What we should want is for money to be scarce. After all, we want it to maintain value, be useful now and in the future. A money that is infinitely plentiful (or increases in amount over time) is (or becomes) utterly valueless, and does nothing for the common man.
The author had me interested to that point. That is plain and utter B.S. Money is nothing more than a medium of exchange - the exchange of wealth - and therefore must adequately measure the existing quantity of wealth at any given time. Wealth is not static, except in small backwaters where not much of any lasting consequence is created, and therefore the supply of money cannot be static, except in small backwaters where not much of any lasting consequence is created.
I had always thought it was only liberals who thought wealth was static and the ownership of wealth a zero-sum game; apparently I was wrong.
posted on 05/20/2012 5:32:38 AM PDT
(TINSTAAFL - Mother Nature Abhors a Free Lunch almost as much as She Abhors a Vacuum)
No, a “medium of exchange” is one attribute, but not the only, of money. It must be a store of value as well. Clearly, the trend for collectivists is to destroy, or at least control these attributes. Some have argued for money to have an expiration date, in order to force spending? In any case if “money” does not maintain value it will eventually be refused, no way around that.
While gold may well be archaic, it is useful to understand it, and why it became money - indestructible, scarce, divisible, homogenous, fungible,recognizeable, etc. The problem today is there isn’t really an objective or standard unit of account. There are standards for distance, time, or weights and measures, but an elastic currency distorts things over time and governments cannot resist debasing whatever is used as money for their own benefit.
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