Should money have intrisic value ?

[caveden]

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".

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?

[kiba]

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.

[caveden]

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.

[grondilu]

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.

[asdf]

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"

[caveden]

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.

[caveden]

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.

[kiba]

This is merely a semantic game.

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

[grondilu]

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.

[kiba]

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.

[MoonShadow]

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.

[grondilu]

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.

[grondilu]

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.

[kiba]

Exactly.

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

Intrinsic and intrinsic value of theory  got confused together.

[tyler]

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.

[grondilu]

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)

[kiba]

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...

[tyler]

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

[Grei R. S. Walker]

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.   

[kiba]

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

Nuclear fusion reaction?