AC and fractional reserve banking

[tolbiny]

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Because most people don't understand money as it is

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Most people can't do anything, fortunately for them imitation is a pretty good way to go. When wal mart sets its prices for the competing currencies you can be damn sure that they will know which ones are using fractional reserve and which aren't and will set those prices accordingly. It doesn't take a whole lot of economic know how to figure out which currency has more gold behind it, even if your average customer doesn't get the literal explanation they still know that steve's dollars buy less than frank's. Demand for the more stable bank notes arises, and so more people put their "gold" in that bank because that's the easiest way to get good quality notes.
Now none of this guarantees that 0% fractional reserve spending happens, but it does ensure that a few guys running the fed don't have (pretty close to) absolute authority on the money supply so that consumer's preferences are met rather than the ideas of a hand full of self interested people.

[abridge]

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On a serious note, obviously nothing prevents it, but I'm sure ACists will say it's fine for them to be dominated by some force since it arose from the free market, and so the market decided that they should be dominated.

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I admittedly don't know too much about AC theory, but might the arguement go something like this:
- People dominated
- Terrible corruption
- People rebel
- Corruption does not continue in the same manner

I could see this case made as an AC model of working out these types of problems. The free market "lets" itself becoming manipulated ---> the free market re-establishes itself.

And maybe in the long-run corruption is thus overcome and everyone is happy yaaaaaaayyyy.

[ShakeZula06]

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People have the choice to put their services in such businesses. Those who do it without consent can be sued for fraud.


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In our case, we have no choice over what money to use. Something tells me that in ACland, there wouldn't be a choice either.

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Why would you make such an assumption?

[Exsubmariner]

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Good point.

Here is another example:

Suppose a company started an online poker site. Since the legality of online "gambling" is uncertain in the U.S. and perhaps elsewhere, suppose that company based it's operations in some small island nation accessible to everyone via the internet. Therefore, anyone who deposited money at the site would have absolutely no legal recourse from his home country should his funds be stolen by the site.

Now let us imagine for a moment that ***Poof*** we are suddenly living in this anarchistic online poker wonderland. What is to stop the site from rigging the random number generator (RNG), planting shills or bots, or otherwise manipulating the game to cheat the helpless, addicted players? Or from not keeping 100% of the players' funds as reserve in a secure account? I say nothing. In fact, I say less than nothing since most people don't know too much about RNGs, internet encryption, and foreign banks, etc.

Online poker wonderland, free from government control, in very short time would be completely dominated by disreputable, cheating sites.

Uh... right? [img]/images/graemlins/wink.gif[/img]

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Uh.....wrong.

The site depends on rake. Therefore it is in the interest of the site to keep the game going as long as possible in order for the most rake to be collected.

If everyone always looses, the site will be out of business in no time and customers will take their business to a site which isn't "rigged."

[Exsubmariner]

I am not making an assumption. Try paying your taxes next year with goats or seashells and see how far you get.

[Exsubmariner]

strong Federal government tactics = tactics of the mafia.

Government is not necessary to enforce a monetary monopoly, but it is handy to have one if you can manage.

[ShakeZula06]

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I am not making an assumption. Try paying your taxes next year with goats or seashells and see how far you get.

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lol, I was referring to this part of you're post-
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Something tells me that in ACland, there wouldn't be a choice either.


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[Nielsio]

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Good point.

Here is another example:

Suppose a company started an online poker site. Since the legality of online "gambling" is uncertain in the U.S. and perhaps elsewhere, suppose that company based it's operations in some small island nation accessible to everyone via the internet. Therefore, anyone who deposited money at the site would have absolutely no legal recourse from his home country should his funds be stolen by the site.

Now let us imagine for a moment that ***Poof*** we are suddenly living in this anarchistic online poker wonderland. What is to stop the site from rigging the random number generator (RNG), planting shills or bots, or otherwise manipulating the game to cheat the helpless, addicted players? Or from not keeping 100% of the players' funds as reserve in a secure account? I say nothing. In fact, I say less than nothing since most people don't know too much about RNGs, internet encryption, and foreign banks, etc.

Online poker wonderland, free from government control, in very short time would be completely dominated by disreputable, cheating sites.

Uh... right? [img]/images/graemlins/wink.gif[/img]

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Uh.....wrong.

The site depends on rake. Therefore it is in the interest of the site to keep the game going as long as possible in order for the most rake to be collected.

If everyone always looses, the site will be out of business in no time and customers will take their business to a site which isn't "rigged."

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I guess you're a currency anarchist, because this is completely analogous to banking.

[ianlippert]

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Uh.....wrong.

The bank depends on interest . Therefore it is in the interest of the bank to keep the lending going as long as possible in order for the most money to be collected.

If everyones assets are devalued through fiat currency , the bank will be out of business in no time and customers will take their business to a bank which isn't bankrupt.


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[Exsubmariner]

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So it's another issue where the worst case AC scenario is the current status quo.

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The prize for the most salient and profound observation in this thread goes to tomdemaine.

Here's some food for thought...perhaps the USA of today is the result of the AC wonderland of decades gone by.