Dario on 27/11/2008 at 00:48
Just wondering if anyone can think of ways in which the existence of Money is flawed, and can unlikely ever fully work for all people. (from a technical stand-point, ignoring the obvious fact that people can't be trusted with anything 100%, no matter how you look at it)
So far, I have:
- Even if everyone who doesn't have "enough" money (just about everyone) were to suddenly GET enough to live comfortably, prices would instantly go way up on everything, and we'd be right back on square 1.
- If everyone made "enough" money, who would hold the lesser jobs that pay little? (like being a trash man for a few hours a week) ...I guess unless those jobs suddenly offered "enough" money somehow.
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My definition of "enough" here is enough to live a comfortable American lifestyle, with an average-sized home, three kids, and money to spend on something big once in a while, like a new TV or pool table, of course without going into debt.
For this particular issue, I'm considering having less money than that "not enough" to say that money is a system that is working for *everyone*.
Scots Taffer on 27/11/2008 at 01:03
Funnily enough, I was having this discussion yesterday with someone but with regard to an upper limit of wealth accumulation. Surely at some point, past the private jets, yachts, multiple homes, fleets of sports cars and opulence, there's a line in the sand and you've got to think: enough is enough. It disgusts me the current state of the world, the economic shithole we currently find ourselves in is largely to do with greed and its continuing ethics (or lack thereof) that are perpetuating the problem.
I'm staunchly opposed to socialism's principles of same wage for everyone regardless of stature, output and so on, but I'm also staunchly opposed to the excesses of capitalism.
Is there a happy balance?
Turtle on 27/11/2008 at 01:22
Do your own homework!
Dario on 27/11/2008 at 01:28
I'm not in school... I'm doing research for a series of political cartoon photo/CG images I'm working on that tackle society issues. One of the issues happens to be money, so I'm trying to develop a deeper understanding of "the problem of money" before I get into it. For now, I'm just trying to figure out if money can even fundamentally work in the world's current setup, or if it's chronically cursed to never allow all humanity to have "enough".
The more I think about it, the more I realize we may be using a system of money that possibly can't work for everyone... contrary to our common presumption that if it isn't working, it's OUR fault. I'm specifically trying to not going to jump to any conclusions though, until I know more about it... thus I came to the place where I thought I'd find the highest concentration of people who know a thing or two, given the flavor of issue-debate that often goes on here.
Chade on 27/11/2008 at 02:43
*Rambling semi-incoherent post ahead*
Most computer nerd's aren't that well read on economics ... you'd probably be better off finding some outgoing economics guys and bugging them (maybe some bloggers?).
I, for instance, am definately not well read on economics. But hey, it's never stopped me in the past ...
There are really two issues here. One of which has to do with money, and one of which doesn't.
Basically money is just a tool which people use to keep track of how much "people owe them" (I'm not sure if I really need to add this paragraph, but whatever). It and other financial tools basically "add value" to the economy by improving people's ability to flexibly offer services to each other. A plumber doesn't have to directly pay back the bricklayer who built his walls - he can provide services for other people instead who will provide services to others who will provide services to others untill eventually someone will do something for the bricklayer and it all cancels out eventually. And through it all the plumber can concentrate on what he does best, rather then finding some other way of repaying the bricklayer (who doesn't happen to need a plumber at the moment).
Now, given that money is really just an IOU, you can't just give everyone money and expect it to add real wealth. That is misunderstanding the role and the value of money.
You can, however, redistribute IOU's from one person to another. So one issue is whether you can redistribute money in a different way and eliminate poverty.
I am pretty sure you can do quite a lot of good that way, but ultimately, you need to remember that redistributing money isn't the same thing as redistributing real goods/services. What's important is how much effort people go to to provide you with what you want. My guess is that the amount of effort that goes into satisfying the rich isn't enough to make a noticable difference to the rest of us, where we to redistribute it all. If the guys making that 5 million dollar yacht were doing something else, would they provide 5 million dollars worth of services to poor people? I doubt it (but feel free to prove me wrong).
If you really want everyone to be better off, then you are barking up the wrong tree. That doesn't have a whole lot to do with money. It is solved by improving the ability of society to produce and distribute the things that people need ... and is a question of technological and organizational capability (money being a part of that, but hardly the only thing).
Nicker on 27/11/2008 at 08:58
Part of the problem seems to be that it is not clear what you mean by “money”, Dario. Are you talking about the symbolic medium of exchange (what Chade is describing) or about things - commodities and services (the things we offer to get money and the stuff we get in exchange for money)?
If that distinction is unclear to you, take a dollar and eat it. Good, yes? Mmmmmm....
Obviously the symbol is not the thing. So is your question “can the medium of exchange be a device for fair distribution of real wealth”? - or is it “is there a feasible method for fairly distributing real wealth”? – or is it another question altogether?
The flip side of the symbol / commodity equation is Currency Trading. This is where people treat the symbol as a thing, thus perverting its function. Each time two currencies change their relative value, someone takes a small but cumulatively significant cut. Since the currency trader has basically rolled the dice and has done nothing of value to earn their take, their acquired “wealth” is parasitic in nature.
Like gambling, currency trading does not create wealth, it merely extracts it. Like parasites in living things, currency trading drains the life of the host while offering nothing in return.
Speculating on currencies also affects their perceived relative values and may amplify and accelerate the relative movement of currencies.
Thus endeth the rant...
scumble on 27/11/2008 at 11:20
In my view, it's a question of who has control over money, and in the capitalist, central banking type system it's a combination of politicans and bankers, and possibly influential corporate types.
If you think of how dependent economies are on credit, you can see most things are set up to favour people who already have money to lend, and when lending drives everything there's an incentive to keep inflating the money supply. I suppose that's one way of putting it, or alternatively those in control of money keep expanding it because they can.
If I go back to what Dario said to start with:
Quote:
Even if everyone who doesn't have "enough" money (just about everyone) were to suddenly GET enough to live comfortably, prices would instantly go way up on everything, and we'd be right back on square 1.
This is correct, but at the moment people don't get "new" money all at the same time, the banks get it first, or they just create more notes. Governments often "create" money by selling debts I think, but I don't know that much about the details. Because everyone is forced to use the same currency in a given territory, whoever gets the money first with a loan, or government grants or something will get the benefit of spending the extra money. Later on, when prices adjust to the increased money supply, most people who didn't see any of that new money and just have to deal with higher prices and devalued savings.
For the people who borrowed the money, a devaluing currency is good because it reduces the value of the loan, so they get to spend money
before prices increase,
and they end up owing less in real value.
To understand why there is such inequality in a capitalist society, you have to ask who has preferential access to credit or government funds. I tend to point fingers at large businesses like Tesco and "privatised" firms with juicy contracts from government clients.
On the other hand, abuse of credit has been so rampant that it drops further down the chain, where a lot of homeowners have cannibalised the apparent value of their homes with those "equity" loans, which pumps even more money into the system, so that the biggest losers are those with even less access to credit.
The more I think about it, the more precarious the whole situation seems. There are other factors leading to inequality in society, but the way money is distributed is quite significant.
So perhaps Dario is right that the system of money doesn't work for equality, but money as a concept can't really be blamed for much.
Well, either this post has elaborated on what Chade and Nicker said or simply added to the confusion.
DDL on 27/11/2008 at 11:52
Surely the real problem isn't money at all, it's people.
After all, if everyone had 'enough' (and honestly, what you consider to be 'enough' is set pretty fucking high even by western standards) then everyone would still strive to be better than the Joneses: wealth is rarely judged as an absolute, it's almost always treated as relative to what everyone else has. There's no fundamental way to make everyone 'content', especially not 'content, and all at the same level'.
Like virtually all species, we've got millennia of selective pressure behind us to BE better, DO better, GET more, BE more successful.
Money is just a way of abstracting and facilitating what would happen anyway.
-also: three kids? No. No no no.
Kolya on 27/11/2008 at 12:08
"There is enough for everyone's need but not enough for everyone's greed." ~Gandhi
Since you can not rely on individuals to see when their needs turn to greed, you need social regulations imposed by a democratically elected authority, eg a country's government. But since money is "liquid" (corporations aren't bound by national borders) national governments have become too weak of an instrument. So what you need to enforce a social global economy is a globally acting social authority, to protect capitalism from it's own worst effects. It's easy to see what those are nowadays. Any economical system should serve the people, instead people are a commodity to a rampant capitalism.
