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Author Topic: The Origin and Nature of Money (mises.org)  (Read 2120 times)
hazek
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March 06, 2011, 03:48:16 PM
 #1

A very important speech on the history and origin of money:

http://mises.org/media/5212/The-Origin-and-Nature-of-Money

Please pay special attention around the 8min mark.

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Steve
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March 06, 2011, 06:30:09 PM
 #2

A very important speech on the history and origin of money:

http://mises.org/media/5212/The-Origin-and-Nature-of-Money

Please pay special attention around the 8min mark.

I listened to it...I think it's a very interesting question whether money needs to be a commodity (and have some intrinsic value beyond scarcity)...I tend to agree with the notion that "money has value because money has value" (even thought the speaker was suggesting that's nonsense)...interestingly, bitcoin does have intrinsic value beyond just its scarcity.  I'd argue that electronic, peer-2-peer, pseudo-anonymous, free transactions give it an intrinsic value above and beyond simple scarcity.  I tend to think something needs little more mild curiosity to be suitable for bootstrapping into money (and bitcoin has plenty of that).  For example, as a parent of two boys, I've witness the "silly band" economy...my living room has served as a spontaneous silly band trading floor for the neighborhood kids on several occasions.  I've also seen the silly band economy wither at the hands of inflation.

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wb3
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March 06, 2011, 06:40:58 PM
 #3

That is interesting. I guess it depends on what intrinsic value means. For many: money is anything that can be traded for other goods which could be just about anything. Intrinsic value: is an important part of money and hard to quantify. But the basis would be if the system of trading fails, what value would the currently held amount of currency be useful for daily life and how long would it hold that usefulness.  For the short term: food would have the highest intrinsic value but falls short in the length of time it is good for.  Gold, for most, would not be that useful but would hold its value for the longest period of time. The best source of money would be a combination between the two, hold immediate usefulness and hold it value in usefulness over time.

If the above stated makes sense, then the best form of money would be the MRE, just need to shrink them more.  Grin

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Steve
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March 08, 2011, 09:43:52 PM
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That is interesting. I guess it depends on what intrinsic value means. For many: money is anything that can be traded for other goods which could be just about anything. Intrinsic value: is an important part of money and hard to quantify. But the basis would be if the system of trading fails, what value would the currently held amount of currency be useful for daily life and how long would it hold that usefulness.  For the short term: food would have the highest intrinsic value but falls short in the length of time it is good for.  Gold, for most, would not be that useful but would hold its value for the longest period of time. The best source of money would be a combination between the two, hold immediate usefulness and hold it value in usefulness over time.

If the above stated makes sense, then the best form of money would be the MRE, just need to shrink them more.  Grin


Just so long as you can squeeze those MREs through the intertubes. Wink

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grondilu
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March 08, 2011, 09:50:34 PM
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Personnaly I'll stick with my view of money as an accounting tool:

http://bitcointalk.org/index.php?topic=2866.0
caveden
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March 09, 2011, 08:48:21 AM
 #6

That is interesting. I guess it depends on what intrinsic value means.

Intrinsic value means pretty much the same thing as "squared circle". It's a logical contradiction, simply doesn't exist. Value is not in stuff, value is on the beholder.

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grondilu
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March 09, 2011, 11:03:56 AM
 #7

Intrinsic value means pretty much the same thing as "squared circle". It's a logical contradiction, simply doesn't exist. Value is not in stuff, value is on the beholder.

Oh please... again?
caveden
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March 09, 2011, 11:18:30 AM
 #8

Intrinsic value means pretty much the same thing as "squared circle". It's a logical contradiction, simply doesn't exist. Value is not in stuff, value is on the beholder.

Oh please... again?

Truth doesn't change in a couple of months. Wink

It's a bit frustrating to see people that were supposed to understand the origins of value to keep repeating a dangerously misleading logical contradiction as "intrinsic value".
It's this constantly repeated mantra that makes so many gold worshipers to question bitcoins fundamentals by saying that "it's not backed by anything, so it cannot have true value!".

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grondilu
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March 09, 2011, 11:40:06 AM
 #9

Truth doesn't change in a couple of months. Wink

It's a bit frustrating to see people that were supposed to understand the origins of value to keep repeating a dangerously misleading logical contradiction as "intrinsic value".
It's this constantly repeated mantra that makes so many gold worshipers to question bitcoins fundamentals by saying that "it's not backed by anything, so it cannot have true value!".

I'm a "gold worshiper" and yet I have absolutely no problem with bitcoin not being backed by anything.  Gold isn't backed by anything either.  It is backed by itself, as bitcoin is.

To me your argument about "intrinsic value" is more about "objective value".  I do think there is no such thing as an objective value.  However, the concept of intrinsic value is different, and it DOES make sense for some stuffs, especially money.

I think your problem is that you keep thinking of the word "intrinsic" with a material meaning.  It is not necessary.

Money is something that can be used as an intermediary for exchanges.  This usefullness has some value.  Talking about the intrinsic value of money is discussing about its residual value once you substract this monetary use.

Take cows, for instance.  They used to be used as money in Africa for instance.  Apart from this monetary use, a cow has obviously some value, because a lot of people can make a good use of a cow, whether it is for its milk or meat.  Cows are money WITH intrinsic value.

Now if you take Yap stones, they are as we know now thanks to Gavin, an ancient form of money.  But those large stones had absolutely no use apart from their monetary use.  Yap stones are money WITHOUT intrinsic value.

Would you dare saying this distinction is not pertinent?  Which word would you use if you don't agree with "intrinsic"?


wb3
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March 09, 2011, 03:49:05 PM
 #10

That is interesting. I guess it depends on what intrinsic value means.

Intrinsic value means pretty much the same thing as "squared circle". It's a logical contradiction, simply doesn't exist. Value is not in stuff, value is on the beholder.

Perspective, Perspective,

The Circle has been Squared on the Hyperbolic Plane, which is closer to reality than a plane.

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March 09, 2011, 05:44:01 PM
 #11

The book that really instilled in me my idea of money is "What Has Government Done to Our Money?" by Murray Rothbard. And I agree that while money's primary purpose is that of being a medium of exchange, it's much easier to get people to go along with it (which is essential to being a money) if it has a value beyond simply a medium of exchange. With Bitcoin, as has been said, it allows you to transact anonymously, freely, and over many miles, which are all non-material commodities themselves. And with Bitcoin, it's important to trust that it's not controlled and subject to the whims of any government. Personally, I have referred to many of my possessions as money, such as bottles of wine, ammunition, and packs of cigarettes. And while the supply is constantly being increased on these, individuals are also constantly taking them out of circulation (because of their practical value).

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