Quote from: dinofelis on January 18, 2015, 08:40:56 AM

Quote from: twiifm on January 18, 2015, 01:59:37 AM

Nothing you wrote supports the argument opposing the charts list view of money. Furthermore, your arguments are childish and emotional so it's not worth my time to debate you.

That's a way of saying that you've lost the argument I guess :-)

What I've shown you is some examples where states *used* the fact that precious metals were generally seen as value-carriers to base their state-decreed money on. There were two simple ways to do that:
- make coins of the precious metal, of which the denomination corresponded in fact to the amount of metal (such as the Joachimsthaler, and the Spanish dollar). The state stamp then simply certified the veracity of the amount and kind of metal.
- give out paper bills that are exchangeable for the precious metal (or at least are decreed to be potentially exchangeable).

MOST of the monetary history consists of *this* kind of state money. As such, the state doesn't "impose value by authority" but *uses* market-determined value to base its state-based money on.

My argument was simple and straight-forward: if it were true that money got its value *solely* from the authority of the state (which is your statement) then no state would have gone through the difficulty of issuing money which is based upon precious metals. They could have issued money by printing paper. But historically, that didn't happen. I was going to write, that never happened, but I'm in fact not sure that it didn't happen anywhere.

It is true that *today* fiat money is exactly that. But fiat money usually (again, I was going to write always, but there may be exceptions) started out as precious-metal backed money and derived its value from the precious metal value that was of course solely given by the market. It is after a century of "scam" that fiat lost his link to precious metals. In many cases, the states intervened to FORBID other money. The USA went as far as to forbid the holding of monetary gold !

But be careful to what I'm saying: I'm talking about the *historical* path, the one you claimed was mostly or always state-authority based.

I'm NOT saying that money HAS TO BE precious-metal based. It doesn't have to. State authority CAN introduce pure fiat money. Only, I'm not aware of any fiat money that was historically issued that way (historically is "more than a century ago"). I'm not excluding that there were examples. But all examples I know of, have an initial link to precious metals.

In fact, state money can indeed be issued, and can have value. The state simply has to guarantee scarcity of the money. Then it can, or cannot, be adopted by the market. If moreover, the state makes laws that make it difficult or illegal to use free market money, such as precious metals, this can kick in the speculative cycle which turns an asset into money.

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Many commodities or materials have been used as money such as rice, stones, shells, etc. The common link is that the state decreed these things to be money not the market. Money has always been a credit system.

I think you should get your historical facts right before claiming such statements.

BTW, here's an interesting piece of the Great Keynes himself about money:

http://encyclopedia-of-money.blogspot.fr/2012/10/phoenician-weight-standard.html

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John Maynard Keynes, the most famous economist of the twentieth century, observed in his Treatise on Money that coinage seemed to hold no charm for some of the societies of the ancient world, and held out the following suggestion:

The stamping of pieces of metal with a trade mark was just a piece of local vanity, patriotism, or advertisement with no far-reaching importance. It is a practice which has never caught on in some important commercial areas. The Semitic races, whose instincts are keenest for the essential qualities of money, have never paid much attention to the deceptive signatures of mints, which content the financial amateurs of the North, and have cared only for the touch and weight of the metal. It was not necessary, therefore, that talents or shekels should be minted.

The simple reason is they used metals because it had the properties they needed. But the money aspect came from the Kings issuance so he can collect taxes. Kings use gold for coins so gold became a valuable commodity. Not the other way around.

Keynes is wrong about this one. The reason they put their faces on the coin is to make them official. Sometimes they debased the coins but the peasants had to use them anyways. It's true that gold made international trading easier because the traders could simply use the weight then melt it down at home and mint the coins again.

Before money existed people used credit. Then they used tokens. Coins just happen to be a shiny metal token. Just read Graebers book on 5000 years of debt.

Your understanding is based on outdated knowledge. It came from economists making assumptions without empirical evidence. Graeber is an anthropologist and his theories come from archeological records not assumptions