Let’s Talk About Money

Yes, I do know nice people don’t talk about money, and also that it makes the world go round, though I don’t remember anyone quantifying the amount of money necessary for 365 days and nights of Earth-rotation.

If you’re looking at that paragraph and wondering if I’ve lost my mind, I assure you, it’s still here, in the little jar by the bedside table where I keep it.  And that none of those statements are nearly as crazy as the idea people seem to have about money nowadays.

What idea?  Well, it apparently, like other things that the left fails to understand, is now called “A social construct.”

No, seriously, someone tried to make that dog hunt on my post about the minimum wage.  He informed us that it didn’t matter if we paid more to people, and it didn’t necessitate the raising of prices, or replacing of human workers with robots in order for the business to survive, because “money is a social construct.”

Now to an extent he was right.  Put a bunch of children alone in the wilderness, and let them grow up in ignorance of all other human civilizations and culture, and they don’t spontaneously start making currency out of leaves, just like they don’t spontaneously start to talk in a complex language, modern or ancient, and they don’t spontaneously start writing.

What they will do, though, is almost for sure start engaging in some form of exchange: my freshly hunted meat for your bowl of berries, my interesting rock for your flower.  It’s just what humans are.  I don’t think we have ever come across a society so primitive that people didn’t trade with other humans.  Just as we’ve never come across a society so primitive that humans didn’t communicate with each other.

Sure individual languages are cultural constructs, built by cultures over millenia.  And sure, individual systems of currency are social constructs, built by usually modern governments.  The governments of the past, though they coined, often were not very good at controlling the currency used in their territory.  In Elizabethan England, you might find French, Dutch or Spanish currency in circulation alongside the English currency.  This makes perfect sense because the important part of such currency was the metal it was made of, and not the figures stamped on it.

Perhaps it was easier to associate value with the precious metals, but the fact remains that then or now, money was worth what you could acquire with it.  That is, that same chunk of gold might get you a chicken in good times, but when chickens weren’t doing well, and the population was booming, it might not even get you an egg.

The value of an object is what is someone is willing to pay for it.  Conversely, the value of currency is what someone is willing to let you buy with it.  Clear as mud?

You see, money is a language, in the end, a system of information.  It allows people to decide what is valued and needed in society and what isn’t.  Or at least it would be, absent varying kinds of government interference.

If I sell my chicken for two bits of gold, or a pretty picture of George Washington, and then go across the way and convince a guy to take that same currency for a cow, it means that I either found a prize idiot or chickens are so rare in that society that they are worth the same as a cow.

Things like rarity, desirability, need, want, get fed into the system, and decided by human beings who need, want, have trouble finding, or are drowning in a given thing and a currency value is set.

That is, in principle, the idea.  Social construct?  Not so much.  Or only because it is impractical to walk around with a cow, a chicken, or a month’s worth of compute work, to trade with any stranger who might be interested.

It would be impossible for a computer to decide and set a value to things, the same value that is set quite easily in a series of myriad transitions.

The economy is just a way of referring to this system of ordered chaos by which most of us make their living.

But make no mistake, at the bottom of it there’s that “we make our living.”

If you read as many biology books as I do, you’ll come across sentences like “The flyspecked toadswallower makes his living by hunting tadpoles in the shallows.”

Whether you’re raising chickens or cows, writing books, programing computers, or breeding prize angora cats, what you are doing is making a living.

Money is the system we use to be able to have a complex society in which NOT ALL of us need to get up every morning and go find a chicken for breakfast.  That is all it is.  But as such it is a brilliant invention, without which society would never have attained the sort of complexity in which people can be so detached from reality as to say money is a “Social construct” as though that meant it is made up, wholesale, out of air.

And I don’t know about you, but I’d rather use my money as I please and make contracts as needed, than to have a government bureaucrat interfere in the system and tell me what I must pay for goods or services.

Because that is the denial of what money is FOR.

Money is neither good nor evil, neither despotic, nor liberating.

It is a tool.  use it advisedly.

 

*Francis Turner had a previous post about money on this blog and makes many of the same points: Something About Money (and Cake.)  Because it’s a complex subject looking at two different approaches at explaining it might help.*

298 responses to “Let’s Talk About Money

  1. Money is neither good nor evil, neither despotic, nor liberating.

    It is a tool. [U]se it advisedly.

    I’ve used a similar line to explain other things such as firearms and nuclear energy, reducing it to “fire.” Fire can cook your food, heat your house… or burn down your city. Is fire good or evil? Neither, it just IS. How you use it might be good or evil.

    • As my sister pointed out to me a long time ago, it isn’t money but the LOVE of money that is the root of evil.

      • Aye. Money is a great tool, but one must never the tool use oneself.

        • ‘Sir, if you made verse you would doubt symbols.
          I am afraid of the li le loosed dragons.
          When the means are autonomous, they are deadly; when words
          escape from verse they hurry to rape souls;
          when sensation slips from intellect, expect the tyrant; the brood of carriers levels the good they carry.’
          —Charles Williams, Taliessin Through Logres

          (The ‘little loosed dragons’ were coins of King Arthur’s realm, stamped with the heraldic symbol of the Pendragon.)

      • You know, I’m not much of an Ayn Rand fan, but her defense of money by Fransisco D’Anconia in Atlas Shrugged was friggin brilliant.

        Money is useful, and I love that it can be used to gain stuff without stealing it.

    • I dunno. Fire in certain areas of a city (the ones that already resemble August 45 Hiroshima) would be a blessing as long as no casualties.

    • For years, I’ve dealt with some virtue signalling, whereby certain people I can’t avoid working with assume an attitude of moral superiority because they are demonstrably financially incompetent, while I, who, because I got married and wanted children (and hate hate hate panicking over money) figured out what I needed to do to make money, did it, and so can pay for stuff – like, for example, a portion of the virtue signaller’s salary that comes from the tuition I willingly pay – are presumed to be less pure.

      I’ve taken it for years, Next time it comes up, I’m going nuclear. Enough is enough.

  2. I would like to put in a long screed about supply and demand curves, short, medium and long term own price demand elasticities and what happens when governments put in price floors or ceilings but 1) I haven’t had enough coffee, 2) I need to get to work at some point and 3)Thomas Sowell did an excellent job in Basic Economics. Instead I’ll just say “Money is, among other things, a holder of value and a medium of exchange” and “ALL MARKETS CLEAR”.

    Social construct my dying …backside.

    • Exactly. Money is an intermediate medium of exchange, abstracting the value of a product into arbitrary units to make “barter” simpler. Instead of trading a chicken for three cabbages, you trade a chicken for some money, which you then trade for those cabbages (or something else, which is the point of money–as an intermediate, you aren’t required to make a final exchange of one good for another on the initial trade if you use money).

      • Reminds me of a D&D character I played for a while, who never quite got the concept. He finally grasped the idea of “barter markers” but never made it to the point that different metals and sizes had different values. 🙂

        • I went to elementary school with people who simply couldn’t grasp that a dime was worth more than a nickle. A nickle was bigger than a time, obviously it had to be worth more.

          Of course, there were some foreigners I encountered later who were upset that all American paper money was the same size. Where they came from, (I’ve long forgotten where; PacRim) every denomination had its own size and shape. Apparently neatly storing more than one denomination in a wallet was a novel idea…

          • I have a vague memory from early childhood of thinking the ridges made the dime more valuable.

          • I don’t remember whether the “ah-ha” moment came before or after I started school – but I do remember I had the same notion (nickel is bigger, it must be worth more).

            It is an early memory, though – it happened when my evil older sister tried convincing me to swap my dime allowance for a nickel. I KNEW then that my dime had to be worth more…

            (Evil at the time, BTW. To say that we did not get along as children is – very understated.)

          • In most countries that I’ve been in besides America, the various denominations of paper money have all been different sizes, though all of the same basic rectangular shape. If you’re blind, it’s a feature — though one that could be obtained in a different way, like stamping the note’s denomination in Braille on one corner of the paper money.

            But I’ve never had trouble storing them neatly in a wallet. The small ones go in front, the bigger ones in the middle, and the largest ones in the back. I actually find it easier that way than with American bills, because I can see at a glance which one is the larger bill (both in size and in value).

            • In Holland, pre-Euro, paper money was all the same size (ignoring the paper 2.5 guilder note that existed only when I was very young). A redesign in the late 1960s introduced markings you could detect by touch. Not Braille, but geometric marks. The most obvious difference between the USA and many other countries is that colors vary. A popular Dutch banknote was the “sunflower”: bright yellow and orange.

          • I recall some quiz or such about “There are two trucks of equal size. You can have either a full truckload of nickels, or half of a truckload of dimes. Which do you choose?” And for a moment it might look equivalent. Then you start (or should start) thinking about relative size and value.

          • Well remember there thinking is not all wrong. A Dime, Quarter, and Half Dollar have volumes at the ratio of 1-2.5-5 because the use to be made of silver.

    • The point is I couldn’t put all this here, so I just tried to convey that unlike this idiot’s idea, it’s not a thing spun in air.

      • No, as a well known gambler of mid last century famously said, money is simply a means of keeping score. Now true wealth is a thing spun out of thin air, or rather out of the minds and hard work of man. Wealth is created when value is added to something.
        The value of a product is whatever the market will pay for it. If that is more than the cost of materials and time you put into creating that product then, congratulations, you are a successful business person. Sell at a loss and you won’t be in business for long.
        This whole social contract chit is a fine sounding con designed to cause the transfer of wealth from someone who created it to someone who thinks they need it more than the creator does.

        • Good point. By and large most traders on Wall Street aren’t creating Wealth (as you’ve defined it) they’ve just moved money around and pocketed some of it. Don’t get me wrong, stocks and bond trading are a large underpinning of our modern world but once the initial transaction has been made and the corporation has received its proceeds, they’re just moving pieces of paper around.

          • I dimly remember when we went to fiat currency (Charles de Gaulle showing up with dollars and saying “I’d like to redeem these, please,” had an effect on that). Even so, I find it hard to fully grasp currency as a thing of physical value. This comes to a head with the concept of creating such currency. That was done by digging up precious metals, or bringing it to America through trade. Which raises the interesting question of how did the US Mint acquire gold and silver for coinage. Or perhaps not, considering it was an exchange of precious metals of known assay and weight for raw material, and increasing the amount of such in circulation.

            Anyway, not fully grasping this makes things like argument of a gold, silver, or bimetallic standard more difficult to grasp. Yet it’s likely very important to fully understand what was going on because while we have fiat currency, it’s still based on something.

            • I suspect your trouble grasping this is, in significant part, a gap created by your education (intentionally?).
              Raw metal was turned into coins by the mint, as a service. You’d bring in $100 worth of silver, say, and you’d get back 99 one-dollar coins. The mint would keep a small amount in payment for the minting process. It’s called seigniorage.
              The bimetallic “standard” was a case of confused politicians believing they could fix prices. Price fixing doesn’t work, ever. It doesn’t matter if you’re trying to fix the price of gasoline, or the price of silver (expressed in gold — or vice versa). In the real world, nothing has an immutable price.

              • I suspect your trouble grasping this is, in significant part, a gap created by your education (intentionally?).

                Since I’m old enough to remember the US moving to fiat currency (and political cartoons like Nixon with a garden hose in an empty swimming pool and the dollar jumping off the diving board, and the caption “Let’s see if it floats.”), it’s more likely a blank spot in education. Seigniorage explains a great deal – including my confusion. For with currency based on coins made from precious metals, the government does not have to keep a reserve as the basis of currency.

                Inflation, then, would be an increase in precious metals greater than could be absorbed by the economy. Deflation when there’s less previous metals in circulation. It makes it clearer to see if you send your precious metals to another country in trade, you have less in circulation in your own, as well as a net loss of wealth.

                What I dimly am aware of, there was complaints that the gold standard made the economy too tight, resulting in the “cross of gold” for much in the US. OTOH, shifting to silver, as was demanded, was in effect devaluing currency, and would have been inflationary. Bimetallic was a compromise, but fail to grasp how that would have worked.

                • The leading popular newspaper advocate of returning to a gold standard would probably be the New York Sun. You can get a very nice tutorial on the debasement of currency (“Fifty Shades of Green”?) by reading their editorial columns … http://www.nysun.com/op-ed/

                • One of the common complaints recorded by leaders over millennia is the outflow of hard currency from their wealthier citizens to foreign realms to pay for exotic and luxury goods. It goes back at least 2500 years. One example is Romans buying luxury goods from the Far East.

                • In spite of popular legend, it isn’t Nixon who moved to fiat currency. That happened much earlier. It clearly was true by the time FDR prohibited gold ownership (without constitutional authority, but then again that was typical for him). A more accurate milestone would be 1913, when the Fed was created.

                  • (Holds flat of hand parallel to floor, waggles.)

                    FDR made private ownership (by American citizens) of gold illegal, but left currency value fixed to a set amount of gold. Nixon took us off the gold standard by unfixing the dollar, letting it float* in the world currency market.

                    *Set it in “freefall” might more accurately describe the effect, but as pretty much all currencies were also there it simply became a matter of which were falling faster.

          • I don’t think you quite got the full concept of a money based system, here. Those “pieces of paper” that the traders pass around represent value, just as the pieces of paper in your wallet do. Being able to trade your part ownership (or right to receive interest payments from) in one company for a different ownership or right, or just for the pieces of paper we call “currency,” is another part of a money-based economy – and a vitally necessary one.

            I was working in that industry when both Microsoft and Genentech were doing their first public offerings – almost all of the investments in those that my broker-dealer handled were the result of the investor selling their existing investment in something else to buy the shares of those companies. No easy ability to sell the old would mean no easy ability to initially capitalize the new.

      • The form of money ($, £, €, etc)used is a social construct in that society agrees to use it. The value that money represents is not. The value of the money (representative of time and effort) will vary for different people and products. I may see the dollar as more valuable than.a candy bar but not a pencil while someone else may value it differently.

        • Which is where the whole idea of a demand curve comes into play. YOU as an economic actor know how much you’re willing to pay for any given item. If the market says “The price is higher” you don’t engage in the transaction. The idea that someone can say “This is the correct price to charge for all pencils” implies perfect knowledge of something that is in flux.

          • Yep. I say it merely as an example of the difference between money and value.

          • Yep. For standard consumption, I’ll pay up to $1.29 for a 2 litre bottle of soda. More then that, the store doesn’t get my business. I stock up on sale at $0.99 or less. OTOH, when I’m travelling, I’ll shell out $1.69 for an ice cold 20 oz bottle at a convenience store or gas station. Even if they’ve got a special on, I don’t stock up.

          • The idea that someone can say “This is the correct price to charge for all pencils” implies perfect knowledge of something that is in flux.

            Which never has worked well. Yet Nixon’s price controls are practically forgotten.

            • And I forgot now if it was during the Clinton or early Obama administration where at least one of the people involved with Nixon’s price control attempt was going, roughly, “Don’t do that! It doesn’t work! We tried that! Really!”

  3. “To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men.” — Francisco d’Anconia

  4. Christopher M. Chupik

    That’s okay. We’re not really nice people. Just ask our enemies!

  5. Yes money used to be metal. If it had a different design on it from Spain or Italy it didn’t matter. Just if it was pure and what it weighed.
    This is why in the movie the gypsy woman bites the coin she is offered. Good gold is soft enough to leave a tooth mark.
    This was only true until 1913. That’s when JP Morgan said, “Gold is money and nothing else.” Then they created the Federal Reserve.
    Morgan was sure of that, yet not one person in a hundred can define what money is today. The Government decided to change the definition of money. Legally – and backed by the force of arms – money is now DEBT. If you try to mint money and call it a dollar they will kill or imprison you.
    It used to be if you took gold to the mint they were obligated to mint it into coins for you. If you dug up a pound of gold you could pay your taxes. In fact reducing the gold content of money was one of the few crimes with the death penalty. But somehow they reduced the gold content of a dollar to ZERO. Nobody died or was even charged with a crime.
    It isn’t that the dollar CAN be used for all debts public and private like they print on them. It MUST be used. The tax code makes sure every good and service must be assigned a dollar value so it can be taxed.
    Let’s be clear – it is THEIR dollar. They create it without any backing but the promise that they control your future work and production. You can only receive it, keep it, or spend it on their terms.
    They define how much interest can be paid on it. Now they can charge you negative interest rates just to hold it.
    Soon they won’t allow even paper dollar receipts and they will be able to seize all your money at the press of an >ENTER< button. Total control.
    In the bible it talks about a time when nobody can buy or sell unless they have the 'mark of the beast'. You want to see that? I'm more convinced every day it is $.

    • I have my issues with fiat currency too Mackey. Yes, I understand the arguments for it, but putting such a vital instrument in government hands strikes me much as giving a gun to an idiot.

      • Paul (Drak Bibliophile) Howard

        Sarah, now I’m thinking that would be a good line to use in a gun-control argument.

        Gun-Controller: We need to keep guns out of the hands of people who would misused them or have accidents with them.

        Anti-Gun Controller: Yep, we need to keep people like you from getting guns.

        👿 👿 👿 👿 👿 👿

      • My biggest problem with Fiat currency is that tiny Italian cars make a poor basis for an economy. 😛

    • The Feral government doesn’t accept cash for taxes, ITAR fees, and other things.

      Last week, I found the city’s “recycling center” would not accept cash for their tire disposal fee.

      “All debts, public and private.” Just another brick in the wall…

      • Refuse to pay your taxes with anything except cash. The problem is, they could require you to bring it to their designated office, and that might be all the way across the country.

    • “If you try to mint money and call it a dollar they will kill or imprison you.”

      So…same as most times in human history?

      • Kit Marlowe who I still think was a proto-libertarian (and crazy as one such would need to be in Elizabethan England) got arrested for coining (and got out, probably because he was a spy, but long story) and his reaction was “Why should the queen be allowed to coin and I not?” 😀

        • In the long ago yesterday I recall seeing an episode of Death Valley Days (I believe it was when Ronald Reagan was host) dealing with the origins of the San Francisco Mint. The stars of the episode were minting their own coins, and the government brought suit to enjoin their practice and penalize the practitioners.

          They got off the hook by proving* their coins had higher gold content than US coins of the same face value.

          *There was a bit of sleight of hand involved, as they used different scales, weighing their coins in Troy ounces rather than the standard ounces used by the US government.

    • That’s when JP Morgan said, “Gold is money and nothing else.”
      —————————

      Except that has never been true. Gold was used as a medium of exchange because it had intrinsic value (it could be fashioned into many beautiful items), it was easily portable (it was highly sought after, meaning that a little of it was worth a lot in trade), and it didn’t spoil. Absent inflation, it was still just as valuable a year later as it was when you first got it.

      If I was a cattle herder moving from point A to point B, and you wanted to buy a couple of my cattle, gold was an acceptable trade because –

      1.) The gold involved will probably take up a small volume of space (particularly compared to the cows its replacing), making it easy to transport
      2.) It probably won’t be long before I’ll run into someone who wants it for fashioning jewelry (either for themselves, or for a customer), meaning that I’ll be able to exchange it for something that I need
      3.) If I decide to save it for a later date, it’ll still be there when I decide I need it.

      As an illustrative example, the game Guild Wars allowed players to carry up to 100 platinum worth of currency. As is the case in most games, currency is essentially worthless within the game except as it allows you to buy things that you want from non-player characters. It won’t allow you to kill a monster, but it might allow you to buy something that will help you to kill a monster. Or to make you look better.

      As is often the case in such games, as the lifetime of the game extended currency began to become less and less useful in comparison to items that appeared within the game. Items eventually appeared that – due to the difficulty in obtaining them – were considered to be worth more than 100 platinum. What do you do when the maximum amount of currency that the game will let you carry isn’t enough to buy the item you want?

      In this case, you make something within the game a new currency.

      Globs of Ectoplasm were used in creating a wide variety of high-end items. And while you could obtain them, you had to put in some effort to do so. They could also be stacked in your inventory, meaning that you could carry quite a few of them around with you. And due to the way that Guild Wars worked, they weren’t in danger of becoming worthless when the next game expansion was released. They met the three criteria of having inherent value, being easy to carry, and not losing value over time.

      As a result, the Glob of Ectoplasm became an accepted form of unofficial currency for high-value items within the Guild Wars playerbase.

      • Exactly. From a famous economist on the history of money: “goods that were originally the most marketable became common media of exchange”.

        Sarah’s post is good, but if I were to pick a nit it would be over the idea that children in the woods “don’t spontaneously start making currency out of leaves”. True enough, because leaves are a stupid currency, but they would start spontaneously using whatever is the most marketable (as in, easiest to trade to others, which may involve density of value, portability, universal usefulness, etc…) commodity they have as money. People are good at naturally figuring out things which make their life easier, and money is one of those basic concepts which are frequently quickly re-invented by different groups even if they don’t already know about it from someone else, or have access to the “money” they are used to. Interesting enough, as a result we get cigarettes or cans of tuna used as money in prison economies, or bottles of Tide to “trade” EBT money, etc…

        • Marketable doesn’t really suffice. Portable, persistent, and verifiable also help.

          After all, gold rushes often triggered economic booms by increasing the money supply and so making it easier to make trades. Why, prior to the rush, did people not resort to other goods to use as money? Well, they did, somewhat, but the other goods would generally be hard to cart around, or perishable, or easy to fake well enough that a transaction could be over before you found out.

        • When I was a kid growing up in France and attending French elementary school, everyone (it seemed) played marbles at recess. There was an accepted scale of values for different kinds of marbles: this kind was worth 1, this one was worth 2, this one was worth 5, and so on. There was also a game where you would set your marble down on the ground and draw a line a certain distance away. Other kids would line up to shoot their marble at yours, and they got a number of tries based on the relative difference in value of the two marbles. If they hit your marble, they got to keep it. If they used up all their tries without hitting it, then you got to keep their marble. There were probably other games, but that’s the one I remember.

          And there was also trading: if someone had a nice value-10 marble that you wanted, you’d have to give him a trade he would accept — and he often would NOT accept ten value-1 marbles. But two value-5 marbles, plus an extra couple of value-1 marbles, and he might agree to trade you that nice value-10 marble of his. (Yep: the value wasn’t actually fixed, and people could make a profit based on their trading partner’s level of demand.)

          So yep. Kids will spontaneously invent a currency system, based on any commodity that is in large demand and limited supply. (Not every kid could persuade their parents to buy them marbles. But you could usually get other kids to give you a few value-1 marbles out of charity, and then win more marbles with your skill.) I’ve been part of one. It was quite a shock to me when I went from elementary to junior high, where NOBODY played marbles any more. (“Are you kidding? That’s a kids’ game.”) Suddenly my accumulated wealth of marbles (not that I had that many) had no value, because nobody wanted it.

          You know, some day when I have kids, I need to tell them about my childhood experience with marbles. Then a few years later when I tell them about basic economic principles, they’ll already have a frame of reference to plug those ideas into.

  6. …my freshly hunted meat for your bowl of berries, my interesting rock for your flower.

    Or my club for your head, which is a whole lot more likely than day old meat for a bowl of berries. In support of my somewhat curmudgeonly comment, I submit that if you put 12 people in a room and tell them that they have two hours to elect a leader, you have absolutely no guarantee that two hours later a leader will be elected. What you can guarantee is that they’ll have picked out someone to hate.

    • And if they are logical, that someone will be the one that stuck them in that room.

    • Cute. But having absolutely zero to do with money.
      I submit to you that if people were ALL as you say, there would be no trade, no barter, no civilization.
      Or it could be you judge others by yourself and you’re a particularly nasty outlier. Something to consider?

      • Or maybe it (a club to the head rather than trading in interesting rock for the flowers) doesn’t happen most of the time because you have to sleep eventually, or someday someone bigger/stronger/wilier than yourself is going to show up.

        That constant feeling that an arrow is going to hit you in the back can’t be very comforting.

    • Or my club for your head, which is a whole lot more likely than day old meat for a bowl of berries.
      ———————

      Except that you only get to do that once. People stop bringing you bowls of berries after that.

      Instead, they go talk to your neighbor over the hill who’s more welcoming (possibly because he’s a cousin by marriage, and thus family), and as a result gets all of the repeat business that you’re missing out on.

      • Or the two come back, and ‘fix’ your club problem.
        permanently.

      • Clubs to the head are ultimately counter productive for you eventually run out of heads to club. Trade, OTOH, allows for the same head to come back with more goods. The take per transaction can be lower than with clubs to the head, but you make a larger profit in the long one.

        • Now, the pedant in me feels impelled to point out that not everyone is wise enough to figure this out. The same pedant is also impelled to point out that in most societies enough people ARE wise enough to figure that out and band together such that the club-to-head crowd tends to either be completely in charge (reducing the need for head clubbing, though perhaps increasing the need to THREATEN head clubbing) or controlled by judicious usage of clubbing back (or some other arrangement). Otherwise there wouldn’t be society.

        • Then you have people like the Vikings, who would trade with you while looking around and counting clubs. If the numbers looked right, they would sail on down the coast, stop when they were out of sight, break out the clubs, and pay another visit around midnight…

  7. My question is why the idiot being discussed here refuses to understand that “social construct” and “operates according to a certain set of rules” are not mutually exclusive.

  8. I hear this kind of argument also coming from people who want to end capitalism. And I look at it and go, “Enjoy your couple acres of land and mule to plow it.” I’m terrible at raising my own food (despite being trained as a botanist!) so what I’d rather do is trade my knowledge and ability to convey that knowledge for pieces of paper (or, these days, more likely, the electrons that signify the same) that I can then use to buy food from people who are better at growing it than I.

    Yes, there are some parts of my job that suck. Every career has parts of it that suck. The trick is in finding a career that doesn’t MOSTLY suck.

    I think it would suck a lot worse if I had to do everything – grow/hunt/raise my own food, tailor all my own clothes, cut wood to heat my house, weave my own bedsheets, etc., etc. And I tend to envision that that would be what the end of capitalism would be like – not some paradise where we’re all given what we need (or really, these days: what we want) when we need (or want) it, but some kind of feudal hellhole where basic goods we take for granted are largely unavailable.

    Maybe I’m a pessimist, I don’t know. But I sure like being able to walk into the grocery store and get a chicken that someone ELSE killed and plucked for me, and in fact, if I want it, I can get one someone else COOKED for me, at that.

    • I’m sure you understand that the people that want to “end capitalism” expect that they will be the ones on top of the feudal heap, having things done for them and given to them by virtue of their innate superiority. If they think about it at all rather than just spouting the dogma of their religion reflexively. Imagine the looks on their faces if it actually came about and they found that no one was interested in subsidizing their existence.

      • Imagine the looks on their faces if it actually came about and they found that no one was interested in subsidizing their existence.

        I think they plan on pulling what Norman Arminger did in Dies the Fire.
        What they forget is that that required a fundamental change in the laws of physics.

      • Yes. What replaces capitalism is always, if not outright slavery, some form of servitude. There aren’t any alternatives to that binary. All rights sit on a base of property rights. If you can’t own things with a clear title you can’t sustain life with food and shelter. If you can’t do that YOU are owned.

    • I don’t think you’re a pessimist.

    • “I sure like being able to walk into the grocery store and get a chicken that someone ELSE killed and plucked for me, and in fact, if I want it, I can get one someone else COOKED for me, at that.”

      One thing I’ve noticed is that getting one of the pre-roasted chickens costs very little more than just buying a whole chicken. One of those economies of scale, where it costs the store almost nothing to stick the chicken in the roaster along with 20 others like it, then run the machine all day. While some people (including me) enjoy the customization that comes from cooking the chicken ourselves, it’s also very nice to know that if we need to, we can stop by the store, grab one of those boxes, and have a tasty meal for the family pretty cheap.

      Yay, capitalism!

      • Yep. It’s our go to for “have been running around all day, need fud.” We get a chicken and a pre-mixed salad. The only time we actually feel a need to go out is if in addition to that, as often happens at novel’s end, I NEED to wash dishes, and we have no dishes, and also the kitchen isn’t fit to eat in.

      • Talked to this one lady a year or so ago about cost effectiveness of certain chores. Baking bread is cheaper and better than buying the loaf in the grocery store ($15 for ingredients [20 lb bag of flour, jar of yeast, sugar] for however much I bake vs. $2+/ loaf) whereas going out and buying a steak dinner is cheaper and more efficient than making it at home ( a decent steak dinner with trimmings costs around $20 and up). Broke it down for her what it takes to prep, cook, and such the steak dinner at home and the look of dawning comprehension was fun.

        Sometimes the precooked stuff is cheaper than the raw ingredients like the whole roast chicken.

        • Depends on what else you were planning on doing with the time and whether or not you get utility out of preparing food. (Utility used here in the economic sense.)

    • I’ve been telling people for years that the older I get, the more willing I am to pay people to do things for me. As an example, I used to change my own oil and spark plugs. I haven’t done that in years.

      Of course the intersection of that attitude with my current financial situation complicates things, as does the fact that some things I prefer to do myself, and some things you can’t find anyone competent, anyway.

      • I still change my own oil, as my Scotts-Irish side canna abide paying that much for that little work, but the rest of the auto maintenance stuff I’ve either outsourced or eliminated by not driving old cars that need fiddling with all the frikking time.

        I’ll also note that some jobs which are absolute heck to do in a home garage are dead easy in a place with a good lift. Now if there were one of those rent-a-stall-with-a-lift garages closer to me I’d be pretty tempted…

    • I find gardening to be fun as a hobby. It wouldn’t be much fun if I actually had to depend on it to eat. And you can only eat just so many tomatoes and zucchini.

    • I start off by asking if their life has value. And then, if their life has value, if that means their time has value. Then I talk about how the only way we’ve ever come up with to prove that a life has value is to barter for it.

      Capitalism has a lot of flaws, but it beats slavery all hollow.

      • I had a “friend” screw me out of some money. I asked him “How long would it take you to make that much money free, high and clear?” He said a couple of months. I said “You just stole a couple of months of my life.” At that point he got it. Before that it was “But you can afford it.”

        • English overloads “friend” to mean everything from “will help you move a body” to “someone I said hello to last week.”

          It’s odd that a language that’s so rich in specific terms is so sparse around that particular thing.

          • No, it’s not. We just tend not to use “acquaintance” and “colleague” or even “Compatriot.” Ours is the poverty, not the language’s.

            • Those words define different types of social relations, not levels of friendship.

              Just because someone is a colleague of compatriot doesn’t necessarily make them a friend.

              • Which is a good part of the point. Colleague implies a closer relationship than ‘coworker’, while either may or may not be a friend, a colleague is more likely to be a friend than simply a coworker. There is an implicit level of mutual respect (or at least regard) rather than just a ‘shares a work space’. Acquaintance is ‘that guy I said hello to last week,’ which is one of the areas you complain ‘friends’ has been expanded into. A compatriot is, by modern definition of friend (the one you’re complaining about) a friend. Comrade used to be a useful term, but the Soviet usage overtook the traditional in the vernacular. The words are there to define the degrees and kinds of acquaintanceship, sometimes it requires modifiers, but for the most part it just requires using the words. If you wish to save ‘friend’ for actually FRIENDS then perhaps judicious use of the words that are already out there to differentiate might be in order?

              • And that’s the point. We use the wrong word for many people to whom it does not apply.

          • These days, a lot of people use ‘fam.’ Short for ‘family.’ I find it too familiar, personally. So I tend to use ‘neighbor’ – while I am aware it is rather inaccurate, for the digital sense it’s a bit handier, also, somewhat more polite and friendly sounding than ‘that guy.’

      • The value of your time is what explains wages/salaries: it is the payment for the time you gave to the employer rather than keeping it for yourself.

        • Laborers get wages based on their work.

          Professionals get salaries based on their job.

          Management gets compensation for their time.

  9. I am seeing more of this “money is a social construct” misunderstanding (idiocy) lately and wonder if it doesn’t have something to do with money (the means of economic transfer) having less of a physical presence in everyday life. “Just swipe this piece of plastic … pay no attention to value being exchanged”. One doesn’t participate in a physical hand to hand exchange. Money, for many, has become “virtual” and therefore exists only in the ether, easily explained as a “construct”.

    • Paul (Drak Bibliophile) Howard

      Yep, “Just swipe the card” until the bank comes after you to pay the bill. 😈

    • “Money, for many, has become “virtual”
      Is the said Idiot a Millennial?

      • Sadly, not just millennial. I’ve worked in government departments where the concept of “virtual money” is all too real.

    • A few of my friends and I were discussing something some years back, when we were working in call centers (for reference, this was in Manila, in the Philippines.)

      We noted that the squatter children / street folk would dig through the bins for drink cans and plastic bottles, and gleefully carry them off. They would have rather impressive hauls, given that we were in the business district. A substantial haul would be worth a thousand pesos at the very least at the scrap recycling seller, who would also sell the scrap for recycling to companies. Per day. In our nice clean cubicles we earned less than that every fortnight. Slightly less than 500 pesos a day, if we were lucky. (Average call center salaries range from 10 to 18 thousand pesos a month, before taxes.)

      Now of course, doing this is dirty, hot work; where the street folk ran the risk of being hit by vehicles, cut by whatever was in the bins, infections, etc. Nevertheless, the lure of cash for trash was rather appealing, so we started bringing home our spent bottles and cans, to sell to these kids along with the other recyclables, by the kilo, haggling for the price. On some months we’d get anywhere from 700 to 1000 pesos, which helped quite a bit in defraying expenses.

      We wondered what would happen to the money if they made so much. My mother, who was with us for that conversation, shrugged and said “Generally? Their parents drink and gamble it away.”

  10. “Money as a social construct” sounds a lot like fancy words designed for avoiding an inconvenient subject.

    And money is a damned sight better than most other means of exchange. Does anyone remember seeing, decades ago, an educational film describing various means of commerce? The disadvantages of the barter system were laid bare when a woman at a boutique attempted to trade a piglet for a dress (piglet escaped; hilarity ensued)!

    Thus endeth my second-ever post here…

  11. Well, I suppose now that we’ve reached a point where something as fundamental as biological sex (or, as the elite overlords of intellect prefer, gender) is a mere construct, why shouldn’t money be amorphous, as well? In fact, are we all not but shadow within shadow?

    Is all that we see or seem/ but a dream within a dream?

    And I’m off to stuff my face with the social construct known as “ice cream” from which I won’t get any of that social construct we call “fat” and I shall remain socially constructed as “healthy.”

  12. As more than one artist – and academic – has noted, money is also a great purifier. Systems that rely on “prestige” and “recognition” and “favours” traded for effort, results, and patronage tend to become insanely complicated Gordian knots of petty yet vicious politics and backstabbing. Especially because there’s often an imbalance between how the one doing the effort values it compared to how the one for whom it was done values it.

    Money makes the value of the effort, the result, or the favour (or yes) extremely clear, and leaves both parties knowing exactly where they stand.

  13. On this subject, I recommend Friedrich Hayek’s essay “The Result of Human Action, but Not of Human Design,” which I think is one of the most significant works of twentieth century social science and even of social philosophy. Hayek points out the existence of a number of things that fall in between the ancient Greek categories of “natural” and “conventional”: language, markets, common law. . . .

    I’d also say that just because something is a social construct doesn’t mean I necessarily want to tear it down. A radical bee (as in Kipling’s story about the beehive) might argue that honeycombs are a hivish construct, and she would be right; but breaking up the combs and scattering the wax would not make the bees better off.

  14. Here is a worksheet of Gold Rush prices for various items. Note that chickens were so rare that eggs were $3 each—at 1850 prices. That’s something like $85 today per egg.

    If you wanted to make money during the Gold Rush, you’d need a farm PLUS enough loyal folk to shoot thieves. Food prices were insane.

  15. Nice people talk about money, they just avoid doing it in public.

  16. The idea of ‘it doesn’t matter because it’s a social construct’ is nonsense– I don’t mean “I wish to dismiss it,” I mean that the statement doesn’t make any sense.

    What do some folks say, it’s not wrong, it’s potato?

    Social construct: a thing that is built on the interaction of a large group; a thing we can’t see an obvious direct reason for that still has to be paid attention to in order to interact with others.

    What part of that makes “so we’ll just take a bunch of random chunks out of it and that will no matter, everyone will totally agree!” make any sort of sense?

    “Hey, I’ll tell folks to drive on the left side of the road. Without changing any of the signs, or even making sure EVERYONE is doing it at the same starting time….that will work out great!”

    **************

    Hm… now I want to try to dig up an article I saw the other day, going into… I think they called it Baconian bias… the idea that there aren’t objective truths, just descriptive truths. It rather went over my half-asleep head and I think I fell asleep while reading it.

  17. “[BLANK] is a social construct.”

    Social construct? They keep using that phrase. I do not think it means what they think it means.

  18. Speaking of money, my husband was let go from his contract yesterday with no notice. IT, so that’s how it goes, but if you’re so inclined, prayers are much appreciated-the job market’s the best it’s been in a while out here but job hunting is never fun.

    • I know. My husband is waiting to see if this is to befall him in a month or so…
      Hugs and prayers.

      • Best wishes to all of you on that.Worrying about that type of thing can be nerve wracking. I’m hoping things have stabilized where I work – 4-8 months ago we were losing IT people daily.

      • As much as people on this side of the aisle hate Unions, I’m pretty thankful that at this stage of my life I’m in one, even if it’s a crappy one, because the rules worked out prevent me from being fired just because my manager doesn’t like my face. I might get transferred, but only to an equivalent job. They can still boot me if I suck at my job, but they have to prove it, and give me a chance to straighten out and fly right first. I also can’t be fired just because they can replace me with a younger guy who doesn’t get paid as much (And who doesn’t have my skills either.)

        • Not here. Private sector unions are actually useful things, in many ways–it’s just that their leadership is often corrupt.
          It’s public sector unions that are intolerable.

          • Yeah. Exactly. People on our side of the Aisle are applauding the vote in South Carolina, but they don’t quite know what’s actually going on in the bigger picture. But not something for here.

  19. In other words, currency not based on physical value of the medium is a social construct, but economies are not. The idea that you can raise the minimum wage and not pass that expense to the customer or not cut expenses by mechanization is mind boggling in its stupidity. Doesn’t matter if currency is backed by silver or gold reserves payable to the bearer on demand, or based on nothing but happy thoughts and unicorn farts. If you increase money earned by employees, you increase the outgo of money that must be made up from somewhere. Governments can print as much money as they’re willing to devalue, but individuals can’t. That’s so simple a concept it’s incredible when someone doesn’t grasp it.

  20. Thanks to the post topic, this song keeps coming to mind:

    • Funny. This is the song that comes to my mind.


      Money makes the world go around
      The world go around
      The world go around
      Money makes the world go around
      It makes the world go ’round.

      A mark, a yen, a buck, or a pound
      A buck or a pound
      A buck or a pound
      Is all that makes the world go around,
      That clinking clanking sound
      Can make the world go ’round.

      Money money money money money money
      Money money money money money money
      Money money money money money money
      Money money

      • “Halfpenny, twopenny / gold Krugerrand.
        He was exceedingly rich / for such a young man.
        Justice for money / what can you pay?
        We all know / it’s the American Way.”

      • Really? This is one that comes to my mind. (I know, I’m showing my age, not to mention a weird choice in music as a kid.)

        I work all night, I work all day, to pay the bills I have to pay
        Ain’t it sad
        And still there never seems to be a single penny left for me
        That’s too bad
        In my dreams I have a plan
        If I got me a wealthy man
        I wouldn’t have to work at all, I’d fool around and have a ball

        Money, money, money
        Must be funny
        In the rich man’s world
        Money, money, money
        Always sunny
        In the rich man’s world
        Aha aha
        All the things I could do
        If I had a little money
        It’s a rich man’s world
        It’s a rich man’s world

        A man like that is hard to find but I can’t get him off my mind
        Ain’t it sad
        And if he happens to be free I bet he wouldn’t fancy me
        That’s too bad
        So I must leave, I’ll have to go
        To Las Vegas or Monaco
        And win a fortune in a game, my life will never be the same

        • I get money from you
          To tickle your whims or mess with your mind
          And I give money to you
          And you pay me back in kind

          And I give money to Bill
          He pays up my bills and helps me make up my mind
          And I give money to Bill
          And he will be on my side

          And I give money to Hank
          Cause Hank owns a bank and he can make it grow
          Now ain’t those amazing folks
          That Bill is lucky to know

          Somehow my finances will grow
          With the interest I show in the interest it gives me
          And now a piece of paper from me
          Won’t seem half as flimsy

          • I’ve got ninety thousand pounds in my pajamas.
            I’ve got forty thousand French francs in my fridge.
            I’ve got lots and lots of lira,
            Now the deutschmark’s getting dearer,
            And my dollar bills could buy the Brooklyn Bridge.

            There is nothing quite as wonderful as money,
            There is nothing quite as beautiful as cash,
            Some people say it’s folly
            But I’d rather have the lolly
            With money you can make a smash.

            There is nothing quite as wonderful as money
            There is nothing like a newly minted pound
            Everyone must hanker
            For the butchness of a banker
            It’s accountancy that makes the world go round.

            You can keep your Marxist ways
            For it’s only just a phase.
            For its money, money, money,
            Makes the world go round.
            Money, money, money, money, money, money!

    • It’s kind of funny when you have rich people write and sing songs about the evils of rich people. The only rockstar to do an honest song about money was Joe Walsh:
      I have a mansion but forget the price
      Ain’t never been there, they tell me it’s nice
      I live in hotels, tear out the walls
      I have accountants, pay for it all

      They say I’m crazy but I have a have a good time
      I’m just looking for clues at the scene of the crime
      Life’s been good to me so far

      My Maserati does one-eighty-five
      I lost my license, now I don’t drive
      I have a limo, ride in the back
      I lock the doors in case I’m attacked

      I’m making records, my fans they can’t wait
      They write me letters, tell me I’m great
      So I got me an office, gold records on the wall
      Just leave a message, maybe I’ll call

      Lucky I’m sane after all I’ve been through
      (Everybody say I’m cool, he’s cool)
      I can’t complain but sometimes I still do
      Life’s been good to me so far

      I go to parties sometimes until four
      It’s hard to leave when you can’t find the door
      It’s tough to handle this fortune and fame
      Everybody’s so different, I haven’t changed

      They say I’m lazy but it takes all my time
      (Everybody say oh yeah, oh yeah)
      I keep on goin’ guess I’ll never know why
      Life’s been good to me so far

      • I’m fond of that song just for the line “I can’t complain but sometimes I still do.”

        • I heard, somewhere, that he wrote that after Jackson Brown did that whole album talking about touring and how hard it was and how he suffered for his art…

  21. Christopher M. Chupik

    Saw a stupid Facebook meme last week about how capitalism is “unnatural” because even cavemen cared for their sick.

    No, I have no idea how the two connect either.

    • BobtheRegisterredFool

      Cavemen sometimes also made a cost analysis and left people to die.

      • As Chesterton pointed out, the only thing we know for certain about cavemen is that they made paintings in caves. Everything else is inference drawn from the customs of technologically primitive humans in modern times – who did not make paintings in caves.

        • BobtheRegisterredFool

          LeBlanc’s Constant Battles.

          We can tell that at various times there would have been tremendous pressure regarding the food supply.

          It’s fairly reasonable to infer that there were a lot of little societies who essentially destroyed themselves with the choices they made. Which would suggest that there variations that we would see as more and less horrible.

        • We can make some guesses from remains– somebody had to take care of the folks who survived injuries that would’ve immobilized them, and there’s the grave-goods stuff.

          Not sure if they’d found the skeletons with mended bones in Chesterton’s time, though…..

          • Those were prehistoric humans. Do we have anything associating them with caves?

            (Sorry, the term ‘caveman’ just bugs me. It is weighed down by associations with Alley Oop and the Flintstones, and frankly, is just a shade less scientific than those two scholarly sources.)

            • BobtheRegisterredFool

              Haven’t we found butchered human remains in some of the same caves that we found the bones of such as cave bears?

            • Paintings and some remains.

              …some of which were probably dragged there by predators….

              • Some of which predators may have been of the two-legged variety.

                • Paul (Drak Bibliophile) Howard

                  Several years ago, people found these pre-human skulls in caves in Africa and got all excited by the idea that other pre-humans had killed those pre-humans.

                  However, then some smart guy noticed that the breaks in the skulls looked like the breaks that leopards made in their kills.

                  Interestingly all of these caves had an opening in the roof which leopard kills could have been dropped into.

                  So the “killer ape theory” got dropped because the “pre-humans” more likely were killed by leopards than by other “pre-humans”. 👿

                • You read the debates of “was the scraping flesh off of bones a burial rite, human butchering or just a funky way the predator in this cave ate” huh?

      • Or ate them with proper ceremony and reverence.

        “Alas poor Yorick! I grokked him Horatio. And he had an exceedingly poor taste, right down to his marrow.”

    • Eskimos pushed Grandma onto the ice floe when she could no longer chew hides …

    • We care for our sick. Socialists just kill them because they’re lives not worthy of life.

      • Yes, but Socialists are kind enough to declare them non-human before killing them. That way, the sanctity of human life is unbesmirched, amirite?

        • “How many legs does a dog have, if you call its tail a leg?”

          “Four; calling the tail a leg doesn’t make it a leg.”

          • Still one of my favorite lines, and it’s amazing how many occasions I find to use it. “How many of thing A do we have if we also include thing B, which really has nothing to do with thing A?” is more popular than you would think.

      • And they will tell you they don’t ‘kill them’ they just inform then their treatment is ‘not cost effetive’

        (which i have been hearing about my leg problems for 26 years)

  22. Funny isn’t it how at root social constructs always seem to come down to the transfer of real wealth from those who earned it to those who decide they need it. Or increasingly these days the demand for mechanisms that hinder earners from their full potential out of some misguided sense of fairness.
    Case in point, how many tens of thousands of jobs lost, how many low income families seriously impacted, by the current need of some to demonize fossil fuels?

  23. I tho’t ’twas love, sweet love, which made the world go round. 😉

  24. BobtheRegisterredFool

  25. [I]t didn’t matter if we paid more to people, and it didn’t necessitate the raising of prices, or replacing of human workers with robots in order for the business to survive, because ‘money is a social construct.’

    The conclusion does not necessarily follow from the premise.

    “Oxygen” is a social construct, but try doing without it or excessively diluting it.

    • Further, idiocy is a social construct:

      noun, plural idiocies.
      1. utterly senseless or foolish behavior; a stupid or foolish act, statement, etc.:

      2. Psychology. (no longer in technical use; considered offensive) the state of being an idiot [a person of the lowest order in a former and discarded classification of mental retardation, having a mental age of less than three years old and an intelligence quotient under 25.].

      http://www.dictionary.com/browse/idiocy

      This does not prevent people engaging in it in other people’s blog comments.

  26. I think the idiot individual above has clearly never seen this basic educational film. (Hoping this works. First time trying to embed youtube here)

    Yeah, it’s a little on the simplistic side, but claiming that money is a social construct means you don’t even have this basic level of understanding of economics.

  27. Barter works just fine in a small community where everyone can keep track of who owes what, or among strangers for simple trading transactions.

    The problem comes when trading is no longer simple and it’s hard to keep track of obligations. Money lets you assign a virtual value to a product; you can sell forty eggs, get thirty eggs’ worth of cloth in return, and you can swap the remaining ten eggs for a “to whom it may concern” promissory note for ten eggs’ worth of some other product that you might want later.

    In the end, all money is promissory notes. Or promissory electrons.

    Gee, wouldn’t it be nice if there was some way you could go back to barter, except you could offload the debt tracking somehow? And maybe have a simple handheld device that almost everyone would have anyway, that could swap information with other peoples’ devices, and you could swap labor for products directly, and manage overages, without actually having “money” at all?

  28. ‘Social construct’ is dismissive insult used by leftists for any institution or tradition that they disapprove of.

  29. I started to feel I understood this subject when I read von Mises. In particular, “Human Action” — which is about money, and economics, and how the free market works. There’s also “The theory of money and credit” which is a real mental workout (I’m still not done with that one). Both are available as free downloads at mises.org.
    Human Action does a great job destroying the notion of objective value. Trade works because each party receives something valued — by that party — more than what is given for it in payment. So value (and by extension, economics) is an aspect of psychology, not of physics.
    As for money, it’s simply an item widely accepted in trade transactions, more widely than barter items. (Think of it as the Type O of economics.) Why is it? Because of convenience, and because it has grown to be that way, call it a habit or a tradition.
    So why gold, and not sea shells or stone wheels? Again, tradition, and the fact that it’s fairly rare (usually), non-perishable, and the supply isn’t subject to rapid change. Exceptions to that last point: the Gold Rush and the Spanish conquest of America — the latter supposedly caused such bad inflation (in Spain anyway) as to wreck the country’s economy and end its status of a global power.
    So money is what people will accept in trade transactions as a medium of exchange — an Esperanto of value. And it works because it has come to be accepted that way.
    Then what’s wrong with fiat money? The fact that its supply, unlike gold, is subject to change at the whim of the government. And that this fact is obfuscated at very great length. The fact that it can be inflated at will is, of course, also the reason why governments like fiat money and have inflicted it universally.
    Apart from von Mises, another interesting reference is The Creature from Jekyll Island, about the creation of the Fed.

    • Trade works because each party receives something valued — by that party — more than what is given for it in payment. So value (and by extension, economics) is an aspect of psychology, not of physics.

      Scarcity is not simply a matter of psychology. A five gallon bottle of water is of greater objective value to a person in the Sonora Desert than one just downstream of the Oroville Dam.

      • Quite true. But the reason you can buy a bottle of water in either place (though not for the same price) is that you value the water more than the price, while the seller values the price more than the water.
        The point you’re making appears in von Mises at length, in a more general fashion. For example in the observation that the value of a thing depends on where it is, which is why transportation has economic value.

    • Mises is quite good, but be wary of dipping one’s toe into the waters of economics and economic theory, especially if one has some smattering of interest in history… Wealth of Nations (Smith) is quite good, too, and more readable than you’d expect. Dense, though, very dense. The sort of book you read and take notes, not because there will be a test, but because you want to.

      • I was just thinking that our “social construct” sophomore needs to come to class when we are discussing Smith. Yes, I make the kids read Smith’s section on the origins of money and the division of labor. Once they get past the differences-between-dogs section, they start to get pick up the ideas quite quickly.

        • That last is why I sincerely wish Smith were more widely read, and taught in schools (middle school, at least). He distills ideas down, but doesn’t leave things out in the explanation- something lacking in the books and lectures I was to learn *mumblety* years ago.

          Another one I like to spring on people is “Economics in One Lesson.” I technically own several copies of that book, but every time I lend the Hazlitt out there exists a good chance it won’t find its way back. *chuckle* I blame Hazlitt and Hayek for leading me to Smith and von Mises. Spent many a scorching hot afternoon reading about broken windows and weights and measures while doing industrial plumbing during the day.

          • I wish a lot of thoughtful authors, like Smith, Locke, de Tocqueville, Madison and Hamilton, were taught more, and Marx, du Bois, Zinn and their ilk far less. IMHO, Rosseau should probably be taught still, but cautiously, and carefully connected to the excesses of the French Revolution.

      • Decided to expand my e-library and downloaded Wealth of Nations from Gutenburg.org . Going to have to go diving for more classic works eventually.

    • Then what’s wrong with fiat money? The fact that its supply, unlike gold, is subject to change at the whim of the government.
      ——————-

      There’s also the point that if the government issuing the fiat money ever collapses, that money instantly becomes worthless (except maybe to a collector). Precious metals, on the other hand, will still retain some value (even if it’s not the same value that they held before the collapse).

      • What’s wrong with fiat money?

        Can I interest you in a one-for-one swap of freshly minted federal reserve notes for this basket of Confederate States dollars and (late-Weimar era) Deutschmarks? Heck, I will even toss in, at no extra charge, an equal (face value) amount of Venezuelan Bolivars!

        It’s all fiat money, right?

        • Any money you spend on an italian car that’s not a Ferrari is wasted….

          Oh, wait, you had fiat in lower case. Nevermind.

        • Can I interest you in a one-for-one swap of freshly minted federal reserve notes for this basket of Confederate States dollars and (late-Weimar era) Deutschmarks? Heck, I will even toss in, at no extra charge, an equal (face value) amount of Venezuelan Bolivars!

          It’s all fiat money, right?

          Actually, no. Confederate notes were not based on reserves of precious metals, since the Confederacy essentially had none. Yeah, yeah, I know the stories of Jefferson Davis and the Confederate Treasury, but if any of them were true, the entire treasury could be carried in two wagons. Confederate notes were essentially fiat money.

          So were the original notes issued by the US government before and during the Articles of Confederation, as well as the state currencies. They were in essence promissory notes based on hope of the success of the new nation and member states. And there was speculation that caused prices of the state notes to fluctuate, so it was like traveling in Europe without the Euro – unless you had Spanish Reals, which were based on metal content. Note that hard currency was difficult to come by even before the American Revolution, so Pieces of Eight were very popular.

          The interesting thing about fiat currency, though, is that people do give it a value. A quick check shows a Confederate North Carolina $1 note going for $23. Thus it could be argued that fiat currency by a defunct government has retained it’s value better than US currency.

      • Fiat money can be voided at any time, for any reason. Not just government collapse. Consider that within the past year at least two countries (India and Venezuela) have summarily canceled several denominations of paper money, instantly turning it into poor quality toilet paper. There are similar proposals to do likewise in Europe, with the feeble excuse that it’s to stop drug trafficking or some such animal excrement.

      • There’s also the point that if the government issuing the fiat money ever collapses, that money instantly becomes worthless (except maybe to a collector). Precious metals, on the other hand, will still retain some value (even if it’s not the same value that they held before the collapse).

        In Alas, Babylon, the US government re-establishes contact with the group of survivors by first dropping leaflets. They found the leaflets could be used as toilet paper, and several could buy a chicken. Currency had returned to the group.

  30. Since many people think money is “just a social construct”; I’d like to invite them to do something socially constructive and send me any amount of money they can afford.

    I promise to use some of it to buy more of Sarah’s stories; since I don’t think she’d appreciate me mailing her a chicken for a book. Come to think of it, I don’t think the chicken would appreciate it either.

  31. Hang on, doesn’t it all loop back on itself since the very idea of a social construct cannot happen without a society of some sort and thus a ‘social construct’ is itself a ‘social construct’?

    And then I ponder an ‘antisocial construct’…

  32. One of Mack Reynolds’ characters once observed that if economists actually knew how money and markets worked, why were most of them leeching off academia instead of becoming feelthy rich?

    • Once upon a time I met a Prof. of Economics who was soon to longer be so… as he was leaving academia to go follow the money. The diamond-studded gold Rolex some friends gave him “because they liked my advice” was something of a hint.

    • Understanding economics never made anybody rich, though failing to understand economics has made a lot of people poor. Even if the knowledge allows you to multiply your wealth a million times, that does no good if you start with nothing.

    • Being knowledgeable about horse breeding, or the basics of football strategy is not the same as being able to pick the winner of a horse race or football game in Vegas.

  33. I thought a standard year requires 366 rotations. Or is that in Canadian money?

    • Paul (Drak Bibliophile) Howard

      Well, a year is roughly 365.2425 days which is why we have leap years. 😉

      • Asimov wrote several articles about the solar, lunar, and diurnal cycles, and how the ancients were distressed at how things *almost* fit.

        I can completely understand why the Mayans said “screw this” and came up with a 260-day year.

      • Yes, but because because we are also orbiting the sun, the number of days we experience is not the same as the number of rotations the earth makes on its axis. (Think if the earth did not rotate, only orbit, we’d still get a day night cycle though only once per year.)

      • When they did the Gregorian reforms, they were aware their new calendar would accumulate an error of a day over the course of a few thousand years.

        So they grandly declared that — the people at that time could fix it when it happened.

        • That wasn’t a bad plan – and the thinking was at least longer term than those responsible for 2 digit years at the root of the “Y2K bug” gave the matter.

          • Paul (Drak Bibliophile) Howard

            The “two-digit” year started when computer memory was expensive so it made good sense to use the “two-digit” year rather than the “four-digit” year.

            Of course, after computer memory became less expensive, there was the problem of the expense required to convert all computer files and computer programs to use a “four-digit” year instead of a “two-digit” year.

            Of course, there were people in the 1980s who knew that a change would be necessary but convincing non-data processing management to fund the changes was extremely difficult.

            • I knew a few programmers who knew it was potential issue at the time, but doubted their code would still be in use 30-40 years later. Alas, many companies seem to have no idea exactly what the ancient programs they rely upon do, making actual replacement difficult – and unnecessary if legacy issues can be corrected for.

            • Fortunately, in the 1990s there were lawyers who were all — the risk is known, the responsibility is known, the damages are going to be high and certain — fix it!

        • In fact, that was exactly the correct thing to do. By the time the Gregorian calendar is a whole day off, the Earth’s rotation will have slowed just noticeably enough that the correction will require a fresh set of calculations. Already we’ve added 37 leap seconds in less than half a century, and the discrepancy is only going to increase.

      • It’s even MORE complicated than that! Watch this and have your mind blown. https://youtu.be/IhqzW97_47w

    • um… it’s pre-caffeine money.

  34. You have to state your reference. By reference to the “fixed stars”, it’s 366.2425 revs per year. By reference to the sun, it’s one less than that because of the orbital motion. That’s why sidereal days are 4 minutes shorter than solar days.

  35. Capitalism is a description of how people actually act, not an economic cargo cult that will supposedly bring about some utopia.

    • Capitalism: people trading stuff with each other, freely. Much of the rest is something like psychology and propaganda, i.e. bribing people with (some) of their own money (less what the people in gov’t keep to pay themselves), pitting some of the people against a different some of the people so a third set can stay on top, and similar obfuscations.

      By this definition, there is no society I know of that *doesn’t* practice capitalism (and black markets do count). Also, there aren’t any I know of offhand that practice pure capitalism.

  36. So let’s talk money. If I can do it for Vox Day, just for Fairness, I can do it for you. (FYI I not only got straight As in cataloging I was invited to teach the class to the next years students when the teacher had a day off. Indexing FTW)

    I need something like an archive:Day 1 to Now.

    Author gets paid. I get my nonfic compilation. Win/Win

  37. m. First try didn’t work. Probably the bronchitus. Bronchitous. Bugger.

    Anyhoo. Got anything like an archive for this site? First post to now?

    Thx

    • See sidebar, right-hand side, between “WE ALSO WALK DOGS (INTERESTING STUFF THAT DOESN’T FIT ANYWHERE ELSE.)” and “Most Recent Comments” for archive listing posts by year and month.

  38. I have been telling people for years that Economics is simple.
    There are only *two* things you need to know:
    1- The Market is a Natural Phenomenon, arising from our owning things… and
    2- Money is a Commodity (make more of it, and it is worth less)

    All else is embellishment, or deliberate obfuscation. As Bob Ringer said in the late 1970s, “Don’t trust an economist who can’t give you a simple answer!”
    The result of the above “Natural Phenomenon” law is that it is impossible to fake it with a committee, or a computer, or -?- , because it is impossible to gather all the information which is contained in that seemingly simple datum called “price”!
    The Soviets found that out the hard way, and all their emulators have been confirming that result….

  39. For an example of a society in which money was considered a “social construct” and wherein the belief proliferated that wages and prices could be arbitrarily decreed by government officials without regard to productivity or value, please refer to Venezuela.

    Somehow I’m thinking there may be a flaw somewhere in this theory.

  40. Dr. Walter Williams puts in terms that speaks to leftist’s feels:

    Suppose you hire me to mow your lawn and afterwards you pay me $30. The money you pay me might be thought of as a certificate of performance—proof that I served you. With these certificates of performance (money) in hand, I go to my grocer and demand 3 pounds of steak and a six-pack of beer that my fellow man produced. In effect, the grocer says, “Williams, you’re asking that your fellow man, as ranchers and brewers, serve you. What did you do in turn to serve your fellow man?” I say, “I mowed my fellow man’s lawn.” The grocer says, “Prove it!” That’s when I hand over my certificates of performance—the $30.

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