Funny Money Forever

[scepticus]

#1

start in the garden of eden (this is the fabled place injin keeps telling us about). Everyone is equal, precisely and only because because everyone has nothing. There is no information, no civilisational context whatsoever, nothing to differentiate adam from eve besides the obvious (I.e. The biological information encoded in our genes). Zero information, zero complexity. Maybe zero violence – certainly the bible told us it was that way.

Now introduce division of labour, leave the garden. Already now there is information. Many are subtlety different from others. Cultural information. Inequality.

Next, barter. Trade differentiates people further, defines them by location and language and goods offered. More culture, civilisation. Already there is war, using basic tactics and techniques and weapons blunt or made of bronze (weapons made by specialists), soldiers, commanders.

Money. The informational content arising from division of labour, information such as language, forms of written records, and most importantly, about power structures has risen to a level at which cultural preferences expressed by the rulers and deferred to by the rest have emerged. This is hard money. It is also fiat money, since the rulers define what they will accept in place of the usual tribute of a sheaf of wheat or a lamb.

The rulers have all the money because there is only so much of it. When a peon gets a piece of money he loses it the next time he finds it necessary to transact with someone better off than him. When having no money, he submits some culturally justified token of his labour instead.

Repeated ad infinitum this leads to a small cadre of managers having all the money. They don't give it back, or when they do, not for long. Why give your employees the means to leave your employment?

The money of the rulers is fiat because they define what value tokens they will and will not accept. After a long time, the money seems just to be, like it always existed. The peons not having any money will do anything to obtain some of it. They are your slaves. Anyone living in a division of labour monetary civilisation without any money is a slave. By this means shall you extract yield.

Is the value of the rulers coin equal in exchange to the total sum of goods produced within the borders divided by the amount of coin? No! It doesn't need to be. Because you can extract yield without actually using any money (at least, not any money that won't come back to you), because you demand money from your people and they don't have any so they must pay a forfeit. A lamb or daughter or a head. Genius, you have invented the first ever funny money. You know what, people will think you have it in the basement of your palace, even if you don't.

Then there is a war and the rulers get decapitated and there are new rulers. Very soon all the hard money has flowed back into the hands of the new rulers as per the process above. Nevertheless, the informational content associated with this social structure is considerable and allows the rulers and peons together to construct remarkable things from the dirt, because the rulers have given the peons a collective purpose, his purpose. But the great achievements come at a price. THis is the basic template for all human activity to date.[/i]

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As you know there are several chapters after this but this is the chapter to which the hard money loons want to turn back to. Right back almost to the beginning. Hey guys, why not right back to the beginning, to barter or adam and eve? Why stop here? What's special about here? Guys?

Anyway, these dreamers make the mistake of thinking that the rulers are going to spend their finite stock of this hyper valuable money back into circulation. Hear it, hear it, ever appreciating money for all! They are going to pay dividends to the most productive peons! The most productive peons will be rewarded and elevated to the ascendancy! You too can take more than you give and be like the great King Zog!

Fools.

As per the above the rulers (e.g. the permanent members of this shiny new monetary economy, not the hopefuls with a day pass) don't need to spend any money except when one ruler wants something from another ruler, so they won't spend it with the peons. Yet they will continue to demand money from the little men. Can't pay, too bad for you. This is how the skill of permanently taking more than you give was perfected. This is the freedom offered by the wise men of mises. Either these wise men are fools or dream of their own tyranny.

Wishing for hard money before the perfection of democracy is a fools game since it will make slaves of 95% of people. Unless you already happen to be the ruler. Even then decapitation or impalement or a nasty little something in your wine is always a possibility.

But you don't want rulers or central planning? Then get thee back to the garden of eden then where there is no information and no division of labour, and re-read the prologue.