Topic: Money is an imaginary concept, but humanity is enslaved by it - page 2. (Read 17699 times)

You didn't understand my point. I am not talking about people's unlimited demands or their needs. I mean the utility of money over barter (i.e. not the utility of things that can be bought with money). With barter you don't have as many options as with money. What you have for exchange may quickly deteriorate, other people may not be interested in that, you can't postpone consumption, and so on...

In this way money is not an abstract imaginary concept in the sense it is meant in this topic

Before we continue, I think, you should substantiate your previous claim about how I misunderstood the word "intrinsic" in respect to money. It is not something that you could say and get away with, so you'd better first take responsibility for your words...

And I still don't understand what you mean

Well what else are we going to use? I mean, theoretically if the money wasnt there, I really see no replacement.

The dollar and the fiat system has been here for longer then anyone can think of. It actually roots back way 1000 AD. I know for fact though bitcoin wont replace the current system, but it`ll be used for something else.

It's interesting you compare money to a supply and demand situation. The demand for money and the supply for money is both infinite. Money is like a scalar quantity. It's always constant. It's used by us humans to put a value on a product or service. It's the root of any economy. For a supply and demand to exist, you need to have money to drive it. I agree that it's an imaginary concept, but it's something that we are so dependent on because it puts a crystallized value on something.

I think it does, but since money can purchase almost everything, and human's demand are so many, you are actually asking wether diminishing marginal utility applies to all the human's demand added together. That is much more complicated than asking the same question for a single utility like bread or milk

In fact, even with 100 utilities, you might run into a problem that the demand appears to be unlimited due to you have less time to consume: Even if you spend all day playing games and watching new movies, you might end up with missing out more and more games and films, not because you don't like them, just because you don't have time (And generally economy theories are not working any more in an environment that has abundant supply)


And you can not exclude the money out of the equation. Without money, you will lose the means to access any other utilities. This transaction demand is also what gives fiat money value, and it enabled most of the commercial activities

Without merchant acceptance, the money is like you described, has no value, but the universal acceptance itself, although does not generate any utility, injected value for currency temporarily until the next trade happens

A good example: In 2009 North Korean suddenly announced that the old currency will not be allowed in circulation, thus anyone holding the old currency immediately lost most of the purchasing power of those currency. The value of those currency suddenly disappeared because the acceptance is removed nation wide

One bitcoin private key without blockchain is totally useless, but once it is in the network, can be transferred between people, some people will start to accept it as a payment method, then it start to have its monetary value. Similarly, fiat money without merchant acceptance is also useless

Red: But you can't say that.  Money does not represent some or any amount of goods. When you have money, you and the one you want to trade with, still have to consider the preference of money over the goods. There is no requiring of goods for money, it is all speculation of what you will be able to trade them for. There is no such thing as going into a shop and just buy, either you accept the shop owners offer, or you make an offer that he might accept. This point is crucial and makes money different from debt, or the debt-based gift economy.

You could just say that the money has no value by itself, and the money an individual has represents the amount of goods that he can have. Thereby you can exclude money out of the equation completely and would lose almost nothing from the picture. If we consider value as utility, then money has some utility to us by and of itself, since it gives us the possibility to choose what to buy (and what not) as well as postpone buying altogether. Whether this utility abides by the law of diminishing marginal utility (i.e. diminishes with the amount of money an individual has) remains to be seen...

Personally, I don't think that it does, therefore there is room for doubt about the nature of this utility

It is imaginary, first comes the concept, then the realization in the physical world. The concept of ideal money is: There is something special that is accepted by EVERYONE in commercial activities and have relatively stable purchasing power over a period of time. As long as these 2 conditions can be met, it is money

So, first came cows and wheat, which was needed by almost everyone when food supply was still not sufficient. Then came gold. The strange thing is that gold is not needed by everyone but still became money thousands of years ago. I think this has something to do with Sovereign power. In old Egypt, wheat is the money, while gold were largely used for decoration. If many people don't feel gold is any more meaningful than some shinny stones they occasionally find in the rocks, then the gold usage as money is very likely to be a decision from the top

The problem is not about the cost, it is about the arbitraging behavior related to the money. This has already been observed on many alt-coins, especially POS coins

If a money unit cost $291.5 to make, but command a market price at 10 billion dollars, thus become a presentation of value, then what will happen? Everyone will try to produce this money and use its market value to purchase other things, because they can make a quick profit right away. This will raise the competition in money creation and raise its cost, at mean time anyone accepting this money will only be willing to exchange similar value of $291.5, no more

People will be forced to accept a market price of $10B if they are not allowed to produce this money, that's how fiat works today. And that's the reason it is called monopole money: Only banks allowed to make money at a cost of $291.5 and spend it like 10 billion. But for a money that everyone can make like bitcoin, its production cost will always be close to its market value, due to arbitraging

The system is devised SO that you are a debt slave from day one, regardless of whether you're an idiot or not. How many people are able to pay, in full, for their house, car, education, and healthcare? Please tell us (I dont mean specifically you) how you would save(d) for these things with rampant inflation.

In this fucked up system, one could argue that "idiots" actually do better, since they clamor for assets, while "smart" people try to save in a currency not meant for saving.

That's a good question

The diminishing marginal utility still applies to fiat money, but because fiat money have universal acceptance (In fact only domestically), can buy you anything, then the diminishing marginal utility will apply to all the things combined together, thus very difficult to observe for average household. You need much larger amount to see the effect

Imagine that you have 100 trillion dollar, adding another 100 trillion dollar is almost useless to you, because it does not buy you any more things than 100 trillion dollar can do. In fact for 50 trillion dollars you might already run out of the things that you can buy in the whole world (Many things are not for sale), this is the problem that central banks are facing right now

This is similar to: When you are very hungry, the first potato will worth almost the same as the second potato to you, and the third... only after eating 5 potatoes, the extra potato will show the effect of diminishing marginal utility

You have also mentioned that when the money does not grant you more ability to buy, it will have diminishing marginal utility. The fiat money's value is very tightly related to the acceptance

Since value is one individual's preference for one thing over another, value creation becomes:

To make something or do something that someone else is willing to pay for.

Considering this, no youth should be afraid to not being able to support himself/herself in the future.

Everyone has a choice, and the only way to be out of the enslavement is hacking your life.

Either if its eating and making money, social skills these are all your areas that most will never even consider until their late age.

Eating - can be starting with cold press juice, outsource workers for personal stuff, like VA`s, the list goes on.

It is pure value, in the sense that you can not point to anything in particular it can do for you directly.

Take all things you can think of, that has value, together, and try to remove the particulars, and extract what the things have in common. You can think of that also as pure value.

Money isnt really a imaginary concept.

If it wasnt for a fiat system in place, what you expect people to barter and be okay with it? The only reason why the system is in place is to avoid the nonsense of bartering, but it just happens that the banks also have the ability to cash out as well since they offered it.

Money is value but at a global level... namely, you may think something is absolutely worth shit nothing, but the market dictates that it's worth 1000 (example: some dodgy painting by one of those high cache abstract painters).
So it's not "pure value", it's perceived value, and a lot of the times the markets are trigged anyway, so it's not a pure "global conscience value", it's a rigged one.

By this interpretation (which I don't disagree with), cash is effectively representative money with the caveat that cash is not guaranteed to be redeemable for any arbitrary amount, instead relying on market functions. Cash itself is worthless, but it represents X units of "anything and everything" (at least within the issuing country, dependent on their legal tender laws, if any!). Since "whatever we want" is basically the most maximally valuable commodity in the Universe, cash is maximally valuable to everyone (unlike, say, camels or silver nuggets), but only while it represents "whatever we want."

The real issue with the traditional definition of representative currency is that it MUST be legal tender for it to be maximally valuable -- I really don't give half a shit about being able to redeem it for a silver nugget because
1) I have no direct use for silver nuggets and don't want the clutter (there's no single item on Earth I want in such quantity that I'd want to be able to spend my net worth on owning... except maybe Tesla Powerwalls - those things are fucking amazing).
2) in the event of some monetary disaster where I'd actually consider redeeming cash for nuggets, I presume the chance of the nuggets actually being there is very low.

Combined, this makes representative currency (by traditional definition) a giant waste of resources. If the best use we can find for gold, silver, rhodium, and whatever is storing them in a warehouse, aliens should kill us all right now. Similarly, using useful items as a medium of exchange is terrible. -So we use relatively useless items. Cash is fantastic with regards to work efficiency because the paper, fabrics, and polymers we use to make fiat in the world has negligible value (not completely the case with all the semi-effective anti-counterfeiting shit built in these days, but the value's still very low). Who really gives a shit if a bank is storing $10,000,000,000 in nominal value using $291.50 in actual material costs (the actual cost of manufacturing the bills) -- I mean, that's pretty cool that we've been able to add what we were using as money back into the productive economy - but it left us open to policy abuse by the issuers, which turned out to be governments (which is probably far better than banks, at least), so I see bitcoin as the final evolution here and putting the final nail in the coffin of using otherwise-useful resources as something to keep in your pocket or a warehouse. "Redeemable" (if you trust the issuer... a LOT) crypto put a bit of a twist on that, but I don't honestly believe it has any place in the mainstream.

Essentially debt is created on credit,other wise banks/finances wouldn't exist,bearing in mind exports/imports,infrastrcture development,employment wages,passing bills,taxes ,interest rates,rebates..etc are the lifeline of a developing country, there is a fine balance in maintaining currency regulations, so if you were to make everyone poor and the value of money to be infinite,an economy would cease to exist

I said that I don't understand what you mean by money having "real" value. Instead of explaining it clearly, you are trying to hang on me using the word "intrinsic" incorrectly. As you might have noticed, I used it only once, and double quoted it at that. So now you have to explain to me how I got it wrong, it was your claim after all...

And you still didn't confess what economic school regarding value you adhere to (so as to avoid further confusion)

We don't have to consider why people choose, just that they do choose. By the way, you got the "intrinsic" word wrong, opposite, in fact. The title is "Re: Money is an imaginary concept, but humanity is enslaved by it". Money is value, real value, pure value, just like the things you need to survive or just want to have, those with the intrinsic value. So even if the money does not have intrinsic value, it has value, real value, and we are not enslaved by it.