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The Monetary Economics of Thurston Howell III
DLWormwood writes "In what has to be the Strangest... Essay... Ever... The libertarian Ludwig von Mises Institute website has posted an essay which goes way too in-depth over the topic of why the castaways of Gilligan's Island used Thurston Howell III's 'worthless paper' instead of gold or seashells."
That is correct. Never, under any circumstance, should you drink the saltwater!
Do you like German cars?
It is actually an essay on economics, and makes some very good points. It uses the Gilligan's Island as an example, because it's very obvious to many, and all the economic factors are known to all the readers.
The essay then goes on to discuss Swiss Dinara and Saddam Dinars which are both very much real, and quite comparable to money on the TV show.
I think the headline does a real disservice to the author of the essay.
********* sig: If you don't like the law, get filthy stinking rich, and buy a better one.
Everyone knows. Cash is king! (even if you can't do a damn thing with it:-)
09 F9 11 02 9D 74 E3 5B - D8 41 56 C5 63 56 88 C0 45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
So here is some caches...
: www.mises.org/+&hl=en
: www.tvtome.com/GilligansIsland/+&hl=en
http://216.239.59.104/search?q=cache:f9Bdhed8_h8J
http://216.239.59.104/search?q=cache:8-dfbA5SWVwJ
Also i have to say this is a rather strange artical. I've taken a quick look at it and if im honest, im totally lost!.
P.S. Sorry for the untidy formatting, its late at night.
- http://www.milkme.co.uk
Read the following to learn more.
Free online book:
http://aor.cat4.net/nwo/sfr/index.php/
If they can do this, surely there's someone publishing a paper on "How to make a geiger counter from coconuts". At least I hope they are...
...but after a few paragraphs I couldn't stop thinking about the most important Gilligan's Island question: Ginger or Mary Ann?
Using Gilligan's Island as an example is a "hook" to draw the reader in, just as the mods conflate opinions into their descriptions of a story. The real story is about how people react to new monies being introduced, especially when one regime is replaced by another. The article cites, for example, the practice of US soldiers distributing $20 bills into Iraq in place of the existing Dinars, but people not only kept using the familiar currency but the Dinar doubled in value as compared to the dollar in spite of it no longer being an official currency. Except in the case of truly "breathrough" innovations, the tried and true usually wins out over the new (and presumably intersting) until there's a critical mass using it. Research shows that the point at which a new innovation takes over is around 25% of the available market (which is why the iPod has begun to pop up so widely; people who aren't early-adopter techie types are seeing enough of their friends using them to get over the inertia of not being the first to use something.) So, this is an article about people using familiar currency over new currency; it juat happens they chose a TV show for their hypothetical example rather than making one up out of whole cloth.
I'll bet he could have bought a lot of these.
Yeah, it's off topic, but so is the original post. So there.
Mary Ann. Duh.
I was this --> ||
Oh well, not like I really need one anyway.
"He does look a bit Oompa like, even if his Loompa is a bit off-kilter."
As if economics were science. At least sociologists perform controlled experiments from time to time. Economists use the same sort of observations and reasoning to support their predetermined conclusions that lead people to conclude that the burn mark on that tortilla is an apparition of jesus. In short, economics is a branch of philosophy rather than science. Not that there's anything wrong with that. Philosophy is useful and important, but we have to remember that nothing in economics is as tested and as certain as anything else we call science.
Give me Classic Slashdot or give me death!
I liked it, and I am no english scholar, but I think the author needs to check here.
Greed: Thurston Howell the Third, obviously.
Sloth: Mrs. Howell, rarely saw her lift a finger.
Pride: The Professor, had a bit of a superiority complex with his prized intellect.
Lust: Ginger, duh.
Envy: Maryanne, secretly covets Ginger's beauty/talent.
Wrath/Greed: The Skipper, he's both fat and mad all the time so he easily fits into representing both sins.
Gilligan? He's the Devil who is always wearing red, and always finding someway of foiling their attempts to get off the island virtually every single episode.
Obviously, the castaways believe they will one day be rescued. If they can do odd jobs for Mr. Howell in the meantime and he pays them money for doing those jobs they can keep the money and then spend it once they are rescued. In fact, in the end they were rescued and were able to use the cash that Mr. Howell had paid them to bring him coconuts and shit.
So all this guy's meanderings about governments and the true value of money are just a load of bullshit.
Their point is that fiat currencies are subject to abuse as they are not secured to a physical entity which limits its growth.
Note that for for one hundred years prior to the existance of The Fed, the purchasing value of a dollar was virtually unchanged!
Post Fed, post gold standard, post secured currency, the value of the dollar's purchasing power has dropped 97%. With Greenspan's current uber-loose credit scheme and our fractioanl reserve (aka fractional safety) banking system, this has vastly increased the amount of money circulating even in the last decade, secured now mostly by residential real estate.
"Republic credits will do"
"No, they wont!"
Click here for a free picture of an iPod!
The next time I use the vending machine downstairs, my mind may well snap.
Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?
that if Gilligan's Isle was real that money really wouldn't be that wortwhile and the group would very quickly revert to a barter system. And I think we all know what services Ginger and Mary Ann would provide in return for a coconut radio or firewood...
comments:
i) a libertarian essay. Only they capitalize "state". XD.
ii) He wends and winds around his points, which were:
00)Scarcity implies value.
01)Ease of transaction implies money.
10)Citizens are aware of these facts, and consequently they affect the economy.
iii) Why did he feel the need to write a essay on what is entry-level economics?
/b
|f(x)dx = F(b) - F(a)
This story is about cash, silly!
Or maybe it's not so odd...MMORPGs are the most likely exposure /.ers have to widespread currency exchange, I guess.
He decided to just watch the government, and kind of scale it down to size, and run his life that way. --Laurie Anderson
So this is what people with advanced degrees in economics do with their time! I could have been writing papers about Gilligan's Island instead of coding until 3am. Boy did I pick the wrong degree or what????
I Am My Own Worst Enemy
And later we see:
Right now, the Skipper is willing to trade one of his fish for two coconuts...
What is wrong with the Skipper, why didn't he ignore Gilligan and go straight to Ginger, the source of the premium coconuts?
I Am My Own Worst Enemy
This is Slashdot. What you are looking for is 'How to make a coconut Nintendo system!'
Oh and don't forget the monkey butlers.
Mother, do you think they'll like this sig?
Paper Money Is Accepted Because... ...there is the expectation that it can be more easily exchanged for goods in comparison to a barter system.
As long as all merchants on the island accept paper currency, it is money. Barter is a hassle, since the medium of exchange is determined in, say 5 pies for 1 shirt. You may have pies and need a shirt, but no one has a shirt to trade. You may have a shirt to trade, but Maryanne ain't bakin' pies today. Money, however, can be used more flexibly.
Had one island merchant refused to accept paper money, the currency system might have crumbled. Imagine if you went to buy beer, and the merchant said "sorry. we only accept shells." How will the merchant employ shells as currency without a dollar-to-shell exhcnage around the corner?
Also, a key premise to the show was that they would be rescued. The acceptance of paper currency showed optimism as much as anything. They obviously did not expect to be unable to use the paper currency ouside of the island.
Amateurs discuss tactics. Professionals discuss logistics.
.. they think to much.
Latewire
Scarcity != poverty.
Something is scarce when there isn't enough of it.
Enough of it for what exactly? To satify (as far as we can tell) infinite human demand.
As a result it's unlikely any society will ever completely overcome scarcity.
Slashdot etiquette:
When you quote the entire article text, post as anonymous coward.
This is to stop people posting text in anticipation of a slashdotting in order to gain Karma, rather than to "provide a service."
What the mods did was correct. If the first poster made a mistake, he should have reposted a reply to his own post, with the same text, as AC.
Norman Cook's Ode to Sl
I always chuckle when I read a story about the riches that could be generated from asteroid mining. Let's assume that I snag an asteroid and recover several thousand tons of gold and platinum. What is that going to do to the market price of gold and platinum?
Mea navis aericumbens anguillis abundat
I'll never read any thing that has a redundant title... It screams "I'm a dumbass... I've have no idea what those words really mean but they're both big so I'll look smart reading it..." Or, worse, the author designed the title to be redundant specifically for the reason that his traget audience is stupid.
||| I still can't believe Parkay's not butter.
Human demand isn't infinite naturally- it's trained to be so by advertising and mental illness. I call it the Munster Syndrome (to separate it from the mirror image mental illness, the Addams Family Syndrome). Anybody who remembers these two sitcoms knows the difference- the Addams Family knew that they were normal and the rest of the world was wierd; the Munsters thought of themselves as wierd and did whatever they could to be like the rest of the world, which was normal. Sufferers of the Munster Syndrome appear to have infinite demand for all sorts of junk because they are trying to keep up with their neighbors.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
For the realists...
No, they wouldn't have used his money. They would have gone into survival mode and just helped each other regardless of getting anything in return.
For the suspenders of disbelief...
When they get rescued, his money will still be worth something back home.
For everyone else...
There's an essay to read...it's not about Gilligan's Island.
if this had really happend.
any decent thinking man would have, forced thurston howell to sign over his money to them, and then berried the asshole. clubbed of killed all of the other men and tied up ginger and marianne for use as alternate sex slaves.
Now this I don't believe is true anymore, but the U.S. Dollar use to be the value of gold that the government owed you. Legal tender, a promissory note that said you had so much gold or what not. Hence the need for Fort Knox.
The idea that the Professor could print money and say will use this to trade commodities is stupid, and he would be voted off the Island real quick. However if he some how said that I will hold something for you and I will give you this dollar which you can trade back for this item. He creates an Promissory Note/I.O.U. That gives value to the money.
Reminds me of Lloyd from Dumb & Dumber
"That's as good as money sir, those are IOUs. Go ahead and add it up every cents accounted for. Look, see this that's a car, 275 thou might want to hang on to that one."
"It takes many nails to build a crib, but one screw to fill it."
When I was there the main use I saw for the dinar was selling them to GIs who wanted souvenirs. I figured the rise in price was due to the Iraqis learning what passed as an acceptable price, as well as the Gis realizing that the supply of good-quality bills was diminishing (ie. fixed demand but dwindling supply).
When I left people in the shops were still selling large quantites of former regime currency for prices ranging from $1 per bill to $20 for a bundle of identical bills. There's a good chance I just wasn't in touch with the local economy, but when the locals are consistently selling their old bills for loose change over the course of a year I have trouble seeing their dead currency as picking up value.
Travel the Galaxy! Meet fascinating life forms...
Only a libertarian would overlook that Gilligan's Island is actually an allegory for a communist society. Odd, you say? Let's discuss: On Gilligan's Island, the Howell's, in all their pomp, bring all their money on a three hour tour. It's value on the island: worthless. But, they drape themselves in their mainland social positions and, as a result, become the buffoons of the show. The Professor controls knowledge on the island. There is no place for religion. Only fact, logic, and above all else, science. The skipper drives the capitalist machine on to the rocks, destroying it and becoming the *real* side-kick of the *supposed* side-kick: Gilligan. Look closely at their relationship. And whose island is it? That's right, it's Gilligan's Island. The everyman. The lowest person in the social order on the boat, that day. Yet, the centre of the island, clad in communist red, once they shipwreck. The commonman now reigns. And Ginger and Mary Anne? Well, even communists like chicks. /. that!
Heh, it's interesting that this was posted now. I just changed my .sig a few days ago to touch on this topic. I'll repeat it here in case I someday change it:
.92 of an ounce, plus .08 ounce of copper, in the form of a coin. The .08 was, in essence, the coinage fee.
"US Dollar, n: A politician's promise to pay nothing on demand."
This is one of the few government promises you can be ABSOLUTELY CERTAIN will be kept.
What the article is talking about is, indirectly, that the paper money you use every day has no inherent value, so why on earth would anyone accept it as money? A currency that is unbacked by anything, but is decreed by law to be a medium of exchange, is called a 'fiat currency', because it obtains its value from executive fiat (decree). Basically, the government is forcing you to accept the US Dollar at gunpoint. If you do not, they can arrest you. (seriously, they can!)
At one time, money was mostly gold, and to a lesser degree, silver. The way it basically worked was this: you, the gold miner (or perhaps, trader with foreign gold currencies), brought your gold to the government mint. In exchange, they gave you a certain number of gold coins, less some percentage to cover the costs of coinage. Gold must be alloyed with other metals, generally copper, to have enough hardness to last through day-to-day wear, and coins were rated based on their 'fineness', or how much actual gold they had in them. Offhand, I think an 8% copper mix was fairly common, and I believe it was often the case that a 1:1 trade was executed; for every ounce of gold you brought in, you received
Well, over time, monarchs and governments figured out that they could increase that percentage a very great deal; for every one ounce of gold they took in, they only had to give out, say, half that much gold, if they mixed in enough copper. Historically, this has been a major sign of economic distress, sometimes presaging the complete failure of the government. Henry VIII is often cited as an egregious example; his 'silver' coins were actually copper with a very thin coat of silver. The high points would often wear off, leading to his nickname of 'Old Copper-Nose'. He did terrible damage to England's economy through this practice. There is a specific word for this form of taxation, but I cannot remember it or find it with Google right now. But it is very, very lucrative; the more you debase your currency, the more of the real value in the economy you can extract through deceit. Over the long haul, the strongest economies were always the ones with the strongest currencies, likely due to the fact that more of the money stayed in the hands of the population. A hidden tax is still tax, and taxes are bad, on the whole, for an economy.
Now, consider what we have now. Instead of anyone doing (a great deal of!) work to mine gold or some other metal out of the ground, instead, the governments of the world can simply wave their hands and create new currency at will. This is absolutely wonderful for the governments in question, because it allows them to extract, at zero cost, value from their own, and other economies. By printing up bills marked '100', they can extract 10 times as much value as from bills marked '10', at zero extra cost. The US is taking huge advantage of this; we are importing vast quantities of goods from all over the globe, and in exchange we're shipping back worthless green paper, to the tune of over a billion dollars a day. This is great for us, but foreign readers... you and your countries are being RAPED. If you think the US is hated now, wait until the world figures out out just how bad it's been rooked.
As a quick aside, I got my very first 'flamebait' mod awhile back for observing, in a discussion about using ink-jet printers to print money, that of COURSE the government hates that! They don't want anyone muscling in on their turf. Printing fifties on your inkjet and spending them
My understanding of the currency market is limited, but the article seems to miss an important point. That being: what incentive do the castaways have to use a monetary system that's initially controlled by Mr. Howell?
Let's say you're in a village in ancient Mesopotamia. Someone has figured out why the barter system is inefficient, and has come up with the idea of money. Now the Mr. Howell of the village happens to have a lot of stones with a hole in the middle of them. He wants to use those as the initial currency. The problem is, he controls the whole market initially, and he hasn't lifted a finger! So, why would the castaways accept Mr. Howell's cash, or his gold -- since he controlled the entire supply in the beginning (assuming, of course that they are rational)? Two reasons:
1) difficult of counterfeiting.
2) because they know that his cash is eventually redeemable for stuff back in the "real world".
As the author states, the castaways had ruled out possibility 2. IMO, possibility 1 is not a strong enough reason to hand over control of the whole currency market to a pompous ass. A rational Gilligan's island would have stayed with barter for a while, then evolved a new currency.
Paper money only has value in a transaction if the seller believes he can use it again to make purchases. Gold, however, can have value because the seller will use it for jewelry, or to electroplate his video cables, or even to pound flat and put on an office window.
Now, you're correct that the value of gold would be less if it were only used in this fashion rather than as an easy way smooth out the difficulties of a barter economy. But paper money would be, for all intents, worthless--after all, how often do you need little rectangles of soft paper? (And paper money doesn't come on a convenient roll!)
You're close. Money has value because other people think it has value. I am willing to exchange my services for little pieces of paper because I know others are also willing to exchange their services for them.
How we know is more important than what we know.
Within the science of economics, fiat means "having no intrinsic value."
"The word fiat, IIRC, comes from the Italian word for "in faith."
Sorry, fiat means the same in economics as in regular English: by degree. It is from a Latin word, 'fier', meaning 'to decree'. It has a slightly negative connotation in English, showing the essay author's bias when he uses it to refer to the fact that U.S. Federal Reserve Notes are legal tender. His bias is completely exposed when we find that the two outside sources referenced are 1. Ludwig von Mises, the economist whose works were used to found Libertarianism and 2. Murray N. Rothbard, the founder of Libertarianism
The essay is rife with flaws from the mainstream economic point of view; its Libertarian slant is hard to wade through. I hate loaded language like 'fiat money' used to refer to legal tender. Just for fun, I'll address one point. Pointing out all the problems would make a good final exam essay at Bachelor level econ class:
The what-if example about the Professor deciding to make money leaves completely misses the point. Here's the way that would need to play out: The Prof would have to offer some kind of service or good that at least one of the other residents of the island wanted. In order to perform that service or hand over that good, the Prof would declare that he would only accept genuine ProfLeaves. In order to get ProfLeaves in the first place, the other resident(s) would have to perform a service or provide a good to him. The Prof can simply demand that others accept for no reason but that's not practical.
This is typically (note: 'typically' is not 'always') how currency gets its start; the government issues the money in return for services and goods from the citizens. The govmt declares that it will be demanding payment in its money as a tax payment. Soon, the money is in general circulation, as somewhere along the line, most of the participants are needing to pay for taxes and the government, as the largest purchaser and provider of new money, can set prices and supply.
For US Currency, it wasn't always legal tender. Indeed, many states and banks issues their own money. This caused a lot of confusion. Imagine travelling to another state and needing to change your money. A major reason the Europeans adopted a common currency is to make trade so much easier. In the US, to cut out all the confusion of all the competing currencies, the Federal government made Federal Reserve Notes legal tender. This means that you can print up your own JoeBucks but can't legally require anyone else to accept them. If they do, that's fine, if not, you have to pay in Fed Notes.
That wasn't economics. That was a libertarian rant against government controlled currency. Gilligan's island doesn't scale to the real world. Now put your nose back in your Ayn Rand book.
Money, per Mises, is the most marketable commodity. If you know you can trade seashells for what you want, you will sell your goods for seashells. If enough people do that, seashells become money. (and past a certain point, a form of money is essentially inevitable, because of the network effect.) The network effect is powerful, and it would be likely to shore up a commodity that somehow lost some of its value, but if it lost enough value, then a new form of money would arise. Belief alone is probably not enough to hold money together.
Fiat money is a hijacking of that natural process to give the government a great deal more control over the economy and a nearly-infinite ability to tax, without approval or even KNOWLEDGE of the people being taxed. Past a certain point, this will destroy an economy, of course, and cause the failure of the government. And last I checked, central planning of an economy was not a very good idea; the more control goes into the hands of a few people, the less well things tend to run.
Money needs to be both a store of value and a medium of exhange. We're doing fine on the exchange part, but we're failing dismally on the store-of-value front. See my signature.
Ginger is the kind of girl you take to a motel and never see again.
Mary Ann is the kind of girl you take home to meet mom and dad and stay with the rest of your life.
Boobies never hurt anyone. - Sherry Glaser.
For some reason, Money reminds me of the observation about calculators that my High School kid just passed on to me "they get to use all the time. Just like in the real world." I've always told my kids, if you face a world without calculators, you've probably been studying the wrong thing anyhow [e.g. you would be better off knowing how to kill things with pointy sticks.]
Money is like that too; If my bits become worthless, the bullets in my closet will be all of a sudden be worth a lot!
This issue is a bit more complicated than you think.
Aren't we ignoring a big point? The folks on Gilligan's Island kept hope that they would eventually be rescued or find a way off the island. Whoever treated the Howells nicely or got a lot of cash would certainly be rich once they set foot back in the United States.
It's a promisory note, and for all the castaways knew, the US government would still back up their dollars when they returned. In fact, thanks to the Professor's radio and the occassional island visitor, they *knew* the US was still A-OK.
That's reason enough to horde cash and gold to me...
The Right Reverend K. Reid Wightman,
I haven't seen the finale yet.
[worthless fluff]
After the invasion of Iraq, there was no more central bank printing dinars and no more Iraqi government to put the fiat behind its fiat currency. The American military started handing out US$20 bills and expected the Dinar to fade from existence. Instead, to the chagrin of the occupation force, the Dinar's value doubled against the Dollar in two weeks.
[more worthless fluff]
Why did the unbacked paper do better than the US Dollar? Because the quantity of dinars was relatively fixed, while the supply of dollars grew. The law of supply and demand tells us that, all else being equal, a rise in the supply of a thing will lower the price of that thing. The thing, in this case, is the Dollar itself; its "price" is its buying power, which the Iraqis watched erode drastically within days.
[more worthless fluff]
Contrary to the popular belief, there indeed is no God.
What the article is talking about is, indirectly, that the paper money you use every day has no inherent value, so why on earth would anyone accept it as money?
Other than food and water, what has inherent value? I accept it as money because I can trade it for other things. You seem to think that a gold standard is essential to using paper as a trade meidum. I can trade money for gold, but it no longer has a fixed rate of trade. Isn't allowing the market to find it's own equalibrium a good thing? If money is being overprinted, it will just fall in value to gold.
We print more money, because the commodity we back it up with is the goods and services that we produce. The economy is always growing, thus we are always printing more money.
HA! I just wasted some of your bandwidth with a frivolous sig!
She wasn't called Lovey for nothing.
I believe the old Middle East kingdoms, prior to evolving a "printed" currency did use salt as "money".
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Your reasoning is positivist, which is debunked junk. Positivism states that we can only know something is true if we have empirical verification, and that everything else is meaningless. This is inherently self-contradictory, for that very statement can only be taken as an a priori axiom. Except, according to positivists, a priori axioms are meaningless tautologies. So, the question is, how do we know that that positivist statement is in fact true? We haven't verified it by experiments, so according to its own declaration, it is a meaningless tautology.
Austrian economists start from self-evident a priori axioms. These axioms do not need to be empirically verified. Indeed, they cannot be falsified empirically, and can only be illustrated. You cannot falsify the action axiom. You can only illustrate it (indeed, everything you do is an illustration of the action axiom).
I would suggest reading the following papers:- Social Sciences and Natural Sciences. Mises, Ludwig von.
- What is Austrian Economics? Mises.org
- Economic Science and the Austrian Method. Hoppe, Hans-Herman.
- Realism and Abstraction in Economics: Aristotle and Mises versus Friedman. Long, Roderick.
If you want to read more on Austrian economics, the best introduction is Man, Economy, and State with Power and Market. Rothbard, Murray. (MES). Man, Economy, and State with Power and Market was Rothbard's treatise on economics, also intended to be a textbook for introducing students to Austrian economics. Mises, Rothbard's mentor, wrote the great treatise on economics simply called Human Action. Mises, Ludwig von. (HA). Human Action is an extremely important treatise, although it is not as easily understandable as Rothbard's treatise. Rothbard, in his treatise, assumes that readers have much of the knowledge in Human Action, so reading MES is not a substitute for reading Human Action; however, Rothbard corrects Mises on a couple of issues (like monopoly) and expands upon Mises' analysis, exploring new categories.Praxeology and Understanding. Selgin, George.
In Defense of "Extreme Apriorism". Rothbard, Murray.
social sciences can never use experience to verify their statemen
Secondly, inflation isn't uniform, and could never be uniform. Inflation redirects wealth from productive voluntary private-sector activities, to anti-productive coercive State-activities, like war.
Thirdly, inflation causes the business cycle.
social sciences can never use experience to verify their statemen
Real answer they figure someday they would get off the island and had use/need for US currancy again. Don't have a word for how crazed you need to be to write and article base on Gilligan's Island.
Right up there with the Freudian interpertation of "The Cat in the Hat". And just as rigorous. No wonder economics is not considered a true science..
putting the 'B' in LGBTQ+
1. There are substitutes for gold. Obviously, if gold were used as money, it would be uneconomical to use it as computer parts.
2. As Rothbard explains, a "commodity basket" is extremely flawed and utopian in the worst sense: it simply cannot work.
3. You do not understand the nature of money. Any given quantity of money is just as good as any other quantitity of money. The commodity chosen as the monetary unit will simply scale to the appropriate value. You also subscribe to typical fallicious beliefs about "deflation". Deflation is not falling prices (or rising purchasing power of the dollar). Deflation is a decrease in the monetary base; inflation is an increase in the monetary base. Printing out dollar bills is inflation. Burning them is deflation.
4. No Austrian who favors eliminating fiat money and replacing it with a commodity-backed standard (gold) supports fractional reserve banking.
social sciences can never use experience to verify their statemen
i am confused...how many coconuts equal one papaya. and how many papayas equal one fish?
Is it 5:30 yet?
And that's exactly why I'm opposed to total free-market capitalism and libertarianism... because the ultimate effect is to concentrate all of the wealth and all of the power into the hands of just a few.
Sure, governments can give you the same problem. But the failure of straight democracy is not the same as a proof for oligarchy.
The Mongrel Dogs Who Teach
Are we better off (to the extent that we're better off) because of fiat money? That is, if not for fiat money, we would be worse off today.
Are we better off (to the extent that we're better off) despite fiat money? That is, if not for fiat money, we would be better off today.
Are we better off (to the exten that we're better off) neither because of nor despite fiat money? That is, whether or not there was fiat money, we would be the same as we are today.
I would suggest you read Facts and Counterfacts in Economics. Hülsmann, Jörg Guido.
social sciences can never use experience to verify their statemen
brains?
for a minute there, i lost myself...
Why do you say that the Addams Family suffer from mental illness? Their approach sounds perfectly healthy to me.
The Mongrel Dogs Who Teach
I had no idea Ginger was a whore.
Because no one group of people is actually normal. Normal will most likely always be a relative term: relative to an individual, which will be relative to culture, which will be relative to the reactions of society to itself, which is constantly changing. The idea of normality doesn't actually exist outside of statistics, it just a social invention to guage one experience against another.
for a three hour tour?
I vaugely remember one episode where Thurston ponied up $1M worth of ransom money for Ginger.
As little kid, I wondered: why did Thurston bring over $1M for a three hour tour?
Might as well wonder why Ginger brought so many outfits.
There is a related article on Reason http://www.reason.com/rauch/082704.shtmldiscussing Thurston Howell III's supposed senate campaign. This was posted on 8/27, it appears that the Monetary Economics article was inspired by it.
There's enough math and computational expertise required in advanced economics to keep any math geek satisfied. It's not a coincidence that large numbers of Physics PhD's are working on Wall Street these days. The cookbook economics you hear on the tube is not the economics being done in research today; it's the economics that politicians and TV newshosts can understand, and communicate in soundbites.
As you alluded, much of basic Econ can be described as a bunch of rules-of-thumb and ad hoc arguments, of the sort, "If we ignore all these things here, and assume that they are constant, we can pretend that this here happens." The problem is that economic systems are complex systems (analogous to the brain's neural network), and can't be modeled well using "billiard ball" physics models. Until recently the only alternative has been to use statistical, "gas law" models and other simplifications of the systems.
Example: a small town may have 1000 citizens, 200 businesses, and perhaps 500 formal and informal groups/organizations. Each of those individuals and organizations has over 1000 'inputs' and 1000 'outputs' - relations with each other and outside entities, that may be considered as economic factors. (Relations may be financial or other.) You have a social network with something like 10^13 relations/interconnections. And that's just a small town or neighborhood.
I'm embarking on a PhD in Econ shortly, after many years in computing, and my math skills are being stretched like they haven't in a long time. Differential equations is a prerequisite for several of the introductory graduate level courses, along with linear algebra and a bunch of statistics and game theory. Thomas Bayes' much appreciated Bayesian Theorem probability is a tool of economists. Vilfredo Pareto (Pareto-optimal" game outcomes) was an economist. Many elements of modern statistics, probability and game theory were developed by economists.
The problem faced by economists has been not that it was too simple, but that the systems under study have been too complex to delve into very deeply until both the mathematical tools and the computational power became available. It was necessary to drastically simplify the models in order to get any sense at all. And, of course, there is a strong philosophical and social-studies thread throughout economics.
Nowadays there is a strong thrust into new approaches to Economics, including complex adaptive systems, agent based systems, Neuroeconomics, Experimental Economics (vis. Vernon Smith, 2002 Bank of Sweden "Nobel" and social network economics.
Often in addition to training and/or experience in biology, physics, systems theory and other disciplines, these approaches require a good understanding of differential equations, comfort in manipulating long chains of partial derivatives, and working with multi-layered irregular networks. Interestingly, even fluid dynamics equations are applicable in some cases.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
That's Interdisciplinary Center for Economic Science at George Mason University. The Founder, Vernon Smith, won the 2002 Bank of Sweden "Nobel" prize in Economics for his work in experimental economics, which is now a very vibrant branch of modern economics. I've heard that it's still hard to get published if your experiment doesn't confirm existing "established theory", however.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
three hour tour. shipwrecked. same odds as five dollar slots if your lucky. duh.
Serenity now, insanity later.
That's right.
Commodity exchange is barter and cannot be reasonably taxed except thru a large and often unacceptable degree of control over your populace.
Money, especially with a government controlled monopoly on it's production, can be easily controlled, taxed, hoarded, and manipulated.
Anyone who thinks that money - whether paper or electronic - will continue to be an uncorruptible substitute for barter has not been paying attention to the advances and use of technology.
Paper money: The Feds are *barely* keeping ahead of the printing technology. The increasing number of counterfeiting cases the FBI prosecutes every year would, in fact, argue that they aren't.
Electronic money: The numbers of cases of hacked credit card databases and the increasing level of social engineering argues that this simply isn't' going to work, either.
Then again, if we go back to a rare metal exchange, and change our currency to reflect that, even with technology to verify that currency, someone will find a way around it.
If it can be designed and built, it can be reverse engineered and hacked. This extends almost as easily to physical systems as it does to electronic ones.
No, I don't know what the answer is. But I'm pretty sure that those in charge are not on the right track to it either.
SB
It's old. The more humans I meet, the more I like my cats. At least they are honest.
Look at Diablo 2. Remember how rare the SoJ (Stone of Jordan) was initially? Then guess what became the currency because it was duped to hell.
SoJs remained the most standard currency for a long, long time. You want this? 40 SoJs. That? 20 SoJs. The economy of the game was quite interesting, because it was so flexible.
Job? I don't have time to get a job! Who will sit around and bitch about being broke and unemployed then?
Von Mises wrote Socialism, what a great book.
the Political Inquirer
Those are questions best left unanswered.
And why is that? Because the philosophy that are espoused by that person and character are so odious that they don't deserve to see the light of day?
Well, if the philosophy is so invalid, then why not bring it out into the open where it can be openly discussed and shown for the fraudulent and dangerous philosophy that it is?
I don't make the rules. I just make fun of them.
You are talking about Everquest, or a like world. The problem is that almost all items have permenance in that game. They never break or go away, unless the character that happens to have them quits and doesn't give them away. So the amount of goods in the economy continously increases, people just keep getting richer and richer as the game just genreates more and more items. Also, since most gold is just used as a proxy for player transactions, and it always increases, it looses value rapidly.
Not all of them are designed like that, however. In Star Wars Galaxies, more or less everything is player made. Players mine the raw materials, make them in to parts, and finished items. What's more, most items deteriorate with use, eventually breaking and becomming useless. There are also items (like medicine) that are used up to do their thing. Finally, structures require a continual upkeep to be paid to operate.
This keeps the economy much more under control. Money is continually created, but it's continually destroyed. If you give someone 50,000 for a rifle it doesn't go and just sit in a bank like in EQ, they spend it on materials to make more rifles. Sony also added hand-of-god mechanics so they can rebalance the output of materials at any time. They can make it more difficult (and thus expensive) to acquire certian raw materials which then drives prices up.
So it all depends on how the game is set up. In some games yes, money is just a fixed thing versus some goods the computer sells you. However in others it really is a representation of value, and isn't static.
The fact that (And I know it's rude but it's the truth) both of them are in posession of the only "currency" that would mean anything to the 4 men on the island. It's between their legs.
Think about it. Gilligan, Mr Howell, the professor and skipper are all going to be interested in one thing before long and honestly, they were probably interested in that prior to ever getting shipwrecked. All four of them hadn't fantasised about banging Ginger or Mary Ann from the moment they stepped onto the boat. Once they get shipwrecked and they've been on the island for a couple weeks it's going to be a question of who's getting laid and not much else is going to matter.
Now obviously Howell is an old dude and his wife is there so he's going to be on a short leash. He'll keep up appearances but you know he's thinking he could bag one of these chicks if he could get away from the old ball and chain. Then again this was before Viagra so maybe not. If this took place today though Thurston would be knocking the bottom out of Ginger. I'm sure he'd go for Ginger. He's rich, she's famous. That's just the way it works.
But say Thurston hadn't the benefit of the little blue pill and was out of the mix. Then you've got Gilligan, the professor, and the skipper vying for two women. One of them is going to end up with the professor obviously because he's the only one of the three available guys who's both height-weight proportionate and not a complete idiot. Ginger probably goes for him and has little trouble staking claim to him.
This leaves Mary Ann to choose between the fat old sailor or the retard. Not a very appealing proposition but she doesn't have to make the choice. Niine weeks and a couple dozen screw ups from Gilligan later he goes looking for coconuts one day and mysteriously doesn't return. The skipper was of course fishing on the other side of the island when it happened and knows nothing about it. In truth though he buried his "little buddy" in a shallow grave so he could claim the sole remaining available piece of tail on the island.
Appended to the end of comments you post. 120 chars.
Society becomes more rich when we have more stuff (under a capitalist system at least, which is what we are using most places). More stuff requires more resoruces. So, if space mining allows us to get them cheaper than on Earth, that makes us more rich. That's the idea behind capitalism: people seeking personal richness creates more wealth, bringing more overall richness. Doesn't always work that way, but it does generally.
In a case like this, the individual group that sought to mine would be seeking personal riches. Suppose they could mine and transport platinum from an asteroid at $50/oz. Even if their load depressed the world price by half, they are still making 8x profit. So this increases, and eventually the price settels at $100/oz, or whatever. Great, this means platinum is now 1/8th what it was. So it's much easier to build all the things we wanted that need platinum, and we are richer for it.
I mean I live a fairly average American life, in economic terms. I make slightly less than the median saliry, but close enough. However I live as well (or better when you factor in healthcare and the like) than nobility from 7th century Europe. The reason being, modern America is a MUCH richer nation than any of the middle ages Euorpean ones.
The mess in Europe was largely a result of precious metals being the backing for, or even the currencies themselves. They weren't used for much other than money, and kewelery. Not so any more, there are plenty of industrial uses and the currencies of today are unhinged from precious metals. They are a raw material, like any other, just an expensive one.
Now I'm looking for the website that has some good ideas on coconut geiger counter case mods. Then I'm going to cluster the things.
Then I'll post a story about the whole thing on Slashdot but my server (built out of bamboo and coconuts of course) will go up in flames from the Slashdotting (literally).
I'm thinking "Profit!"
Unless of course the RIAA, MPAA, or some other "AA" comes along and sues me.
Appended to the end of comments you post. 120 chars.
Ron White from the Blue Collar Comedy Tour did a bit on this, talking about coupons at a fair to buy beer. There are places like that which will not take you cash, you have to go buy their little fake currency and use it, the vendors won't take dollars directly.
I've been in situations where I won't take money either. I've done service for service trades, my computer skills for some skill they have. I'm not interested in cash, I want them to do something for me. I mean I suppose realisticly I'd do it for enough money, but as a pratical matter I don't want dollars, I want labour.
It's even more abstract in many caes, electronic money. There isn't a paper float to back all the money in our economy, much of it exists only in computer databases. My economics professor compared it to a tribe that used big rocks for currency. They were too big to move, so you just owned certian rocks, which changed to other ownership when you bought something.
It works like that today, often. Banks just transfer money to eachother via trusted channels, and databases are updated. No cash transfer ever follows.
That all works fine though, as you noted, it's just an agreed upon form of storing worth. You create a good that has worth, or perform a service that has worth, you get a paper or electronic proxy for that worth from teh recipiant, which you then give in exchange for something you want, etc.
I'm a librarian at the Mises Istitute as awell as a long-time (8 years) Slashdot reader. I just wanted to inform folks that the Mises Institute does some really cutting edge work on the legitimacy of Intellectual Property. If you are interested, google "Stephan Kinsella" "Against Intellectual Property". I have also written a paper that touches on the economics of this issue, and how the hacker community has been an incredibly influential market factor. It is located here.
Since you cannot extrude the salt in the salt water (urine won't do it and neither will persperation), you will, over time, collect a lethal dosage of salt.
You will die.
Yes, I read that link. But doing further research didn't turn up anyone duplicating his test nor any medical reasoning on how you'd get rid of the excess salt.
Interestingly, even fluid dynamics equations are applicable in some cases
Ref, Link ?
Although I can easily think-up hypothetical examples myself I wonder what the real uses are.
(I'm a physicist, not an economist)
Working for necessity's mother.
You might be interested in reading William Greider's "Secrets of the Temple: How the Federal Reserve Runs the Country". Despite the melodramatic title, it's a serious and engaging history of money in the United States. It was assigned reading for a monetary policy class I took a couple of years ago at the University of Utah.
And this differs from the methodology of economics in what way?
A real practical difference is that changes in economical thinking affect the economy - thereby affecting (yet) unmeasured values.
This feedback is not, of course, valid in astrophysics.
Working for necessity's mother.
Toilet paper! Ever tried to wipe your butt with gold or seashells?
Sure bring back some if you ever come dirtside again, but more useful:
1) a large rocky asteroid - hollowed out, sealed and air added. Living space. This is where the gigabucks are.
2) Use the gold as reaction mass for your electrically powered "ship"/asteroid maeuvering drives
3) use the platinum in rocket nozzles or whatever else it is good for
"recover several thousand tons of gold and platinum. What is that going to do to the market price of gold and platinum?"
Nothing if you don't bring it back, or cut a deal with the current people about releasing it - cf the European central banks gold sell-off deal.
Given the current/expected cost of lifting stuff to orbit (mind if you are mining asteroids I would expect that to have come down), I would expect anything in orbit to be more valuable simply in terms of mass already lifted than any dirt-side commodity market value.
The Singularity is closer than you think
Quant
... and the handsome sexy one is the Professor!
See, it is a geek show!
Now... it does depend on the Libertarian how simple minded they wish to get... one of the main selling parts of the party is that you can explain the basics of the system in about 16 words: ("Do whatever you want to yourself; but, cause provable injury to someone else, it's your fault."); The problem is then going into the various instances of the ideal. For example: Private Roads and Punishment systems. Here is where things get confusing and complicated in a usual discussion.
Although... Competition *could* be a great role for a library system, look at it this way: you have three library systems, one funded by a philantropist, one funded by government/public funds, one funded by a church. Don't you think they would each have different focuses? The religious parents take their kids to the church library, they don't have to worry about the *evil* Harry Potter books (and the kids do what kids have always done, sneak out the back and go to one of the other libraries).
I will say competition plays a great role in the food chain: You don't compete, you don't eat.
Nephilium
"Longer lines at airports do not a police state make." -- Jonah Goldberg
what about a real challenge, explaning the bush economics ...
bring it on! --- JFK
Here's a link to the Liberty Dollar, a value-based (backed by gold / silver) currency that you can possibly even spend at some stores.
I first read about 'em in a weekly newspaper article in Maine.
One of the defects of using money that is based on a commodity is that there are times in which there is not enough money in the economy, so people start hoarding it.
The Asian economic implosion in the late 1990s was caused by this--inspite of the economies going sour, caused by people not spending money, governments thought that keeping inflation down was the most important thing, so they refused to print more money, further exacerbating the problem. (Indeed, The Economist and many others continue to call for the Japanese to go hog wild printing Yen in order to give that economy a boost.)
I once read a nifty metaphor to explain this. A babysitter's club uses vouchers to get babysitting...people volunteer to babysit to get vouchers, and then the vouchers they get can be used to get free babysitting for when they wanna have an evening on the town.
At first, they only give out one free voucher. Because of that, people hoard that one voucher for when they really may need it, meaning that no one can earn any more vouchers since no one is wanting to spend their one voucher.
The solution was to print off an extra 5 free vouchers and give them to the participants. That way people were more comfortable spending the vouchers, which allows other people to earn vouchers, and then you got a little economy going on.
In the Japanese situation, the scarcity of the money means people are too uncomfortable spending it....
with regards to personal economics?
w ith.th3.txt/
An essay on the comparative advantages, personal and financial, of sharing living expenses and domicile with one's parents..
http://ohhla.com/anonymous/howl_III/skillion/live
It's certainly much more healthy than the Munsters- but still not perfect when it comes to having relationships with the rest of society. To do that- you have to treat at least some other people as normal also.
However, yes, it's much more healthy than always trying to be something that you will never be.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
Absolutely correct- which is what bugs me most about anybody thinking that gays or autistic people are "normal"- when clearly they are outside of the statistical norm bell curve by at least a sigma, if not more. "Normal" only has any real meaning within statistics- if you think that you're normal you're really probably quite wierd.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
which is what bugs me most about anybody thinking that gays or autistic people are "normal"
Depending on your sample. If your sample includes only west hollywood, gay is going to be the norm. If your sample includes some autistic commune in northern california, then autism is going to be the norm. If your sample includes urban china, then doing tai chi every morning is going to be the norm. If you take the entire world as a sample, there's not going to much of an identifiable norm outside of being a member of the species homo sapiens and general actions/habits associated with that. (i.e, "Well...walking seems normal...and eating...and breathing). However, Gays and Autistic people would definitely not be normal. But then again...neither would being from Texas. Honestly, I think being from Texas is a bigger mental disorder than autism.
I think the problem with the word normal and how society uses it these days is that normal is more and more being used to mean "ideal" rather than "average". And when average is the ideal...we kinda have nothing to shoot for.
so it doesn't catch words as well
i meant buried. as in kill them dig a hole and put them in it.
I guess i wouldn't want to be on an island with me either, unless i was the only one there. but i guess that would be the point.
And when average is the ideal...we kinda have nothing to shoot for.
Mind if I use that quote in On Lawn's most recent Journal Entry? It describes the current candidates for President of the United States quite correctly.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
They cannot be used to pay taxes, and they cannot be used to pay off liabilities (courts will not recognize a liability paid off if it's paid off in gold). Furthermore, for a long period of time, The State criminalized the holding of gold for monetary purposes, and only allowed for its holding for personal (jewelery) uses. Rothbard wrote on this in What Has Government Done to Our Money?
social sciences can never use experience to verify their statemen
My game is Shadowbane, which has had enough gold sinks in it that inflation would not have been a problem, except for a massive gold dupe bug that existed for a while. The duped gold has mostly worked its way out of the system by now, though.
As for whether or not there is actual inflation in EQ, though, your statements didn't disprove it. The things that I would want to see in order to tell if there is any inflation are the following: The $/pp exchange rate on EBay.
The pp prices of a basket of "comparable goods". In other words, you can't compare the price of an Executioner's Axe last year to the price of an Executioner's Axe today. You have to compare the price of the "Best Weapon" last year to the price of the "Best Weapon" today. (Or even better, total value of one characters "Best Gear" a year ago to their "Best Gear" today.)
And probably adjust for the US$ inflation over the same time period.
I have no particular opinion on whether or not there *is* inflation in EQ, but that's how you'd measure it.
He decided to just watch the government, and kind of scale it down to size, and run his life that way. --Laurie Anderson
The heart of the libertarian obsession is competition. Everything must be forced to make sense only in relation to this extremely narrow notion which is totally inappropriate for so many human beahviors.
Wrong. The "heart of the libertarian obsession" is voluntary (inter)action, which in my mind is appopriate for any human behavior.
The real world is far more complex and Libertarianism absolutely refuses to see that.
Au contraire. Libertarians acknowledge that the world is complex and so they offer complex solution to its problems: the free market.
If you want to criticize libertarianism, that's fine by me, but please make an effort to know what you're talking about.
You will know that fiat-currency was not "chosen" by the free market, but imposed by top-down State-interventions. For a long period of time, the private holding of gold for monetary purposes was outlawed -- that is, our gold was confiscated -- stolen -- by the State, and replaced with unredeemable pieces of paper.
social sciences can never use experience to verify their statemen
bobobobo's post would have been a bit more humorous to me if I hadn't known that he plagiarized it from Bob Wallace's 2002 article "Inner Gilligans and Original Sin."
sure.
Look, if someone has a proveable claim -- e.g., my great-grandfather stole land from their great-grandfather, so therefore the land which I inherited really doesn't belong to me -- then I'm all for courts returning the land to it's rightful owners. You can only legitimately pass on, give away, or trade away that which you have rightfully acquired.
Your argument about the rich stealing from the poor is flatly wrong. Quite frankly, sounds like Marxist crap. Oftentime it is the other way around. There is no systematic relationship of thievery between the rich and the poor. There is a systematic relationship of thievery between those who are part of the State-apparatus and those who are not: the State-sector is everywhere and always parasitic.
social sciences can never use experience to verify their statemen