We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Samizdata quote of the day – money isn’t wealth “If money is infinite, why is there poverty?”
Because money isn’t wealth. It’s a claim on wealth.
You can print claims. You can’t print the goods and services those claims are supposed to buy.
Give everyone $10 billion and nothing gets richer. Prices just explode until that “wealth” buys nothing.
Poverty isn’t a shortage of paper.
It’s a shortage of production.
Printing money doesn’t solve that. It hides it for a moment, then makes it worse.
– Rock Chartrand
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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Money always starts off as something that people value before-and-apart-from its use as money – that is why (for example) silver was used as money in the Middle East for many centuries BEFORE the invention of coins. Gold (normally imported from lands under Egyptian control) and even salt were also used as money. Honest money remains something (some commodity or other – it need not be gold) that people value before-and-apart-from its use as money.
Carl Menger pointed out the above – and also how governments (and business enterprises that depend on governments – such as banks) try and subvert money, for their own corrupt purposes.
Credit Money systems allow governments to spend vastly more than they would otherwise – at least for a time, and allow certain private parties to enrich themselves at the expense of everyone else – the “Cantillon Effect” named after the early 18th century economist Richard Cantillon.
Yes mostly. The mere paper claim is wealth to the extent that others will give you actual stuff in exchange for it. And the German government of the early 1920s substantially financed itself from these paper claims.
As with everything else the value of paper money is in the eye of the beholder. Most people most of the time behold it as useful. And they’re right. Barter is very tiresome.
And I would argue that money usable as a means of exchange is actually an accretion to the aggregate wealth if the community, over and above that represented by real stuff.
But as the Germans found out you can destroy that value by making money unusable as a means of exchange. Which is in substance the policy of the nee mind just print more mob.
On the post itself – yes indeed increasing the amount of money does NOT increase the amount of wealth.
It should not be necessary to say this – but it is necessary, as there have been people such as Hobson and Keynes who argue that increasing the amount of money, and spending it, DOES make everyone better off – they are called “under consumption” theorists – although “Monetary Crank” is a more accurate description.
Sadly almost every university economics department in the world is in the hands of such Monetary Cranks (the “economics” they teach is not economics at all) – who argue that creating more money (from nothing) “stimulates the economy” and makes people better off.
Not all the people who support such policies are morons – some are highly intelligent, but corrupt.
They know very well that such policies will NOT make most people better off – indeed will make most people WORSE off, but they also know that if they get the Credit Money first (the Cantillon Effect) such policies will make them personally better off – at the expense of everyone else, because they (or someone connected to them) will be able to buy real assets, such as land, before the price goes up.