If they spoke in terms of linking the two, wouldn't that imply the two were/technically/ though perhaps not functionally, separate things?
Not really. The word "soul" is the English version of the Latin "anima" (Greek "psyche"), which is the root of words such as animated, animal etc. It's precise meaning is something like "that which causes a body to move". So, if you throw a stone, you are the soul of the stone while it's moving. And if a body movement is caused by it itself, then it is its own soul, so to speak. This "causality of movement" is what people discussed about in deep details.
For example: it seems evident that the soul of a stone is simpler from that of a plant, since a stone can move itself only in one direction (down) while a plant has both the "down" movement of a stone as well as an "up" movement (like that of fire), plus a growing movement. And both a stone (or fire) and a plant seemed to have simpler soul than than an animal, for the animal had both kinds of movement as well as that of moving itself based on desires such as thirst, hunger, sex etc. And humans? Humans added to the mix movements based on reasoning, something animals didn't possess. So with this you develop a taxonomy of internal movements: mechanical soul, vegetative soul, volitive soul, rational soul etc., and then proceed to study what causes each one.
Plato, thinking on this, would work in terms of universal causal principles: there was a structural Cause of movements, and individual entities would be merely entities composed of, among other things, that Cause (but not in the sense that they had "pieces" of that Cause in them). Aristotle, on the other hand, was more concerned with how movement arose from individual beings themselves, and worked in terms of the way the matter from which a body is composed had to be organized for it to be able to move. Both things aren't mutually exclusive, and neither differ from, say, modern-day concepts such as the DNA. A being's DNA causes the matter it's composed of to organize in this or that way, and this organized matter is able to move in this or that way precisely because of this organization (provided there's energy input, of course). On the other hand, a DNA, to exist, must obey the supreme Laws of Physics, which in turn must obey the even more supreme Laws of Mathematics. So, while Plato would probably talk about Mathematics as the ultimate soul of anything (and the properties of a specific individual's DNA as his derivative personal soul), Aristotle would take the matter organization produced by the DNA as the being's soul. But any way you take it, the Mathematics, the Physics, the DNA, the order produced by this DNA etc., nothing in this complex is "separate" from the concrete being in any meaningful way. These are all logical distinctions, not material distinctions, except in the sense that, although every DNA obeys Physics, Physics isn't only about DNAs, and although Physics obeys Mathematics, Mathematics isn't only about Physics, etc. etc. etc. As my Philosophy teacher once told me, nothing proves better the existence of the soul (in the proper, pre-Cartesian meaning of the word) than our 20th-21st century Academic Biology.:)
So, what we have isn't really an opposition between the Greek and Semitic concepts (or lack thereof) of the soul, but merely the fact that Hebrews simply didn't bother to develop such a fine grained terminology. It's simply the case that in this field the Greeks had more depth than the Hebrews. But in the end what both were talking about was pretty much the same.
I guess it's time for someone to assembly a list of pro and anti-RIAA American Universities. In a few years, if not months, it's going to become a major factor for anyone selecting which University to attend.
Germany has still many odd interactions with the post-WW2 world. I don't live in Germany, but I'm of German descent (3rd generation) and as such now and then either read or hear about what's going on "over there", and rarely it's something I like. For instance, did you know that home-schooling your kids in Germany can cause you to go to jail, lose parenting rights, and put your kids into an orphanage? Not only that, but until Hitler (yes, he!) prohibited it in the 1930's, home-schooling was allowed. So, modern-day "we censor books" Germany not only holds old nazi laws valid, but also have no shame on actually destroying real people lives for violating them. How can this be?!?
Germany is a schizophrenic country. Nazism shattered its collective mind beyond recognition, causing a profound cognitive dissonance to develop, and no cure is on sight. Unfortunately we're still going to see lots of BS coming from there...
In the Greek context that informs our Western philosophical outlook, and often works at odds with our religion outlook, there is very much a distinction of Mind, Body, and Soul. So, in that context, the question gets even broader in that you must also ask the same question of the mind. Is it brought over with the body? Is the soul as well? Being separate and noumenal, the mind and soul may not be brought over but copied or a new one created in the reconstitution of the copied body. In that Greek context, teleportation is existentially dangerous, I'd think.
This isn't entirely correct. Thanks to our Cartesian-shaped worldview, we use to read these distinctions used by the Greek philosophers of old in a much stronger way than they themselves did, when in fact the first philosopher to absolutely separate soul and body was Descartes. He himself acknowledged this as a very novel move, so much that he presented his own dualism as a complete departure from everything everyone had made before him. The actual Plato, on the other hand, was much more akin to, say, Buddhism, in that the actual "you" is a mixture of heterogeneous elements that once dispersed aren't "you" anymore, than to the post-XV century, Descartes-based, new philosophical and religious movements whose worldview became mainstream in the West. And Aristotle, the Atomists, the Stoics, and pretty much everyone in old Greece, were that way too. What they discussed wasn't the fact, broadly acknowledged, that the human soul is absolutely linked to the body, but what this link was and how it was structured.
What about musicians who, for whatever reason, choose not to tour? Should they just not be able to profit from their work?
What about the truck driver who, for whatever reason, choose not to drive trucks anymore? Should they just not be able to profit from their previous truck rides?
Answer: no, they shouldn't be able to profit from previous work.
What would prevent them from making live shows? Like, you know, all musicians during the whole human history always did? Have they all starved, per any chance? Or what you actually mean is that current musicians would lose the ability (that their predecessors never had) to work once and, if lucky, profit forever? Because this is not what "work" is supposed to be, and it surely doesn't apply to most of humanity.
Give me a way to do my work once, doesn't matter what it is, and live from it until I'm dead, and I'll think it's fair for musicians to have the same privilege. Otherwise, forget it. It's simply fair that they work everyday, as everyone else does, by doing whatever they're good at, as everyone else also does. Copyright is at best illogical, at worst an aberration.
Correct. In Portuguese we have the words "livre", meaning free from restriction (for example, when a prisoner is freed, we say he's "livre"), and "grátis", meaning free from cost, from were comes the derived word "gratuito", meaning that which is free from cost. Thus, freeware translates to "software grátis" or "software gratuito" (both are used and have the exact same meaning), while free software translates directly to "software livre" and free software movement becomes "movimento do software livre". It's all pretty straightforward, and I believe other Latin languages are similar.
Sure, I'm in total agreement with you. The problem with a pure fiat money isn't that it doesn't have intrinsic value while gold would have intrinsic value. Neither of them has intrinsic value, and for that matter, nothing has. But the point is simply that fiat money allow governments to more easily manipulate to their advantage the value people attribute to it.
When government prints money, it knows people will still sell goods and services priced according to the previous value for some time, without noticing that in keeping these prices the amount of money running around in the economy is greater than the amount of goods and services that can be purchase by it. That allows government to acquire more without having the actual means to, actually removing goods and services from the economy. The moment people notice what happened, prices rise, and then rise a little more, to accommodate for those goods and services that are missing since they went to government. Result: after inflation, things aren't simply equal. People lost actual goods and services to government, and have to produce more.
That's why money printing, and the inflation it causes, is considered a hidden tax. Government (and its friends, namely banks, who received money earlier than everyone else) profit, people lose. And those who lose more are all those who have their income adjusted last. Namely: workers.
A gold standard, by avoiding this kind of manipulation, is simply more fair. If government wants to tax, it has to actually tax, and face the election results of that, not hide what it's doing behind tricks so that no one except economist understands what's going on.
Because they are rare. You cannot "print" as much gold as you want, as governments do, creating inflation and through it making the poor pay your bills. You have to make careful usage of what you have, for once it's gone, it's gone.
I really hate the whole "Genuine" part of the name. They're using "genuine" to mean "licensed", because as everyone knows, the only difference between the copy of XP my roommate bought from the store and the copy of XP I burned from his legit CD is that his copy is legally licensed and mine's not. They're bit-for-bit identical and there is no way to tell the difference.
I'm not sure this is the case. Many field technicians I know download and use customized Windows XP CD-Rs with updates up to such date already installed, anti-virus and firewall packages, custom themes, MS Office already installed too (and updated), plus some additional utilities. If these also included back-doors or not is a matter of dispute. In any case, though, they're not bit-for-bit identical copies of a legally licensed Windows XP retail CD, and thus, in all fairness, neither "genuine" nor "licensed". So much that you might even put an official license on them (say, by purchasing one online from Microsoft), and thus have them licensed, but still not genuine.
Of course Microsoft doesn't work this distinction in this exact way, but they tend towards it when they say a "non-genuine" copy might have been tampered with virus and the like. Anyway, I just wanted to point out that it's perfectly possible to have a legitimate "genuinely sourced from 'x'" label that's clearly distinct, in meaning and application, from that of "legally licensed from 'x'".
If not, your statement can be logically correct but of no practical consequence.
So what? In the context it was made it's meaningful as an example of the contrary, to reinforce the central point. You picking this for discussion is silly. It's akin to I talking about fallacies and showing an example with an absurd conclusion, then you saying something on the line of "Do you know someone who thinks humans are made of glass? No one thinks humans are made of glass! Your example is of no practical consequence!"
Go back to my original post, read it in context, and focus on the main subject. This is the best advice I can provide you.
That leads to a vicious cycle. If money becomes scarce, the interest rate will rise, since the economic risk is higher, and as you point out less money will be lent out and available. (. ..) The same problem occurs in the free market, only in an uncontrolled fashion. (. ..) Growth is always crazy up-down, the difference is in how big the swings are.
No, no! The total amount of money existing in the economy, no matter what this quantity is in numerical terms, is always a representation of the total amount of goods and services available in that same economy. All the currencies of the world "add up" to all the goods and services in the world. Neither is "bigger" or "smaller" than the other for the sole reason that one represents the other, and the other represents the one. Many of errors in Keynesian macroeconomics come from ignoring this fact, and taking both things as divergent realities.
When the numerical amount of money is a fixed quantity, be it tons of gold, tons of silver, tons of some basket of metals, or even bills of US dollars (if it were a stable quantity to begin with), prices for individual goods in the whole market float up and down. If people have more interest in good A, and the offer of A stays the same, the price of A increases, while the price of something else that isn't that much interesting anymore, let's call it B, decreases. This is a pretty clear signal to producers of A that they must increase the production of A, while producers of B will notice the profit per unit is smaller and will diminish its production. Inflation is per definition inexistent, for price increases in some areas are counterbalanced by price decreases in other areas, while at the same time these same self-balancing prices work as immediately understandable signals for all those involved. They simply know what to do.
The same goes for money borrowing. Money saved available for lending being in a fixed quantity, and people interested in borrowing money being in a greater number than the money available, the result is the natural interest rate, what causes the money offer to equal the money demand. More demand for money, higher interest, so that both balance. Lower demand for money, lower interest, so that both balance. The result is that there's never a "shortage" of money. The exact amount of actual money available reaches the hands of the top interest-paying-capable people in need that money. And how do they know they can pay this interest? Because they're the producers of A, which is selling well! In short: money prices and interest rate walk in perfect consonance, as market signals clearly intelligible.
Now, let's look at what happens the the amount of money available isn't fixed, but increases over time. The first important aspect of this is that the new money doesn't enter the whole market simultaneously. It enters the market in a layered way: first to these banks. Then to those secondary banks. Then into the money pool for borrowing, what causes the interest rate to go down artificially, this being the first break in market signaling. Then into the hands of great investors, who can purchase more commodities, this being the 2nd break of market signaling. Notice that, since the commodity manufactures are basing their current prices in the previous, lower money pool situation, unaware that conditions changed, this means industrialists take advantage of the ignorance of their providers to purchase goods at devalued prices. And so on and so forth, until the new money reach the whole market, progressively causing inflation as more and more sellers notice the money supply increased (due to higher demand) and go about readjusting their prices to reach a new equilibrium.
If things stayed at this, at some point the readjustment would be complete and a new equilibrium reached. The industrialist that received money earlier would have profited from the induced inflation, someone in the end of the scale would have lost to compensate
Can you name ONE actual country that has no direct or indirect relationship to the USA? (I can't think of any.) If you can't, then your hypothetical is really an impossibility and isn't very useful.
I really believe you should take a logics class. You clearly don't understand that a formal syllogism is valid or invalid irrespective of the actual contents of terms presents in each premise. Ever heard what a variable is?
With respect to your World War I German bills, they have no exchange rate because, while they were currency in 1917, they are not currency NOW. You'll note that "currency" and "current" share the same root.
Wrong, wrong, wrong! You believe a currency must be officially defined and supported by a country or, worse yet, by some kind of officially recognized "central bank". This isn't true at all. Anyone can create any currency and try to use it, unless where prohibited by law.
Here in my city, for instance, some charity organizations made exactly that. You get an arbitrary number of bills when you give them something they need, and then can use these bills to purchase things you're interested in at their bazaars, as well as from anyone that decides to support it. Another example: in Argentina, when their national currency imploded some years ago, some cities developed their own currencies, extremely stronger. And at last: if nowadays some groups of people decide to accept Confederate or WW1 bills as money, it becomes "current currency" as well.
So far as whatever anyone is trading in these "alternative" currencies isn't traded in any way, shape or form using another, "official" currency, there's no exchange rate between both.
You have a few conflicts in your reasoning, and also don't seem to include time valued functions such as borrowing in your analysis.
I didn't do it directly, but indirectly, when I mentioned promises. Money, whether used right now or expected to be received in future, is also a material expression of confidence. You "know" (trust) that with a $1 bill you can get this, and "know" (trust) that it's not enough to get that. Adding a time dimension doesn't change this characteristics, except for the fact that you must take into account with more attention a subjective factor (that is present in all cases anyway), namely, that the person/country who is borrowing money believes that what he can get using it right now is both worth more than the increased cost he's paying for and also worth more than merely getting it later under a lower cost.
You treat efficiency as a minor advantage. The ability to store goods & services in a readily tradeable value unit is essential to a functioning modern society. It also allows time flexibility in trade with regards to time, specifically borrowing and saving.
Sorry if I gave that impression. That's not the case. What I'm arguing against isn't a person or a country building reserves. I'm arguing against he overdoing it. After the point were security and flexibility have been reached, accumulating more for the sake of it is utterly useless.
The exception to this is when this accumulated money doesn't stay frozen in some place, but on the contrary, is made available for borrowing. Provided the interest rate is a result of market forces, not government interference, it becomes extremely useful.
(. ..) Also, since money is a scarce resource, if there is insufficient liquidity to meet demand it's value will increase. This will cause a further decrease in supply as people hold money. People won't be able to borrow, and debts become more costly. (. ..) The question is do people want to deal with the pain of these self-adjustments? Such self-adjustments have lead to things like mass unemployment, revolutions, etc. Governments tend to choose monetary policy that is geared towards stability rather than the more natural path for economic growth (boom-bust cycles).
No, no, no! This is a typical Keynesian error. People don't hold money by storing the paper in some dark room. They want to profit from the money scarcity, and do so by lending the money to those who need it. And that's why the government must not tamper with interest rates: because the interest rate is precisely the means by which a person can judge whether borrowing money is a good idea or not. A natural interest rate of, say, 20%, automatically limits the borrowers to those who have reasons to believe they be able to produce more than this 20%. Were the government to artificially lower the rate to, say, 5%, and lots of people who expect to produce between 5% and 20% will borrow it, entering into production patterns that are suboptimal due to the available amount of resources. They'll believe they're prospering, and the government will believe it's making the economy run, when in fact it's only creating a bubble of misdirected investments that will at some point bust, showing to all how badly allocated all that money has been.
The key to economic success isn't an increase in liquidity through artificial means, but an incentive to saving money, so that an accurate natural interest rate develops and money can be optimally allocated through borrowing. When Keynesians try to "solve" the bubble/bust cycle by flooding the market with printed paper and thus tampering with the interest rate, they're in fact creating the very bubble that will bubble in future.
So, the answer is: even if people don't want the pain, it's desirable, because otherwise it's just pushing the pain to a future date, when it'll be much worse. A fully free-market with a hard-to-tamper currency has
1929 saw DEFLATION, not INFLATION... the author confuses America with Germany...
It's irrelevant. 1929 saw a bubble created by Wilson's credit expansion bust. The end of the petrodollars age will see a bubble created by Nixon's abandonment of the gold standard bust. The direction this bust takes is secondary to the fact that normal people will suffer no matter what.
but then, this is the LEAST of the inaccuracies of this post.
I simplify, but you can see that Country A need not trade with the US to have a dollar exchange rate for its currency.
True, but that's why I mentioned in my hypothetic example that country A wouldn't have any relationship to the USA in any way, direct or indirect. We can use other examples, too. I can create a currency entirely mine using my printer. I print AG$1,000,000, or better yet, I make my own online deposit bank which holds in a nice MySQL database all your (and mine) AG$. Then I go out trying to exchange these for US dollars. What's the exchange rate? There isn't one. And why there isn't one? Simply because no one can use it for anything, except maybe purchasing a smile from me. Same goes for the old WW1 German currency, the Confederate money, etc. Even if they have some value for me, there not existing a market for them (as currency - maybe they have some value as art, or at least as recyclable paper), they not being usable as a purchasing device for real goods and services, they by definition have no (mutual) monetary value.
And lead to the destruction of many economies due to lack of liquidity. You also have the potential issue of localized booming markets (eg China) causing global deflation. (. ..) The richness of a country is not just what it produces, but also what it can acquire through trade. That's why countries stockpile tradable resources such as gold, dollars, and more recently the euro, rather than just any piece of paper or metal.
You clearly think along Keynesian macroeconomic lines. To refute your reasoning, thus, I would have to provide you a full course on classical liberalism coupled to a detailed refutation of Keynes, something I'm not on a position to do.
As such, I'll limit myself to point you where you can download all the books you want and more demolishing Keynes and some more: the ebook repository at the Mises Institute website. Start with Mises own Human Action and proceed from there.
In regards to your specific points, I can offer some comments, but I'm sure they're going to sound incomplete without the above basis. In any case, here're them:
a) Liquidity is a meaningless parameter. The amount of money available, or rather, the number you attach to incommensurable goods, services etc. to which you attribute subjective valuations, does not make a country to produce more or less. The real economy is always an exchange of goods or services for other goods or services. Money makes what would otherwise be a barter system more efficient in that it makes everyone save time by not having to construct by themselves a chain of "who wants what" to be able to make deals, but that's it. Remove completely all kinds of money, be them paper or metals, and you still have a market obeying the exact same rules and suffering from the exact same shortcoming when tampered by government.
b) Deflation isn't a problem. In a market without government interference, prices as a whole have no reason at all to increase. Increases and decreases in prices are localized. Some areas have price increases because demand increased, others have price decreases because demand decreased, and that's it. Everything in this regards is nothing more than markets self-regulating, and a global deflation would be exactly that: the global market self-readjusting prices due to offer and demand.
c) In regards to the richness of a country, you're right in that it comes also from what it can acquire through trade, but wrong that this depends on how much reserves it has. I guess you believe in the "balance of trade" concept. When thought in terms of balance of money flows, it has little meaning, because you're looking at the wrong parameter. When you look at what is actually being exchanged, then you have the real balance of trade, and it's always perfectly balanced. The goods and services that came out from a country have been exchanged by the goods and services that entered that country. And that's it. An actual imbalance is impossible.
The similarity of one can be made by way of promises ("I promise you that if you provide me this right now for less than you would require otherwise, I'll provide you something tomorrow for less than I would require otherwise"), which money in the end is. Since promises can be valued (you trust the country that's promising you), you also "purchase" them (pretty much like a service, nonetheless!). If the promise is kept, so good. If not, if it's broken, the market will readjust itself to take that into account. But at any given time, everything that went out (promises included) was exchanged by everything that came in (promises included), and thus, no imbalance can exist, ever.
To have all of this detailed I suggest you search for "keynes" in the Mises Institute website. There are more than 2,000 ar
I'm aware of the arguments for the gold standard, though not the fourth issue that you mentioned.
It comes from a very old school of economical thinking: Mercantilism. People who adopt this posture usually think in Keynesian macroeconomics terms, but that's only because Keynes himself was, as far as I know, a great fan of Mercantilism. The whole idea so dear to many current mainstream economists that the "balance of trade" is something important for a nation, is at the core of many of the errors still practiced today by governments all over the world, even though it has been proved false again and again since the end of the XIX century by a myriad of classic liberal and libertarian economists.
There really is no solution to this other than teaching sound economics to all the ignorant politicians who act based in this nonsense, and this, unfortunately, is something almost impossible. Sound economics is all about markets self-adjusting, and since there's no opening for politicians exercising their discretionary power in such a scenario, even those who actually do know about this will most of the time just ignore it.
I'm curious, do you subscribe to the Austrian School of Economics?
Yes, in fact I do.:)
It's been a long time since I took my Economics class, but I'd always felt that the whole fiat-based monetary system backed by US dollars was just a means for the US to export inflation during the first OPEC oil-shock in the 70's.
I don't know if that was the effective reason for the decision, but even if it is, such a move would have happened anyway. The USA learned economics from Keynes many, many years before Mises arrived on the USA. When he did, you already had everywhere Economics courses on colleges and universities almost or entirely based on Keynes dropping hundreds of new keynesians on the market every year. And Keynes was very vocal in his repudiation of the gold standard and his defense of fiat money, arguing that the former was "primitive" and the later a more appropriate way of doing things for an enlightened age. So, it were only a matter of time until it happened. If anything, the whole OPEC oil-shock just accelerated the process, but it wouldn't have been by itself sufficient cause for it to happen.
By the way: someone else in this thread asked my opinion on a global currency. If you're interesed, here's my reply to him.
I didn't know of the Wikipedia entry, thanks for the link. I began taking notice of this interpretation by reading, many months ago, Ron Paul's very detailed Congress discourse on the subject, way before I even knew he was a presidential candidate. It's linked from the Wikipedia entry, but it's so interesting and full of historical details I cannot avoid reposting the link here: The End of Dollar Hegemony.
I'd be interested too read your opinions on a theoretical single global currency. No exchange rates at all...would it solve problems or create them?
It would solve two problems:
a) That arising from countries artificially manipulating the exchange rate to make their exports more attractive to foreign buyers. This is an absurd concept because it's nothing more than government of country A using the taxes paid by all its citizens to subsidize the consumers of country B, so that a small groups of people inside country A profits more. An indirect and very cumbersome way of redistributing wealth, it that much.
b) That arising from deals such as this I mentioned, that the USA made with OPEC.
But it would not solve one additional problem:
c) That of printing-created inflation. If you have 'n' goods, and 'x' paper bills available, then roughly speaking those 'n' goods have a value of 'x'. Double the amount of money available without doubling the amount of goods available and 'n' will now cost '2x'. This is the main source of inflation globally, and not those psychological mysteries that most economists think are the cause of prices rising.
For this to not happen, the global money must be independent of any government, even a global government, with a rate of increase either null or at least fixed. This is why many classic economists believe gold should be (again) the global currency. Although its available quantity increase over time, it's at an almost fixed rate, outside of any and all governments desire to change its pace. A return to the gold standard would then be able to solve these 3 problems.
Unfortunately, there's a fourth problem that has no solution outside of economical training:
d) The belief that the more money you have stored in a country, the more rich it is.
When the gold standard was the norm, most countries believed this, and as a result tried to their best to store as much gold as they could, much like what's done nowadays with US dollar reserves. But this doesn't make sense either. The "richness" of a country isn't in how much paper bills or tons of metal it has stored. It is in its productive (goods and services) output. The more a country produce things others are interested in, the more it profits from its efforts.
That doesn't mean reserves are useless, of course. They have a purpose: that of allowing for the correction of errors or to deal with externalities. But beyond this, accumulating paper or metal for the sake of it is useless, and shouldn't be done, for many useless wars were waged on this false assumption.
Anyway, outside of politicians knowing economics well enough to not make dumb mistakes, a return to the gold standard would be the best approach. Too bad it won't happen.
The problem is that it's an statistic devoid of any significance. If I we both met and we exchanged a single $1 dollar bill between ourselves once per second, we would have "flowed" $63 million dollars after a year. What does this mean? Nothing. The whole velocity of money concept is bogus. And yet, many people give an undue value to it. Sad, but true.
I'd say that market speculation is a dramatically more potent force on your ability to get US dollars than any exchange of goods.
These number exchanges between columns of a mainframe database surely have detectable effects on the real economy, but they all boil down to expectations on what the real world will be like within a reasonable frame time based on what it is now and what it has been in the since some time. Market speculation is playing these expectations, and it works marvelously well while the actual situation is sufficiently stable. But change the true rules of the game and the system will float wildly until everyone gets used to the new situation and learns to play by the new rules. What I'm describing relates to this concrete reality, not the imaginary chess play that's developed on top of it.
Perhaps, but the USA is also the 'consumer of last resort' for the export economies of these same European and Asian countries so they cannot dump all of their dollars without destroying the purchasing power of the average American and if that average American cannot consume then the entire world feels the pain right along with us here in the USA. (. ..) the Europeans and the Asians cannot do what you suggest because they would be killing the goose that lays the golden eggs.
True, but that's also why they're trying to change. So far all these countries have their economies tied to what happens in the USA because USA owns the universal means of exchange. Americans can consume, consume and consume, and print more, more and more paper money to be able to consume ever more, without that hurting their economy through inflation in any way, because all the paper excess is exported and circles around the world, creating inflation "there". And this inflation, in the very specific sense of a lack of conditions for sustained growth, is something that the European Union, China, Russia etc. don't what to support anymore. But for that to be possible they must first cut their US dollar dependency, and this in turn can only be made by they having the ability to purchase oil in their own currencies. Using your allegory: they don't want to depend on the goose that lay the golden eggs, they want to become that goose.
Note that they plan to do so in a way that won't hurt them, but will certainly hurt USA and most probably all other countries, since most of these won't have the privilege of being in the "currency basket" of their dreamed future OPEC. Once the world (USA included!) must use euros to purchase part or all of their oil, Europe will have them as captive markets for its expensive goods and services, as well as access to cheap goods coming from them, all coupled to not having a single worry about how much they're spending due to the export of their inflation, and so on and so forth, in a very similar way to nowadays USA. So, for Europe everything will be perfect. Same goes for the ruble and Russia, the yuan and China, and etc. etc. etc., for all currencies part of the currency basket.
They will profit a lot, rising from their position to a new high level, while USA, because it's so high now, will lose a lot, going down until it arrives at the same level the others have reached. For them it'll be, compared to where they were, way high. For USA it will be, compared to where it was, the lowest since the end of WW2, if not lower. For everyone else, it'll be a lot of chaos during the transition, followed by an accommodation to the new status quo.
And if history teaches one thing, is that this won't be a peaceful process.
Slashdot Mirror
Some people already do this. The Auctioneer addons pack for World of Warcraft has alpha, beta and gamma versions released before the official release.
For example: it seems evident that the soul of a stone is simpler from that of a plant, since a stone can move itself only in one direction (down) while a plant has both the "down" movement of a stone as well as an "up" movement (like that of fire), plus a growing movement. And both a stone (or fire) and a plant seemed to have simpler soul than than an animal, for the animal had both kinds of movement as well as that of moving itself based on desires such as thirst, hunger, sex etc. And humans? Humans added to the mix movements based on reasoning, something animals didn't possess. So with this you develop a taxonomy of internal movements: mechanical soul, vegetative soul, volitive soul, rational soul etc., and then proceed to study what causes each one.
Plato, thinking on this, would work in terms of universal causal principles: there was a structural Cause of movements, and individual entities would be merely entities composed of, among other things, that Cause (but not in the sense that they had "pieces" of that Cause in them). Aristotle, on the other hand, was more concerned with how movement arose from individual beings themselves, and worked in terms of the way the matter from which a body is composed had to be organized for it to be able to move. Both things aren't mutually exclusive, and neither differ from, say, modern-day concepts such as the DNA. A being's DNA causes the matter it's composed of to organize in this or that way, and this organized matter is able to move in this or that way precisely because of this organization (provided there's energy input, of course). On the other hand, a DNA, to exist, must obey the supreme Laws of Physics, which in turn must obey the even more supreme Laws of Mathematics. So, while Plato would probably talk about Mathematics as the ultimate soul of anything (and the properties of a specific individual's DNA as his derivative personal soul), Aristotle would take the matter organization produced by the DNA as the being's soul. But any way you take it, the Mathematics, the Physics, the DNA, the order produced by this DNA etc., nothing in this complex is "separate" from the concrete being in any meaningful way. These are all logical distinctions, not material distinctions, except in the sense that, although every DNA obeys Physics, Physics isn't only about DNAs, and although Physics obeys Mathematics, Mathematics isn't only about Physics, etc. etc. etc. As my Philosophy teacher once told me, nothing proves better the existence of the soul (in the proper, pre-Cartesian meaning of the word) than our 20th-21st century Academic Biology.
So, what we have isn't really an opposition between the Greek and Semitic concepts (or lack thereof) of the soul, but merely the fact that Hebrews simply didn't bother to develop such a fine grained terminology. It's simply the case that in this field the Greeks had more depth than the Hebrews. But in the end what both were talking about was pretty much the same.
I guess it's time for someone to assembly a list of pro and anti-RIAA American Universities. In a few years, if not months, it's going to become a major factor for anyone selecting which University to attend.
Germany has still many odd interactions with the post-WW2 world. I don't live in Germany, but I'm of German descent (3rd generation) and as such now and then either read or hear about what's going on "over there", and rarely it's something I like. For instance, did you know that home-schooling your kids in Germany can cause you to go to jail, lose parenting rights, and put your kids into an orphanage? Not only that, but until Hitler (yes, he!) prohibited it in the 1930's, home-schooling was allowed. So, modern-day "we censor books" Germany not only holds old nazi laws valid, but also have no shame on actually destroying real people lives for violating them. How can this be?!?
Germany is a schizophrenic country. Nazism shattered its collective mind beyond recognition, causing a profound cognitive dissonance to develop, and no cure is on sight. Unfortunately we're still going to see lots of BS coming from there...
Answer: no, they shouldn't be able to profit from previous work.
Give me a way to do my work once, doesn't matter what it is, and live from it until I'm dead, and I'll think it's fair for musicians to have the same privilege. Otherwise, forget it. It's simply fair that they work everyday, as everyone else does, by doing whatever they're good at, as everyone else also does. Copyright is at best illogical, at worst an aberration.
Correct. In Portuguese we have the words "livre", meaning free from restriction (for example, when a prisoner is freed, we say he's "livre"), and "grátis", meaning free from cost, from were comes the derived word "gratuito", meaning that which is free from cost. Thus, freeware translates to "software grátis" or "software gratuito" (both are used and have the exact same meaning), while free software translates directly to "software livre" and free software movement becomes "movimento do software livre". It's all pretty straightforward, and I believe other Latin languages are similar.
Sure, I'm in total agreement with you. The problem with a pure fiat money isn't that it doesn't have intrinsic value while gold would have intrinsic value. Neither of them has intrinsic value, and for that matter, nothing has. But the point is simply that fiat money allow governments to more easily manipulate to their advantage the value people attribute to it.
When government prints money, it knows people will still sell goods and services priced according to the previous value for some time, without noticing that in keeping these prices the amount of money running around in the economy is greater than the amount of goods and services that can be purchase by it. That allows government to acquire more without having the actual means to, actually removing goods and services from the economy. The moment people notice what happened, prices rise, and then rise a little more, to accommodate for those goods and services that are missing since they went to government. Result: after inflation, things aren't simply equal. People lost actual goods and services to government, and have to produce more.
That's why money printing, and the inflation it causes, is considered a hidden tax. Government (and its friends, namely banks, who received money earlier than everyone else) profit, people lose. And those who lose more are all those who have their income adjusted last. Namely: workers.
A gold standard, by avoiding this kind of manipulation, is simply more fair. If government wants to tax, it has to actually tax, and face the election results of that, not hide what it's doing behind tricks so that no one except economist understands what's going on.
Because they are rare. You cannot "print" as much gold as you want, as governments do, creating inflation and through it making the poor pay your bills. You have to make careful usage of what you have, for once it's gone, it's gone.
Of course Microsoft doesn't work this distinction in this exact way, but they tend towards it when they say a "non-genuine" copy might have been tampered with virus and the like. Anyway, I just wanted to point out that it's perfectly possible to have a legitimate "genuinely sourced from 'x'" label that's clearly distinct, in meaning and application, from that of "legally licensed from 'x'".
Go back to my original post, read it in context, and focus on the main subject. This is the best advice I can provide you.
No, no! The total amount of money existing in the economy, no matter what this quantity is in numerical terms, is always a representation of the total amount of goods and services available in that same economy. All the currencies of the world "add up" to all the goods and services in the world. Neither is "bigger" or "smaller" than the other for the sole reason that one represents the other, and the other represents the one. Many of errors in Keynesian macroeconomics come from ignoring this fact, and taking both things as divergent realities.
When the numerical amount of money is a fixed quantity, be it tons of gold, tons of silver, tons of some basket of metals, or even bills of US dollars (if it were a stable quantity to begin with), prices for individual goods in the whole market float up and down. If people have more interest in good A, and the offer of A stays the same, the price of A increases, while the price of something else that isn't that much interesting anymore, let's call it B, decreases. This is a pretty clear signal to producers of A that they must increase the production of A, while producers of B will notice the profit per unit is smaller and will diminish its production. Inflation is per definition inexistent, for price increases in some areas are counterbalanced by price decreases in other areas, while at the same time these same self-balancing prices work as immediately understandable signals for all those involved. They simply know what to do.
The same goes for money borrowing. Money saved available for lending being in a fixed quantity, and people interested in borrowing money being in a greater number than the money available, the result is the natural interest rate, what causes the money offer to equal the money demand. More demand for money, higher interest, so that both balance. Lower demand for money, lower interest, so that both balance. The result is that there's never a "shortage" of money. The exact amount of actual money available reaches the hands of the top interest-paying-capable people in need that money. And how do they know they can pay this interest? Because they're the producers of A, which is selling well! In short: money prices and interest rate walk in perfect consonance, as market signals clearly intelligible.
Now, let's look at what happens the the amount of money available isn't fixed, but increases over time. The first important aspect of this is that the new money doesn't enter the whole market simultaneously. It enters the market in a layered way: first to these banks. Then to those secondary banks. Then into the money pool for borrowing, what causes the interest rate to go down artificially, this being the first break in market signaling. Then into the hands of great investors, who can purchase more commodities, this being the 2nd break of market signaling. Notice that, since the commodity manufactures are basing their current prices in the previous, lower money pool situation, unaware that conditions changed, this means industrialists take advantage of the ignorance of their providers to purchase goods at devalued prices. And so on and so forth, until the new money reach the whole market, progressively causing inflation as more and more sellers notice the money supply increased (due to higher demand) and go about readjusting their prices to reach a new equilibrium.
If things stayed at this, at some point the readjustment would be complete and a new equilibrium reached. The industrialist that received money earlier would have profited from the induced inflation, someone in the end of the scale would have lost to compensate
Here in my city, for instance, some charity organizations made exactly that. You get an arbitrary number of bills when you give them something they need, and then can use these bills to purchase things you're interested in at their bazaars, as well as from anyone that decides to support it. Another example: in Argentina, when their national currency imploded some years ago, some cities developed their own currencies, extremely stronger. And at last: if nowadays some groups of people decide to accept Confederate or WW1 bills as money, it becomes "current currency" as well.
So far as whatever anyone is trading in these "alternative" currencies isn't traded in any way, shape or form using another, "official" currency, there's no exchange rate between both.
I didn't do it directly, but indirectly, when I mentioned promises. Money, whether used right now or expected to be received in future, is also a material expression of confidence. You "know" (trust) that with a $1 bill you can get this, and "know" (trust) that it's not enough to get that. Adding a time dimension doesn't change this characteristics, except for the fact that you must take into account with more attention a subjective factor (that is present in all cases anyway), namely, that the person/country who is borrowing money believes that what he can get using it right now is both worth more than the increased cost he's paying for and also worth more than merely getting it later under a lower cost.
Sorry if I gave that impression. That's not the case. What I'm arguing against isn't a person or a country building reserves. I'm arguing against he overdoing it. After the point were security and flexibility have been reached, accumulating more for the sake of it is utterly useless.
The exception to this is when this accumulated money doesn't stay frozen in some place, but on the contrary, is made available for borrowing. Provided the interest rate is a result of market forces, not government interference, it becomes extremely useful.
No, no, no! This is a typical Keynesian error. People don't hold money by storing the paper in some dark room. They want to profit from the money scarcity, and do so by lending the money to those who need it. And that's why the government must not tamper with interest rates: because the interest rate is precisely the means by which a person can judge whether borrowing money is a good idea or not. A natural interest rate of, say, 20%, automatically limits the borrowers to those who have reasons to believe they be able to produce more than this 20%. Were the government to artificially lower the rate to, say, 5%, and lots of people who expect to produce between 5% and 20% will borrow it, entering into production patterns that are suboptimal due to the available amount of resources. They'll believe they're prospering, and the government will believe it's making the economy run, when in fact it's only creating a bubble of misdirected investments that will at some point bust, showing to all how badly allocated all that money has been.
The key to economic success isn't an increase in liquidity through artificial means, but an incentive to saving money, so that an accurate natural interest rate develops and money can be optimally allocated through borrowing. When Keynesians try to "solve" the bubble/bust cycle by flooding the market with printed paper and thus tampering with the interest rate, they're in fact creating the very bubble that will bubble in future.
So, the answer is: even if people don't want the pain, it's desirable, because otherwise it's just pushing the pain to a future date, when it'll be much worse. A fully free-market with a hard-to-tamper currency has
You clearly think along Keynesian macroeconomic lines. To refute your reasoning, thus, I would have to provide you a full course on classical liberalism coupled to a detailed refutation of Keynes, something I'm not on a position to do.
As such, I'll limit myself to point you where you can download all the books you want and more demolishing Keynes and some more: the ebook repository at the Mises Institute website. Start with Mises own Human Action and proceed from there.
In regards to your specific points, I can offer some comments, but I'm sure they're going to sound incomplete without the above basis. In any case, here're them:
a) Liquidity is a meaningless parameter. The amount of money available, or rather, the number you attach to incommensurable goods, services etc. to which you attribute subjective valuations, does not make a country to produce more or less. The real economy is always an exchange of goods or services for other goods or services. Money makes what would otherwise be a barter system more efficient in that it makes everyone save time by not having to construct by themselves a chain of "who wants what" to be able to make deals, but that's it. Remove completely all kinds of money, be them paper or metals, and you still have a market obeying the exact same rules and suffering from the exact same shortcoming when tampered by government.
b) Deflation isn't a problem. In a market without government interference, prices as a whole have no reason at all to increase. Increases and decreases in prices are localized. Some areas have price increases because demand increased, others have price decreases because demand decreased, and that's it. Everything in this regards is nothing more than markets self-regulating, and a global deflation would be exactly that: the global market self-readjusting prices due to offer and demand.
c) In regards to the richness of a country, you're right in that it comes also from what it can acquire through trade, but wrong that this depends on how much reserves it has. I guess you believe in the "balance of trade" concept. When thought in terms of balance of money flows, it has little meaning, because you're looking at the wrong parameter. When you look at what is actually being exchanged, then you have the real balance of trade, and it's always perfectly balanced. The goods and services that came out from a country have been exchanged by the goods and services that entered that country. And that's it. An actual imbalance is impossible.
The similarity of one can be made by way of promises ("I promise you that if you provide me this right now for less than you would require otherwise, I'll provide you something tomorrow for less than I would require otherwise"), which money in the end is. Since promises can be valued (you trust the country that's promising you), you also "purchase" them (pretty much like a service, nonetheless!). If the promise is kept, so good. If not, if it's broken, the market will readjust itself to take that into account. But at any given time, everything that went out (promises included) was exchanged by everything that came in (promises included), and thus, no imbalance can exist, ever.
To have all of this detailed I suggest you search for "keynes" in the Mises Institute website. There are more than 2,000 ar
There really is no solution to this other than teaching sound economics to all the ignorant politicians who act based in this nonsense, and this, unfortunately, is something almost impossible. Sound economics is all about markets self-adjusting, and since there's no opening for politicians exercising their discretionary power in such a scenario, even those who actually do know about this will most of the time just ignore it.
By the way: someone else in this thread asked my opinion on a global currency. If you're interesed, here's my reply to him.
I didn't know of the Wikipedia entry, thanks for the link. I began taking notice of this interpretation by reading, many months ago, Ron Paul's very detailed Congress discourse on the subject, way before I even knew he was a presidential candidate. It's linked from the Wikipedia entry, but it's so interesting and full of historical details I cannot avoid reposting the link here: The End of Dollar Hegemony.
a) That arising from countries artificially manipulating the exchange rate to make their exports more attractive to foreign buyers. This is an absurd concept because it's nothing more than government of country A using the taxes paid by all its citizens to subsidize the consumers of country B, so that a small groups of people inside country A profits more. An indirect and very cumbersome way of redistributing wealth, it that much.
b) That arising from deals such as this I mentioned, that the USA made with OPEC.
But it would not solve one additional problem:
c) That of printing-created inflation. If you have 'n' goods, and 'x' paper bills available, then roughly speaking those 'n' goods have a value of 'x'. Double the amount of money available without doubling the amount of goods available and 'n' will now cost '2x'. This is the main source of inflation globally, and not those psychological mysteries that most economists think are the cause of prices rising.
For this to not happen, the global money must be independent of any government, even a global government, with a rate of increase either null or at least fixed. This is why many classic economists believe gold should be (again) the global currency. Although its available quantity increase over time, it's at an almost fixed rate, outside of any and all governments desire to change its pace. A return to the gold standard would then be able to solve these 3 problems.
Unfortunately, there's a fourth problem that has no solution outside of economical training:
d) The belief that the more money you have stored in a country, the more rich it is.
When the gold standard was the norm, most countries believed this, and as a result tried to their best to store as much gold as they could, much like what's done nowadays with US dollar reserves. But this doesn't make sense either. The "richness" of a country isn't in how much paper bills or tons of metal it has stored. It is in its productive (goods and services) output. The more a country produce things others are interested in, the more it profits from its efforts.
That doesn't mean reserves are useless, of course. They have a purpose: that of allowing for the correction of errors or to deal with externalities. But beyond this, accumulating paper or metal for the sake of it is useless, and shouldn't be done, for many useless wars were waged on this false assumption.
Anyway, outside of politicians knowing economics well enough to not make dumb mistakes, a return to the gold standard would be the best approach. Too bad it won't happen.
Note that they plan to do so in a way that won't hurt them, but will certainly hurt USA and most probably all other countries, since most of these won't have the privilege of being in the "currency basket" of their dreamed future OPEC. Once the world (USA included!) must use euros to purchase part or all of their oil, Europe will have them as captive markets for its expensive goods and services, as well as access to cheap goods coming from them, all coupled to not having a single worry about how much they're spending due to the export of their inflation, and so on and so forth, in a very similar way to nowadays USA. So, for Europe everything will be perfect. Same goes for the ruble and Russia, the yuan and China, and etc. etc. etc., for all currencies part of the currency basket.
They will profit a lot, rising from their position to a new high level, while USA, because it's so high now, will lose a lot, going down until it arrives at the same level the others have reached. For them it'll be, compared to where they were, way high. For USA it will be, compared to where it was, the lowest since the end of WW2, if not lower. For everyone else, it'll be a lot of chaos during the transition, followed by an accommodation to the new status quo.
And if history teaches one thing, is that this won't be a peaceful process.