Laying bare how dangerous it could be for Democrats to ignore populist opposition to corporate-friendly "free trade" deals, Republican presidential nominee Donald Trump on Tuesday attacked Hillary Clinton for her stance on trade in general and the Trans Pacific Partnership (TPP) in particular.
Speaking in Monessen, Pennsylvania, Trump said the "TPP would be the death blow for American manufacturing" and vowed to "withdraw" the U.S. from the agreement.
He said Clinton took "a leading part" in drafting the 12-nation deal, noting that the former secretary of state "praised or pushed the TPP on 45 separate occasions, and even called it the 'gold standard,'" according to prepared remarks.
"Hillary Clinton was totally for the TPP just a short while ago, but when she saw my stance, which is totally against, she was shamed into saying she would be against it too," he said. "But have no doubt, she will immediately approve it if it is put before her, guaranteed. She will do this just as she has betrayed American workers for Wall Street throughout her career."
With this claim, MSNBC reporter Alex Seitz-Wald wrote on Twitter, Trump appeared to be "speaking directly to [Bernie] Sanders supporters." Sanders has made opposition to the TPP and other rights-trampling deals a cornerstone of his campaign.Common Dreams
Trump also said he would renegotiate the North American Free Trade Agreement (NAFTA)—and placed partial blame for that deal also at Clinton's feet. "It was Bill Clinton who signed NAFTA in 1993, and Hillary Clinton who supported it," he said.
Trump Just Drove a Truck Through Hole DNC Platform Panel Left in Clinton's TPP Promise
Deirdre Fulton, staff writer
ht Don Quijones at Raging Bull-Shit
32 comments:
and even called it the 'gold standard,'"
Makes sense since a gold standard for fiat is unjust and stupid.
I notice even Progressives often use "gold standard" to indicate the epitome of something. Why? Are they cognitively captured by gold-buggery?
It's a figure of speech Andrew...
Well duh again, Franko.
What's next from you? 1 + 1 = 2?
I notice even Progressives often use "gold standard" to indicate the epitome of something. Why?
Because as Matt pointed out: it has another definition, which has been in use for decades. One dictionary definition is "A model of excellence; a paragon.” Webster: "something that is considered to be the best and that is used to judge the quality or level of other, similar things.”
No need to sneer at Matt. You’re the one who asked the dumb question.
Andrew we have to be careful with figures of speech...
Paul taught "have a pattern of sound words..."
These figures of speech can become in effect 'UNsound' words... If we don't keep them in perspective... Like the word "money" or "church" nobody knows what these words specifically mean they are figures of speech and hence ambiguous... Turns into a philosophical problem if we start to use them literally...
There was a time when a guarantee meant just that. Now it means a warranty.
Not so dumb. I've noticed that even gold-bugs fare better at Naked Capitalism than fundamental reformers like me who get banned.
Besides, using "gold standard" to indicate "A model of excellence; a paragon" is bound to reflect favorably on the use of gold as money so why do Progressives persist in doing so? Because they lack confidence in their own "solutions" and deep down think gold-bugs are wiser than themselves?
we have to be careful with figures of speech... Franko
And that's my point. "Let no corrupt communication proceed out of your mouth ..." Ephesians 4:29
Originally, a gold standard was literal — it referred to gold being the official measure of money. Money was valued in reference to the gold standard. Gold is no longer used in this way, though it's still valuable, so the term has taken on a looser meaning. The gold standard of something is simply a great or excellent example. A gold standard is the best of the best. from https://www.vocabulary.com/dictionary/gold%20standard
Matt:Like the word "money" or "church" nobody knows what these words specifically mean they are figures of speech and hence ambiguous.
Those who understand MMT know what the word "money" means just fine. No ambiguity, no confusion, no figure of speech. Money is negotiable debt, period. Negotiable debt (or wordier: a negotiable credit/debt relation) is money. This identification recaptures all the usages and explains them and is perfectly intuitive. It is the only intelligible, principled definition, the only one that makes sense and is applicable to all common and universal usage. There is no mystery at all that isn't coming from the components of this definition - that it occurs in time, that it is between two persons/ agents, that it is a purely social/moral concept etc.
The problem is that people don't think systematically, clearly and consistently in terms of this perfectly clear definition, first made completely clear by Mitchell-Innes. I mean, nobody can be perfectly clear about anything - that is omniscience. But the word whose meaning is clearest in this post, the "thing" whose essence has been best described - is "money". What is weird is that people pretend that something which has been made so clear and distinct and simple still has definitional problems.
"Those who understand MMT know what the word "money" means just fine. No ambiguity, no confusion, no figure of speech. Money is negotiable debt, period. Negotiable debt (or wordier: a negotiable credit/debt relation) is money."
Even shorter it's "information"! Does "life" have to balance its account with someone/something before it can "live", to start "signaling"?
Andrew-
The most likely reason you got banned from Naked Capitalism is they have a strong policy against spammers. People who repeat the same talking point over and over again, makes you sound like loon.
"govt backed usury private banking cartel, blah blah blah"
"equal distributions of fiat blah blah blah"
Dont you have anything worthwhile to contribute other than writing the same comments everyday (apparently at different sites even)?
"Those who understand MMT know what the word "money" means just fine."
that's like saying "anybody in the Southern Baptist Convention knows what the church is..."
You've got a major philosophical problem with your statement there Calg....
Andrew,
You have to come up with more than just "it says so in the Bible..."
You have to back it up with some other secular type analysis that also makes sense...
I think you are taking all of that Hebrew Scriptures stuff out of context and trying to apply it to our present era which is in conflict with what Paul taught in the Greek Scriptures...
Next thing you know you find yourself advocating for the killing of our LGBT people like this guy:
https://www.youtube.com/watch?v=j9J0DRvXGF0
Advocating for a specific implementation today because "that's how God told Israel to do it!" is a non-starter...
It doesnt matter if we have a policy whereby our US Treasury uses a regulated system of non-govt sector fiscal agents or whether that agency function is accomplished directly by civil servants... as long as the payments systems and credit system is working well the details of how we structure those systems are not important...
Matt:You've got a major philosophical problem with your statement there Calg...
Well, name one. Understanding "money" once was a philosophical problem, but it has been solved for practical purposes. I am of course repeating the MMT definition of money. But it meets resistance at an MMT blog.
Are you unable to tell what a church (building) is? Or what a church as group of religious believers is? Really? It doesn't take belief in any religion to understand such words. What it takes to understand the MMT definitions and MMT is ("philosophical") commitment to speak clearly, plainly and consistently and consciously understand what you are saying.
Schofield:
Money isn't information - at least not in any clear non-metaphorical way that I have ever seen explained. It is negotiable, transferable debt, and vice versa.
Does "life" have to balance its account with someone/something before it can "live", to start "signaling"? Not sure what you are saying here.
Money isn't information
"Money" is a record of credit/debt. It is initiated as someone's liability and becomes someone else's asset. The record aspect of money is information and an essential aspect of money is as a unit of account.
The general definition of money is a record of credit/debt expressed in a unit of account. Money is used as a medium of exchange and in every monetary exchange involving money that which is saved as a store of value is exchanged with something else that is agreed upon by the parties to the exchange as of equal worth.
"Money" is a term expressing a general idea that is well-uerstood in commerce, finance and economics since it enters into the customary and legal institution of contract. This requires money to be information or have an informational component in order to make a contract specific.
I don't think that there is any controversy over this in either accounting or law, even though there may be confusion about it elsewhere, because commerce in a monetary production economy depends on it. I believe that this is Christine Desan's point from the legal standpoint.
"Money" is a record of credit/debt. It is initiated as someone's liability and becomes someone else's asset. Tom Hickey
Shares in Equity, common stock, is another possible (private) money form.
But why should those with equity share it when government subsidies for private credit creation allow them to legally steal purchasing power instead?
So, surprise, surprise, we end up with gross wealth inequality.
The context of "gold standard" is clear. What does Matt want, a gold-plated iron-clad platinum certified guarantee?
Sorry, we only accept American Express.
Tom - I have to differ a little. You're emphasizing some things, going one way, while I am going another from usual MMT basics. (I'm veering in the direction Geoffrey Gardiner, Mitchell Innes & Wray do, I would say.) The money is not the record, the money thing is the record, which conveys information - I didn't word my response to Schofield right. Initiation as liability, becoming an asset? Simultaneous, really, they're two ways of saying the same thing. It is initiated as a credit/debt, asset/liability. What "money" is is the credit-debt relation itself. Calling it "money" means the way one is viewing or using such relations. An important point is that it is a purely immaterial, social, moral relationship.
"Money" is a term expressing a general idea that is well-understood in commerce, finance and economics
Was ist bekannt is nicht erkannt. What is familiar is not known (often because it is familiar). If it were really well understood, there would be no need for MMT. The problem with economics is that people understand it extremely well naturally, so well that they can have crazy ideas about it that they never take seriously or apply, even if they think they do. And they can be taught things like rules of accounting without understanding why they do them - they're so natural that people realize they're right. But then many people wrongly consider them "conventions" when they're actually things that the mind cannot think of in any other way ( a la Kant). MMT splits hairs over this stuff - so it manages to do the finance and economics far more consistently and carefully.
Money is used as a medium of exchange - not really. At least it is important to understand Mitchell-Innes's "There is no medium of exchange". (H/t Gardiner - also for "negotiable credit/debt") Since there is none such, a fortiori, money is not a medium of exchange, as commonly understood.
Similarly, "the unit of account" is putting the cart before the horse. (Account of what?) The real core of the thing is (a) Mitchell-Innes' universal law of commerce & banking or whatever he calls it - the matching and cancellation of credit & debts. The measurement by units occurs by this more fundamental matching and is based on a judgment of their equality. Creditary relations, monetary transactions are more fundamental, simpler, than relations of exchange or barter.
All I have the time to say now.
Thanks, Calgacus. Here are my thoughts from the POV of philosophy of language and linguistic analysis, which attempt to clarify meaning.
My point as a philosopher of language is that the meaning of a terms is determined by their use in contexts. "Money" is a complicated term in that is used many different contexts from ordinary language to technical subjects. Therefore, looking for an "essence" of money is a wild goose chase, as is looking for a single defining characteristic of a set of all uses of "money." This is generally impossible when a single terms is used technically, sometime in different technical fields, and it also common in ordinary language, where its use is varied and unspecified.
it has technical meaning in several disciplines, including economics, and is also a very commonly used term in ordinary language. So the "meaning" of money, being determined by the particular context in which it is used is not only complicated but also somewhat confused and stands in need of analysis in terms of the context. So in this is sense "money" as a set of meanings is a once a term of high level of abstraction and also a metaphor.
However, "money" is quite well defined in certain contexts, like accounting and law. In any accounting jurisdiction, accounting is done in a particular unit of account. In commercial law and its use in contracts, it is also well-defined as a currency. Since economics is a study of behaviors based on use of money in accounting and according to the law of commerce and contracts, it is well understood in this regard, generally in terms of the state money used in the jurisdiction.
On the other hand, there is considerable controversy in the sub-fields (sub-contexts), theory of money, for example, where it has somewhat different meaning in a commodity theory than it does in a debt theory or chartalist theory. To the degree that the term is context independent in these controversies the debate is confused for lack of criteria, and agreement is therefore elusive.
I don't have any difficulty with someone saying that they agree with x, y, or z in the matter of theory of money. The problems arise in claiming that x, y, or z are correct in holding that such and such is the meaning of "money," and the only proper use of the term "money." What are the criteria and what is the justification for these criteria? Is the justification so obvious as to be self-evident or is it logically compelling. Why is there disagreement in debate?
From the point of view of a technical field such as science, law, or accounting, meaning must be specified technically in order to be clear and precise. This usually requires operational definition or authoritative stipulation (law, regulation), especially in cases where meaning is complicated by extensive use in ordinary language. This is obviously in order to avoid confusion, which is key in the area of contract where one of the requirements of a valid contract is clarity of conditions prior to agreement by the parties.
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Economics as a supposedly scientific discipline has not done this in way that all professionals who do economics agree upon. There is no absolute criterion given "on high" as an essence, nor is there a commonly accepted operational definition. Economists in general are not expert in either law or accounting. Although much of economics is based on accounting in economic systems in which markets and prices are fundamental and a currency is the standard of settlement, a lack of operational definitions clouds the entire field with confusion. Debates on history and theory of money have not clarified this. Looking in from the outside, it seems to be a fine mess.
Things are somewhat different in finance, since finance is directly based on accounting and law, and the meaning of money is defined in accounting as a record in a specific unit of account that is determined legally and understood operationally in accounting records. That unit is generally state money in modern economies and state money is technically defined by law and regulation.
My own view is that if economics is a science, economic scientists using "money" as it is used in commerce and contracts would be well advised to stick to the legal and operational uses of the terms involved in order to avoid confusion and to conform to the way the terms are actually used in the subject matter, which in economics is commerce-related and therefore subjects to law and regulation. While what some people think that a term like "money" signifies may be interesting from particular points of view like theory of money or history of money, money is what the relevant law currently says it is. In a system with established accounting standards such as the FASB, accounting is a legal matter, too, e.g., key for tax purposes as well as contract settlement. While there may be some controversy about the meaning of laws and regulations, that is decided by the judicial process, usually based on precedent. For example, in contract disputes the issue is not just what the parties understood when executing the contract but the legal environment in which it was done, the applicable commercial and contract law of the jurisdiction.
I am not arguing that Innes, Gardiner, and Wray either have or don't have the "correct" concept of money. It's not my field, and I will leave it to experts to work out. In the meanwhile, I will take Wittgenstein's advice in such matters: "Back to the high ground." The "high ground" here is legal definition beginning with constitutional law as the law of the land. Most modern constitutions rest the money power in government and specifically the legislature, which is then interpreted by the judiciary. Subsidiary matters are delegated, such as record keeping and reporting to an accounting standards board, e.g., for tax purposes, a central bank that handles the currency and issues of money and banking, a tax department that has charge of taxation matters, etc. Look to these for laws, regs and customs, as well as operational definitions, of relevant matters like money.
On one hand, the history of money is relevant to the evolving meaning of money, but the meaning is a term like money for use in a science like economics must be determined with respect to its economic use, which is its practical use as determined by current legal and operational definitions. These may change, e.g., through adoption of "digital money," blockchain, etc. For example, blockchain units are "mined" digitally analogously to gold. They become someone's asset. The value of the original owner's asset is equity after subtraction of liabilities, e.g., mining expenses. This is raising new questions.
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As I thought, we disagree a great deal, nearly every sentence. "Money" is not such a complicated term and its meaning is not visibly evolving. "Money" does have a very clear definition and essence once we distinguish between "money" & "money-things". If you understand the definition, the point of view it embodies, the rest of MMT is straightforward following-your-nose science. The only problem there is that the above distinction can and often is forgotten - as you do above. States can define money things and they can measure money in a unit of account. But they cannot and never have redefined the concept of money. Acres or hectares are units of area that states can define, but all states use the same concept of area. As I said, it is the clearest defined notion above. It is not a wild goose chase. The goose has been found & cooked. The debates have successfully made things crystal clear. Unless one wants to see a fine mess, there isn't any mess or confusion to speak of showing.
Merely saying that there are difficulties isn't the same thing as pointing ones out. Merely saying that a word is used differently in different contexts doesn't make it true. MMT, economics, common usage and people in general are interested in how the word is used with the same meaning in different contexts. These different contexts are exactly what people are ignoring when they use the concept "money", which is why it is so useful. Therefore focusing on these contexts that are ignored by the concept is manifestly wrong. As I said to Matt - if there are differences and difficulties - name one.
"Back to the high ground." The "high ground" here is legal definition beginning with constitutional law as the law of the land.
This is NOT the high ground - as Innes noted: The thing is not to look at what the state's laws say, but what the state does [and can't do]. States don't have the power to define the concept of money, any more than they have the power to define friendship or area or political power. They can pass laws that say pi = 3, but they cannot make it so. They can say gold or silver is money, but they cannot make them money; at best they can make a quantity of gold or silver a "money-thing". "Money is what the relevant law currently says it is" is as absurd as "pi" is what the law says it is. As worthy of studies as laws may be, as much as they may embody good philosophy and science, they are not meant to be and are not treatises in philosophy. They presume practical understanding (bekannt, connaitre) of their (familiar, too familiar) terms, which is almost always good enough. The "legal and operational definitions" are not definitions at all of "money", but of certain usages and practices involving money, of things which may be legally considered money-things. They beg the question of what money is. For doing capital S Science and capital P philosophy, for criticizing laws, one should try to consciously understand (erkennen, wissen, savoir) such terms. One can never do this for everything, but that doesn't mean you can't ever do it for anything.
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The problems arise in claiming that x, y, or z are correct in holding that such and such is the meaning of "money," and the only proper use of the term "money." What are the criteria and what is the justification for these criteria?
Whatever criterion you care to name. Basically, the MMT definition clearly and exactly covers all uses of the word "money". Again, show me a problem. What problem?
Why is there disagreement in debate?
Because the people who disagree with the MMT definition don't understand it. Like all very easy, trivial things, it is extremely tricky. Wray sometimes suggests that people simply aren't listening; he's not wrong. Was going to point out to Bob Roddis that the Austrian theory (that he championed after I belittled it while responding to Matt a while ago) - is the right sort of, the right style of thinking. But the Austrians don't take their own way of thinking seriously enough, they skip crucial steps. If they didn't, if they thought more carefully and sloowwwwly they would become MMTers - like Marshall Auerback did IIRC.
“Money” and its correlates on other languages is dictionary defined. Dictionaries list many senses in which the “term” money can be used. They are probably not exhaustive.
These are the starting points of discourse. If one wishes, on can coin a new term and its use, but as Minsky observed about money, the trick is in getting people to accept it.
Everyone fluent in English knows hot to use the term so as to be understood by others. But one doesn’t know what they actually understand by the term until it is clarified in discourse. It is possible that different people have quite different conceptions of money.
People disagree about basics. Disagreement is characteristic of philosophical debate. The first step in philosophical debate is to clarify meaning so that parties to the debate are on the same page. Obviously, different parties are going to attempt to frame the debate by getting their definitions and assumptions accepted either explicitly or implicitly. This infects the debates into which “money” enters in econ, for instance.
There is also disagreement in science, e.g., where technical definition is either not specified to the agreement of all. Need I say that MMT is controversial on money? All sides point to the obviousness of their claims.
In money and banking, finance,and economics “money” is generally defined operationally based on function: (1) a medium of exchange, (2) unit of account, (3) store of value, and standard of deferred payment. Roy Harrod begins his book entitled, Money, with: “It is perhaps not necessary to dwell on the traditional definition of money as being a medium of exchange, measure of value, a medium for deferred payments and a store of value.”
Medium of exchange is usually listed first since this is how most people think of money, that is, basically in terms notes and coin (money-things). This is certainly now the concept of “money” is initially acquired by children, and it remains predominant throughout life unless a person enters banking, finance or economics. Those initial impressions are a strong force in one’s tacit knowledge.
Other uses of “money” are metaphors that are based on tangible money-things, hence, built on early impressions. Accounting flows can be visualized as notes and coins flowing through pipes like molecules of fluid. That is the metaphor on which stocks as reservoirs and flows as faucets and drains is based. These are the familiar hydraulic models illustrating where the money “comes from” and where it “goes.” We think and speak in terms of such metaphors all the time.
Cognitive science shows that language is based on metaphor. Indo-European languages are based on Indo-Iranian roots that are connected with the world experientially. Other terms are built on these roots using metaphor, often with the aid of prefixes and suffixes.
"Money" is a controversial term in economics, science and finance. Some hold that only commodities like gold and silver that are universally accepted and serve as a numeraire are money and all money is derivative from that. Others hold that only debt is money, and among these there are arguments over what constitutes "debt."
You say, '"'Money' does have a very clear definition and essence once we distinguish between "money" & "money-things.” But that is the point of contention between those who's hold a commodity theory and those who do not. You are simply saying “we” are right and “they” are wrong and if you don't understand out argument you are stupid. That’s pretty much where most argument between Keynesians and Austrians end up.
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Austrians would say, for instance, look at what is happening now with gold and silver as the system becomes shaky. People realize that if currencies collapse, gold and silver will be accepted as money while other “money” is not accepted and no longer functions as a token substitute for the metals as money’s intrinsic value. The basic assumption is that money must have intrinsic value and what does not have intrinsic value cannot be “real” money. They will never be convinced otherwise owning to historical evidence of currency collapses.
If an argument is not logically compelling enough to result in consensus, the matter remains unresolved, like most of the "enduring questions" that are debated in traditional philosophy. They are enduring No single answer has been able to hold the day.
You say, for instance, "its meaning is not visibly evolving." On one hand, the topic of the day is "digital money" and "blockchain money," and MMT says that it's not money. Good luck with stopping people from using "money" in that sense.
“But they [states] cannot and never have redefined the concept of money." They define what counts as money under the law and have done so for a long time.”
See Aristotle on nomisma:
All goods must therefore be measured by some one thing, as we said before. Now this unit is in truth demand, which holds all things together (for if men did not need one another's goods at all, or did not need them equally, there would be either no exchange or not the same exchange); but money has become by convention a sort of representative of demand; and this is why it has the name “money” (nomisma) – because it exists not by nature but by law (nomos) and it is in our power to change it and make it useless [Aristotle, Nicomachean Ethics 1133 a 29-30].
As far as we are mostly concerned in MMT, "money" is modern money, and that means state or chartal money. It is established by fiat, either dictated by the monetary authority and generally it is institutionalized in terms of a set of laws that apply to contracts and commerce, with the highest authority being the constitution of the state issuing the money. IN the US Constitution, the term “money” appears in Article 1, sections 8-10, but it is not defined specifically and its meaning is taken to be understood as the common use. Further elaboration is left to subsequent legislation and regulation, and judicial interpretation. Christine Desan explores the English usage that shaped the American.
MMT doesn't say that chartal money is the only type of money possible or that has been used. “Modern” money implies that there was pre-existing money. Modern money, as MMT uses it, following Keynes, means state money, after Knapp. There was pre-state money as Innes shows, and money doesn't need a state to exist.
The argument there boils down to whether money must be a financial instrument (credit-debt) or an a commodity (asset). The participants in this debate basically shout at each other, each putting forward evidence that they are right, while the other side rejects the evidence as being decisive, e.g., adducing counter-examples.
Even though money became institutionalized through law, which implies a lawgiver (authority), the term “money” has meaning independently of state money. Some of those meanings are grounded in contexts that precede the introduction of state money or temple token offerings.
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Money grew out of custom and there is no single custom that can be shown to be the origin of money. One early use was credit-debt as shown by records on pottery shards, and another was temple tokens that were (apparently) obtained by worshippers by exchanging goods, presaging state chartal.
Both are found in Sumer, IIRC. That is already a fairly advanced form of money, with elements of custom but also established rules governing use that are least porto-legal, going beyond the parties involved as something that is “settled.”
Graeber argues that money actually grew out of a sense of obligation and reciprocity (fairness, justice) preceding custom. Initially, there was no established rule regarding reciprocity, as in families today. A sense of fairness was in play.
Rules seem to have develop out of Wergeld (“man price,” blood money), which gave money a proto-legal and proto-institutional basis. Certain behaviors became customary over time and customs became explicit rules when group became so large as to require codification and accounting.
Those behaviors have been shown to have pre-human origin in dispositions (reciprocity, sense of fairness) and traits (like food for sex), although it's a stretch to say that primates used money. But without reciprocity, money could never have arisen as an evolutionary development because the basis for it would not be there.
From this, it seems clear that the term “money” covers a lot of territory. It is a high level of abstraction, a set of sets, or set of sets of sets. However, it is very difficult to define the rule of inclusion that separates the set called “money” from the its complement. It’s like Justice Potter Stewart on pornography:
The most famous opinion from Jacobellis, however, was Justice Potter Stewart's concurrence, holding that the Constitution protected all obscenity except "hard-core pornography." Stewart wrote, "I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that."
The Court's obscenity jurisprudence would remain fragmented until 1973's Miller v. California. Many legal observers[who?] feel that, after Miller, it remained confusing and vague. What is obscene in one place can well be completely legal in another. source
The meaning of “money” is like that based on what Michael Polanyi called “tacit knowledge.” Tacit knowledge is the data bank on which people communicate. Issues arise when different people’s tacit knowledge is different owing to a variety of factors such as enculturation.
I am not arguing for the correctness of any conception of money or theory of money here. Jus’ say’ that to the degree that money is specified legally and the courts are in concurrence, there is no argument in that jurisdiction about uses of money such as accounting, finance, commerce, and contracts. This is where argument and debate stop at an established frame of reference.
Here is an interesting quote from Nicholas Oresme and the First Monetary Treatise by Jörg Guido Hülsmann at Mises. (Oresme's Treatise was composed prior to 1335.)
The very first question of monetary theory is of course: what is money? Oresme answers that money is a commodity; more precisely, it is 1) a quantity of precious metal with 2) a stamp that certifies the metallic fine content. The certification can be provided by a private person or private organization, but it can of course also be provided by some government agency.
By the time Oresme wrote, government had invaded the money certification business for more than 1,500 years, but Oresme insisted that such government involvement did not belong to the nature of money. He thereby rejected the influential state theory of money, according to which it was the state rather than the market who decided what money was.1
The state theory of money had been championed in the writings of Plato and Aristotle. It was in fact embodied in the very language in which these philosophers wrote. The Greek word for money was "noumisma"—from "nomos," the Greek word for "law."
Now in the 14th century, Oresme stressed that the Latin word for money—"moneta"—had a different etymological root. It had nothing to do with the law and the state, but with information and certification. Its root was "moneo" (I inform) "because it informs us that there is fraud neither in the metal nor in the weight." The production of money was therefore not, in its essence, an act of officialdom. It was a market activity. The money producer rendered a certification service. He informed the prospective users of his coins about the metallic fine content. This information was useful because it reduced uncertainty and measuring costs.
And so the argument has been ever since between money as a legal artifact and a commodity with intrinsic value.
People realize that if currencies collapse, gold and silver will be accepted as money while other “money” is not accepted Tom Hickey
Fiat shall always be required for taxes and the income tax (which includes capital gains on precious metals) not only is proportional to income but is progressive.
So why should people cease to deal with fiat since they can't escape the need for it to pay taxes? Increasingly so during inflation given progressive taxation?
and no longer functions as a token substitute for the metals as money’s intrinsic value. Tom Hickey
Fiat does not function as a token substitute for precious metal; it is backed by the taxation authority and power of government.
Historically, currencies have collapsed, first in value owing to inflation, devaluation and debasement, and secondly, owing to the collapse of the government. In the second case, there is no ability to tax. This was a contributing factor to the collapse of the currency of the Confederacy in the US Civil War, for instance. There was no means to collect taxes. Previously, the Continental had collapsed owing to over-issuance.
And so the argument has been ever since between money as a legal artifact and a commodity with intrinsic value. Tom Hickey
1) Taxes must be paid with fiat - even the least expensive fiat will do so a gold standard is a scam to benefit gold owners and money hoarders.
2) Commodity based money is stupid even as a private money form since common stock is backed (normally) by living, productive assets including technological know-how and skills - not by dead assets like gold.
Previously, the Continental had collapsed owing to over-issuance. Tom Hickey
Right now the central banks typically create fiat for BOTH the monetary sovereign and for the private sector.
Obviously then, the MMT crowd should be for disallowing the creation of fiat for the private sector if they wish to maximize the amount of fiat that can be created for the monetary sovereign.
And actually, it was British counterfeiting that destroyed the Continental, I've read.
Expensive physical fiat is more expensive to counterfeit successfully so the use of expensive physical fiat is to be understood as an anti-counterfeiting device having nothing to do with intrinsic value.
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