Jump to content
House Price Crash Forum

Frankenstein Finance/timebomb That Nobody Can Defuse;


Recommended Posts

0
HOLA441
  • Replies 159
  • Created
  • Last Reply

Top Posters In This Topic

1
HOLA442

I meant the difference between fiat and bread/gold is that the latter are valued for their properties alone.

Bread has some nice properties, but using it for savings is not one of them.

Would you use gold for savings if it grew on trees?

If not then your valuation its not intrinsic to the properties of the object itself. You will still use bread for the same purpose no matter how much there is.

Edited by Police
Link to comment
Share on other sites

2
HOLA443

It's usually pretty obvious whose property the land is. Where it isn't and there is a dispute, free market (perhaps even volunteers) arbiters can resolve the dispute. If the loser fails to abide by the conclusion, they can be denounced as an outlaw.

It doesn't matter that there is no central arbiters. Reputable arbiters, who had a record of being fair and just, would be in demand by people trying to resolve disputes. This is how the law forms itself from the bottom up.

As long as people accepted the decisions of the arbiters, then the loser of the case will not be supported by their peers and neighbours. It is the latter who would impose the law (likely through ostracism), instead of the police.

What good is their land if no one wants to trade with them? They will become poorer by stealing.

People know stealing and violence is bad. People will tend not to trade or socialise with such individuals. This makes them poorer in the long run.

A gun is also a good equaliser against the strong who insist on trying to take what isn't theirs by force too.

The government has stripped power from families and individuals and left them with an inadequate police force to replace it.

If the government has done such a great job of helping the poor, how come the imbalance between rich and poor has become so large? Despite the excessive theft and the violence it can apply, it has failed time and time again.

I find it difficult to accept the idea that some people's claim to pre-existent natural matter is more legitimate than others, don't you think this may cause a bit of social tension down the line when the have-nots find themselves renting in perpetuity?

Link to comment
Share on other sites

3
HOLA444

I am perplexed by this idea of neutral arbiters that can be brought in on a whim. Do they follow up a decision with force? Presumably the person who agrees to pay for them had a bit of an advantage in the decision, or do these arbiters work free of charge?

Arbiters maybe society seniors. They may be considered old and wise. These sort of people aren't going to be swayed towards immorality, if there very placement in society is due to their rigorous morality.

Alternatively, a free market arbiter may have a reputation for making fair decisions. If you have a genuine dispute, which requires a genuinely fair conclusion, you will want a fair arbiter. If the result is poor and a re-trial is sought, the previous bad arbiter will see their reputation decline, which will hit their business (ie. it is their livelihood to judge fairly).

Ofc, there could be alternatives, but it is how known anarchic societies exist/existed and it formed the basis for our common law too.

I guess if you really think these people will appear and do good that is up to you. In anarchy though, might is right, no other mechanism works.

My opinion is that most people want to live and trade peacefully. There will always be a minority of thugs, but I doubt such a path will be profitable in the long run.

Society works best when people trade their goods and skills, which they are expert at. By choosing to become an outlaw, you would lose access to the goods created by others and would have to make do with what you could make/steal yourself. You would also lose support and representation in disputes, which would make you rather vulnerable and disposable*.

* Law from the bottom up tends to rely on restitution. This requires either you or your surety/insurer bringing the case to arbiters. If you have neither a surety or an insurer, no one will be there to claim restitution. This means there would be little risk to law abiding people killing an outlaw, if it went that far. This isn't a good position for the outlaw.

Link to comment
Share on other sites

4
HOLA445

If I was in the Mafia I would.

Then don't be surprised when they rob you blind too.

Would you use gold for savings if it grew on trees?

If not then your valuation its not intrinsic to the properties of the object itself. You will still use bread for the same purpose no matter how much there is.

Supply is strongly linked to demand.

If I have as many loaves as I can possibly eat, your additional bread is worthless to me.

Link to comment
Share on other sites

5
HOLA446
6
HOLA447

I find it difficult to accept the idea that some people's claim to pre-existent natural matter is more legitimate than others, don't you think this may cause a bit of social tension down the line when the have-nots find themselves renting in perpetuity?

If others share your opinion, then owning land will not be considered legitimate and the problem is solved.

Only laws which are decided by the people (through the free choice of arbiters) would apply in an anarchic society. This inevitably would be what people wanted as otherwise the arbiter wouldn't be in demand.

My opinion is that some land ownership would be accepted and the free market price wouldn't lock people out of buying it. After all, an acre of grazing land often costs about the same as an old car, currently. You could build several houses, sheltering numerous families, on such a plot if you wished.

Link to comment
Share on other sites

7
HOLA448
8
HOLA449

I'll only eat as much as my belly could allow. The rest would rot and would be worthless to me.

But the value of the bread to your system is the same regardless. Your cognitive valuation changes according to your perceptions of abundance.

Much the same as gold. It has no properties that make it "good" for saving. Only your subjective valuation - and part of that is the valuation of others.

Gold has no counterparty risk - except the "market".

Edited by Police
Link to comment
Share on other sites

9
HOLA4410

If others share your opinion, then owning land will not be considered legitimate and the problem is solved.

Only laws which are decided by the people (through the free choice of arbiters) would apply in an anarchic society. This inevitably would be what people wanted as otherwise the arbiter wouldn't be in demand.

My opinion is that some land ownership would be accepted and the free market price wouldn't lock people out of buying it. After all, an acre of grazing land often costs about the same as an old car, currently. You could build several houses, sheltering numerous families, on such a plot if you wished.

So if a society decided that any person under 5 10" was the rightful property of anyone above that height and the social arbiter had the final say that would be ok according to anarchist philosophy?

Anything goes under anarchism then!

Link to comment
Share on other sites

10
HOLA4411

So if a society decided that any person under 5 10" was the rightful property of anyone above that height and the social arbiter had the final say that would be ok according to anarchist philosophy?

Anything goes under anarchism then!

There were anarchists fighting in the Spanish civil war. They refused to organise themselves into hierarchy on principle.

When it came to battle, they fought badly and lost. Taking land off of anarchists is like taking candy off a baby.

Link to comment
Share on other sites

11
HOLA4412

But the value of the bread to your system is the same regardless. Your cognitive valuation changes according to your perceptions of abundance.

An object has no value. People value objects. The amount of value people give to objects, depends on how much they want (i.e. demand) the object, relative availability (i.e. supply).

If I have my fill of bread, any more is worthless to me.

Much the same as gold. It has no properties that make it "good" for saving. Only your subjective valuation - and part of that is the valuation of others.

Gold has no counterparty risk - except the "market".

Quite right, yet people have valued it for millennia. Maybe people just want it because it looks pretty and there isn't much to go around? I don't proclaim to understand the fickleness of people's beliefs, but I can certainly observe them.

Link to comment
Share on other sites

12
HOLA4413

So if a society decided that any person under 5 10" was the rightful property of anyone above that height and the social arbiter had the final say that would be ok according to anarchist philosophy?

Anything goes under anarchism then!

It's not the arbiter who gets to enforce the decision, it is the individuals who value their decision.

There were anarchists fighting in the Spanish civil war. They refused to organise themselves into hierarchy on principle.

When it came to battle, they fought badly and lost. Taking land off of anarchists is like taking candy off a baby.

They sound like daft buggers then.

You can have voluntary hierarchies in anarchist societies, where it is beneficial for there to be. For example, people may rent a factory owner's machines, in order to maximise their own productivity. This creates an employer/employee relationship. In other words, it's a mutually beneficial arrangement.

edit: sp + added a bit

Edited by Traktion
Link to comment
Share on other sites

13
HOLA4414
Fiat means forced.

There is no such thing as intrinsic value.

A more accurate definition of fiat is 'An arbitrary order or decree'- so when the market issues it's judgement on the current value of Gold it's issuing precisely such an arbitrary valuation- in effect the value of gold is being asserted by force of majority opinion.

You may say that the market arrives at it's opinion in an unforced manner- but this in no way alters the arbitrary nature of the valuation- unless you are under the impression that the markets are entirely rational at all times- an idea so funny it ought to have it's own TV show.

Regarding intrinsic value- do you consider the nutritional value of bread an opinion or a fact?

Link to comment
Share on other sites

14
HOLA4415
I meant the difference between fiat and bread/gold is that the latter are valued for their properties alone.

Bread has some nice properties, but using it for savings is not one of them.

But isn't the reason Gold is used for savings in part because it has no real use- unlike silver which is used in electronics.

I accept that Gold is used as a store of value- but that value is a matter of opinion- the nutritional value of bread is a matter of fact.

Decorative and durable can be more valuable than edible and biodegradable to some. Beauty (or should I say, value) is in the eye of the beholder.

Does the speed of light alter if enough people choose to believe it has-no. Does the nutritional value of bread alter if enough people choose to believe it has-no. Does the value of Gold alter if enough people choose to believe it has- yes.

Some things are in the eye of the beholder- other things are not.

Whether something is nutritious/biodegradable or decorative/durable may affect its demand. That's up to individuals in the market place.

Just because something is nutritious, it doesn't mean it has intrinsic value; it just means that a hungry person might value it more than a well fed person.

But does the fact that there is no demand for bread today reduce it nutritional value? No- because this value is intrinsic. The same could be said of Gold- does the fact that there is no demand for gold today make it less durable? No. Because this durability is intrinsic.

But if this durability is a constant why does the value of Gold alter over time? The reason is obvious- because that value is not a function of the metal's durability but is determined by fiat- in this case the arbitrary decree of the market. Gold is worth 'x' because the market decrees this to be the value- next week the market might decide it's worth 'y'.

So Gold's value is subject to the arbitrary whim of market forces, just as paper money is subject to the arbitrary whim of state forces- in practical terms there is no difference- if anything the market is even more capricious than the state- so it's hard to see why anyone would believe it offers any kind of protection from loss. Both paper money and Gold are worth what people believe they are worth- no more and no less.

The logic of the gold holders is fatally flawed because the very crisis of paper currency they seek protection from is a defiance of the fiat principle that can only be explained as a loss of faith. Gold itself is just as exposed to a similar crisis of faith should events take a wrong turn.

Link to comment
Share on other sites

15
HOLA4416

A more accurate definition of fiat is 'An arbitrary order or decree'- so when the market issues it's judgement on the current value of Gold it's issuing precisely such an arbitrary valuation- in effect the value of gold is being asserted by force of majority opinion.

Nope. Fiat means forced. Fiat money is money forced on people by a state.

In a market, if the vast majority want to use something as money, you still don't have to, you can refuse without getting shot.

You may say that the market arrives at it's opinion in an unforced manner- but this in no way alters the arbitrary nature of the valuation- unless you are under the impression that the markets are entirely rational at all times- an idea so funny it ought to have it's own TV show.

Regarding intrinsic value- do you consider the nutritional value of bread an opinion or a fact?

A fact.

But whether you value nutrition is an opinion.

Ask an anorexic.

Edit - here is the problem with your "well the result is the same" philosophy. It completely overrides individual judgement. After all, if you rape a woman or make love to her, it's the same thing as far as your proposition is concerned if in both cases she winds up pregnant.

Edited by Injin
Link to comment
Share on other sites

16
HOLA4417
But does the fact that there is no demand for bread today reduce it nutritional value? No- because this value is intrinsic.

Would that value still be present for someone with an allergy to wheat, or yeast ?

The same could be said of Gold- does the fact that there is no demand for gold today make it less durable? No. Because this durability is intrinsic.

But if this durability is a constant why does the value of Gold alter over time?

What is the unit of measurement (for gold) to which you refer ? (Loaves of bread ?)

Link to comment
Share on other sites

17
HOLA4418

But isn't the reason Gold is used for savings in part because it has no real use- unlike silver which is used in electronics.

I accept that Gold is used as a store of value- but that value is a matter of opinion- the nutritional value of bread is a matter of fact.

So is gold's durability and shine. Nutrition is just a property of the object.

I agree that bread being considered tasty or gold being considered as a store of value is entirely subjective though. It very much depends on whether the individuals are hungry, wealthy or any number of different things.

(BTW, gold is used in electronics too - it's a good conductor).

Does the speed of light alter if enough people choose to believe it has-no. Does the nutritional value of bread alter if enough people choose to believe it has-no. Does the value of Gold alter if enough people choose to believe it has- yes.

Some things are in the eye of the beholder- other things are not.

Properties of objects do not change (EDIT: ignoring time + outside influence - a snap shot if you will), but people's opinions of them do. Nutritional value of bread is a property, in the same way as durability is of gold. You may value the former if you are hungry, but the latter if you are not.

You need to compare apples with apples, rather than apples with oranges. You can compare the properties of the objects or the subjective opinions. You can't cross compare the two.

But does the fact that there is no demand for bread today reduce it nutritional value? No- because this value is intrinsic. The same could be said of Gold- does the fact that there is no demand for gold today make it less durable? No. Because this durability is intrinsic.

Agreed.

But if this durability is a constant why does the value of Gold alter over time? The reason is obvious- because that value is not a function of the metal's durability but is determined by fiat- in this case the arbitrary decree of the market. Gold is worth 'x' because the market decrees this to be the value- next week the market might decide it's worth 'y'.

Bread's value alters over time too. If you over supply food, well fed people will not value it as much. If you under supply food, starving people will scramble for it. Bread is susceptible to market forces, just as gold is. This invalidates your second point - gold is no more determined by fiat, than bread is.

So Gold's value is subject to the arbitrary whim of market forces, just as paper money is subject to the arbitrary whim of state forces- in practical terms there is no difference- if anything the market is even more capricious than the state- so it's hard to see why anyone would believe it offers any kind of protection from loss. Both paper money and Gold are worth what people believe they are worth- no more and no less.

The logic of the gold holders is fatally flawed because the very crisis of paper currency they seek protection from is a defiance of the fiat principle that can only be explained as a loss of faith. Gold itself is just as exposed to a similar crisis of faith should events take a wrong turn.

You've got the logic wrong above, which has lead you to this incorrect conclusion, unfortunately.

Everything has a market value, which takes into account the properties of the object. The values of the objects change over time, depending on people's opinions. This is true of each and every object.

However, fiat money gains value due to legal tender legislation, which forces debts (including taxation) to repaid in fiat money. The legal tender law is what gives the currency value, which is underpinned by threats of violence. I can't refuse to pay taxes in fiat money, therefore there is no choice. A broken contract in something other than fiat money, will be ordered to be paid for in fiat money.

Without legal tender laws, fiat money would not be in demand. Without threats of violence giving those bits of paper value, people would use money which others value highly instead. Greshams Law would dictate that the latter would drive out the former (leading to hot potato + wheel barrow + end of fiat money scenario).

edit: typo

Edited by Traktion
Link to comment
Share on other sites

18
HOLA4419

You've got the logic wrong above, which has lead you to this incorrect conclusion, unfortunately.

Everything has a market value, which takes into account the properties of the object. The values of the objects change over time, depending on people's opinions. This is true of each and every object.

However, fiat money gains value due to legal tender legislation, which forces debts (including taxation) to repaid in fiat money. The legal tender law is what gives the currency value, which is underpinned by threats of violence. I can't refuse to pay taxes in fiat money, therefore there is no choice. A broken contract in something other than fiat money, will be ordered to be paid for in fiat money.

Without legal tender laws, fiat money would not be in demand. Without threats of violence giving those bits of paper value, people would use money which others value highly instead. Greshams Law would dictate that the latter would drive out the former (leading to hot potato + wheel barrow + end of fiat money scenario).

There's also the convenience factor which has been overlooked. £10 notes are more useful than £10 gift cards because the former can be used universally, this quality adds value as it makes people's lives a little easier.

Also if a "free market" in currency was introduced it would add an extra element of uncertainty because you'd never be able to predict the whims of those you trade with. If you spent 2 years saving Groats for a new car and the manufacturer then decided they wanted Sovereigns you'd be left with a pile of -potentially- worthless currency, and what's to stop me issuing Authoritarian IOU's in exchange for goods and then deciding that I won't accept them as payment? Nothing, presumably.

Edited by Authoritarian
Link to comment
Share on other sites

19
HOLA4420

There's also the convenience factor which has been overlooked. £10 notes are more useful than £10 gift cards because the former can be used universally, this quality adds value as it makes people's lives a little easier.

Also if a "free market" in currency was introduced it would add an extra element of uncertainty because you'd never be able to predict the whims of those you trade with. If you spent 2 years saving Groats for a new car and the manufacturer then decided they wanted Sovereigns you'd be left with a pile of -potentially- worthless currency, and what's to stop me issuing Authoritarian IOU's in exchange for goods and then deciding that I won't accept them as payment? Nothing, presumably.

Precisely, that's why it works.

Btw, do you know accept the earlier point that fiat money is simply a needless overhead?

Given you think it'll happen anyway, we might as well use the money having all these taxmen and central bankers costs and use it for something else......

Link to comment
Share on other sites

20
HOLA4421

Precisely, that's why it works.

Btw, do you know accept the earlier point that fiat money is simply a needless overhead?

Given you think it'll happen anyway, we might as well use the money having all these taxmen and central bankers costs and use it for something else......

Banks don't make money. Ask the shareholders. Banking nowadays is virtually a not-for-profit operation :lol:

Edited by Authoritarian
Link to comment
Share on other sites

21
HOLA4422

Banks don't make money. Ask the shareholders.

I referred to central banks.

Do you now agree that the end result of your position ("it'll happen anyway") is that the central bank, taxman, state etc is simply a needless overhead?

If not, why not?

Link to comment
Share on other sites

22
HOLA4423

I referred to central banks.

Do you now agree that the end result of your position ("it'll happen anyway") is that the central bank, taxman, state etc is simply a needless overhead?

If not, why not?

Because once the foundations are removed the whole thing will collapse. If you dissolve the state arguing the toss over the name of your money tokens will be the least of your worries.

Edited by Authoritarian
Link to comment
Share on other sites

23
HOLA4424

Because if the foundations are removed the whole thing will collapse. If you dissolve the state arguing the toss over the name of your money tokens will be the least of your worries.

I'm confused.

You say that there is no point removing the state and central banks because we'll have the same result anyway even in a free market where people are allowed to refuse offers made to them, but also that if we do everything will change.

Both cannot be true. Any chance you can clarify?

It does look to me like you just like the idea of a CB etc and are making shit up as you go along to justify it.

Link to comment
Share on other sites

24
HOLA4425

I'm confused.

I know.

You say that there is no point removing the state and central banks because we'll have the same result anyway even in a free market where people are allowed to refuse offers made to them, but also that if we do everything will change.

Both cannot be true. Any chance you can clarify?

It does look to me like you just like the idea of a CB etc and are making shit up as you go along to justify it.

I'm guessing that normal people - not the sort of geeks that frequent HPC - would prefer a universal currency to a patchwork system of glorified gift vouchers. But if you remove the state society won't be able to make that choice as private capital accumulation becomes very difficult. No state, no functional free market.

Edited by Authoritarian
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information