Much of your post demonstrates a confusion between money and debt. Perhaps it would help to re-read the portions from Charles Rist's book, contained in the post linked below, and some of Rist's other books.
Yes, I had read that post originally, which is what interested me in the topic. I find it fascinating that economic camps hold such disparate views. To me, it really is as opposite as people who claim HIV causes AIDS, and people who claim HIV does not cause AIDS. One side is right and other is not. I realize that in economics, it is somewhat different in that much of the divergent views of monetary systems actually boil down to which metrics are used to observe the state of the system, and which levers are used as the input controls to effect the future state. But there is an enormous difference between a fait money system and a hard money system. I suppose you could point out that either can work, so both are legitimate from that perspective.
Perhaps I am confused, but that is why I asked anyone to show in a simple setting, how a monetary system evolves from pure barter. I don't see the utility of a significant tangential enterprise solely as a mechanism to allow easier exchange of goods and services, provided the same function can be provided by careful application of a set of procedures and rules.
If you reread your post to me, you will see that 100% of the difficulty with a non-gold money supply is a failure of discipline. Why not address that as the root cause, rather than resort to a system that is 50% efficient? If a well disciplined system can achieve for 5% cost what a hard currency system can only do at 50%, which would you choose?
I think a clearer way to illustrate the difference between the two approaches to remove the division of labor typical of modern society from the equation. Imagine an individual who spends half his day building a chair to sell (his job), then spends the other half his day digging for gold so he can sell his chair and contribute his correct fraction of increase to the money supply. Compare this to the guy who spends all day building two chairs because he is part of a society disciplined enough to have an effective fait monetary system.
IMO, it is far better to pass two chairs to the future (or more likely, two factories, two inventions, two cures for disease, etc) than it is to pass half of that and a corresponding amount of effort cast into some lumps of metal. The lumps of metal not only took 1/2 your effort, they don't multiply on their own, whereas the fraction of societies efforts which enable production do, sometimes quite non-linearly as well. |
