A question to ACists about money.

[Money2Burn]

I was reading a post by Borodog in reply to ALawPoker, where he mentions how private individuals cannot afford an agressive war because they do not have the power to tax or counterfiet money. This made me think about money in an AC society and I have some questions about it. For one thing what would be used as money? Since money is created by the state, in an AC society I could not figure out how currency would develope. Who would create this money? How would currency hold value without a state backing it?

If these questions have been answered in previous threads could someone provide a link? Thanks.

-Chris

[Borodog]

Money predates the state and its monopolization of it. Money is a market phenomenon; real money, i.e. commodity money, is simply a commodity, like any other. The traditional commodity money that defeated all comers was gold.

See, for example, this post:

A money is a market commodity who some smart fellow realizes is more easily exchanged than what he has produced. If he can exchange his goods for this more readily exchanged good, the value of his own goods and his ability to get what he wants have both gone up. There is a snowball effect in the market, and a few commodities will rapidly become moneys, and will [attain] value as a medium of exchange (in addition to whatever uses they already served in the market). Market moneys compete against each other, and ultimately there are usually only one or two. Historically there have been many moneys, including salt, sugar, seashells, tin, etc. but ultimately gold won out (with a few places still using silver) in the 19th century. The reasons that gold makes a good money is that it is durable, easily divisible, hard to counterfeit, and has a high value to weight ratio.

A money elliminates the problem of double coincidences of wants. It also elliminates the problem of incomensurable units, almost magically. Potential consumers of goods will bid against each other in units of the money (ounces of gold, for example) and will generate market prices for all goods and resources. This creates a single unit that all goods can be measured in to establish the costs of production, as well as the revenues that can be earned from sales. This allows the entrepreneur to engage in cost accounting. Cost accounting is a miracle of the market. It allows producers to determine, in a single unit, exactly how much production will cost them, exactly how much they can generate in sales. The latter minus the former will either be a profit or a loss.

[DougShrapnel]

[ QUOTE ]
I was reading a post by Borodog in reply to ALawPoker, where he mentions how private individuals cannot afford an agressive war because they do not have the power to tax or counterfiet money. This made me think about money in an AC society and I have some questions about it. For one thing what would be used as money? Since money is created by the state, in an AC society I could not figure out how currency would develope. Who would create this money? How would currency hold value without a state backing it?

If these questions have been answered in previous threads could someone provide a link? Thanks.

-Chris

[/ QUOTE ]Even without being an advocate of AC the printing of money should be decentralized. The only problem is the national debt. And the national debt is the reason why the government should get out of the money printing business. We should not trust the government with that responsibilty.

[hmkpoker]

[ QUOTE ]

I was reading a post by Borodog in reply to ALawPoker, where he mentions how private individuals cannot afford an agressive war because they do not have the power to tax or counterfiet money. This made me think about money in an AC society and I have some questions about it. For one thing what would be used as money? Since money is created by the state, in an AC society I could not figure out how currency would develope. Who would create this money? How would currency hold value without a state backing it?

[/ QUOTE ]

Technically, anything can be used as money in a libertarian society. Capitalism is the barter system.

The only reason money exists is to reduce transaction costs of trade. If I have X and I want Y, which you have, but you don't want X and you want Z instead, now I either have to offer you an awful lot of X, or trade with someone who wants X and has Z. This is really annoying, so all barter societies historically eventually adopted a locally recognized commodity as a trade intermediary. It's better for everyone; now getting Y for X is much easier, because th owner of Y DEFINATELY wants money.

Money historically has taken different forms in markets, but it's always a non-consumable, non-perishable, scarce, portable object. You want something that's easy to carry, hard to counterfeit, and something that isn't going to be consumed. The Greeks built their civilization on gold and silver, which proved to be nearly perfect in the aforementioned criteria, and they've been the standard for centuries all over the world until the government began forcing people to use the money that it produced.

I'm pretty sure a libertarian society would just default to a gold "standard" just because it's easy and I don't think many businesses are going to want to haggle with the customers (duh, that's why money came into existance). It has value because people believe it has value, and it's in their best interest to do so.

[ShakeZula06]

I'm not well versed in this subject but I'll offer my opinion.
[ QUOTE ]
what would be used as money?

[/ QUOTE ]
What is typically used, hard, precious metals. Remember what the point of currency is, a unit of exchange. I would imagine gold or silver. Or maybe this.
[ QUOTE ]
Since money is created by the state, in an AC society I could not figure out how currency would develope. Who would create this money?

[/ QUOTE ]
People interested in providing this service for profit. I don't think currency is needed necesarily, in absence of a currency gold and silver would be common mediums of exchange.
[ QUOTE ]
How would currency hold value without a state backing it?

[/ QUOTE ]
It can be backed by gold or another precious metal. It bears pointing out that this is how (to my knowledge) money has been backed by precious metals for all of history with the exception of last hundred years or so.

[Borodog]

[ QUOTE ]
, anything can be used as money in a libertarian society. Capitalism is the barter system.

[/ QUOTE ]

Man I hate when you say that.

Sure, since a commodity money is, of course, a commodity, you are "bartering" when you buy things with money. But calling capitalism "the barter system" obscures that "money" has its own name for a reason; it fundamentally changes the nature of the economy (see the above bit about cost accounting).

[hmkpoker]

[ QUOTE ]
Sure, since a commodity money is, of course, a commodity, you are "bartering" when you buy things with money. But calling capitalism "the barter system" obscures that "money" has its own name for a reason; it fundamentally changes the nature of the economy (see the above bit about cost accounting).

[/ QUOTE ]

Bartering naturally leads to money. I made that very clear. What's the problem?

[Al68]

Also, the gov't does not "create money". It creates debt notes backed by the gov't. And historically, private companies have done this. And private companies still sell "notes" backed by gold.

The idea that gov't "creates" money in any real sense is just false. The U.S. gov't has never "created" one dollar of wealth.

[Money2Burn]

All,

Thanks for the replies. I was completely overlooking what all of you mentioned that money has been other things besides standardized bills or coins. Borodog your post was especially helpfull in showing how money could develop out of some commodity that was easily devisible and tradable. Thank you.

-Chris

[Nielsio]

[ QUOTE ]
[ QUOTE ]

I was reading a post by Borodog in reply to ALawPoker, where he mentions how private individuals cannot afford an agressive war because they do not have the power to tax or counterfiet money. This made me think about money in an AC society and I have some questions about it. For one thing what would be used as money? Since money is created by the state, in an AC society I could not figure out how currency would develope. Who would create this money? How would currency hold value without a state backing it?

[/ QUOTE ]

Technically, anything can be used as money in a libertarian society. Capitalism is the barter system.

The only reason money exists is to reduce transaction costs of trade. If I have X and I want Y, which you have, but you don't want X and you want Z instead, now I either have to offer you an awful lot of X, or trade with someone who wants X and has Z. This is really annoying, so all barter societies historically eventually adopted a locally recognized commodity as a trade intermediary. It's better for everyone; now getting Y for X is much easier, because th owner of Y DEFINATELY wants money.

Money historically has taken different forms in markets, but it's always a non-consumable, non-perishable, scarce, portable object. You want something that's easy to carry, hard to counterfeit, and something that isn't going to be consumed. The Greeks built their civilization on gold and silver, which proved to be nearly perfect in the aforementioned criteria, and they've been the standard for centuries all over the world until the government began forcing people to use the money that it produced.

I'm pretty sure a libertarian society would just default to a gold "standard" just because it's easy and I don't think many businesses are going to want to haggle with the customers (duh, that's why money came into existance). It has value because people believe it has value, and it's in their best interest to do so.

[/ QUOTE ]

Like Boro said, they've used salt and suger(?) before. Another example are sigarettes in Germany after the state currency collapsed. These are all consumable.