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Is currency inefficient?

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tbj2102@gmail.com
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So the real issue is trade itself. What do you propose instead? "Everybody just do stuff and try to be useful to other people"? If this is so, you would get so many people just sponging this way so fast (not to say that there aren't any people doing so in the current mixed economy) as just one issue to pop up once you move beyond a few friends and family members doing stuff for each other. Search the forum for "communism" or some related terms and I'm sure you'll fine plenty of stuff written already on the problems that come with this. If you proposed something else I can't think of or glean from your posts so far instead of trade, then please tell me.

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@bluecherry (#26): I'm not exactly sure what I'm proposing anymore since my thinking on this has evolved so much. I hesitate to say "communism" since that seems to imply that I'm advocating we establish some kind of planned state-run economy. Anarcho-communism doesn't seem to fit either, since I'm not proposing that anyone actively go out and try to dismantle the state to make some kind of utopia. I can say that I haven't had many interactions with a state apparatus at all recently. Perhaps that's the important point -- living without trade or attachment to property rights enables one to, for the most part, avoid almost everything the government is and does, including taxation, without really impeding one's ability to target one's productive capacity to further one's values. I think it's about time to wrap this thread up since the title does not really seem to reflect where the discussion is at this point. As you say, the topics I am raising now are more appropriately categorized elsewhere.

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Trade is about trading value for value, not necessarily about currency.

Currency is saved work that one has done but not yet consumed, making it portable for future trade or consumption. Without currency (savings) you are consuming your work as you do it with no long range plans to save for tomorrow. You are living in the here and now like a hunter-gatherer since even a farmer needs to save some of his work for the next harvest.

This sort of lifestyle makes little sense and is the laughing contradiction behind those that claim profit (savings) is “evil”.

By claiming to live without currency (unconsumed work) you are either living on the range of the moment daily like that hunter-gatherer, which I doubt the OP is doing, or you are more likely trading value for value but have no objective measurement. If this implies obligations then you have an IOU which is nothing more than inefficient currency at best.

If you say there is no IOU, then it implies loose undeclared “obligations” in which people have to perform to their ability and receive what they need - Communism. The Soviet Union’s attempt at this was also laughable and I’ll never forget a Soviet official explaining how “businesses” could not operate and had to trade in an unorthodox fashion like the character Radar use to do on the old MASH TV show (three cases of toilet paper for anesthesia).

But this is well covered ground. The importance of currency and the resultant Price in transactions has been so well covered by Mises and his work on the Economic Calculator to render all of this discussion not even of a fun “What if…” exercise. It simply does not work as history has shown.

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@Spiral Architect (#28): You are conflating the concepts of currency and capital: http://aynrandlexico...investment.html.

I think I have completely failed to explain what model I am living by if it is being interpreted as anything close to what people in the USSR did. I will flush it out more in a post elsewhere, but perhaps a short analogy will help. The corporate world stopped paying dividends as a matter of habit long ago. Corporations have no obligation or expectation to issue dividends to investors. That doesn't destroy a corporation's capacity to attract investment. I invest in people and my relationships with them. I help them build their competencies, skills, and self-esteem. I don't care at all if these human capital investments pay dividends. It's simply not relevant to me. The underlying value is being created and grown constantly.

The model most people seem to be working off of is like debt equity: value is produced for someone in exchange for a predefined payout or series of payouts at a predefined time or times. I do work on a model that's more analogous to a "buying stock in a company that doesn't pay dividends" model: I produce value for someone without any concern whatsoever about when or even whether that value will actually be returned to me by the person. The analogy breaks down because a corporation is a legal construct and stockholders have limited legally protected rights in the corporation. I work with actual people and would not be interested in having some kind of legal "property right" in the products of that person's mind and efforts even if I could have it. (The "Unincorporated Man" series does a great job of displaying why such a property rights would not be useful to me and gives IMO a very fair treatment to the "pro-incorporation" arguments.)

Edited by [email protected]
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I’m talking about the base value and purpose of money, not capital. Money is born from work being not consumed at the time the work is realized (and saved for the future). Capital is a natural result of that subject however as the two are tied together since capital is savings also – it’s the next evolution of saving work for the future.

FYI - If you invest in corporation you are still looking for either a return on investment or at least a safe storage of your current value.

Anyway, if you are simply talking about helping friends 'cause they help you then I think I get it, you’re talking simple courtesies amongst friends sense the friendship is the real value at work here. If you are saying you do this for non-friends out of some universal karmic “what comes around goes around” idea then that is an entire different subject.

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The safest store of value and greatest return on investment is in improving the lives of other people through helping improve their productive capacity and ability to create value. That's all I have to focus my life on. I have realized I can get anything I ever want through that focus whether it is billions of dollars or a good meal.

Money is simply irrelevant to me because it has become so clear how to take actions that produce positive results. A "moocher" is not someone who is evil while you are good. It is just someone you've made dependent on you by focusing on giving them tangible things instead of helping them see that they can get those things without you.

Edited by [email protected]
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The safest store of value and greatest return on investment is in improving the lives of other people through helping improve their productive capacity and ability to create value. That's all I have to focus my life on. I have realized I can get anything I ever want through that focus whether it is billions of dollars or a good meal.

Money is simply irrelevant to me because it has become so clear how to take actions that produce positive results.

Value is the result of positive work and money is simply an easily transferable storage of value. You are implying they are different when it’s the exact opposite: Currency is the most efficient method of gaining and transferring values, or positive work as you call it – that is why farmers carry around coins instead of bales of hay.

Honestly I don’t understand your point here because you are implying you either have no desire to achieve any values or you do but plan on making your life harder by ignoring the most efficient way of saving and exchanging the values you have earned. Either way you seem to be really telling us that honest trade up front is less safe than some undefined world of helping others and hoping they will reciprocate at a later time commune style. Who benefits in that scenario?

A "moocher" is not someone who is evil while you are good.

Oh, yea.

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Galt made the same point to Dagny and Rearden (re: moochers). People in parasitic relationships are both immoral.

If currency is the most efficient and safest store of value why did Francisco destroy his mines instead of selling them and why didn't Galt have billions of government backed dollars or any significant tangible property in his apartment outside Galt's Gulch? Human competency and motivation are the safest stores of value.

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Galt made the same point to Dagny and Rearden (re: moochers). People in parasitic relationships are both immoral.

If currency is the most efficient and safest store of value why did Francisco destroy his mines instead of selling them and why didn't Galt have billions of government backed dollars or any significant tangible property in his apartment outside Galt's Gulch? Human competency and motivation are the safest stores of value.

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"Francisco destroy his mines instead of selling"

Because passing over a really useful resource he discovered would only slow down the process of economic decline and, something which applies to Galt too, not only was the backing of a government that useless and corrupt not worth beans, but the government doesn't belong dictating currency anyway. Galt didn't have much in his apartment outside of the gulch because nobody's property rights were safe out there anyway and what things of personal value he did have he made destruct upon anybody trying to take them from him for the same reasons Francisco destroyed the mine business, given that Galt's personal stuff involved a lot of really useful inventions. The strikers and general inhabitants of the gulch did use a currency among themselves though - gold.

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I've had a request to discuss Francisco's "money speech" and got hold of a copy of For the New Intellectual. I think it will be helpful to my point to examine this speech more closely.

Let's start with a highly relevant question from Francisco's speech:

"Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose, if he's evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?"

Replace the word "evil" with "unnecessary" and my answer to the question would be "yes." Money itself is not evil any more than a rake is evil. They are both tools, but they are both merely tools. When's the last time you used a rake? Neither tool is in principle integral to furthering human values. The vast majority of people have a completely immoral relationship with currency because they attempt to use it for exactly the purposes described above, just like most people in the world who have guns use them to kill and intimidate rather than for any moral purpose. I'm not anti-money any more than I am anti-gun or anti-rake. I just don't really see any of those three things as integral or even that efficient at furthering human values. People want to pay others to think for them and make their problems disappear without effort. In other words, the vast majority of what people use money for is to purchase mind-killing convenience.

"Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions -- and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth."

How in the world can someone who says he is an Objectivist argue with the claim that the skills and competencies residing in the mind as well as a proper philosophical outlook are not only the safest but the most productive stores of value? The value of the productive capacity of the mind above all else is one of the core teachings of Objectivism. It is required prior to any kind of tangible or intangible output that is valuable. Galt and Francisco didn't need much of anything physical from the world outside Galt's Gulch. They may have brought a few useful things but the rapid success of Galt's Gulch had little to do with whatever objects they might have brought from outside and fundamentally to do with Galt's productive capacity and motivation as well as that of the others admitted entrance.

I think people usually dangerously misread Atlas Shrugged in such a way as condoning the main protagonists' pre-Gulch behaviors and philosophies as quite moral even if not perfect. Galt correctly viewed Dagny and Rearden as far more evil and dangerous than any of those traditionally thought of as "villains." The novel was fundamentally about the ability of these extremely immoral people to reform and become moral and showed a path for their reformation. Rand demonstrated that these protagonists were extremely depraved -- far more so than the "moochers" -- and then demonstrated how even someone that evil can change for the better. Atlas Shrugged is a novel about the principle that even the most evil of us can abandon our immoral behaviors and start producing value.

The extreme good that Dagny and Rearden were capable of after their final entry into Galt's Gulch as compared to the extreme evil they had been working towards is a reflection of one thing and one thing only: Galt's intangible philosophical investment in them. And by the way, I don't think either of them ever received a claim from Galt on any portion of their future production due to this extremely useful investment. Was Galt irrational for this behavior? Would he have been marginally better off for sending them a bill for philosophical services rendered in that final sentence of the novel?

Edited by [email protected]
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Let me put it short and simple: Currency is only as a useful symbol to the extent that moral action is required to obtain it. The increased symbolic value of gold rather than paper is that the difficulty of finding or creating gold is much higher than that of printing paper. Gold is has no more inherent symbolic value than the rareness of people's ability to acquire it. Given that, I could just as easily trade in a currency based on how fast I can run a marathon or how big a skyscraper I could build in a given amount of time. I'm saying the symbolism is inefficient. Instead of valuing a college degree let's value someone's underlying skills and competencies. Instead of valuing actual gold in someone's pocket let's just value that person's ability to acquire gold when and if it's needed. It's far easier, more effective, and more efficient to value someone's demonstrated competency.

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I'm saying the symbolism is inefficient.

That is indeed what you are saying. I can clearly tell that's what you are saying. That's weird, that the two of us never even met, and yet, I can tell what you are saying. Any clue on how it's possible for us to communicate like this? Any idea on how it's possible for anyone, ever, to communicate with another person?

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I think people usually dangerously misread Atlas Shrugged in such a way as condoning the main protagonists' pre-Gulch behaviors and philosophies as quite moral even if not perfect. Galt correctly viewed Dagny and Rearden as far more evil and dangerous than any of those traditionally thought of as "villains."

Really? I mean... Really? I'm a patient person but... What?

To get this back on track I give you the history of modern philosophy.

The-evolution-of-philosophy.jpg

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@Nicky (#39): Exactly. Just like the most concise language is the most useful, symbols which are the most linked to the meaning they are supposed to convey are the most useful. The symbolic value of currency today is like the symbolic value of a 10,000 page schizophrenic rant. The products of production, including currency, can so easily be acquired by so many immoral means that the symbolic value of having property rights in any product of the mind, including currency, is virtually nil. We don't need such a useless proxy for productive behavior when we can simply observe the productive capacity of other individuals (what is really valuable) from the way those individuals behave.

@Spiral Architect (#40): I thought my interpretation of this was quite obvious. Apparently not. Rand deliberately sets up two extremely attractive protagonists in order to give a very fair treatment to their immoral philosophy and best demonstrate its life-or-death crucial difference with Galt's. Don't be lured into the trap of viewing their pre-Gulch actions as some noble struggle. These actions, such as creating Rearden Metal and building the new railroad line, were fundamentally the extremely destructive product of mindlessness-- a refusal to replace conditioned habits with flexible thinking that recognizes the true nature of reality. The book does not in any way support the view that these actions were morally good in any sense whatsoever. Atlas Shrugged has nothing to do with James Taggart or the other "villains" -- at its base it is about the protagonists' struggle to justify an unjustifiable lifestyle and their eventual abandonment of their attachment to their habits. The "heroes" of the story are Galt and his companions, not Dagny and Rearden. The focus of the story is on the protagonists' growth and reformation from an immoral philosophy to a moral one. It is absolutely paramount to distinguish the superficial "beauty" of the protagonist's behaviors from the true beauty of Galt's. Unless you see this you can't have any clue about the power and potential of Rand's ideas.

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I've had a request to discuss Francisco's "money speech" and got hold of a copy of For the New Intellectual. I think it will be helpful to my point to examine this speech more closely.

I would suggest re-reading the beginning of part three if you want to discuss currency as it is portrayed in Atlas Shrugged, since there are subtle examples and conversations you probably missed. I'm perplexed why you're talking about a lack of currency when everyone in the gulch used currency (gold, as was already mentioned). When Galt was showing Dagny around, Dagny talked to Wyatt about some work he is doing. Wyatt mentions how money is representative of time and effort, and its use saves people time on their work. Saving time leads to spending time on even more productive endeavors, which may include development of things you admire, like wikipedia. At least based on this quote, the idea is that without currency, you are unable to trade in such an abstract way. It's not the money that is a primary, but the work that goes into making money. Francisco's speech, especially the part you quoted, makes this connection, and Galt's gulch makes this clearer with examples. "It's far easier, more effective, and more efficient to value someone's demonstrated competency." This is what is valued if people look at money in the proper way, i.e. representative of working with one's mind to be a productive individual like everyone in the gulch strived to be.

Your argument appears to boil down to the idea that people shouldn't be valued in terms of only how much money they have, and I agree with that, as would anyone else here. But that doesn't mean money hinders the ability to value skills and competencies! I brought up wikipedia earlier and asked what you do for wikipedia to indicate you value the competencies that went into producing it. Money is what I use, via donation. You said you contribute to some articles, but that sounds so minor. You come across as a free-loader if you don't do much at all for services you use while insisting that money is inefficient.

For the record, your interpretation of Dagny and Rearden being viewed as far more depraved than the moochers is quite a strange interpretation. Mistaken, yes, but the moochers were so bad because not only were they wrong, they were evasive, and fundamentally ignored any notion of self-interest. Galt's speech was explicit about that. Honestly, it doesn't seem like you read very carefully, so I'm not going to address the other mistakes I see yet. You are missing many key details.

Edited by Eiuol
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@Nicky (#39): Exactly. Just like the most concise language is the most useful, symbols which are the most linked to the meaning they are supposed to convey are the most useful. The symbolic value of currency today is like the symbolic value of a 10,000 page schizophrenic rant. The products of production, including currency, can so easily be acquired by so many immoral means that the symbolic value of having property rights in any product of the mind, including currency, is virtually nil. We don't need such a useless proxy for productive behavior when we can simply observe the productive capacity of other individuals (what is really valuable) from the way those individuals behave.

Speak for yourself. I earned every penny I have.

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@Eiuol (#42): I've read Atlas Shrugged several times at different stages of my life and I got a perfect score on the LSAT (a test of logical reasoning). I'd suggest that my performance on this test would support the supposition that any inconsistency you perceive between my interpretation of Atlas shrugged and specific details of the book is not likely to be due to my having not read the book carefully or grasping those details. If you have some particular detail you find inconsistent with my interpretation and want to discuss, please bring it up and I'm happy to respond, but I can't respond to some vague problem you have with my having missed a lot of details in the book. Please don't be an apologist for the immoral behavior of Dagny and Rearden. Galt did not make any mistakes that I'm aware of and is held up as the pinnacle of morality in Objectivism. Anything less than his type of behavior is immoral, not "merely" mistaken. A mistake reflects a fundamental incompetency and unwillingness to think -- i.e., immorality -- no matter what.

To address the specific you did bring up: The people in Galt's Gulch didn't only use gold money for a specific purpose, they also used airplanes, cars, writing, verbal language, and many other things for specific purposes. The fact that they used any one thing as a tool for a specific purpose in Galt's Gulch does not necessarily elevate that particular tool to a status as something fundamentally necessary or useful for human existence.

"Your argument appears to boil down to the idea that people shouldn't be valued in terms of only how much money they have, and I agree with that, as would anyone else here." That is not an exact reflection of my argument. Not only should people not be valued only in terms of how much money they have, my argument is that someone having money does not reflect any inherent value in that person. There is a much easier and more efficient way of identifying human value which does not involve using the size of a person's bank account or yacht as a poor proxy of that peron's value. Simply observing the value of a person's behavior in each moment and being very aware of that person's behavior patterns is both sufficient and necessary to an evaluation of the person. There is zero use or value in interjecting the extent of a person's legally recognized property rights into what should be an instantaneous process that comes from the gut.

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@Nicky (#43): What country do you live in where you are allowed to trade values with others without contributing to the corrupt, immoral government behaviors that you presumably disagree with? If you conduct taxable trade in the US or any other country I am aware of in order to acquire currency you are no better than Dagny or Rearden pre-Gulch.

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@Nicky (#43): What country do you live in where you are allowed to trade values with others without contributing to the corrupt, immoral government behaviors that you presumably disagree with? If you conduct taxable trade in the US or any other country I am aware of in order to acquire currency you are no better than Dagny or Rearden pre-Gulch.

Thanks.

Edited by Nicky
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@Nicky (#43): What country do you live in where you are allowed to trade values with others without contributing to the corrupt, immoral government behaviors that you presumably disagree with? If you conduct taxable trade in the US or any other country I am aware of in order to acquire currency you are no better than Dagny or Rearden pre-Gulch.

So it is immoral to use currency because it's taxed? This whole thread is nonsense. I don't see how currency is inefficient. What is inefficient is providing a service without some measurable return.

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The safest store of value and greatest return on investment is in improving the lives of other people through helping improve their productive capacity and ability to create value. That's all I have to focus my life on.

This is essentially altrusitic: providing services for people without expliciting requiring any return. I don't know why you seem to care so much about other people's productivity more than your own. If you value your own mind and your life, you should do what you can to support yourself physically and mentally. This means that if you're of legal age, you should not be living off other people's paychecks. I'm sure your parents worked for that car they're letting you borrow. And they worked for that gas money, food, and shelter that they're 'offering' you. It's immoral to take advantage of their kindness and love for you, and be a drain on their finances for an extended period of time.

From what I've read, the real issue at work here is wanting to be liked by everyone: clients, family members, etc. And you've exaggerated this to the point where you're actually denying yourself reasonable payment for your services, because you think you won't be liked if you explicitly require it. Maybe it's true that you won't be liked as much; but you'll be respected more, and your work will probably improve because you'll have an incentive to work harder.

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The notion that Wesley Mooch is a victim Dagny created and the man could have been saved by a more charitable focus of her attention is simple perversion. This ignores free will (i.e. the looters could reach down and find a pair to learn to live like men), it perverts justice by suggesting she should have shown mercy and trained the person sucking the life out of her, and it certainly ignores the central concept of Rand’s heroes – Their egoism.

I’d actually love to hear Rand respond to the idea that Atlas Shrugged is about how the producers learn to be the good guys by centering their productive focus on others, not themselves. That would be gold.

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