Merged A Thread for AlexPontik to Explain his Ideas

Myriad said:
So you like to go really slow?




Really really slow!
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Admittedly, it is not the fastest means of travel. But if the rest of the thousand-man parade has to crawl on their hands and knees while singing my praises, then the palanquin is more than capable of keeping up.
 
I think to really understand money, we need to go back to Ancient Egypt. Which actually invented a unit of currency (the deben) thousands of years before anyone minted actual coins. In a sense, it was the ultimate fiat currency, in that it didn't even (physically) exist.

The problem when bartering is more than hauling the grain around to buy a carpet. That can be solved. But how much grain is a carpet worth? What if you're selling pottery instead of grain? How many cups and dishes is my fine carpet worth? What if it's olive oil? Cedar wood imported from lebanon? Slaves? Having a conversion table in your head between any two of literally thousands of different products is beyond any human's capacity. Even if you were literate, carrying that many conversion tables around and perusing them at each stall to compare prices would be nuts.

Enter the deben. Which TECHNICALLY was supposed to be a unit of weight, but here's the funny thing: it was a different weight for each metal. So for example a deben of gold was less grams than a deben of silver, which in turn was less grams than a deben of copper. So it basically came down to equal value.

Now that simplified things enormously: instead of having conversion tables in everyone's heads between any 2 of thousands of products, we just need one price for each product: the price in deben. Sum up the values on one side of the deal, sum up the values on the other side, if they're equal, we know that the deal works.

So for example I want to buy a literate slave to serve as a scribe for my noble house. And find someone selling one. Well, that guy is top notch. Young, healthy, male, literate. I can compare prices in deben around, haggle a bit without much success, agree that the slave is worth 10 deben. (Actual top price of a slave, btw.) Well, I just bought a new rug worth 5 deben, which I'll offer as part of the price (I really need a new scribe more than a new rug,) and I'll throw in some pottery worth 3 deben, and top it off with enough grain for 2 more deben. We can quickly agree that the two sides of the trade are equal, shake hands, and now I own a dude.

Actually minting coins was just the natural extension of that. Now instead of just mathematically converting values for bartering, I can just sell my new rug and grain for money, and go buy my new scribe with the money.
 
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Money also relies on trust to be useful, that is to say, if I exchange my construction labor for a hundred dollar bill, one of the base assumptions in that transaction is that I can take that hundred dollar bill home and exchange part or all of it's represented value for something I want. Banking, especially lending, relies on this trust and this is what allows us to make transactions without physical tokens. Heck, exploitation relies on this, criminal or not, and I reckon (for what it's worth) it's part of why being robbed can feel so violating even if it's just on paper.
 
Trebuchet said:
The OP joined up, created three threads in less than an hour, and has never been back. Feel free to discuss his ideas but don't expect him to join.
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Who cares? It's a question worth debating, so it doesn't matter if the OP returns or not.

psionl0 said:
The usual characteristics of money are usually defined as:

A unit of accounting.
A medium of exchange.
A measure of value.
A store of value.
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You missed the big one - it abstracts the particulars of goods and services, which has the psychological effect of causing people to value money itself. Capitalists go to extreme lengths to amass as much of it as they can, even though it harms the economy and the environment, and even themselves.

Not just individuals, but whole countries pursue destructive policies in order to amass more money, not seeming to realize that in the end money has no intrinsic value. In the US today we have thousands of people dying every day to 'protect' the wealth of a few elites who were scared of losing some of their precious money. But it has been like this forever.

The Aztecs prized gold and silver for ornaments, decorations, plates, and jewelry. But they did not use it as money. To the Spanish who plundered it however, money was all it was good for. So they melted down the priceless artistic treasures and introduced it into their economy - with predictable results.

When gold is used as a currency its only value is the goods and services it represents, which in the case of introduced gold is nothing. So while a few people became 'rich' the economy as a whole suffered because their money was artificially debased. This started the Price revolution, a 150 year period of unprecedented inflation driven by the wrong-headed idea that gold has an intrinsic monetary value.
Causes
Influx of gold and silver

From an economic viewpoint the discovery of new silver and gold deposits as well as the productivity increase in the silver mining industry perpetuated the price revolution. When precious metals entered Spain, this influx drove up the Spanish price level and caused a balance of payments deficit. This deficit occurred on account of Spanish demand for foreign products exceeding exports to foreign markets. The deficit was financed by the metals that entered these foreign countries and in turn increased their money supply and drove up their price levels.
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Roger Ramjets said:
You missed the big one - it abstracts the particulars of goods and services, which has the psychological effect of causing people to value money itself.
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I would describe that as an effect of money rather than a characteristic.

The other main effect is to facilitate trade between individuals. However, it would be a mistake to assume that money evolved to replace barter. A society where individuals exchange a wide variety of goods and services among themselves is quite an evolved society which does not seem possible without some medium of exchange. It is more likely that money evolved concurrently with individual trade or that it was created by community leaders first and that facilitated exchange.
 
Roger Ramjets said:
Who cares? It's a question worth debating, so it doesn't matter if the OP returns or not.

You missed the big one - it abstracts the particulars of goods and services, which has the psychological effect of causing people to value money itself. Capitalists go to extreme lengths to amass as much of it as they can, even though it harms the economy and the environment, and even themselves.
<snip>
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Do you really believe that only people in a capitalist economy go to extreme lengths to amass as much as they can? Nonsense - any economy which involves money has people who amass as much as they can, and even those which don't will suffer from the same symptom. That's because, as you pointed out elsewhere, the human race in general is selfish and greedy.
 
ok, so to some of you the initial argument makes some sense, let's continue...
The below is quite an unusual argument, any feedback both positive and negative is welcome, but please, keep it classy :D


Money! Is it the end, or is it the beginning for people?
1. Why can time and effort needed to trade, be a problem to some people, so that they need it reduced (time and effort to trade) by introducing money to society?
2. Because people may want to do something else, instead of spending the needed time and effort to trade.
3. But…for some people…time and effort spend to trade…is what they do for fun!

The jokers
1. People who spend time and effort to trade, because it is fun to them, in the end… learn how to do this efficiently(= spend less time and effort to trade).
2. Because they become good in trading efficiently, they become good with money(= spend less time and effort to trade)!
3. Because being efficient in trading, which is what these people do, is what money’s end also is (Money reduces the time and effort needed to trade), Jokers are divided into funny Jokers and SAD JOKERS.

The GREAT DIVIDE : funny jokers and SAD JOKERS
Funny Jokers:
1. Funny Jokers, in the end… want to have fun, and becoming good in trading(=less time and ef-fort spend), is their way of having fun.
2. Because their end is to have fun, when the fun Funny Jokers have, covers their needs, they don’t need to go further. But because they are becoming good in trading(=less time and effort spend), if they become more efficient in trading, than money in society is at the time, they end up with more money.
3. Since when this happens, Funny Jokers are more efficient in trading than money in society is at the time, keeping these money is useless to them, because they are more efficient at trading, than the money they hold. And, because more money doesn’t give them more fun at that point, Funny Jokers end up trading these money for nothing, plus put time and effort to do that, so that they are spend efficiently, because helping society does give them more fun!

Sad Jokers
1. Sad Jokers spend time and effort to trade, but they are not having fun. Because others spend time and effort to trade, plus have fun doing this , Sad Jokers need to become good at some-thing else to make money. So they spend their time and effort on something else, on which they become efficient…
2. Because they become good at something else, their actions are not reducing the time and ef-fort spend to trade, as… they spend their time and effort on something else. So, the money they make, is more efficient in reducing the time and effort spend on trading, than they are, and…the more money they make…the more time and effort needs to be spend on trading in society, and money in the end becomes inefficient for society…cause…
3. Because of this, what is no one’s problem in society…becomes everyone’s problem in society. Why? Because some Jokers are sad and this is funny. Why? Cause others aren’t and they are useful to society.
 
A clarification "Jokers" is not used as a derogatory term it is used as "Jokers" can be anyone.
 
This is very confusing. You start by asking (if I paraphrase correctly) why trade was such a chore that money had to be invented.

That seems to be asking about the basic purpose of trading (fairly exchanging things you have in abundance for other things you lack) and about why we might want to make it more convenient.

But everything you wrote after that seems not to be about people who want to swap what they have for what they need, rather it's about people who have specialised in the job of exchanging other people's goods, for a fee. And about whether they find it fun or just do it for the fee.

I really don't understand what point you are trying to make, if any.
 
AlexPontik said:
ok, so to some of you the initial argument makes some sense, let's continue...
The below is quite an unusual argument, any feedback both positive and negative is welcome, but please, keep it classy
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It's a discussion forum, not a lecture hall. Please take some time to respond to the feedback. Just ignoring it and plowing ahead with part two of your lecture belies the claim that feedback is welcome.
 
Every society has various types of wealth which can be accumulated and interchanged (to some degree):

political power, fame, financial assets, favors, honor ...
money is just one of the many currencies we use.
 
I think there are a few flaws here, both minor and major. It's possible to accumulate wealth in many ways depending on what constitutes wealth. Money is just one. In some societies, it might be seashells or jewelry or wives. It's possible to be a miser in any system, and possible to have more than you need in any society where power is measured by acquisition.

While one might hope that people who make money and trade well for the sport in it will stop when they get enough, or at least will be more generous with the excess than the gloomy, driven ones, I'm not aware of any solid evidence that they do. If the point of the game is the score, it may not matter whether it's an obsession or a diversion.

As a kind of aside, I in my youth was one of those people who was happy to stop when I got enough of anything, including grades and scores, and society in general, parents and teachers in particular, were severely critical of that habit. The urge to climb higher whether or not you've reached where you want to be is ingrained into our culture.

Money is a conveniently light and portable way to measure social status, but in its absence there will always be something.

But the initial implication that money is just a shortcut for those unwilling to take the time and effort for trade seems fundamentally wrong. Perhaps in a primitive village of hunter-gatherers, but in the real world as it exists, it's not a matter of time and effort.

It may be technically and impractically true that the flight of a butterfly affects the weather in Michigan, but the observation doesn't help shovel snow. And likewise, while it might be trivially true that I could parlay a jug of maple syrup into new brake rotors for my Hyundai, in no real sense is it doable. It's more than just time and effort: its practical possibility. It's not just that I can shorten the process by selling the syrup to buy the rotors It's also that the transaction need not take into account the long chain of transactions whereby acquired enough money to buy the maple grove and the equipment, and found a way not to starve to death during the maple season, etc. etc.; and also the long chain of transactions whereby the auto parts store came into existence, and hired the people who made the order that bought the rotors from the distributor who paid for them to be shipped from the factory in Korea and on and on and on.

A medium of exchange and assignment of value is not just a convenience. It's a necessity.
 
Well, I wouldn't say it's a necessity strictly speaking, seein' as fairly advanced ancient societies managed to work perfectly well before the invention of actual money. Actual currency came VERY late after cities and trade, as in literally thousands of years later. And Egypt managed to work perfectly fine and be an economic powerhouse without using currency internally, even after they were minting coins for foreign trade. If those foreigners are willing to give up valuable goods for gold and silver coins, sure, Egypt had the precious metal mines and was willing to stamp it into coins. But it obviously wasn't NECESSARY to keep its internal market going.

And then there were the Chinese, which pretty much just abstracted everything to quantities of bronze. Now technically it's money, but unlike gold, you didn't have to believe that it has a certain value. It was actual bronze you could use for weapons, tools, statues, whatever. And people did use it like that. Or conversely you occasionally see stuff like Dong Zhuo melting bronze statues to pay his troops during the Three Kingdoms civil war.

Basically it was a bit of a hybrid. It worked as money all right, but it was also a good that was useful by itself.

Anyway, just to clear things up, I'm not saying that money is BAD or anything. Just that technically it's not NEEDED. It just makes things a lot easier, but that's about it.
 
HansMustermann said:
Anyway, just to clear things up, I'm not saying that money is BAD or anything. Just that technically it's not NEEDED. It just makes things a lot easier, but that's about it.
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"It just makes things a lot easier, and that is about it" is what I argue as well.
"Makes things a lot easier" for humans means "reduces time and effort spend by humans", which generally is common sense to humans.Why?
Because if I write down the following:
speaker 1 said that "humans are trying to reduce the time and effort they spend to feel good" (regardless of what are the results)
speaker 2 said that "humans are trying to do something other to feel good". (what something other? Anything other anyone can think and write)
For the second this something other compared to the what the first speaker said can be:
1. similar but not the same with the first speaker's view if it is "humans are trying to reduce the time and effort they spend, plus something other to feel good".
2. completely separate from the first speaker's view if it is "humans are trying to do something other than reduce the time and effort they spend to feel good".

for 1. "humans are trying to reduce the time and effort they spend, plus something other to feel good" takes more time and effort to do than "humans are trying to reduce the time and effort they spend to feel good".

for 2. "humans are trying to do something other than reduce the time and effort they spend to feel good", since they do something other than reducing the time and effort the spend to feel good, they are increasing the time and effort they spend to feel good.


"Just that technically it's not NEEDED", I am not sure what you mean, if it just makes things a lot easier...this is what it is technically needed, to make things a lot easier. "but that's about it" is correct, that is about it, if you are referring to trade, because you need to mention where money makes things a lot easier.

Regarding trade, trade is defined in the following simplistic way: "I do this for you, you do this for me". Why? Because this is a most general, and simpler way to define it.
Any specific categories of trade, fall under this property. As examples:
  1. Baker makes bread, customers buy bread with money (or barter in older days).
  2. Financial speculator moves capital from one company to another, if the company does well (perhaps because of the extra capital, perhaps regardless) then the financial speculator's portfolio is more valuable. Still the speculator expects when he/she moves capital that "I move this capital to you, you increase the value of my portfolio company". Why? Because if the company does something erratic, which implies that something is gone wrong, then the capital is moved away from the company.
  3. Mom allows kids to watch late TV, but they have to have finished their homework first.
Money when defined as "money reduces the time and effort spend to trade" doesn't refer only to currency, credit cards, etc., mutual agreements kept, without any currency exchanged is still money. Metaphorically? No. Literally as mutual agreements kept, reduce the time and effort spend to feel good in humans relationships.

Currency is one way to implement money, as is gold or any other material of value to humans.
Credit cards is another, as are checks or any other process based product with the aim to reduce time and effort spend to trade as its sole purpose.
Contracts is yet another, or any other form or agreements bound with more than words (in the case of contracts it is the rule of law, i.e. if you break the contract "you promised to do this, you didn't do it, now you will incur a penalty in life which is this"

When is something not money then? When during trade, this something increases time and effort spend.
For example, a girl goes into a store and buys a dress with currency. Why isn't the dress itself money , and the currency is in this example?
Because the girl wants to spend time and effort with the dress (to try it on, to wear it, to maintain it - wash it , iron it). However with the currency she wants to spend less time and effort, so she gives away her money and gets a dress. To sum up:
Does the girl want to spend time and effort with the dress? Yes in order for her to feel good.
Does the girl want to spend time and effort with money? No, without trading money for something else, only specific people can spend time and effort ( e.g. collectors of old currency), and when one is trading, the time and effort is reduced (by the definition of money, in this example because it is easier than the girl buying a girl with chickens).
 
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AlexPontik said:
ok, so to some of you the initial argument makes some sense, let's continue...
The below is quite an unusual argument, any feedback both positive and negative is welcome, but please, keep it classy :D
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I struggle to figure out why some find the concept of money so difficult.
 
HansMustermann said:
Well, I wouldn't say it's a necessity strictly speaking, seein' as fairly advanced ancient societies managed to work perfectly well before the invention of actual money. Actual currency came VERY late after cities and trade, as in literally thousands of years later. And Egypt managed to work perfectly fine and be an economic powerhouse without using currency internally, even after they were minting coins for foreign trade. If those foreigners are willing to give up valuable goods for gold and silver coins, sure, Egypt had the precious metal mines and was willing to stamp it into coins. But it obviously wasn't NECESSARY to keep its internal market going.

And then there were the Chinese, which pretty much just abstracted everything to quantities of bronze. Now technically it's money, but unlike gold, you didn't have to believe that it has a certain value. It was actual bronze you could use for weapons, tools, statues, whatever. And people did use it like that. Or conversely you occasionally see stuff like Dong Zhuo melting bronze statues to pay his troops during the Three Kingdoms civil war.

Basically it was a bit of a hybrid. It worked as money all right, but it was also a good that was useful by itself.

Anyway, just to clear things up, I'm not saying that money is BAD or anything. Just that technically it's not NEEDED. It just makes things a lot easier, but that's about it.
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But I would contend that even if money as an actual thing you can hold in your hand does not exist, some abstraction of value must exist for anything but local trade, and it must be possible to transmit that value without trading physical objects. There has to be some intermediate carrier of value, whether it's currency, credit, or just faith, or it would be so difficult and time consuming to achieve trades that it would become impracticable.

If Ogg the cave man has more meat than he needs and wants an axe, he might go to the guy who is good at making axes, and suggest a trade, which the axe maker might well accept because he's too busy making axes to hunt. If he doesn't need the meat, but knows the weaver needs some meat, and he needs a blanket, he might still take the meat, with another trade in mind.

But if I produce maple syrup in the woods of Vermont and need brake rotors for my Hyundai, it might be theoretically possible for me to swap my way across the world, and end up, after some research, with something the maker of brake rotors wants more than syrup - or I might find out that he knows a way to parley some syrup into something else, but even then, if a fellow from India wants them and gets there first with a simpler transaction, I'll lose the deal before I get there, and the quest for an object that would ordinarily cost me an hour of my time ends up costing a month and untold peripheral inconveniences and expenses, as I must carry enough swappable merchandise, or do enough labor, to support myself and my passage in the enterprise.

e.t.a. and of course I know that even that is an oversimplification since there isn't some guy in Korea or China making brake rotors in his back room.
 
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