Merged A Thread for AlexPontik to Explain his Ideas

bartering is value for value,
Money is an iou for that value,

God I feel like i'm playing bioshock again haha.

offtopic

just played burial at sea, wow that wraps it up nicely.
 
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p0lka said:
bartering is value for value,
Money is an iou for that value,
Click to expand...
A definition of money is not that easy to nail down.

Modern (fiat) money is essentially IOUs for sure. However, commodities like gold, bitcoin, sea shells etc are not issued by any person and don't promise that they can be exchanged for anything of value (but people are willing to do so). Then there is fiduciary money which again is an IOU but the issuer promises to give the commodity it represents in exchange.
 
psionl0 said:
A definition of money is not that easy to nail down.

Modern (fiat) money is essentially IOUs for sure. However, commodities like gold, bitcoin, sea shells etc are not issued by any person and don't promise that they can be exchanged for anything of value (but people are willing to do so). Then there is fiduciary money which again is an IOU but the issuer promises to give the commodity it represents in exchange.
Click to expand...
All of that fits under my definition.
Whether it be bitcoins gold or a Rembrandt, if someone wants it then it has value.
The thing that bugs me is when money becomes a thing in itself and not just an iou for future bartering.

Edit:
sorry i should really read threads before replying to a question as
I think what im saying has been said before. I'll go read it.
 
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bruto said:
How do you track and evaluate the job they have done, though? It sounds as if you're just describing barter with lax rules.

And, of course, as always, your model is of a simplistic, primitive society. You don't "go in a market and take" a balanced and mounted set of tires for your car, a chain for your bicycle, a television set, a tank of acetylene and a set of baby shoes, and stuff them in a sack to take home.
Click to expand...

I don't disagree with what you write, but your comment "model of a simplistic, primitive society" is a good place to start, here's how I would write about it.

Start with a primitive society.
People in that society, have to do things for one another to survive, and enjoy their lives.
If you have a small number of people (up to 20 people), let's assume that you have close relations and talk to each other (a specific case of the general "I do this for you, you do that for me",whatever this and that are).
Your society is pretty successful and your numbers grow. But now let's say you are 500 people, doing things for one another.
Now it's harder to remember everyone and keep track of everything, so people need to find a way to organize their actions. Whatever way they choose, they need to make promises to one another for whatever they need, but as the numbers are large, they need to track what is happening, to have an overall view. Why? Most people are lazy, but some are worse, and consequences follow because of this, which humans don't want (and I assume you know why by what I wrote).
Whatever solution they invent to track what is happening as they trade ("I do this for you, you do this for me"), this invention is an attempt human make to reduce the time and effort spend to trade. Why? Because if they don't try to do that the time and effort spend to trade is more that it could be, and this doesn't make sense for humans, as they could spend the extra time and effort to do something fun.
You will notice that the number 500 is not needed, it doesn't matter if it is 500, 5 million or 5 billion, still humans try to find a way to reduce the time and effort it takes for them to trade, because then they can enjoy what they traded.
What about investments, bonds, bitcoins, blah blah blah? Exactly that, blah blah blah if they don't reduce the time and effort spend to trade. This means, when they work, hooray, but when they don't for a long time and consequences accumulate, at the end everyone finds out. What? That the investments, bonds, bitcoins, blah blah blah didn't work, and it usually has to do with human behavior. Why? Wouldn't the losers be winners if they did what the winners do? And what do the winners do? They win of course, the game is set and played, and they won. Shouldn't they have won? It's up to society to decide. But you need to know what the purpose of money is first, and it is not that difficult to understand.
Money reduces time and effort spend to trade, try to see if it matches or not with whatever experiences you have and come back with examples from your experience. Does it do anything else, that it should be doing?
 
The formatting above is a little dense, but I would note a couple of things.

First of all, the inconvenience of pure barter goes beyond having fun with the time saved, and becomes a matter of actual productivity soon enough. If we did not have money or some similar equivalent, forget fun: we wouldn't have the time or energy to get any complex job done or product made.

I like to use the simple example of how I would get a set of brake rotors for my Hyundai. It's not just that an attempt to deal directly would take time away from my life. It's that it could not be done. The only possible way it might be done would probably result either in a set of brake rotors cast in a sand pit out of scrap metal, or good precise ones as expensive as a house.

I would also note that although the primary purpose of money is, of course, to buy things for your labor, it has other purposes that are important at least to some people. One of the chief of those is capital. If you are going to establish a business - say a brake rotor factory - you can't just walk down the street and say "I think I'll make brake rotors today." Assuming you do not live in a state where the government does it, you need to find investors who will do more than just promise to work a lathe or sweep a corridor. You need money, and you need to get it from people whose vision of what money is for goes beyond simple barter. The very idea of a capitalist economy complicates the role of money.

There is also the issue (fraught with controversy no doubt) of inheritance. Many people consider money not in terms of what it will buy them within their lifetimes, but what it will procure to their heirs in theirs. Now of course, you may well consider this a bad idea, and be one who favors the idea that no inheritance should ever take place, but without it, our economy (and our distribution and use of capital) would be very different.

Control of inheritance is an economic weapon of considerable potency. If forbidden, it changes capital, the way businesses and lands are administered, and where power resides. If restricted (as for example in southern US states where it was once illegal for blacks to leave an estate) it shapes the power structure of society for generations to come.

As for the winners and losers, again one can argue both sides of this, but for many it's clear that the purpose of money is, essentially, as a marker in a game. In theory of course one gambles some money in order to get more, in order to do something with it later. But in practice, it seems, some people gamble money in order to get more money in order to gamble more. Later never comes. It remains to decide whether this sport is good or bad for the rest of us. After all, if someone loses money, someone else gains it. Is that good or bad?

Finally, I would reiterate that money may serve a social purpose which, while it is not purely related to monetary value, would be met one way or another by something else if money did not exist. It's fashionable among rich conservative folk to argue against taxation and the like on the grounds that one is "penalizing the best," and the implication is clear that for them, money is not just money, but an indication of personal superiority. Making it and holding on to it are markers of social superiority. In many feudal societies and their descendants, class makes money. Here in the US, money makes class. If money were not the gauge, I suggest that something else would be. Of course the counter-argument to that would be that if money were not the gauge, the determination of who is the best would be different. But if you go into that hole, beware: it's full of bees and spiders!
 
bruto said:
I like to use the simple example of how I would get a set of brake rotors for my Hyundai. It's not just that an attempt to deal directly would take time away from my life. It's that it could not be done. The only possible way it might be done would probably result either in a set of brake rotors cast in a sand pit out of scrap metal, or good precise ones as expensive as a house.
Click to expand...

Just to add, a quality set, IE one that is not going to break when you brake, takes some effort from a number of people. Engineers, designers, drafters, testers, and all sorts of other people to come up with the specifications let alone the physical item. All of these people need to be paid, which would be impossible in a barter system, or at least cumbersome to the point it wouldn't happen. You'd have to stop your Hyundai flintstone style for a while as we do the potatoes to brake rotor math.
 
bruto said:
The formatting above is a little dense, but I would note a couple of things.

First of all, the inconvenience of pure barter goes beyond having fun
with the time saved, and becomes a matter of actual productivity soon enough. If we did not have money or some similar equivalent, forget fun: we wouldn't have the time or energy to get any complex job done or product made.
Click to expand...
Nothing goes beyond having fun, what do you think human being do during their lives?
They have fun and they die, or do they do something else?
And if they do something else, is it something else than trying to keep the fun going for the next generation?
Productivity is what people say they have, when the fun they have is enough.
It usually means the energy we need to spend is acceptable by our current measures. And we humans like to spend as little energy as possible. Why? Because we like to spend most of our energy having fun. What fun? Human fun, we all know it when we experience it.

bruto said:
I like to use the simple example of how I would get a set of brake rotors for my Hyundai. It's not just that an attempt to deal directly would take time away from my life. It's that it could not be done. The only possible way it might be done would probably result either in a set of brake rotors cast in a sand pit out of scrap metal, or good precise ones as expensive as a house.

I would also note that although the primary purpose of money is, of course, to buy things for your labor, it has other purposes that are important at least to some people. One of the chief of those is capital. If you are going to establish a business - say a brake rotor factory - you can't just walk down the street and say "I think I'll make brake rotors today." Assuming you do not live in a state where the government does it, you need to find investors who will do more than just promise to work a lathe or sweep a corridor. You need money, and you need to get it from people whose vision of what money is for goes beyond simple barter. The very idea of a capitalist economy complicates the role of money.
Click to expand...
Here's my view.
In the beginning humans had neither money nor capital.
Then humans had money, but money was concentrated on few people in society, and this was the law of the land.
Then humans said, let's allow everyone to have as much money as they want, and capital was born.
Now, capital, or do what you want with your money, is the law of the land.
Regardless, still humans do things for one another and prefer spending the least amount of time and effort on that, so that they can have their fun. Thus money.

bruto said:
There is also the issue (fraught with controversy no doubt) of inheritance. Many people consider money not in terms of what it will buy them within their lifetimes, but what it will procure to their heirs in theirs. Now of course, you may well consider this a bad idea, and be one who favors the idea that no inheritance should ever take place, but without it, our economy (and our distribution and use of capital) would be very different.
Click to expand...
Here's my view.
People found a way to make money in their lives.
So they claim they are good at making money.
But somehow, the one thing they need more, is more money...even though they are good at...making money...which would make one think that they wouldn't have a problem to make more money in the future if they needed to...since they are skilled at making money.
But this isn't what happened in history. It seems to me the ones who made money understood, that if you have money in society things are in general more stable for you in life, and they wanted their children to have the same benefit.

The economy would be very different without inheritance as you said, but this isn't what we are discussing here, let's drop it.


bruto said:
As for the winners and losers, again one can argue both sides of this, but for many it's clear that the purpose of money is, essentially, as a marker in a game. In theory of course one gambles some money in order to get more, in order to do something with it later. But in practice, it seems, some people gamble money in order to get more money in order to gamble more. Later never comes. It remains to decide whether this sport is good or bad for the rest of us. After all, if someone loses money, someone else gains it. Is that good or bad?
Click to expand...
"After all, if someone loses money, someone else gains it. Is that good or bad? " If both participants are having fun it is good, if both are not having fun it is bad, and if one of the two is not having fun it is conflict, which is the worse.

bruto said:
Finally, I would reiterate that money may serve a social purpose which, while it is not purely related to monetary value, would be met one way or another by something else if money did not exist. It's fashionable among rich conservative folk to argue against taxation and the like on the grounds that one is "penalizing the best," and the implication is clear that for them, money is not just money, but an indication of personal superiority. Making it and holding on to it are markers of social superiority. In many feudal societies and their descendants, class makes money. Here in the US, money makes class. If money were not the gauge, I suggest that something else would be. Of course the counter-argument to that would be that if money were not the gauge, the determination of who is the best would be different. But if you go into that hole, beware: it's full of bees and spiders!
Click to expand...

The purpose of something is the most efficient way something is used.
A hammer can be used most efficiently to put nails on the wall, because this is its purpose, this is what it was made to be used for.
You can also smash ones head with a hammer, but this isn't what hammers are made for.
We usually don't blame the hammer for the smashed head, but the one who held it and smashed the head.

Regarding the need for any type of social superiority, here's my view.
In the beginning there were boys and girls.
Boys had to be fun for girls in order for girls to allow them to have fun with them.
But boys didn't want to spend the needed time and effort to be accepted by girls and they organised society so that girls didn't have too much say, and then they went on and started competing between themselves, the best one according to the boys game rules, won the admiration of the girls.
And then the boys thought, if I get to that good position in the game, I am good for life.
And thus superiority was born, or why even though if you stabbed me I would die as you would if I stabbed you, I somehow am better than you.
Better in what? Better in having fun as a human (cause what else do you think you are doing but that?. And the appropriate stories to support the ones who where better get amplified in society.
As long as society if fun, it is worth a shot, and when not, usually history repeats itself...
 
A short essay about the economy

From what I think I know (then I could easily be wrong), the economy consists of:
1. Kids who are working for other kids = employees
2. Kids for who other kids are working for = employers
3. The actions all the kids do for one another = trade
4. The current rules trying to specify what is allowed and what is not = law
Edited by zooterkin: 
<SNIP>
Edited for rule 4.
https://www.thestudentroom.co.uk/showthread.php?t=6607844 for the full article.

 
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There are times when using a metaphor or analogy can make concepts clearer to the reader.

This is not one of those times.
 
AlexPontik said:
From what I think I know (then I could easily be wrong), the economy consists of:
1. Kids who are working for other kids = employees
2. Kids for who other kids are working for = employers
3. The actions all the kids do for one another = trade
4. The current rules trying to specify what is allowed and what is not = law
Click to expand...
5. The kids who produce and the kids who consume
6. The kids who are creditors and the kids who are debtors
7. The kids who collect taxes and the kids who spend the taxes

Let the kids grow up and add about 100 different kinds of kids and you will start to get a model that resembles a modern economy.
 
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