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Responding to arguments about government-issued currency

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brian0918
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For future reference, what is the best response to the following attempt to justify taxation:

"Dollars" are not property in the sense that this computer is, or my house is. They're a mechanism by which the government provides people with the service of buying and selling; they have zero intrinsic value, and thus the government isn't really taking anything tangible when they relieve you of them.

My response was that the government has no right to grant itself total control over a currency that must be permitted in any transaction.

Edited by brian0918
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The person's premise that fiat currency has zero value is false, and we know this because when we go shopping people exchange food, clothes, TVs, and all sorts of other stuff for our dollars. The value of the dollar at any point in time is the goods and services that people are willing to exchange for it. One might argue that fiat money has no "intrinsic value"; or, one might argue that it ought not to have "exchange value". However, the simple facts is that today, at the time of taxation, it does have exchange value. When the government takes US dollars from me, what it is taking away is my ability to get a certain amount of real value (food, clothes, TV, etc.) for those dollars. It is exactly as if the government took away the food, clothes etc. that I could not buy. And, of course, the only reason the government takes those dollars is because the dollars have exchange value. What the government wants to do, in essence, is this: stop me from buying some food, clothes, TVs, so that it can buy those things instead (perhaps indirectly, by giving the money to other people, who can then spend it).

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I actually laughed out loud when I read that quote.

You should have asked him to give you all his worthless currency, and when he refused argued that it was valueless to him and therefore it didn't matter if he gave it away.

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So something that has no intrinsic value can still have an exchange value, and something that has an exchange value can still be considered property? What is the argument for the latter?

Edit: Actually, isn't it simply the case that the "value" of something is always defined by what people are willing to trade you for it. This person is trying to redefine value to create a loophole for taxation.

Edited by brian0918
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So something that has no intrinsic value can still have an exchange value, and something that has an exchange value can still be considered property? What is the argument for the latter?
I put "intrinsic value" in quotes, because it is often used in a fuzzy way. Can you come up with some concrete examples to flesh out what you mean when you say "intrinsic value"? Does a CD with William Hung's singing have "intrinsic value"? Better still, imagine if gold had no industrial uses, but was used almost exclusively as jewelery, would that imply "intrinsic value"?

Anyhow, clarifying that concept is not required to discuss property rights. The rationality of a value ought not to be a legal prerequisite to establish property rights. (Perhaps there's a particular example you're considering, where is appears to apply. If so, could you elaborate.)

So, I can legally own an item that nobody else values or wants. I might own it even if it is irrational for me to value it.

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Then how do you explain that intellectual property applies less to things that fewer people (IE only you) value and more to things that many people (or people in general) value?
I don't understand the question. If some singer's album sells a million copies, and another singer sells just 50 the same IP laws apply to them.
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I put "intrinsic value" in quotes, because it is often used in a fuzzy way. Can you come up with some concrete examples to flesh out what you mean when you say "intrinsic value"? Does a CD with William Hung's singing have "intrinsic value"? Better still, imagine if gold had no industrial uses, but was used almost exclusively as jewelery, would that imply "intrinsic value"?

Then what I guess needs to be made clear is that money has value and that when you trade something for money, you then *own* the money - it is your property (and not US Govt property, as it says on the bill). If it is not your property, then the argument is lost, no?

Edited by brian0918
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...when you trade something for money, you then *own* the money - it is your property
Yes, it is.

...(and not US Govt property, as it says on the bill).
Does it say that on the bill? Technically, rather than being an asset of the Federal Government (or the Fed Reserve) bills are liabilities of those entities. Bills came about from traditional "bills of exchange" and other such "promissory notes". They are promises made by the person drawing the bill.

A good analogy is a bank's check, because it is very similar to a government note. Suppose I give you a check. The money in my account is my asset, and the bank's liability. When presented, the check represents a liability of the bank, not an asset. The asset is yours.The check is proof that I have assigned that much of my assets to you. The bank has that much less liability to me, and that much more liability to you. The check has the bank's name on it, and my name and account details; yet, it is your property. The check may not even have your name. It could be a bearer check, made out to "cash".

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"Dollars" are not property in the sense that this computer is, or my house is. They're a mechanism by which the government provides people with the service of buying and selling; they have zero intrinsic value, and thus the government isn't really taking anything tangible when they relieve you of them.

Dollars are not a mechanism by which the government provides people with the service of "buying and selling." Dollar bills are money. The function of money is three-fold:

1. Store of value

2. Medium of exchange

3. Unit of account

There is nothing about these 3 functions that necessitates government control.

Now, in so much as him saying the dollars has zero intrinsic value, he is right. The only value placed on the dollar is due to its marginal utility as a medium of exchange. Its status as a medium of exchange is declared by fiat, so people accept it on the premise that the government will continue accepting it. If we knew that the government is going to collapse tomorrow, then the dollar bill would be entirely worthless, and people would wiping their asses with them and scrambling to get resources with intrinsic (actual) value, i.e. gold, silver, real estate, an Armani suit, a bushel of wheat, whatever. Something tangible. He's right that the dollar is not tangible, but it still is my property in the sense that I have traded tangible goods to receive it. If we agree with his reasoning, then a borrower can simply decide to renege on a contract to pay back a debtor, because the contract is intangible and has no "intrinsic value." Factually speaking, this is exactly what the government would be doing if they "relieved you" of your dollars--they would be defaulting on a loan that I gave them, i.e. my tangible goods in exchange for their banknote.

Edited by adrock3215
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As expected, my debate with this individual has gotten more and more fundamental. I provided him with a rough explanation of the foundation for individual rights. His response is the most repulsive yet, and I'm not sure exactly how to respond besides in disgust.

The natural state of man is to be dominated by powerful men and institutions, and then by his needs, I think (I could be wrong but I think I speak for a certain tradition of thought on the matter). This isn't a desirable thing, but that's no reason to try to deny it. Rights are a statement that domination must have limits, if we are all to realize our full potential. Without the force of government eliminating criminals who would harm you or steal your property, the "coercions" and the influence of "contrived goals" would encounter on a daily basis would only increase.

What I had thought of was to ask how his "natural state" applies on a deserted island, but I'm not sure that is convincing.

Edited by brian0918
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"The natural state of man is to be dominated by powerful men and institutions, and then by his needs, I think (I could be wrong but I think I speak for a certain tradition of thought on the matter). "

Well, the next logical questions are:

1. Does he think free will is part of human nature? -that would of course disprove the above statement. It would also be easier to prove the existence of free will than to disprove this statement.

2. Ask him if by natural state he means "human nature" or "derived from human nature and reality".

If he does, well then human nature (and reality) applies to the tyrant just as it does to the serf. Or do we have two different species, Aryan and Semitic? If so, why isn't there a clear distinction between the two? Why did the only attempt to create such a distinction end in a burned out bunker in Berlin, with crazy Addie boy feeding his dog a cyanide pill and then blowing his own brains out, all over the the new wallpaper?

He's right about one thing, there is a "tradition of thought" on the matter.

Edited by Jake_Ellison
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The natural state of man is to be dominated by powerful men and institutions, and then by his needs, I think (I could be wrong but I think I speak for a certain tradition of thought on the matter). This isn't a desirable thing, but that's no reason to try to deny it. Rights are a statement that domination must have limits, if we are all to realize our full potential. Without the force of government eliminating criminals who would harm you or steal your property, the "coercions" and the influence of "contrived goals" would encounter on a daily basis would only increase.

Oh, ok...so he is going to go along with the Hobbesian state of nature outlook. That's easy enough to disprove, since there have been anthropological studies showing that the state of nature was actually far more Lockean than Hobbesian. He is entirely consistent with his reasoning though. I assume he's a stinky "intellectual" liberal; incidentally, most stinky "intellectual" liberals are Hobbesians who deny the existence of free will and have a very pessimistic view of man's capabilities.

Edited by adrock3215
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