NationStates Jolt Archive

If the state din't exist then no one would hold a monopoly on minting currency. Which would mean everyone could produce their own.

How is this compatable with the free market?
How would the strength of the individual currencies be worked out?


I ask this, not because I think that I have uncovered a flaw in this theory, but because I am genuinly interested in how it would work. (I realise that many very intelligent people would have already have thought of the answer before I was probably even born.)

[And yes, I realise my extreme ignorance of economics is showing]

I am a scientist not an economics person...so bear with me.......

The buying of currencies would make the bought currencies stronger and possibly make the others weaker......this is sooooooo confusing :headbang:

If the state din't exist then no one would hold a monopoly on minting currency. Which would mean everyone could produce their own.

How is this compatable with the free market?

Very easily. Check out Murray Rothbard.

How would the strength of the individual currencies be worked out?

The market process.

If the state din't exist then no one would hold a monopoly on minting currency. Which would mean everyone could produce their own.

Quite simply, currency is nothing without:
a. the resources to back it up.
b. agreement with the recipient that it has value.

The tale of the Emperor Joshua Norton illustrates this perfectly, he declared himself Emperor and created his own money. Because the people of his hometown liked him, they accepted this money. It had value because the recipient agreed that it did.

The fundamental flaw of "anarcho-capitalism" (more properly right libertarianism) is that, without the state to back this up, no-one has to accept it. This would require them to set up their own protection for their transactions, which would come to resemble the state after time and would basically be the state recreated. This is how the modern state was created in the first place.

Vas.

Money as a good can be regarded the same as any other product. You can look at the price of one apple as being 20p or you can look at the price of 20p as being one apple. The price of money is generated by the same mechanism as that of apples. It is scarce relative to it's demand.

Modern money is just paper with a govt stamp on it. It only has value because people believe it does. The only reason an apple is worth 20p (or 20p is worth an apple) is that the grocer is willing to trade 20p for his apple.

Such a thing is theoretically possible without a govt but in all likelihood currency will be something of actual value, probably gold, silver etc. Maybe oil, corn or some combination or ratio of goods. This is the normal condition. Actual currencies in the world have been cattle in Africa, rice in Japan and cigarettes in concentration camps. Anything can be used as a medium of exchange. Some things are better than others for obvious reasons and something will become the standard medium of exchange. This will be the currency.

Dischordic as usual is barely making enough sense to figure out how to reply to him. I'm not sure what he means by "protect their transactions" and the state was formed for military protection, not economic reasons, no matter how much he wants to blame everything on economics.

Dischordic as usual is barely making enough sense to figure out how to reply to him. I'm not sure what he means by "protect their transactions" and the state was formed for military protection, not economic reasons, no matter how much he wants to blame everything on economics.

Again with the not reading properly. I said MODERN state, not state in general. The modern state, characterised in general by a centralised legal system and representative democracy, was created by the emergent middle classes to protect their new property claims against the tendency of the upper classes to lay claim to all property and the danger of the lower classes rising up and trying to take it over. It was formed for protection of assets (which, in general, is what military protection is anyway).

Vas.

As a libertarian-conservative, I think that I can answer your question. Money in a libertarian society would be representitive of silver or gold. Both silver and gold have recognised value all over the world. Therefore all currency would in theory be of equal rate of exchange.

Why place anarchists and capitalists in the same boat? These are 2 completely different idoleogies. Anarchism rejects the state, whereas free-market capitalism relies upon a robust but minimalist government to maintain law and order, enforce contracts and defend property rights. In my opinion, capitalism is the practical realisation of libertarian philosophy.

Again with the not reading properly. I said MODERN state, not state in general. The modern state, characterised in general by a centralised legal system and representative democracy, was created by the emergent middle classes to protect their new property claims against the tendency of the upper classes to lay claim to all property and the danger of the lower classes rising up and trying to take it over. It was formed for protection of assets (which, in general, is what military protection is anyway).

Vas.
The modern state protects property rights?

The tale of the Emperor Joshua Norton illustrates this perfectly, he declared himself Emperor and created his own money. Because the people of his hometown liked him, they accepted this money. It had value because the recipient agreed that it did.
30 tons of flax!

Why place anarchists and capitalists in the same boat? These are 2 completely different idoleogies. Anarchism rejects the state, whereas free-market capitalism relies upon a robust but minimalist government to maintain law and order, enforce contracts and defend property rights.
No it doesn't.

The gold standard, which was employed by the "Destroyers" in Atlas Shrugged.

Money is valued in the same way as anything else, whatever people think its worth. I'm willing to pay a certain amount for a given product and I'm willing to pay a certain amount (of my normal currency) for a certain amount of another currency, hence, exchange rates. The only difference between modern government regulated money production and personal money production is the total number of currencies.

30 tons of flax!

500 TONS OF FLAX!!!!

There is no "monopoly" on minting in the United States. Only bills minted by the treasury can bear the trademark "Federal Reserve Note", but that doesn't mean that I can't mint my own currency in denomonations of 1, 5, 10, 20, 50, 100 dollar bills. It isn't counterfeiting if I do not represent them as Federal Notes. My bills may not be valid everywhere, but Federal Reserve Notes (US Currency) aren't valid everywhere either. If people use them, then the bills have value outside of the ink and paper, if people don't use them, then they are worthless.

i was watching the history channel one day (of course it was because the husband had control of the remote)

they were talking about how during the california gold rush there was a shortage of US currency so the local san francisco banks issued their own currency. it worked as long as people had faith in the banks and until the US government supplied adequate currency to cover the huge amounts of wealth being generated from the gold fields.

i guess it would work like that. government woudlnt be involved in the money business.

Again with the not reading properly. I said MODERN state, not state in general. The modern state, characterised in general by a centralised legal system and representative democracy, was created by the emergent middle classes to protect their new property claims against the tendency of the upper classes to lay claim to all property and the danger of the lower classes rising up and trying to take it over. It was formed for protection of assets (which, in general, is what military protection is anyway).

The modern state protects property rights?

Yup, stupid question - laws against trespass and police arresting trespassers, campaigns against squatters, etc, etc.

Vas.

Such a thing is theoretically possible without a govt but in all likelihood currency will be something of actual value, probably gold, silver etc.

Why do gold and silver have 'actual' value? They are a lot closer to money in the sense of having a value because people are agreed on their value. They're pretty and their durable I guess.

Quite simply, currency is nothing without:
a. the resources to back it up.
b. agreement with the recipient that it has value.


I think its mostly the latter of these two elements in most contemporary large (capitalist) economies. The money in my pocket is effectively a promisary note from the bank of england promising to pay the bearer £5 worth of gold (presumably) on demand. Now, this is never actually going to happen. There'd be very little point for one thing, but also there isnt enough gold to back up the promise if everybody wanted to call it in.

I'm guessing very few states have the real resources to back up their currencies. The vast majority of the money in the international finance system is 'imaginary' in this sense.

The issue of forged/counterfeit currency is interesting. I thought of this whilst paying for a bus with a counterfiet coin (I got given it in change, I needed to get home, consider it a act of petty rebellion against the bus company) if currency is a really good forgery, then most people will accept it as money, it can be used as money... it effectively is money.

However, the state doesnt like this, hence the criminality.

Money is a consensual illusion. It works because we all agree to it working. Not in a democratic, vote for it sense, but by granting tacit acceptance through the use of money.

for an interesting take on alternative money laws.. check out some simple Byzantine history.

The nomismata was the most stable currency in history- with a fixed weight and purity of gold for over 800 years.

Anyone could mint their own- in fact, war reparations were required to be copies of government-minted coins, even down to the face of the current emperor on one side.

without a government, the same system can subsist- generally accepted standards of purity and weight, of some valuable metal. exchanges simply require verification of the standard... a small scale and volume measurement.

no need for paper money, folks. it wasn't a good idea in the first place.

no need for paper money, folks. it wasn't a good idea in the first place.
I agree, have you ever tried to kill someone with a sock full of twenties? Its hard work, especially with them trying to get away and screaming. Now you get a sock full of nickles (or a good sized rock), then you're in business.

As for money, hacksilver could be used. You make a silver bracelet, and then when it comes time to pay for that apple, you just whack off the appropriate amount of silver. I don't remember who used it, but people did, and people know everything, especially people with big knives for whacking peices of silver off of their bracelets (or at least thats what you tell them to their faces).

microsoft would issue our money.
or maybe haliburton...

Yup, stupid question - laws against trespass and police arresting trespassers, campaigns against squatters, etc, etc.
...Eminant domain laws to put in roads. That's not protecting private property. Frivolous lawsuits against successful companies, calling them "in violation of antitrust laws". That's not protecting private property.

Not always protecting absolute property absolutely does not infer that the law does not, in general hold a structural bias towards the protection of private property.

microsoft would issue our money.
or maybe haliburton...

I doubt it. Currency would most likely be issued by banks or other financial institutions.

And a note for anyone wondering about private currencies: private or semi-private currencies exist today. All Scottish banks can issue currency, for example. Or "libert dollars" (http://www.norfed.org/) or e-gold (http://www.e-gold.com/).