A country can function without a national currency.

October 18, 2018, 9:27 am

Agree29 Disagree58

33%
67%

The debate "A country can function without a national currency." was started by lachlan2 on October 18, 2018, 9:27 am. 29 people are on the agree side of this discussion, while 58 people are on the disagree side. That might be enough to see the common perception. It looks like most people are against to this statement.

lachlan2 posted 25 arguments to the agreers part.
Matthew354 posted 3 arguments, TheExistentialist posted 1 argument, Nemiroff posted 8 arguments to the disagreers part.

lachlan2, tenyiyi, NitinTher, crispsandchips and 25 visitors agree.
Matthew354, CHANGEMYMlND, TheExistentialist, Nemiroff, KateLynn, abhimanyu, wth64828, camx, sayesha, Jocelyn, wmd, x1nyan, bhnf, Runtz, xenophon00 and 43 visitors disagree.

lachlan2
replied to...

I'm not sure what ypur trying to say at the beginning.

But it is not a matter of gold fluctuating against the paper representing it. The paper is a direct recipts for gold, so the price ia whatever the price of gold is.

If a bank has excess gold reserves it can pring new recipts for the gold. So there is no way recipts or "bank notes" can cease to exist.

3 weeks, 1 day ago
Nemiroff
replied to...

I think I found the an answer to my own problem. it wasn't gold that I thought vanishes into the ether but the dollars exchanged for it. the treasury should be able to buy gold with those dollars to replace it, although I'm still thinking through the implications of whether we will replace it at a loss. setting an artificial preset value on a product that naturally fluctuates will have consequences as well.

your rants about the transactions between individuals still completely missed the point and this revelation came from repetitively trying to explain the problem to you. however with this fundamental problem resolved you still have the technical concerns, like the ones others have raised.

3 weeks, 2 days ago
lachlan2
replied to...

Ok so a real world example: I produce a widget in America and sell it in Germany for three Euros. This means I value the 3 Euros more than I valued the widget, and the buyer vice versa. I am not stick with 3 Euros now, I can use it to buy its entire amount in gold if i value the gold more than 3 Euros. There are many reasons an individual could value 3 Euros or its exchange in gold more.

If I don't exchange by 3 Euros for gold I didn't "get robbed of gold" I just don't value the gold more than the Euros! Probably because I want to buy something in the EU So I'm better off not worse off!

People can still value fiat currencies in a free market. Maybe they still have purchasing power in certain areas. But money is never an end in itself.

3 weeks, 2 days ago
lachlan2
replied to...

Maybe I worded that wrong. You said that if we sell goods in another country we fiat to which there is no way to exchange for gold.

Well yes there is, it can be sold for gold. Every fiat money has a price relative gold. If the fiat money in your example is impossible to sell for gold, where the currency is so inlfated no amoint can exchange for gold, individuals wouldnt be trading goods for it in the first place!

3 weeks, 2 days ago
lachlan2
replied to...

If people trade products for a cpuntries currency then they value the country's currency more than the goods.

And you're saying if we trade to a country and people end up with their fiat money, its not true that they can't just use the money to buy gold if they want it obviously!

You're making the allegation that it is only possible to trade fiat for gold but not the other way around.

3 weeks, 2 days ago
lachlan2
replied to...

So your assuming an exhange of gold for its value in a fiat money causes the gold to get sucked into the ether.

If you sell your gold for its equal amount in fiat money, you value the amount of fiat money more than the gold and the owner of the fiat money values the gold more than the fiat money. You are both better off. The gold dosen't vanish from the economy it just has a different owner. This would make gold still have a value in the economy, it would just be owner by different people who may save it in other banks who now gain reserves.

So you're wrong.

3 weeks, 2 days ago

on the flip side, if we sell our products for their currency, there is no exchange for gold. it's entirely a one way street

and rather than growing our economy, it inevitably shrinks into zero.

3 weeks, 2 days ago
lachlan2
replied to...

So to your example, if I pay a foreigner paper gold claims and they cash out, they are not taking "our gold reserves" they are taking the gold they have direct claims to.

3 weeks, 2 days ago
Nemiroff
replied to...

print, dont print, we are still screwed

3 weeks, 2 days ago
Nemiroff
replied to...

so now its 3 papers, 3 gold.

the gold that was withdrawn is then sold for that fiat currency. the fiat currency is exchanged for those 3 papers. that are then used to swap for the gold. now our economy has 0 papers and 0 gold. sure the balance is still equal, except our economy is worthless.

3 weeks, 2 days ago
Nemiroff
replied to...

do you understand that I am talking about outside fiat currencies interplaying in that?

your missing and ignoring the entire point I'm talking about.

3 weeks, 2 days ago
lachlan2
replied to...

If, in a free market, a bank has gold reserves and issues receipts for each ounce of gold, and they run out of gold reserves, this will ONLY be possible by printing more paper than there is gold.

And if a bank did this and a fellow eventually came to redeem his receipt for gold, to find put they don't have any, then the banker goes to jail for fraud and breach of contract.

3 weeks, 2 days ago
lachlan2
replied to...

No your explanation dosen't follow basic math.

If a bank issues papers backed by 1 ounce of gold, and they have 6 ounces total. If one person redeems 3 papers for 3 ounces then the bank reserve is 3 ounces. There is never a situation possible where paper exosts withput gold backing. The paper is a direct receipt of gold, so redeeming a receipt for gold for the physical gold would void the paper.

Do you understand that?

3 weeks, 2 days ago

there is nothing wrong with equal exchange between individuals. the only robbery is us robbing ourselves for being stupid enough to be the only nation to employ this system.

the equal exchange for goods is not the issue, the issue comes when they trade that currency in for gold, whereas we cannot do the reverse since we will be the only idiots allowing that.

as our gold reserves diminish, that means less gold to back our currency, therefore our currency, and our economy, lose value. when our reserves reach zero, what happens? think.

it's an ok system if everyone's using it, but this one sided exchange is beyond stupid. all of your rants are missing this very simple reality and basic math. this explanation, combined with my step by step example is as clearly as I can make this. if your response highlights something I missed I will respond, but if your completely ignoring what I'm trying to explain here, then you're on your own. I know your smart enough to understand this therefore i must conclude that your choosing to not understand this.

3 weeks, 2 days ago
lachlan2
replied to...

So @Nemiroff what were you saying about how voluntary trade is "robbery"?

Mercantilism was a fallacious theory used by authoritarian kings in order to take control of a nations money.

So as we see statists often make absurd arguments about free trade and money that fall into 18th century economic-flat earther fallacies. Mercantilism was smashed long long ago. Do you care to take back the idea that buying gold from another country is robbery?

Or maybe the robbery is when the Federal Reserve creates money out of thin air to buy US Treadury bonds, therefore placing a regressive tax on the poorest citizens and using it for their own benefit.

3 weeks, 3 days ago
lachlan2
replied to...

And it dosen't matter if another country uses fiat money. If I hold gold and my canadian friend holds paper and we trade, we exchange values and both become better off to our own values as this is true for everything.

I think your problem is that you're viewing other products and fiat money as indivodually owned property, and viewing gold as a giant collective vault of "America's gold" and if I trade MY gold outside of the country the vault is drained. This isn't true.

This isn't true for banks either. If private banks hold gold reserves and don't want export any, then they don't. If close my savings with a bank and trade my gold out of the country it is at nobody's expense.

3 weeks, 6 days ago
lachlan2
replied to...

Mercantilism is exactly what ypu are proposing, that wealth is decoded by the amount of gold in government borders.

So in you're hypothetical example the person ends up with the same thing in the end. A certain amount of claims to gold. It dose 't matter if gold leaves the country on an individual basis, bwcause voluntary exchange leaves both individuals with what they value more. You are looking at gold money as a giant collective vault, where indoviduals sell gold to foreigners and the vault empties. That really dosen't matter with a medium of exchange. If the supply of money decreases and demand stays the same, the purchasing power will just increase. There is no loss to the country and gold can be traded across borders freely as anything else. A transaction is not robbery. If I sell gold to a Canadian he is not "robbing" the usa of gold. For one the gold is mine not the collective's and also it dosen't make either of us worse off.

Mercantilists believed that free trade of gold robbed a country of gold and made them less wealthy. So you're a merchantilist if you believe this.

3 weeks, 6 days ago
Nemiroff
replied to...

and once again, this does not change in any gold standard system imaginable whether we print more or dont

3 weeks, 6 days ago
Nemiroff
replied to...

then I have no idea why this isnt adding up for you.

I'm not sure why you mentioned mainstream capitalism attacks or flat earth mercantilism. the problem is basic math with addition and subtraction....

they exchange our gold money for our gold (-gold for us), buy faith money with that gold, exchange faith money for our gold money, then trade that gold money for more of our gold (-gold for us again)

the only way gold money will work is
a) everyone is on gold money
b) we refuse to trade with non gold money (aka total isolationism currently)
or
c) we dont exchange gold money for gold... which kinda undermines the whole gold money concept.

3 weeks, 6 days ago
lachlan2
replied to...

Yes, it is a representation of gold.

3 weeks, 6 days ago
Nemiroff
replied to...

do you believe the paper (or digital value) should be exchangeable for it's worth in gold on demand?

3 weeks, 6 days ago
lachlan2
replied to...

No I'm not if we only have paper for gold that actually exists than trading for paper IS trading for gold. The value of the paper claim to gold is the same as the value for gold. And privatized money does not mean we wpuld actually carry physical gold it probably means we would carry a card or paper that directly represents gold from a private company. You know this but ypur playing dumb to make capitalism sound bad and to flow along with the dumb mainstream.

If we have paper that dorectly represents gold and you think we would lose wealth by selling gold to people outside of the country , then you are falling for 18th century mercantilism. Do you want to have the 18th century debate between flat earther mercantilism and economics?

3 weeks, 6 days ago
Nemiroff
replied to...

so if they can exchange our currency for our gold, and they can trade for our currency with their faith based currency... cmon man.

put the printing excess paper thing aside. even if we don't do that your still missing the most important problem

3 weeks, 6 days ago
Nemiroff
replied to...

noone is going to carry around lumps of gold. a gold standard means you have paper currency backed by gold.

and the gold standard revolves around the guarantee that you can exchange that currency for an equal value of gold...

3 weeks, 6 days ago
lachlan2
replied to...

So our currency can't become worthless bdcause the gold is gone when the currency IS gold.

3 weeks, 6 days ago
lachlan2
replied to...

So if you are holding gold and don't want other people to buy it for fake paper, why don't you just not sell it?

They can't rob gold.. They can buy it.. that isnt robbery.

And again for governments, if they don't want more paper claims to gold than there is gold THEN STOP FUCKING PRINTING PAPER!!!!! that is 100% a problem of central banks and government and 0% a problem of capitalism. If you haven't realized it, that can't happen if there is no central bank or government control of money.

3 weeks, 6 days ago
Nemiroff
replied to...

once we have no more gold our currency becomes literally worthless, along with our economy

3 weeks, 6 days ago
Nemiroff
replied to...

and that doesnt change the fact that fiat currencies cant abuse the exchange for gold to take all of the gold that backs the non fait currency.

the type of gold standard is irrelevant to the problem

3 weeks, 6 days ago
lachlan2
replied to...

We already talked about that, and it was completely because the Fed created more claims to gold than there was gold. The Bretton Woods standard was hardly even a "gold standard". That's why I think it would be better to not even have a national currency.

3 weeks, 6 days ago

I have my own concern of how a non fiat currency will interact with non fiat currencies. our gold reserves will be robbed. that was one of the main reasons we, as one of the last non fiat currencies, abandoned the system.

3 weeks, 6 days ago

I mean they can function but not well haha.

3 weeks, 6 days ago
lachlan2
replied to...

This is why these debates don't really work, like do you want me to spend an hour digging in to why Kenynsian economics is wrong?

3 weeks, 6 days ago
lachlan2
replied to...

Even the basic logic is nonsense. If an individual offers me a currency for my products I base my decision on what I can buy with the money I recieve. I don't stop and think "hmmm, I wonder how strong this country's economy is".

You also need to grasp that value is subjective, only price can be objective.

3 weeks, 6 days ago
lachlan2
replied to...

TheExistentialist I don't even know where to start with your criticism of free market currency. Value of money is not based on the strength of an economy. It's based on supply and demand like anything else. Government creation of new money does not grow an economy. Deflation (not "inflation of money") is not a bad thing.

3 weeks, 6 days ago

I think you mean price or exchange rate, because value can never be objective. I'm not sure ypu know what ypu're talking about when you say state backed. We value USD based on its purchasing power, and prices are always transactions in the past, so we value USD from historical prices, which eventually imputs back to gold. But there is no gold for USD. It's backed by debt.

You said that the price of currency would inflate because the government can't print money without a national fiat system. Yes, that is a feature of capitalism. And a rise in the price of currency is deflation not inflation. Don't misuse terms.

3 weeks, 6 days ago

I have to agree with TheExistantialist here on this, because the strength of cryptocurrency is reliant on the decisions of a state (particularly from countries that have a significant impact on their economic policy making). Venezuela is one case of a failed economic system, that is now relying on cryptocurrency since their national currency is useless; there is however still enough backing from more significant countries for those cryptocurrencies to remain relevant for Venezuela.

4 weeks ago

In the absence of a "gold" standard or some kind of objective value system accompanying a currency (whether it be gold, lead, silver, copper, etc...) no currency can exist without state backing as it replaces the objective standard. Even crypto-currency has to be valued against state backed currencies.

The issue with standard backed currency (gold standard) is that we don't have enough of that resource in circulation to cover all the money we have in circulation. This would result in an ever inflating price of currency without the means to create new money to service debts, loans, modulate inflation, vary interest rates etc... So if we can't have a standard backed currency, then it must be state backed. Meaning that we assign value to currency based on the strength of the state's economy in which it is based. So the Dollar is valued by the strength of the US' ability to produce, export, import, and create value through work as well as the stability of the government that govern's monetary policy. This is why countries like India have a currency that is "lower" in value per unit than the US. It is simply a statement of the stability, availability, and backing the state is able to provide to a given currency.

Crypto-currency and other non-state backed currencies still derive their value from state currencies. If, for example, all the world's currencies took a nose dive, BitCoin and other crypto-currencies would suffer as they're intrinsically valued (and therefore backed) by state backed currencies. So while a given country could abandon it's own currency and rely solely on crypto-currencies, they would then be completely dependent on foreign monetary policy. If, for instance, the US decided to outlaw the use of BitCoin and similar currencies, the value of that currency would take a nose dive and any country relying on that currency as their primary currency would loose value without any action of their own. They essentially become dependent on other nation actors good graces. A country cannot function independently with such a system.

4 weeks ago

ALSO, just because there are right wing elements you disagree with doesn't mea N you arent a right winger. I think socialism is stupid and nonfunctional, I am still part of the left wing SPECTRUM.

4 weeks ago

furthermore, socialists dont care who claims to legitamizes the money, private or public. that is irrelevant to why they want it eliminated. so no, they neither spread nor fall for that fallacy. your arguing against a strawman

4 weeks ago

not a full response, but the term "socialist fallacy" heavily implies "a fallacy spread by socialists", when in reality the whole concept is something they are actively fighting against.

4 weeks ago
lachlan2
replied to...

I never even started talkong about monetary policy and socialism, I only made the allegation that Matthew fell for a fallacy that socialists are known to fall for.

However I will say this, just because because we don't have collectively owned means of production, or "real socialism", does not mean we cannot acknowlege specific areas pf our economy that are collectively run. For instance I can acknowledge that we have a socialist society for roads, mail, currency, defense, etc.

4 weeks ago
lachlan2
replied to...

I'm not a right winger given that the absence of government and private property rights are not right wing beliefs.


I don't care what the end fantasy is for socialists- all of the regimes will at some point nationalize currency if not already. This is all irrelevant to my debare, which proposes that a cpuntry can funtion without nationalized currency.

4 weeks ago

of course socialism has many watered down forms that most right wingers fail to even acknowledge... but honestly calling a government socialist is like calling a government capitalist.

are all capitalist governments democracies? centralized? dictatorships?

the answer is an economic system is inadequate to describe a government. how are laws enacted according to the communist manifesto? let me guess, no details?

4 weeks ago
Nemiroff
replied to...

you said a national currency is a socialist fantasy, when socialism really came well after millenia old national currencies.

socialism and communism seek to put all PROPERTY into the public domain. they seek to ultimately ELIMINATE all currency. and the fantasy barely describes any details regarding government structure.

your definitions and history are all skewed. and I dont think socialist key tenets came from some random "pamphlet". anyone can make a pamphlet.

4 weeks ago
lachlan2
replied to...

It was a communist goal to place all money and credit in the hands of the state, staight out of the pamphlet "communist goals".

Given that a society without indirect exchange is a hypothetical fantasy, and narly all interventionists and socialists believe in fiat money nationalized under the state, it is jot a straw man.

Plus my argument is not specific to socialists, it's directed to anyone that believes in national currency. So given that's both of you this is not a strawman argument.

4 weeks ago

you guys do realize real socialism seeks to eliminate currency? you guys are arguing against a strawman.

4 weeks ago
lachlan2
replied to...

Well you made the allegation that we would be a barter economy if the government did not nationalize money. If that were true it would mean government invented money. Since you are saying you don't believe this you understand that a country without national currency would still use money, right?

I know you are not a socialist, if you read my last comment I just said that you fell for a socialist fallacy to confuse state and society, which you did. You made the allegation that if the state does not nationalize something, then that thing will not exist at all.

What do ypu think the issue is if currency was free before the invention of cryptpcurrency?

4 weeks ago
Matthew354
replied to...

"Governments did not invent money!" I never said they did! I just disagreed with your original post. I disagreed not because I'm some far left leaning socialist that believes money has to be regulated by the government, or that the state/government invented currency. That is just blatantly false, and you inferred far too much from me.

I do in fact hope cryptocurrency give people the ability to be autonomous from the state, not be required by the government to be held accountable, and make national currency obsolete someday, the only problem is that it hasn't been proven to work like how national currency did.

And for the record, I have serious distaste for left leaning politics and socialist ideals. I'm pro business and heavily against bigger government, I'm just down to earth on the idea of supporting national currency until cryptocurrency has proven otherwise.

4 weeks ago
lachlan2
replied to...

I agree currency is important.

I'm disappointed in you, as you've fallen for maybe the worst socialist fallacy in existance.

Governments did not invent money! This cannot be stressed enough. Read "What has government done to our Money" by Murray Rothbard for a good explanation. Money is developed for indirect exchange by individual action the same way every other good is created.

A cou try without a nationalized currency would have sound money created by the private sector. And without a central bank issuing fiat money and inflating the money supply.

The idea that things do not exist if the state does not control them is to confuse government with society. Do you really think if the government never took control we would have stopped using our own private money and started bartering? That's ridoculous if you think that.

The government dosen't control the market for MLB baseball, so do you believe MLB baseball dosen't exist?

4 weeks, 1 day ago

In a lawless and almost none existent country? Sure, with some bartering. A developed country? Not at all. And even a growing interest with some developing countries are are getting into cryptocurrency, when they couldn't buy a plot of land and infrastructure to facilitate a system of currency.

Really, there is no better way to put value into an individuals' work than currency.

4 weeks, 1 day ago
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