Thread: Money
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Old 06-30-2014, 01:52 PM   #2 (permalink)
John Wilkes Booth
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question... have you been watching the zeitgeist series?

as for the 'money from nothing' criticism, i don't necessarily disagree that the current monetary system is dysfunctional (i don't know enough to make an informed statement) but i think that the gold standard is just another example of an arbitrary and man-made standard. yes gold is a real commodity but ultimately its value depends on the whims of the consumer.... the simple fact that it is rare doesn't make it valuable. it's rare + there is a demand for it, which is why it maintains some relatively constant value that you can base money off. but say people collectively decided they didn't want/care about gold jewelry anymore. its value would decrease despite its rarity. it of course has other uses but it wouldn't be as valuable as a commodity anymore.

so with this in mind it isn't so bizarre to base currency off confidence... ultimately what you want out of a currency is something that you can be confident that others will accept in exchange for other goods and services.

so why the wealth inequality? simple... capitalism is by its nature a hierarchical system with winners and losers. any one individual can rise through the ranks and become rich... but there will always be more people on the bottom than on top, for the same reason companies will almost always have more workers than bosses.

what's more the workers and the bosses will inevitably compete against one another for control over the same pool of money. the workers want higher wages and the bosses/owners want higher profits. both these allocations of money have to come from the same stream of revenue, and generally the rich will win this battle as 1) they have the inherent leverage in that they can replace workers with others who are desperate enough to agree to their terms 2) they have the money to purchase political clout.
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