> I'm curious if you've read David Graeber's "Debt" and if so what were your thoughts? If not, I think you'd find his analysis interesting.
I haven’t. You’re correct. I really need to read his book even if I know there will be some conclusions I strongly disagree with. The anthropological analysis will be insightful.
> It's an analysis that draws a very clear line between the idea of money and things that are valuable. For example, a primate trading sex for food wouldn't be an instance of using money in this framework. I also think you'd enjoy his exploration into the usage of currency as the means to, as you say, pay soldiers.
My understanding is a currency medium can often be chosen which are dual use. Cigarettes in jails and we have many example of seeds being used. I’d also point out primates (and possibly other mammals) will adopt non-intrinsic value currency once humans introduce them to it in experiments. If they are taught an item is exchangeable for anything of value they will adopt it and start a micro-economy.
> I think he references much older examples of doing so than the 1700s, such as Roman soldiers being paid in coin, but you might be talking about indications of credit (the early American dollar as an example). This also though has apparently been used for millennia, there's evidence of such in ancient sumeria.
That is certainly true but subtly and critically different. Those coinages were not fiat, they were based on precious metals, and actually the attempt by the Romans to debase their metal backed currency to raise funds beyond their contributed to uncontrollable inflation which factored into to the collapse of Rome. The most important distinction of pure fiat is that the currency is not redeemable and is fundamentally backed by the violence of the state from collection of tax revenue and war and colonization. Western fiat started with Bank of England founding in 1694, explicitly to wage a war of revenge against France without the hard currency funds.
> I'd like to understand better what you mean by this. Are you saying that a reduced usage of usd because people are buying good with Bitcoin (or "paper" issues of credit backed by Bitcoin and tracked by whatever cryptocurrency people call bank ledgers, considering the slow Bitcoin block write speed), will result in a real devaluation in the USD and thus a lesser ability for the USA to do imperialism and police brutality? This is a fascinating and unique argument and I'd like to hear more.
Yes I absolutely. I’m saying that but even further. USD is global reserve and great financial benefits have always been given to the empire whom’s currency is the global reserve, gilder, sterling, this isn’t a new phenomenon.
If Bitcoin can challenge even a small portion of this status it can have an enormous effect. This effect will not be limited to only USD but all major fiat currencies and it can put significant pressure on the expansion of sovereign debt and central bank money creation. Critics of government debt love to focus on the social programs, and yes they can create massive economic inefficiency, extensive socialism is proven to be organically toxic in some sense, it’s simply unnatural when made extreme, however black white thinking can’t capture an important nuance of the balance between competition and collaboration, or socialist structures and capitalist, a healthy system needs a balance because social policies act like insurance systems, which we can prove enable increased risk taking, which enables faster innovation.
But let’s get back to the specifics. Military budgets are distinct in function from social redistribution programs. They purely expend resources not redistribute. Citizens are taxed across each layer of their society but the largest percentage is always the federal entity. This tax collection is only part of it, another huge tax is inflation along with issuance of huge amounts of federal government debt. Significant adoption of Bitcoin and other hard PoW cryptocurrency’s will upend this as reserves are moved to hard PoW private currencies and taxation via inflation and debt will be ineffective. However because local government taxes and budgets don’t utilize these monetary techniques they will not be effected in the same way. On the contrary because you can view society has having a certain optimal tax burden and redistribution framework, then federal burden is squeezing out local governments. The end of fiat currency could give rise to more city state, Renaissance like, structure.
Lastly, remember that industrialization is directly linked to increased government size and also war, this is because factories are large concentrated physical locations of economic production, they can be seized very easily with soldiers. My personal belief is that since crypto currencies are a form of private currency which are resistant to state violence and economic production is becoming so global and nimble, all these variables combined are pointing to the coming end of fiat and large federal governments world wide. Perhaps it will take around 100 years is my guess.
ps. sorry for delay in reply I was traveling with family and didn’t have any spare time.
I haven’t. You’re correct. I really need to read his book even if I know there will be some conclusions I strongly disagree with. The anthropological analysis will be insightful.
> It's an analysis that draws a very clear line between the idea of money and things that are valuable. For example, a primate trading sex for food wouldn't be an instance of using money in this framework. I also think you'd enjoy his exploration into the usage of currency as the means to, as you say, pay soldiers.
My understanding is a currency medium can often be chosen which are dual use. Cigarettes in jails and we have many example of seeds being used. I’d also point out primates (and possibly other mammals) will adopt non-intrinsic value currency once humans introduce them to it in experiments. If they are taught an item is exchangeable for anything of value they will adopt it and start a micro-economy.
> I think he references much older examples of doing so than the 1700s, such as Roman soldiers being paid in coin, but you might be talking about indications of credit (the early American dollar as an example). This also though has apparently been used for millennia, there's evidence of such in ancient sumeria.
That is certainly true but subtly and critically different. Those coinages were not fiat, they were based on precious metals, and actually the attempt by the Romans to debase their metal backed currency to raise funds beyond their contributed to uncontrollable inflation which factored into to the collapse of Rome. The most important distinction of pure fiat is that the currency is not redeemable and is fundamentally backed by the violence of the state from collection of tax revenue and war and colonization. Western fiat started with Bank of England founding in 1694, explicitly to wage a war of revenge against France without the hard currency funds.
> I'd like to understand better what you mean by this. Are you saying that a reduced usage of usd because people are buying good with Bitcoin (or "paper" issues of credit backed by Bitcoin and tracked by whatever cryptocurrency people call bank ledgers, considering the slow Bitcoin block write speed), will result in a real devaluation in the USD and thus a lesser ability for the USA to do imperialism and police brutality? This is a fascinating and unique argument and I'd like to hear more.
Yes I absolutely. I’m saying that but even further. USD is global reserve and great financial benefits have always been given to the empire whom’s currency is the global reserve, gilder, sterling, this isn’t a new phenomenon.
If Bitcoin can challenge even a small portion of this status it can have an enormous effect. This effect will not be limited to only USD but all major fiat currencies and it can put significant pressure on the expansion of sovereign debt and central bank money creation. Critics of government debt love to focus on the social programs, and yes they can create massive economic inefficiency, extensive socialism is proven to be organically toxic in some sense, it’s simply unnatural when made extreme, however black white thinking can’t capture an important nuance of the balance between competition and collaboration, or socialist structures and capitalist, a healthy system needs a balance because social policies act like insurance systems, which we can prove enable increased risk taking, which enables faster innovation.
But let’s get back to the specifics. Military budgets are distinct in function from social redistribution programs. They purely expend resources not redistribute. Citizens are taxed across each layer of their society but the largest percentage is always the federal entity. This tax collection is only part of it, another huge tax is inflation along with issuance of huge amounts of federal government debt. Significant adoption of Bitcoin and other hard PoW cryptocurrency’s will upend this as reserves are moved to hard PoW private currencies and taxation via inflation and debt will be ineffective. However because local government taxes and budgets don’t utilize these monetary techniques they will not be effected in the same way. On the contrary because you can view society has having a certain optimal tax burden and redistribution framework, then federal burden is squeezing out local governments. The end of fiat currency could give rise to more city state, Renaissance like, structure.
Lastly, remember that industrialization is directly linked to increased government size and also war, this is because factories are large concentrated physical locations of economic production, they can be seized very easily with soldiers. My personal belief is that since crypto currencies are a form of private currency which are resistant to state violence and economic production is becoming so global and nimble, all these variables combined are pointing to the coming end of fiat and large federal governments world wide. Perhaps it will take around 100 years is my guess.
ps. sorry for delay in reply I was traveling with family and didn’t have any spare time.