Money is an imaginary concept, but humanity is enslaved by it

[freeyourmind]

https://www.youtube.com/watch?v=8DwYo21LTK4

Here's a 3 min video on measures/symbols and compares money vs. wealth, by (IMO) an incredible philosopher by the name of Alan Watts.  I'm not sure what the forum rules are around posting videos - there is an ad on the video unfortunately, but I'm not affiliated with the uploader.  It's just a clip from a much longer lecture which you can search for.

Anyways, he is great at questioning basic assumptions that normally go unquestioned as we grow up and become conditioned to our particular society.  Money is one of those basic assumptions, that even though it's one of the most important things to understand in today's world, the average population a) doesn't have a very good understanding of it and b) accepts that level of ignorance and doesn't feel the need to learn.

I live in Toronto, and through elementary school, high school there is very little in terms of learning about the monetary system and money.  I went to what is considered a top business school in the country and specialized in Finance, and still other than learning about financial/economic theories and concepts, there wasn't much in terms of learning about money or the monetary system.  That was skipped as an assumption that everyone already understands it.

The learning unfortunately, comes outside of the education system (at least from my experience), with personal interest and research.  I'm interested to know whether anyone here has learned anything about money, monetary policy, central banks, the history of fiat money, and maybe the history of American currency over time and the different systems they had in place, how they changed from being backed by gold, partially backed by gold, not backed by anything, etc.?  It seems important to know for anyone that uses money, which is everyone.

[johnyj]

https://www.youtube.com/watch?v=8DwYo21LTK4

Here's a 3 min video on measures/symbols and compares money vs. wealth, by (IMO) an incredible philosopher by the name of Alan Watts.  I'm not sure what the forum rules are around posting videos - there is an ad on the video unfortunately, but I'm not affiliated with the uploader.  It's just a clip from a much longer lecture which you can search for.

Anyways, he is great at questioning basic assumptions that normally go unquestioned as we grow up and become conditioned to our particular society.  Money is one of those basic assumptions, that even though it's one of the most important things to understand in today's world, the average population a) doesn't have a very good understanding of it and b) accepts that level of ignorance and doesn't feel the need to learn.

I live in Toronto, and through elementary school, high school there is very little in terms of learning about the monetary system and money.  I went to what is considered a top business school in the country and specialized in Finance, and still other than learning about financial/economic theories and concepts, there wasn't much in terms of learning about money or the monetary system.  That was skipped as an assumption that everyone already understands it.

The learning unfortunately, comes outside of the education system (at least from my experience), with personal interest and research.  I'm interested to know whether anyone here has learned anything about money, monetary policy, central banks, the history of fiat money, and maybe the history of American currency over time and the different systems they had in place, how they changed from being backed by gold, partially backed by gold, not backed by anything, etc.?  It seems important to know for anyone that uses money, which is everyone.

True, those theories about money are always correct under a monopole monetary system, because people have no other choice but believe whatever they say, and they can always find an explanation for what happened and what they plan to do. But now we have a totally different monetary system built on bitcoin, we can try and see if those theories are correct

[johnyj]

If alien come to earth, they will be shocked by the fact that human on earth will starve just because money printer is not working

[countryfree]

If alien come to earth, they will be shocked by the fact that human on earth will starve just because money printer is not working

Or maybe because it's printing too much.

Now, how could we live without money? If I go to a restaurant without money, how do I pay? Or would they feed me for free? Free beer, too?

[dulldog]

In most of the people's mind, money is a standard unit of value. Just like using meter to measure length and using kilogram to measure weight, people use money to measure value

Based on proven economy theory, value is decided by supply and demand: More supply and less demand will decrease the value, vice versa. However, this does not apply to money: Money can be used to purchase anything, the demand for money can be regarded as infinite. When demand is close to infinite, the supply will not change its value in any significant way. So for average household, the money's value feels the same for them regardless of money supply

So there is a strange phenomenon: Banks create money to dilute the wealth of the whole society, but when average people are becoming poorer, they need banks to create more money to rob them so that they could get a little bit more income. As a result, banks create 100$ of money but give them 1$ so that they can hang on for a while

If everyone's money suddenly increase by 1000 times, then money's value will crash right away. The art to maintain money's value is to keep majority of people's demand for money at close to infinite. So increased money supply should be used to buy assets and debts, to increase average people's living cost, make sure that they never have enough money. Only through this way, the money's value will be stable

The amazing thing is: Such a system seems to be formed naturally over time. It is the demand for money that enslaved majority of human. And the more they are enslaved, they demand more money, thus make the money more valuable

Of course the money I'm talking here is fiat money

Interesting.
Are you familiar with the publications of John Keynes? I bet you you'd love his ideas.

However I think this topic is more of a philosophical issue and it's not about money after all. But it's about human nature with its constant growing greed.

[freeyourmind]

If alien come to earth, they will be shocked by the fact that human on earth will starve just because money printer is not working

Lol.  Wouldn't it be cool to see a documentary on human beings, just observing behaviour with no basic assumptions?  Narrated by David Attenborough of course.

Interesting.
Are you familiar with the publications of John Keynes? I bet you you'd love his ideas.

However I think this topic is more of a philosophical issue and it's not about money after all. But it's about human nature with its constant growing greed.

I haven't been a fan of the Keynesian system because like many other theories, it only works properly (to benefit the general population rather than a selective/elite group) with a benevolent government that has no self-interest.  So with a responsible government, it would work a lot better, but with the current style of government, it just gives way too much power to a few people, which is constantly exploited at the cost of avg Joe.  All the wars that we've had in the past few decades....would it be possible without a Keynesian system?  The speculation and asset bubbles?

So far, I only see libertarians wanting to move away from Keynesian economics, and they don't have a realistic chance at being elected.

[Razick]

I've heard the claim that infinite demand for money allows increased supply without triggering inflation, but it's usually used to justify money printing, so that's an interesting idea. However, both sides miss something important when using this argument: The supply of goods and services doesn't change as a result of a higher money supply (although a higher money supply can temporarily drive increased production). The more dollars there are chasing limited goods, the less it is worth.

It doesn't matter if society realizes this is happening, they do understand on some level or another that buying power is falling when prices rise.

You can't really blame banks here though. Fractional reserve banking is, as you say, a natural phenomenon, but, at least so long as there are reserve requirements (either by fiat or necessity--to maintain solvency), private banks can only *multiply* real currency, not mint infinite new currency. The amount of real currency created by central banks directly controls the money supply, therefore, central banks *over the long term* are always to blame for inflation.

[johnyj]

If alien come to earth, they will be shocked by the fact that human on earth will starve just because money printer is not working

Or maybe because it's printing too much.

Now, how could we live without money? If I go to a restaurant without money, how do I pay? Or would they feed me for free? Free beer, too?

Indeed, the concept of money has been around for thousands of years, and after the society split into many specialized industry branch, money as a universal transaction medium facilitate trades between people, people don't know how to live without it, it is like air and water

Maybe someday in future, when everyone could produce everything they want with the help of a robot, trade will become unnecessary, then money will disappear. But due to human's limited life time, specialization is very possible to extend further, thus money will never disappear

If money is always needed, then the best we can do is to make sure it distributed based on the fair trade principle: Market decide its value and its cost is close to its face value

[johnyj]

I've heard the claim that infinite demand for money allows increased supply without triggering inflation, but it's usually used to justify money printing, so that's an interesting idea. However, both sides miss something important when using this argument: The supply of goods and services doesn't change as a result of a higher money supply (although a higher money supply can temporarily drive increased production). The more dollars there are chasing limited goods, the less it is worth.

It doesn't matter if society realizes this is happening, they do understand on some level or another that buying power is falling when prices rise.

You can't really blame banks here though. Fractional reserve banking is, as you say, a natural phenomenon, but, at least so long as there are reserve requirements (either by fiat or necessity--to maintain solvency), private banks can only *multiply* real currency, not mint infinite new currency. The amount of real currency created by central banks directly controls the money supply, therefore, central banks *over the long term* are always to blame for inflation.

In today's world, production capacity is just like the demand for money, is almost infinite. With more money invested, there will be more goods and services produced, to make inflation in check, or even trigger deflation, due to more products and non-changing demand

As soon as there is some profitable goods, money will flow in like flood and mass produce those goods immediately. We have seen such kind of dramatic change in industry landscape of bitcoin ASIC miner. It is jaw dropping that during a very short time of 2 years, all the last several generations of semiconductor processing node has been passed and now we are tapping the newest processing nodes which are still in laboratory phase

So it seems no matter how much money is printed, there will be corresponding goods/services generated quickly. But the problem is on the ownership: All those newly created money belongs to some private banks, they give nothing in exchange for those money. That created a loophole in the financial system, so that banks will eventually claim everything's ownership by just printing money

[Nicolas Dorier]

Maybe someday in future, when everyone could produce everything they want with the help of a robot, trade will become unnecessary, then money will disappear. But due to human's limited life time, specialization is very possible to extend further, thus money will never disappear

What a sad world would it be, it would basically mean that human cooperation is not anymore required.

Making money is sadly seen as shameful is my country, because it means that "we eat too much of the pie, that is unfair".
But when we think about it, money is the only force that make us act for the well being of strangers without being compelled to do so.
Money is the reward for being helpful to someone else, this is often forgotten.

Well, I don't think we should blame people for that, I must admit that this definition is not very legit in today's world.
The definition of money has been corrupted, not because of "society" or "mankind" greediness, but by the very persons who defined themselves as sacred arbiters of value on behalf of the society.

[johnyj]

Maybe someday in future, when everyone could produce everything they want with the help of a robot, trade will become unnecessary, then money will disappear. But due to human's limited life time, specialization is very possible to extend further, thus money will never disappear

What a sad world would it be, it would basically mean that human cooperation is not anymore required.

Making money is sadly seen as shameful is my country, because it means that "we eat too much of the pie, that is unfair".
But when we think about it, money is the only force that make us act for the well being of strangers without being compelled to do so.
Money is the reward for being helpful to someone else, this is often forgotten.

Well, I don't think we should blame people for that, I must admit that this definition is not very legit in today's world.
The definition of money has been corrupted, not because of "society" or "mankind" greediness, but by the very persons who defined themselves as sacred arbiters of value on behalf of the society.

The money is a must because people need some kind of value token to do the trade, it should have universal acceptance, so fiat money is the closest candidate. It is this definite demand for transaction medium give fiat money value, and no matter how heavy the slavery is, people will still use it, since they don't have other choice

However, if people managed to produce some other universally accepted value certificate, then that can be used as money, so bitcoin is really creating a new alternative

[dulldog]

All the wars that we've had in the past few decades....would it be possible without a Keynesian system?  The speculation and asset bubbles?

Well I think it certainly would, but I can see your point.

[AtheistAKASaneBrain]

Maybe someday in future, when everyone could produce everything they want with the help of a robot, trade will become unnecessary, then money will disappear. But due to human's limited life time, specialization is very possible to extend further, thus money will never disappear

What a sad world would it be, it would basically mean that human cooperation is not anymore required.

Making money is sadly seen as shameful is my country, because it means that "we eat too much of the pie, that is unfair".
But when we think about it, money is the only force that make us act for the well being of strangers without being compelled to do so.
Money is the reward for being helpful to someone else, this is often forgotten.

Well, I don't think we should blame people for that, I must admit that this definition is not very legit in today's world.
The definition of money has been corrupted, not because of "society" or "mankind" greediness, but by the very persons who defined themselves as sacred arbiters of value on behalf of the society.

The money is a must because people need some kind of value token to do the trade, it should have universal acceptance, so fiat money is the closest candidate. It is this definite demand for transaction medium give fiat money value, and no matter how heavy the slavery is, people will still use it, since they don't have other choice

However, if people managed to produce some other universally accepted value certificate, then that can be used as money, so bitcoin is really creating a new alternative

We need wages being paid in bitcoin, having to convert your fiat into bitcoin monthly to use it it's annoying.

[stasis-crypto]

If alien come to earth, they will be shocked by the fact that human on earth will starve just because money printer is not working

Or maybe because it's printing too much.

Now, how could we live without money? If I go to a restaurant without money, how do I pay? Or would they feed me for free? Free beer, too?

There exists a need for regulation and centralization; the Libertarian's wet dream of decentralized EVERYTHING would fail because it would require people to act not on impulse, but for the greater good.

That borders on socialism, no? And look how successful that's been in history.

[stasis-crypto]

I've heard the claim that infinite demand for money allows increased supply without triggering inflation, but it's usually used to justify money printing, so that's an interesting idea. However, both sides miss something important when using this argument: The supply of goods and services doesn't change as a result of a higher money supply (although a higher money supply can temporarily drive increased production). The more dollars there are chasing limited goods, the less it is worth.

It doesn't matter if society realizes this is happening, they do understand on some level or another that buying power is falling when prices rise.

You can't really blame banks here though. Fractional reserve banking is, as you say, a natural phenomenon, but, at least so long as there are reserve requirements (either by fiat or necessity--to maintain solvency), private banks can only *multiply* real currency, not mint infinite new currency. The amount of real currency created by central banks directly controls the money supply, therefore, central banks *over the long term* are always to blame for inflation.

This, right here. The money supply is insulated from the supply of goods, those are generally determined by disposable income as per inferior goods and what not. Overall, money supply economics are far more complex than a few theories can describe, simply because there's so many factors to take into account. It's constantly changing, unpredictable, and a clusterfck at best.

[BillyBobZorton]

If alien come to earth, they will be shocked by the fact that human on earth will starve just because money printer is not working

Or maybe because it's printing too much.

Now, how could we live without money? If I go to a restaurant without money, how do I pay? Or would they feed me for free? Free beer, too?

There exists a need for regulation and centralization; the Libertarian's wet dream of decentralized EVERYTHING would fail because it would require people to act not on impulse, but for the greater good.

That borders on socialism, no? And look how successful that's been in history.

Those opposed to welfare are Fucked. We are headed towards a future where automation will allow for 95% of people not needed, and 5% of human labour will be all that's needed to generate the world's GDP. When we get there... you either give the people that "aren't needed" a welfare or prepare for a total catastrophe.

[l3552]

https://bitcointalk.org/index.php?topic=998993.0

"Greed" as "money" requires commoditization to have meaning as a word. The passing of greed is not the changing of human nature by itself, but the systemic change that will allow the realization that you can't have more by depriving others, because you are linked. How can I be greedy in a system that for ever single transaction I do I got as much good as I shared?

This whole idea came out from the intention of rescuing half of the world from misery and preserving humanity from a second Dark Ages in case the scenario of economic devastation takes place. So, be kind.

1) Today's System
1.1) Allegorical Development of Money
1.2) Bad Effects of Money on Human Organization
2) The Counter System
2.1) Incentives
2.2) Inner Workings

=Today's System=

Today money is a commodity supplied out of the void without any qualitative differentiation across a market based on debt and violence, and the ones who first touch it wins all because new money destroys every price it meets. You can dream about it like black goo being pumped from darkness and darkening everything it touches...

[johnyj]

Those opposed to welfare are Fucked. We are headed towards a future where automation will allow for 95% of people not needed, and 5% of human labour will be all that's needed to generate the world's GDP. When we get there... you either give the people that "aren't needed" a welfare or prepare for a total catastrophe.

Is it possible that today's highly concentrated industry structure is caused by the fiat money system (Large enterprise get larger loans thus expand much faster than small enterprise and wipe them out by economy of scale)? Would bitcoin make things better because there will not be an easy way to get financing through credit expansion?

[freeyourmind]

Those opposed to welfare are Fucked. We are headed towards a future where automation will allow for 95% of people not needed, and 5% of human labour will be all that's needed to generate the world's GDP. When we get there... you either give the people that "aren't needed" a welfare or prepare for a total catastrophe.

We are still quite far from the type of automation that will allow for 5% employment.  Even if the majority of production is automated, there are still many other components of a goods producing business that may not be automated if they are competing in a relatively free market.  Procurement, logistics, marketing, sales, support, R&D, etc. would still require a human component without AI right?  Then there are service industries.

I consider Tesla to be one of the most technologically advanced companies, where a large portion of their production is automated, but they still need to employ a ton of people, not only in production, but for the other components of running a business.

To your point, there would need to be a better way of distributing resources aside from time-based income though.  Almost sounds communist.

[johnyj]

We are still quite far from the type of automation that will allow for 5% employment.  Even if the majority of production is automated, there are still many other components of a goods producing business that may not be automated if they are competing in a relatively free market.  Procurement, logistics, marketing, sales, support, R&D, etc. would still require a human component without AI right?  Then there are service industries.

True, automation require a lot of R&D, and when complexity raised above certain level, the cost will be higher than the gain. In a highly  complex system, a small bug will cause days of delay in automated system, which could trigger a chain of reaction.

But anyway that is the trend, maybe not 5%, but 20%, there should be a framework that can be adjusted based on how much labor is needed to re-allocate the resource to those redundant people. Current solution is printing lots of money to create lots of useless job just to make people get something to do, not a bad idea but far from efficient