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Why Ayn Rand is right. A weak but interesting argument. (Epistemology)

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Why is Ayn Rand right? Weak but interesting argument.

Let us prove this with regard to her Epistemology.

Many people begin with existence exists.

But I'm going to start with measurement.

Rand says that measurement requires a standard, but the standard of measurement is not the substance of the measurement.

Consider if we were to make the measure of value of US coins based on substance (their relative copper and nickel content).

Pennies would be worth more than dimes, because they weigh more.

Half Dollars would be worth only a little bit more than a quarter.

Or how about paper money?

A one hundred dollar bill would be worth nothing, because it is made of paper.

The reason Ayn Rand is right is because her epistemology corresponds, not just to reality, but to currently existing reality.

Ayn Rand is the voice of the United States, and the institution of money in the US corresponds to her epistemology.


The reason this is profound:


If the value of actual money was based on its composition, rather than its denomination, we would have to pay for everything with coins. Paper money would have no value.

If the standard of measurement for money was also it's substance, the US monetary system would be relying on the intrinsic value theory,

rather than the Objectivist value theory. Let me make this clear.

If the standard of measurement of money was also the substance of the measurement, the US would have to declare that copper had intrinsic value, and and everyone would be forced to agree.

But if the US monetary system was based on the Objectivist theory of value, it would say that money is guaranteed the value of its denomination. This means that money is both objectively valuable, and also subjectively valuable. In other words, the money is guaranteed to have its value, but if you want to spend two hundred dollars on a game console at the game store, that is what your money is worth to you.

Basing a currency on the substance of copper in it would be disasterous because not everybody likes copper.

Many would be unhappy paying for all of their purchases with unlimited amounts of copper coin.

But if the government backs the currency, paper money is possible, and people can carry large amounts of money on their person.

A weak argument, but an interesting one.


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  • 2 weeks later...

Sebastien, that is an interesting rumination. Concerning a portion of it:

Ludwig von Mises writes: “The laws which govern the value of money are different from those which govern the value of production goods and from those which govern the value of consumption goods.” The value of production goods (say electricity at the plug) derives from the value of the consumption goods it makes possible (such as chilled wine from the electric refrigerator).*

According to Mises, exchange-value, which is the kind of value had by money (by an object as money), should not be seen as production-value or as consumption-value. He writes about money’s exchange-value here.

Copper wire at the plug has production value. A copper bracelet has consumption value. A copper penny, as money, has exchange value.

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  • 2 months later...

Wealth is stuff: homes, cars, food, fuel.

Money is nothing but a claim on wealth.  

Gold makes good money because it is scarce; i.e., it limits how much a government can inflate the money supply or multiply claims on existing wealth.

Waiter: Would you like your pizza cut into 6 slices or 8?

Fed chairman: Make it 8.  I’m extra hungry today.

The pizza represents wealth.  Subdividing it into a million slices won’t make the pizza grow.

People used to be able to redeem dollars for gold.  The threat of redemption kept the Fed honest.  Domestic convertibility ended in the 30s and international convertibility ended in the 70s.  Now a dollar is worth 4 cents and shrinking.

If your house appreciated 100% your wealth didn’t increase.  You still own the same house (wealth is stuff, not money).  That just means it takes twice as much money to buy the same thing.  

Edited by NameYourAxioms
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