Money as an accounting tool

[grondilu]

Few days ago I was talking with some left-anarchists on IRC (#ranarchism on freenode).

We were having the same old debate between right and left anarchists about capitalism and money.  Somehow, this debate wasn't as sterile as I thought, for it allowed me to clarify my mind about what money is.

Bitcoins are truly worthless, apart from their properties which makes it useful as a money.  I've always suspected the same about gold, but with gold it's not that clear, for gold does have some use in jewelry and industry.  So, I was a bit uncomfortable with the absolute "fiat" aspect of bitcoins.

Anyway, the interesting part began when one of the guys asked me the following question :

- Name one thing that you feel passionnate about, and that you couldn't do in a left-anarchist society.

I thought it was quite an interesting way to ask things, but after a few seconds, I just answered :

- Eating, for one.  I just don't see how I could earn my life in a communist world.

Then the guy described me his kind of ideal society,  how I would have to farm 30 minutes a day to get some food for instance.  Now, I don't know exactly what I feel passionnate about (or more precisely, this is my business), but I know I don't feel passionate about farming.  I also don't have any skills for that.  Workers have to be specialised in what they are doing.  I think specialisation has been a characteristic of human economics activities since neolithics, right ?

Anyway, at this point this was not the anwser I had in mind.  I felt it more in the lazy approach.  So I asked :

- What if, for some reason, I don't feel like farming and I'm willing to pay someone to do the job for me ?

Then the guy denied the very existence of money so I had to imagine I pay the guy with gold.  At least the guy can not deny the existence of this metal.  However, he couldn't imagine I could find someone who would accept some gold.  "Gold is worthless", he said.  And other sentences of the same kind.  I had to say : "maybe gold is worthless, but maybe my worker just doesn't hate farming as I do.  Maybe he's just bored, or maybe he even enjoy farming.  Also, perhaps he wants to offer his women a gold ring."

I think I was going on the wrong path here.  Now, here is my idea of how money arise from an anarchist society.


In order to have some food, you have to work.  If you don't, you don't get any food and the communauty rejects you.   Therefore, the communauty has to remember, somehow, who worked and who didn't work.  They could, for instance, write this in a book.   In front of each name, they write a boolean saying "did work for his food", "did not work for his food".  Even if this book exists only in people's head, it still exists.  But it's obviously more efficient if it's written down on paper.  This is the beginning of money :  a symbolic proof of work.

Now, a boolean data is not very good either.  One could expect people to eat more if they worked more.  So, it's more efficient to write a number in front of each name, instead of a boolean.  That's already something which is very difficult to do if people just have to use a "mental book".  Numeric data is tricky to memorize, not even mentionning that we're talking about a large number of numbers (for a large communauty of workers).  Denying the usefullness of a real physical book, is just as silly as denying the usefullness of writing against just speech.

If you have a book with quantified values representing amounts of work, or value, you just have everything that makes money what money is.  You can transfer value by exchanging values, providing the two people concerned agree to it.  You can do pretty much any thing you can do with money, but there is a drawback :  it's centralised.  Only one person can modify it at a time.  Usually it's the job (a specialised job) of a specific person called the book keeper.  The communauty has to trust him not to write down phony numbers, nor attribute himself some work he hasn't done.

So the next idea is decentralisation.  Every unit in the book could be represented by some token.  Whether it is a piece of paper, a precious stone, whatever.  It just have not to be faked easily.  It is just a way to decentralise and distribute the book's units.  It's nothing but an accounting tool.

That's it.  That's how I see money now.  A pure conventional decentralized accounting tool.

And as such, it doesn't have to have any value per se.  It just has to permit to represent a limited amount correctly.  It has to be divisible (as numbers are), limited in quantity (each number is supposed to represent a fraction of the wealth produced by the community, therefore the total amount has to be limited), and it should not be easily faked (otherwise anyone could claim any amount).

[1713984573]

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[1713984573]

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[Cryptoman]

To me, anarchism simply means absence of centralized control.  You can't really say left anarchism or right anarchism because there will not be any government to force one direction or the other.  Once government is gone or irrelevant, you just have to wait and see what evolves.  

Humans will always have the greatest productivity and highest standard of living if there is specialization of work, since everyone has different interests and talents.  For this to happen efficiently, you need some medium of exchange, call it money or whatever you want.  Yes, it is a kind of record keeping in a sense, or reward for productivity.  You can consume this reward immediately or save it up for other uses.  Anyone who saves his/her reward can then invest or loan it or consume it further into the future.  So somehow we always get back to the accumulation of money or capital in one way or another because not all humans are as competent/efficient/thrifty.  I do not see anything wrong with this, but I do see something wrong with forcing everyone down to the lowest common denominator.  

[Sjalq]

Like the post.

Anarchy will end up in extreme capitalism flowing from the natural consequences of non-aggression. The only question is whether non-aggression is possible, not its outcome. So I agree with the right - anarchy argument. If your left - anarchy friends ever did have a book (something they would need or starve) they would soon be screaming "burn the book" if they didn't learn anything from how useful it proved.

I noticed you called Bitcoin Fiat. The word Fiat is from the Latin meaning "Let it be done" and as I understand denotes a decree from a government. So a fiat currency can only exist when a government decrees it to be such.

However if a bunch of people simply decreed that something should be currency I guess that could also be called Fiat. Since it is the will of the people to "decree" gold as currency in times of trouble, then bitcoin is no more fiat than gold if it is decreed as currency by the market.

[MoonShadow]

You are correct, more or less.  However, and I'm know I'm being anal here, what you are describing is a currency unit; not money.  And the use of a money arises first in the absence of coercive forces such as a government.  A socialist anarchy is impossible, because capitalism is the natural extension of individuals exercising their right to trade the fruits of their own labors.  If a socialist society were to form from an otherwise anarchist society, one of two things will happen.  Either the best efforts of the majority (seeking the greater good) will be undermined by a minority (seeking only their own best interests), such as was entertainingly described in the movie Star Trek Insurrection, resulting in the rise of a warrior class (and therefore a peasent class) ultimately leading to the formation of a monarchy.(all warrior classes form rank structures, the guy with the highest rank is the monarch by default)  Or the first generation of social anarchists will wisely foresee this flaw in their own logic, and found some institution intended to organize the collective forces within society to oppose the rise of gangs or any other warrior class that is not beholden to the socialist collective.  In which case, they have just established a government, and are no longer anarchists.

True anarchy as a political structure is unsustainable, and will always lead to something else entirely.  Most self-described anarchists are aware of this, and therefore are not really anarchists; but instead are whatever kind of idealist that they expect would come from the anarchy.  Anarchy is simply a temporary condition; the time period between the final collapse of the current condition and the initiation of the intended political structure.  Karl Marx was, himself, aware of this and regarded a forced state in anarchy as a necessary step towards his communist ideal.  Historicly, they are all wrong.  Anarchy has always led to the formation of warrior classes taking control of territories, whether you call them gangs, warlords or freedom fighters.

[Sjalq]

You are correct, more or less.  However, and I'm know I'm being anal here, what you are describing is a currency unit; not money.  And the use of a money arises first in the absence of coercive forces such as a government.  A socialist anarchy is impossible, because capitalism is the natural extension of individuals exercising their right to trade the fruits of their own labors.  If a socialist society were to form from an otherwise anarchist society, one of two things will happen.  Either the best efforts of the majority (seeking the greater good) will be undermined by a minority (seeking only their own best interests), such as was entertainingly described in the movie Star Trek Insurrection, resulting in the rise of a warrior class (and therefore a peasent class) ultimately leading to the formation of a monarchy.(all warrior classes form rank structures, the guy with the highest rank is the monarch by default)  Or the first generation of social anarchists will wisely foresee this flaw in their own logic, and found some institution intended to organize the collective forces within society to oppose the rise of gangs or any other warrior class that is not beholden to the socialist collective.  In which case, they have just established a government, and are no longer anarchists.

Love it!!

True anarchy as a political structure is unsustainable, and will always lead to something else entirely.  Most self-described anarchists are aware of this, and therefore are not really anarchists; but instead are whatever kind of idealist that they expect would come from the anarchy.  Anarchy is simply a temporary condition; the time period between the final collapse of the current condition and the initiation of the intended political structure.  Karl Marx was, himself, aware of this and regarded a forced state in anarchy as a necessary step towards his communist ideal.  Historicly, they are all wrong.  Anarchy has always led to the formation of warrior classes taking control of territories, whether you call them gangs, warlords or freedom fighters.

Also true but what I found surprising was that Anarchy existed for hundreds of years in many regions before warrior classes could be established so that they could gain dominance and form monarchies.

[grondilu]

However if a bunch of people simply decreed that something should be currency I guess that could also be called Fiat. Since it is the will of the people to "decree" gold as currency in times of trouble, then bitcoin is no more fiat than gold if it is decreed as currency by the market.

Indeed, the decree doesn't have to come from a government.  It can come from people.

[Sultan]

Very interesting thought experiment.

I think the thing with gold is its commodty value where people perceive it to be pretty in jewelry etc. (it also has industrial uses, but I don't believe that is what drives people to hoard it) Of course, currently the reason people hoard it is to store their wealthy, so you could say that its value is artificially floated.

As for BitCoins, its only function is purely as a medium of exchange. Nevertheless, I believe, just like gold, if the majority want a particular 'thing' to be money, then let it be done. A BitCoin will only have value if one can trade it in for goods and services. If nobody is willing to accept your Gold, ie. because its illegal to use as money, you can still 'sell' it to a rich woman, namely the ex-president of Tunisia's wife.

[grondilu]

As for BitCoins, its only function is purely as a medium of exchange. Nevertheless, I believe, just like gold, if the majority want a particular 'thing' to be money, then let it be done. A BitCoin will only have value if one can trade it in for goods and services. If nobody is willing to accept your Gold, ie. because its illegal to use as money, you can still 'sell' it to a rich woman, namely the ex-president of Tunisia's wife.

Lol.  Mrs Ben Ali doesn't buy gold.  She just goes to the central bank of her country, and she demands immediate delivery of gold bullions.

[barbarousrelic]

To me, anarchism simply means absence of centralized control.  You can't really say left anarchism or right anarchism because there will not be any government to force one direction or the other.  Once government is gone or irrelevant, you just have to wait and see what evolves.  

I've always thought this as well. Once your political stance is 'anarchism' having any modifiers ('anarcho-sociailism',  'anarcho-capitalism') is not really meaningful, just an attempt to predict what people will choose to do. Different people will do different things.

[MoonShadow]

Also true but what I found surprising was that Anarchy existed for hundreds of years in many regions before warrior classes could be established so that they could gain dominance and form monarchies.

This is true, but the areas that anarchy existed could only maintain this politcal condition if there was some kind limiting factor to the spread of the monarch's control.  Usually this was so only in areas that were geographically undesireable to live in, or simply could not sustain a large enough population to coalese into a city-state.  Such areas included high mountainous regions, various degrees of desert, or extreme latitudes.  Basicly, a natural anarchy has only existed peacefully, throughout history, beyond the political reach of society.

[MoonShadow]

However if a bunch of people simply decreed that something should be currency I guess that could also be called Fiat. Since it is the will of the people to "decree" gold as currency in times of trouble, then bitcoin is no more fiat than gold if it is decreed as currency by the market.

Indeed, the decree doesn't have to come from a government.  It can come from people.

And by doing so, do the people not become a government?

[MoonShadow]

To me, anarchism simply means absence of centralized control.  You can't really say left anarchism or right anarchism because there will not be any government to force one direction or the other.  Once government is gone or irrelevant, you just have to wait and see what evolves.  

I've always thought this as well. Once your political stance is 'anarchism' having any modifiers ('anarcho-sociailism',  'anarcho-capitalism') is not really meaningful, just an attempt to predict what people will choose to do. Different people will do different things.

Historicly, this is not so.  The people who choose tend to be those people who already have some advantages over their countrymen, and become the warrior class themselves.  No exceptions.  The "communist" revolution of Cuba is a prime example.  The revolutionaries there were not communists, they were thugs who made a living killing people until they became the govenment itself and had to cut back on the killing.  They called themselves, and surely many believed, that they were communists; but the big picture is that they were just another warrior class.

[Sjalq]

Also true but what I found surprising was that Anarchy existed for hundreds of years in many regions before warrior classes could be established so that they could gain dominance and form monarchies.

This is true, but the areas that anarchy existed could only maintain this politcal condition if there was some kind limiting factor to the spread of the monarch's control.  Usually this was so only in areas that were geographically undesireable to live in, or simply could not sustain a large enough population to coalese into a city-state.  Such areas included high mountainous regions, various degrees of desert, or extreme latitudes.  Basicly, a natural anarchy has only existed peacefully, throughout history, beyond the political reach of society.

I've heard examples, although I have not researched them up thoroughly, of anarchy existing in Ireland, Iceland, Scotland, and large parts of Europe before there were monarchs. As I understand even monarchies are relatively new developments in these regions taken against the timeline of human presence.

[MoonShadow]

Everything is relative.