NationStates Jolt Archive

My girlfriend and I were arguing over what would happen if we go rid of money. What do you all think? I said that without money people would 'buy' everything in the world, so she said use coupons.
I said that money was essentially coupons, but she said standardise everything....

I said that wouldn't work if other countries weren't the same, so... You got it! World Domination! (Is it just us or does that come into most of your arguments somewhere?).

Anyway, what do you all think?

Money came after civilisation.

We still barter in my village. I sold my mother to get this computer.

Money came after civilisation.

Yes, but we hadn't experienced money then. If we go back to using money now, we'll completly muck up the world.
Won't we?

Well, what I meant was in all the countries that are reliant on money already, which is a good proportion of the world. Of course, I could be wrong.

Yes, but we hadn't experienced money then. If we go back to using money now, we'll completly muck up the world.
Won't we?

Not really. You could remove any physical exchange of currency....how many people pay with cards and such nowadays? What about online means such as paypal? That may still be currency, but even this form could theoretically be abolished in a collective society.

International trade could quite easily take place now on a product-for-product basis, if need arose.

My girlfriend and I were arguing over what would happen if we go rid of money. What do you all think? I said that without money people would 'buy' everything in the world, so she said use coupons.
I said that money was essentially coupons, but she said standardise everything....

Well.. the original idea behind money was to make bartering more efficient.
Example:
Fisherman has fish and wants a warm fur coat for the winter. Without money he would need to to spend time finding that one hunter who wants to have fish in exchange for a pelt (or someone who has what the hunter wants and would like to have fish in exchange for that or .. you get the idea). By the time he succeeds his fish would probably have gone bad - and all the time he spent looking was not used doing what he is actually meant to do: fishing.

With money he can just give the fish to a randomfishtrader and obtain money - which every hunter will accept. Much more efficient. You just need to agree what money is actually worth - which is why its worth was originally based on the very durable and hard to obtain gold[1].

So - going back to a pure bartering system would be stupid. But what if we made it so that people would work for free - but at the same time would not have to pay for things ? Theoretically that *could* work - communism being one oft the better known ideologies that somewhat incorporates this idea. However, it requires a massive planning and huge amount of statecontrol to ensure supply meets or exceeds demand. One would have to ensure people would not take more than they should - and the slightest corruption can have quite painful consequences. See the Soviet Union for examples.

[1]Nowadays however money has very little real value. We just all agree it works, because if we don't the worlds economy would collapse.

Not really. You could remove any physical exchange of currency....how many people pay with cards and such nowadays? What about online means such as paypal? That may still be currency, but even this form could theoretically be abolished in a collective society.

International trade could quite easily take place now on a product-for-product basis, if need arose.

How could it take place on a product-for-product basis? How would the MEDCs give the LEDCs things they wanted for raw materials? Would these items be perishable? As it is, money came in to allow for people not to have to trade in things such as horses and cows, but isn't a standardised system a currency, giving things set values and such?

In our modern world, people want to standardise everything, so isn't that automatically making a currency?

If any of you want to get rid of money, send it to me!

Money is the natural evolution of barter.

It was born out of the main inefficiencies of barter, the first being double coincidence (I have what you want, you have what I want), which is difficult to find. This leads to people bartering what they have for good they know lots of people want, so they can get the things they want. Others copy this, and by a process of elimination, we get a single exchange good (rather than production good, or consumption good), money.

The other inefficiency in barter is time. In barter, if you achieve double coincidence, you only achieve it at that time, there isn't really a store of value. Money is a store of value, through saving money.

Some have defined money as Any formalization of good-will.

More:

Sometimes we are happy to do things for others, and expect nothing in return, but most of us do expect something in return when we do something for others. When we do something for others, we generate good-will - we have an expectation that they will do things for us in return.

With family and friends most of us don't like to formalize this good-will. We just expect that favors will be returned. Sometimes people decide that insufficient favors are being returned, and people argue.

The economies of scale in a modern society mean that we will deal with many people who we never even see again, and cannot reasonably expect to return favors. A computer programmer cannot go to a fruit stall and try to swap one line of computer code for an apple. A single line of computer code out of context is useless to anyone. Money allows us to expect the favor to be repaid by others. Money allows the fragmentation of the utility in large system.

Describing money as formalization of good will may seem strange in the context of bank robberies, stand-over merchants, scam artists and criminal force, but these people are actually stealing good-will. We may think that a small amount of the money we receive has been obtained through force or exploitation, and it has. But a high percentage of the money has been obtained through genuine productivity. If people perceived that 99 percent of the money which circulated in the community were stolen they would not bother to trade with money. They would simply find something else to deal with - probably just old fashioned barter, and the money system would collapse. All systems have parasites.

Significantly too, money is not the little green bits of paper with pictures of popular feminists or the words "In God we Trust" on them. This is just a form of documentation called cash. The contents of bank accounts is also money - even though there is no such cash related to it (banks have cash but not enough to pay all their investors, the money is invested elsewhere in the form of loans).

Anyone who says "there is only so much money in the world" and starts talking about the amount of cash is ignorant. The total amount of money in the world is not just the amount of cash, but includes the amounts in bank accounts and the amount of money lent out based on those accounts. In a sense the same cash can be counted many times. The details can be found in any first-year economics textbook.

http://bovination.com/cbs/money.jsp

It works, unfortunately. There's been a few cases of barter based economies, but only on a small scale.

Can anyone actually picture our (currrent) world without some form of currency?

If you can please post it here, I just can't imagine it - the whole communism idea is fine until you add corruption to the equation, then look what happens to it. There will always be corruption in the world, so to stop people taking too much you need to impliment some sort of system to stop people taking more than they've earnt (i.e. need and deserve). This is where you get the need of money. A barter based economy would not work on a global scale simply because there is not the whole 'I have what you want, you have what I want' thing going on. You'd need huge barter-loops going around to satisfy that, making the whole system hugly inefficient and thus preventing us from ever reverting to it.

Can anyone actually picture our (currrent) world without some form of currency?

Not without some massive increase in productivity. If supply is so much higher than demand that everyone *can* have what they want for free it would work. But I doubt that would be good for humanity... very few people actually do necessary work because they enjoy it or consider it a way to better themselves.
And without the need to work to keep alive all those other people would probably just sit on the couch watching soap operas all day...

Not without some massive increase in productivity. If supply is so much higher than demand that everyone *can* have what they want for free it would work.

So basically if everyone decided they wanted to own something like the Empire State Building, productivity would have to increase enough to provide for that?

It works, unfortunately. There's been a few cases of barter based economies, but only on a small scale.

Why is it unfortunate? I see nothing unfortunate about the idea of money being effective.

The reason barter can only work on the tiniest of levels is the good-will need not be formalised between people who are very close, and have simple needs. A primitive, tribal community, for example.

Not without some massive increase in productivity.

I disagree, what would be necessary is the ability to create matter and energy in any form we wish by simply wishing it.

I disagree, what would be necessary is the ability to create matter and energy in any form we wish by simply wishing it.


Wouldn't that be a massive increase in productivity?

lack of money doesn't mean that bartering is the only necessary alternative. only if you keep a short termist and capitalist system which requires immediate transactions and as a result requires relative worth for all things.
coupons = money.

if you take a more long term view, money needn't be necessary, but it can't really be done under capitalism too well. for example: 'i give my life's worth of labour into the economy, and in repayment i get to consume the fruits of others' labour (for "free")"
the "transaction" is no longer immediate, but life-long and far more vague. as a result, things do not need a relative worth, and money is not needed.

of course that assumes enough resources to meet needs. which we have today.
it also assumes a bit less greed on the part of those people who make up the system. which we don't have today :(
also, if one country were to adopt this, trade would become difficult (unless the government retained money for that purpose... but that strikes me as wrong somehow), so the country would have to self-sufficient (unless all countries in the world worked on the same system of course)

viva la revolution ;)
(this is part of the UDCP's manifesto, found here (http://www.udcp.org))

I think it would be possible to have a civilisation without capital, but it would be radically different from our current civilisation. From the age that you can talk you're taught the importance of money by everything around you. The media, government, everything revolves around it. If any government made an attempt at making such drastic changes they would be overthrown in an hour. I do like the idea of a civilisation without capital, and I think that it would be a much better culture then our current one. But let's face it, money makes the world go 'round!

While I think it's 'possible' to have a civilisation without capital, I don't really think it's possible in this world. Not after all we've been through with money.

of course that assumes enough resources to meet needs. which we have today.

That depends on how you define "to meet needs". To keep everyone alive - yes. To keep everyone alive with a decent standard of living - no.

Wouldn't that be a massive increase in productivity?

No, more like the abolition of physics.

Pure Metal, what are you on about?

coupons = money

Coupons don't equal money, coupons are money! They are simply a less efficient form of money than that which exists now, in that a coupon is attached to a particular good, or service, whereas normal money can be exchanged for any goods or services. Exactly why a less efficient economic system is better is beyond me.

Money is not immediate in its nature. Pure barter is. Money can act as a store of value by saving it.

I think it would be possible to have a civilisation without capital

Capital is simply that which is used for production. People normally (and wrongly) represent money as capital simply because money is a means of exchange, and can therefore buy what is needed for production.

Actually Pol Pot's Cambodia abolished money...

Of course, money wasn't necessary any more in his lunatic agricultural communist paradise...

No, more like the abolition of physics.
Stupid laws of physics.:gundge: ;)

To keep everyone alive with a decent standard of living - no.
yes.

if resources were spread more evenly and the rich few didn't own and hoarde so much, yes.


as i said, can't really be done under capitalism can it :p

Just you guys wait... assuming the world doesn't end in the next couple decade’s automation is going to grow to a massive scale. The trend has always been to maximize the output while minimizing the input required for production (think the cotton gin). Automation represents the final stage of that evolution; negligible human input and near limitless production. After that it would only be a short while before the modern corporate monsters use their limitless capital to expand by buying out any and all smaller competitors while merging with similarly large corporate entities. Before you know it every means of production will be monopolized and everyone will work for the same company. Salary and better yet, dividends will then be used to purchase whatever is needed creating a sort of fountain effect with all existing currency.

Ok I admit, I'm just trying to make communists squirm but you know... :p

No, venal.

Not really. You could remove any physical exchange of currency....how many people pay with cards and such nowadays? What about online means such as paypal? That may still be currency, but even this form could theoretically be abolished in a collective society.

International trade could quite easily take place now on a product-for-product basis, if need arose.

It often does. Countries maintain limits on how much of a foreign currency can enter or leave its borders. Even multinational corporations sometimes trade steel for coffee beans or somesuch.

A large part of the dot.com bubble was sites "bartering" ad space. Set a theoretical value of $100 a week for each banner ad on a page. Set up a page of 10 banner ads and host ads for 10 sites that do the same. They will each host one of your ads. On paper you're spending and earning $1000 a week. Set an arbitrary value of a million dollars per week for an ad, and let them do the same and you're a multi-million dollar company, that happens to have debt equal to its revenue. Which is pretty good since most big companies are in debt for years before turning a profit.

My girlfriend and I were arguing over what would happen if we go rid of money. What do you all think? I said that without money people would 'buy' everything in the world, so she said use coupons.
I said that money was essentially coupons, but she said standardise everything....

I said that wouldn't work if other countries weren't the same, so... You got it! World Domination! (Is it just us or does that come into most of your arguments somewhere?).

Anyway, what do you all think?
I wish we could get rid of money, but certain people would just hoard and manipulate...well people *cough* Bill Gates *cough* do that now anyway...well it only works small scale or in theory.

I wish we could get rid of money

Fiscal revolution starts at home! If you don't like the burden of money, let me relieve you of that burden. A bank cheque will do nicely, cash would be better.

Ok I admit, I'm just trying to make communists squirm but you know... :p

That's not necessarily something for communists to squirm about. After all, presumably when automation reaches a point when there simply aren't that many jobs available, those who don't have a job will have to be provided for, and work would become a totally voluntary thing - you wouldn't have to work at all, you'd just be welcome to do it if you had a passion for it. Marx predicted that communism would only come about once capitalism had ensured there was literally more than enough to go round for everyone to have a really great standard of living.

So, what you're saying is that capitalism is to blame for the existance of communism?

Money is neccesary. This ain't 4000 B.C., people don't make their own stuff and and people can't trade what they ain't got. I want a computer. What do I have? Oh, it turns out I got nothin'. Damn.

Replace all paper money with gold. Then have every nation in the world use only gold for currency.

Replace all paper money with gold. Then have every nation in the world use only gold for currency.

And prepare for South Africa to take over the world.

That's not necessarily something for communists to squirm about. After all, presumably when automation reaches a point when there simply aren't that many jobs available, those who don't have a job will have to be provided for, and work would become a totally voluntary thing - you wouldn't have to work at all, you'd just be welcome to do it if you had a passion for it. Marx predicted that communism would only come about once capitalism had ensured there was literally more than enough to go round for everyone to have a really great standard of living.

This is true. Just as bartering reached it's breaking point and was replaced with a more highly evolved system Capitalism will follow suit when it is ready and only when it is ready. Eventually it's very nature (min/maxing as I said before) will lead it to a point where it will become as comparatively useless as bartering before it and society will enter a new stage. It certainly won't be some mind-numbingly boring and stagnant egalitarian 'utopia' though.

I'll welcome it if it comes in my life time.

Money was invented because it is useful.

If we abolished it, in some irrelevent hypothetical situation, it would simply be re-invented.

It isnt an idle or unnecessary thing.