2019-11-30 Beyond Money

Swiss paper money is colorful. I like the visual aspect very much. The implications … not so much.

I don’t mind “generic trade thing” but I sure mind that it seems to rule the world. I feel like there is a social infrastructure layer missing atop of it. Like money sits atop trade which sits atop production which sits atop subsistence. But what sits atop money? Just laws? Or Is there some other way of organizing things that will make having too much money obsolete? I guess we just don’t know or we’d have done it by now.

Sometimes I wonder whether perhaps we could find a way that lots of money can be prevented from having meaningful impact on the rest of us (does not corrupt our government, does not destroy our planet). Perhaps given such a setup, we wouldn’t mind millionaires and billionaires raking it in. It’d be like raking in sand. Useless in the greater sphere of things.

I don’t know enough about Marx but I think what I want is to separate money and capital. Capital enables you to make money and invest it in order to make more. So it is tied to production of goods and services somehow, if they need an upfront investment. Thus, if in the future we no longer need this investment, having more capital might not give you a head start. Something like that.

I’m thinking that many new things don’t just replace the previous thing but add a new dimension that the previous thing was lacking. So “better laws” are not really what I am looking for but let’s take the dystopia of China’s social point system: it could take over society and then people will be bound by it even if they have a lot of money.

Society, it seems, has a way of growing power structures that then cannot be changed until the underlying structure is made obsolete. Let’s take radio as an example. Every country fights over how radio is used, how frequencies are reserved, and once entrenched, once all the capital is invested, once the legal framework is built, it is incredibly difficult to change. Packet radio, free spectrum? Forget it. A new way of organizing radio can only happen once it is utterly obsolete due to the utter dominance of first television and then the Internet. Now, when all investments have turned to dust, we can think about a new way to organize radio – because nobody cares anymore.

So, a society where money still exists, where we can use it to trade, but where we don’t need it to invest, where having a lot does not allow you to make a whole lot more, because it has been rendered obsolete by some other way of organizing our lives – and where this other way is not a fascist dystopia. Any ideas?

Tags:

Comments

@deshipu suggested Limes Inferior. Wikipedia says about the monetary system:

… its currency are green, red and yellow points. Their value is different ­– red points are almost valueless – only basic items like basic food can be bought for them, green points have a bit higher value and only yellow points have real value. Conversely, only employed are paid any yellow points, the more the higher their class. That means only those with class over 4 (and practically 3 because there is a shortage of jobs for class 4 and no jobs for lower classes) can get any yellow points officially. Therefore, a black exchange market for points flourishes.

– Alex Schroeder 2019-11-30 16:40 UTC


Money and Capital are two seperate things, always been. Capital is stuff to produce goods for consumption. So tools, machines, roads, ports, plants, it is all capital.

Money is a system of social accounting, managed and enforced by the state. The state forces its citizens to acquire money to pay their taxes. As everybody needs it for that reason, it is also used as a medium of exchange.

You can’t live in total autarchy, buying a farm, raising cows etc. You need to get some Franks for paying taxes, either by selling your labor or some assets. Otherwise the state will come and expropriate your farm and throw you in jail.

You can always exchange money into capital or vice versa. But prices vary. If the state prints more money wihtout an increase in capital or goods, we just get rising prices, i.e. inflation.

People always confuse money with capital. More money doesn’t make a country richer, but more capital does. Capital gets formed by saving and investing over time. There has to be a return for it or nobody would do it and just consume all their stuff. Money can just be printed or credited to bank accounts by the central bank.

– Peter 2019-11-30 20:18 UTC


The funny thing is that when you go back to early money societies, it’s just as true: the Roman state with its coins used to pay soldiers, and asking for it in taxes, making sure that the armies could get supplied. And when society breaks down, when the state is weak, payment in kind returns.

As for the accumulation of wealth, I’m going to read Is Inequality Inevitable? by Bruce M. Boghosian.

– Alex Schroeder 2019-12-02 07:27 UTC


This is exactly how money works. The state issues currency to buy things and hire soldiers - and then demands it back in the form of taxes. That’s why people in a state need to acquire ist money - and then it is conenviently used in all transactions.

This very worthwile presentation by Randall Wray explains the origins of money and Modern Monetary Theory (MMT) out of debt, Wehrgeld and Tally sticks:

https://www.youtube.com/watch?v=E5JTn7GS4oA

Of course, money as such explains nothing about wealth inequality. Money and wealth are not the same. I found the article to be a ridiculous attempt to reverse engineer some real life phenomenon by creating a way too simple model.

– Peter 2019-12-02 21:00 UTC


I found the article quite convincing considering the very limited statements it made. Of course, it doesn’t explain anything about real world oligarchies, how exactly the soviet republics degenerated into oligarchies, and so on.

The experience reminded me of why I cancelled my Scientific American subscription: all the articles on subject matters I was unfamiliar with sounded quite convincing but all the articles on biology I read seemed simplified and trivial – and one day I decided that I would be better off reading Nature instead. But then One day I stopped reading it and so now I’m left with the random input of social media.

– Alex Schroeder 2019-12-03 15:57 UTC


Please make sure you contribute only your own work, or work licensed under the GNU Free Documentation License. Note: in order to facilitate peer review and fight vandalism, we will store your IP number for a number of days. See Privacy Policy for more information. See Info for text formatting rules. You can edit the comment page if you need to fix typos. You can subscribe to new comments by email without leaving a comment.

To save this page you must answer this question:

Please say HELLO.