.  As a result, the crop has a real market value that is independent of it's trade value (to the farmer) and independent of speculative value.  Said another way, even if peanuts were used as a medium of exchange in his twon, the farmer's crop value would not drop to zero with the introduction of a better medium of exchange, such as silver coins.  Likewise, a mattress or shelter also has a definable value outside of the context of their trade value.

Thus, a paper currency has little intrinisc value.

Very, very well stated.

Thank you.
Quote
The fact that a peanut is more versatile than a bitcoin and from a semantic POV has more "intrinsic value" does not make it more valuable as a currency.

I never claimed different.  The intrinsic value of a money is not additive to it's trade value.  The intrinsic value of a money functions as a 'price floor', supporting the market value of the money in times that it's trade value drops below it's intrinsic value, such as during times of war.  Bitcoin is an excellent currency, but has no value to anyone that is denied (by war, fiat, or otherwise) access to a functioning marketplace.  At least the peanuts are still food.

Quote

Bitcoin lacks "alternative value" as something else outside maybe an experiment in cryptography. This is somewhat unimportant since all the qualities it does have makes it a pretty decent form of money.


Again, it's not simply a matter of semantics for me to correct you here, since in context we are using econimic definitions.  Bitcoin has all the qualities of a fine currency.

Quote

If "alternative value" == "intrinisc value" then I'd have to answer the question "Should money have intrisic value?" with a resounding no. Both bitcoin and gold prove this.

Bitcoin does not require intrinsic value to function well as a medium of exchange, but gold does not support your statement.  Gold has quite a bit of intrinsic value, which is one reason that it has been such a sound money for over 5000 years.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 12, 2011, 07:47:25 AM
 #48

Bitcoin does not require intrinsic value to function well as a medium of exchange, but gold does not support your statement.  Gold has quite a bit of intrinsic value, which is one reason that it has been such a sound money for over 5000 years.

Don't get me wrong I really like gold and silver and am in both, but honestly, if denied access to a functioning marketplace what do I use them for?

"If you see the price of gold go up beyond $2000 you might want to sell some of your gold and buy lead"
-Robert Kiyosaki

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January 12, 2011, 07:57:20 AM
 #49

Don't get me wrong I really like gold and silver and am in both, but honestly, if denied access to a functioning marketplace what do I use them for?


Electronics, decorative use, industrial application, etc.

Bitcoin? Umm.....

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January 12, 2011, 08:04:41 AM
 #50

A zerohedge article form today says intrinsic value should be 0, but gold will do as a substitute. The article pretty much describes the problem to which bitcoin is a solution.

http://www.zerohedge.com/article/guest-post-gold-improbable-answer-life-universe-and-everything
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January 12, 2011, 08:18:01 AM
 #51

A zerohedge article form today says intrinsic value should be 0, but gold will do as a substitute. The article pretty much describes the problem to which bitcoin is a solution.

http://www.zerohedge.com/article/guest-post-gold-improbable-answer-life-universe-and-everything

lol.  Indeed !

Quote
It's worth noting that digitized fiat currencies of today meet two of the three requirements 100%. If we find a way to make it hard to create, it would be a better choice than gold.

The guy is talking about bitcoin, without even knowing it Smiley
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January 12, 2011, 08:32:17 AM
 #52

People, please, stop spreading misinformation! There's no such thing as intrinsic value, this is a fallacy. A fallacy on which Marxism is based, by the way!

intrinsic (comparative more intrinsic, superlative most intrinsic)
  • innate, inherent, inseparable from the thing itself, essential
  • (of a body part, relating to anatomy) comprising, being part of a whole

Therefore, by the definition of instrinsic, and by the fact that value is subjective (it's an opinion people have on stuff, not something innate, inherent, inseparable from the thing itself), intrinsic value is a contradiction in terms.

Also, do not confuse utility with value. Water is a buzillion times more useful than gold, nevertheless gold is much more valuable.
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January 12, 2011, 08:34:35 AM
 #53

People, please, stop spreading misinformation! There's no such thing as intrinsic value, this is a fallacy. A fallacy on which Marxism is based, by the way!


But we don't believe in the intrinsic theory of value!

Intrinsic value have place in our subjective theory of value! It simply mean utility other than monetary utility. Get it?

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January 12, 2011, 08:43:01 AM
 #54

No, you're contradicting yourself. Just read again what I said.
Something cannot be a subjective opinion of the beholder and an intrinsic feature all at the same time.
And utility is not value.
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January 12, 2011, 08:50:13 AM
 #55

No, you're contradicting yourself. Just read again what I said.
Something cannot be a subjective opinion of the beholder and an intrinsic feature all at the same time.
And utility is not value.

Damned it I thought we agreed on that.  Intrinsic/Extrinsic has nothing to do with subjective/objective.


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January 12, 2011, 09:26:56 AM
 #56

If you've agreed that anything has intrinsic value then you've agreed on a fallacy.
Just understand the terms you're using, they have a meaning.
If value is on the beholder only - and it is - it can't be an inseparable attribute of valued things.
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January 12, 2011, 09:31:18 AM
 #57

If I post something here and nobody reads it... did it have value?

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January 12, 2011, 09:53:23 AM
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If you've agreed that anything has intrinsic value then you've agreed on a fallacy.
Just understand the terms you're using, they have a meaning.
If value is on the beholder only - and it is - it can't be an inseparable attribute of valued things.

Come on...  Tabacco has intrinsic value.  Because many people like smoking.

If you are one of these person, then for you tabacco has value because there is an INtrinsic property INSIDE tabacco (actually probably nicotine) that you like.  Such a value doesn't rely on anything EXterior to the tabacco leaf.

Now you consider a $100 bank note.  It has some value, due to the fact that many people will do some stuffs to have some.  Those people are OUTSIDE of the bank note.  Thus this value is EXtrinsic.

So to sum up, whether a money should have or not intrinsic value depends on whether or not you might desire it for itself, if you were alone on a desert island, for instance.

The fact that value is subjective has nothing to do with this.  It's *orthogonal*.
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January 12, 2011, 10:35:18 AM
 #59

Come on...  Tabacco has intrinsic value.  Because many people like smoking.

If you are one of these person, then for you tabacco has value because there is an INtrinsic property INSIDE tabacco (actually probably nicotine) that you like.  Such a value doesn't rely on anything EXterior to the tabacco leaf.

The value of tobacco is not an intrinsic property of it. The intrinsic properties it has that make it useful for smokers are not its value, nor determine it. Previous belief that value was an attribute of stuff led to serious economic misunderstandings - and it does until today. That's why I'm being pedantic and asking you people not to spread this mistake. "Come on", it's not that difficult Wink
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January 12, 2011, 10:43:24 AM
 #60

The value of tobacco is not an intrinsic property of it. The intrinsic properties it has that make it useful for smokers are not its value, nor determine it. Previous belief that value was an attribute of stuff led to serious economic misunderstandings - and it does until today. That's why I'm being pedantic and asking you people not to spread this mistake. "Come on", it's not that difficult Wink

Well, I'm pretty sure that if you remove nicotine from tabacco, people would enjoy it much less.

I don't see what misunderstandings you are talking about.  Some people believe in objective theory of value, if that's what you mean.  But almost no one here does, I think.  It's a completely different matter.

The point is, even in a subjective theory of value, the question of the intrinsic value of money has some pertinence, because it is not the same if you chose to use a commodity (such as wheat for instance) as a currency,  or if you use a completely abstract, otherwise worthless, unit of account such as bitcoin.  This problem has interesting issues per se.
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January 12, 2011, 03:45:43 PM
 #61

Bitcoin does not require intrinsic value to function well as a medium of exchange, but gold does not support your statement.  Gold has quite a bit of intrinsic value, which is one reason that it has been such a sound money for over 5000 years.

Don't get me wrong I really like gold and silver and am in both, but honestly, if denied access to a functioning marketplace what do I use them for?


Both silver & gold have significant industrial uses, as well as potential uses that are cost prohibitive due to the high monetary value.  Off the top of my head, in the absence of a functioning market for silver or gold (unlikely, even in a war zone, Nazi sub captains carried a bar of gold for this reason) then gold makes a better bullet than lead and silver has antibiotic properties that are significant enough to be critical in dire situations without proper modern medical facilities. 

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 12, 2011, 03:48:15 PM
 #62

If you've agreed that anything has intrinsic value then you've agreed on a fallacy.
Just understand the terms you're using, they have a meaning.
If value is on the beholder only - and it is - it can't be an inseparable attribute of valued things.

Now this is a semantic argument.  You are simply debating the common definition of the term "intrinsic" versus it's economic definition.  I for one, do not misunderstand that even an intrinsic value is a result of how various humans desire the object.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 12, 2011, 10:21:46 PM
 #63

Both silver & gold have significant industrial uses, as well as potential uses that are cost prohibitive due to the high monetary value.  Off the top of my head, in the absence of a functioning market for silver or gold (unlikely, even in a war zone, Nazi sub captains carried a bar of gold for this reason) then gold makes a better bullet than lead and silver has antibiotic properties that are significant enough to be critical in dire situations without proper modern medical facilities. 

Conclusion remains the same, money does not need to have alternative uses to be useful or valuable. If it properly fulfills the requirements of sound money it will be valuable.

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January 12, 2011, 10:27:42 PM
 #64

Both silver & gold have significant industrial uses, as well as potential uses that are cost prohibitive due to the high monetary value.  Off the top of my head, in the absence of a functioning market for silver or gold (unlikely, even in a war zone, Nazi sub captains carried a bar of gold for this reason) then gold makes a better bullet than lead and silver has antibiotic properties that are significant enough to be critical in dire situations without proper modern medical facilities. 

Conclusion remains the same, money does not need to have alternative uses to be useful or valuable. If it properly fulfills the requirements of sound money it will be valuable.

Currency doesn not need to have an alternative use to be useful or valuable.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 13, 2011, 08:32:03 AM
 #65

If you've agreed that anything has intrinsic value then you've agreed on a fallacy.
Just understand the terms you're using, they have a meaning.
If value is on the beholder only - and it is - it can't be an inseparable attribute of valued things.

Now this is a semantic argument.  You are simply debating the common definition of the term "intrinsic" versus it's economic definition.  I for one, do not misunderstand that even an intrinsic value is a result of how various humans desire the object.

There not two different definitions (economic vs common). I've posted before the dictionary entry. An intrinsic attribute of something is inseparable from the thing itself. Value just can't be intrinsic. Ever.
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January 13, 2011, 08:32:13 AM
 #66

I don't see what misunderstandings you are talking about.  Some people believe in objective theory of value, if that's what you mean. 

Yes, that's what I mean. And there are a lot of people who still believe in that.
If we here, that do understand the difference, keep using terms that only have meaning when this false theory is true (intrinsic value) we'd be just fueling even more this misunderstanding.

That's somehow what Gary North says in his text: http://www.thefreemanonline.org/featured/the-fallacy-of-quotintrinsic-valuequot/
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January 13, 2011, 08:40:56 AM
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Yes, that's what I mean. And there are a lot of people who still believe in that.
If we here, that do understand the difference, keep using terms that only have meaning when this false theory is true (intrinsic value) we'd be just fueling even more this misunderstanding.

That's somehow what Gary North says in his text: http://www.thefreemanonline.org/featured/the-fallacy-of-quotintrinsic-valuequot/

Why doesn't he just title his article "the fallacy of objective value" ??
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January 13, 2011, 08:50:37 AM
 #68

An intrinsic attribute of something is inseparable from the thing itself. Value just can't be intrinsic. Ever.

Yes it can.  I can enjoy a tasty ice-cream.  It has some value for me.  This value is due to chemical and nutritic properties of the ice-cream, which are intrinsic to the ice-cream.   It's a subjective intrinsic value.

Now I can desire cigarettes.  Not because I could smoke them .  I don't smoke.  But I can desire to own some, because I know that a lot people smoke and would do many things for cigarettes in dark times.  It's extrinsic value.

But if I was to reformulate my initial question in order to avoid this debate, I would ask :

"Should money have value other than trade value ?"
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January 13, 2011, 02:19:28 PM
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That's somehow what Gary North says in his text:

Appeal to Authority.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 13, 2011, 02:21:30 PM
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If you've agreed that anything has intrinsic value then you've agreed on a fallacy.
Just understand the terms you're using, they have a meaning.
If value is on the beholder only - and it is - it can't be an inseparable attribute of valued things.

Now this is a semantic argument.  You are simply debating the common definition of the term "intrinsic" versus it's economic definition.  I for one, do not misunderstand that even an intrinsic value is a result of how various humans desire the object.

There not two different definitions (economic vs common). I've posted before the dictionary entry. An intrinsic attribute of something is inseparable from the thing itself. Value just can't be intrinsic. Ever.

Okay, I can debate by these rules.

Yes, There is an established economic meaning of "intrinsic"; infinity!

Nah, nah, nah!

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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January 13, 2011, 05:12:41 PM
 #71

An intrinsic attribute of something is inseparable from the thing itself. Value just can't be intrinsic. Ever.

Yes it can.  I can enjoy a tasty ice-cream.  It has some value for me. 

But if the value exists for you, it can't be intrinsic to the ice cream. The value is in you, in your opinions, in your mind. If you're gone, such value is gone, although all properties really inherent to the ice cream remain.

"Should money have value other than trade value ?"

"Should money have utility other than trade utility ?"

There, better. Smiley
And I bet that if people were used to these terms, they wouldn't spend much time thinking to answer "No, something doesn't need to be useful for A in order to be useful for B, being A and B completely unrelated"
But even libertarians quite often don't understand that, and I bet that the fact that so many people constantly throw phrases like "Real money must have intrinsic value!" (sic) is related to the problem.
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January 13, 2011, 05:27:26 PM
 #72

Value is very much like morality.

Some people think both are intrinsic, and others believe they are subjective.

Just as caveden was saying that there is no intrinsic value, one could argue there is no objective morality.

However if one were to say: "Raping is evil" I would say this is a widely accepted morality amongst human beings which would be incredibly tempting for us to make the claim that "Raping IS evil" rather than "I THINK/BELIEVE raping is evil". Technically it is still subjective, but most humans suscribe to this.

Similarly to gold, at the moment and for the longest period of human history, gold has been perceived as a store of value and suitable means of exchange, everybody wants gold. It doesn't have INTRINSIC value, however since it is widely used and accepted by everybody, it might as well be, NOT SAYING THAT IT IS! A BitCoin appears to be a good means of exchange so far, but the majority of people haven't adopted that yet. Maybe in the future when everybody seeks BitCoins rather than gold opinions will change, I feel gold has had too much of a headstart, and so will always retain its value unless something revolutionary happens, such as alchemy or finding a planet made entirely of gold.

Intrinsic things are the utilities, what it can be used for. And this is on par with the claim that "a brain is intrinsic to a live human being". Every human being has one, but the value we have for it... well... I could say it differs from person to person.

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January 13, 2011, 05:32:01 PM
 #73

But if the value exists for you, it can't be intrinsic to the ice cream. The value is in you, in your opinions, in your mind. If you're gone, such value is gone, although all properties really inherent to the ice cream remain.

Oh, please, you can't get rid of the observer here, otherwise it doesn't make any sense.  The concept of value doesn't mean anything if there is not at least one human being involved.  Same for colors, sounds, and so on.  If you want to think things like this then it's a bit like the old lame debate about a tree falling in a forest where there's noone to hear it.   I doubt anybody has ever tried to suggest a notion of value as intrinsic as the atoms the ice-cream is made of.  I'm pretty sure people mean intrinsic value as opposed to trade value.

If you deny the existence of at least one observer, then the world itself doesn't exist.
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