Comments on 2019-11-30 Beyond Money

@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


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