Quote from: classicsucks on May 16, 2017, 08:08:50 PM

Straw man argument. I'm not replacing economic theory with "gobbledegook", I'm simply pointing out to you that mainstream theory just supports the current system, which is neither stable, normal, or rational (surely you don't you believe that, right?).

I simply think that economist's understanding of things like money improved over the years. A bit like medical knowledge improved over the years, and that medical theories from beginning the 20th century are maybe less accurate than those of end of the 20th century.

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Imagine what the "economists" said about the spending and lending of the king and his court... I'm sure it was favorable. Many of these so-called scientists are just rationalizing the current system. Friedman is precisely such an ass-licker - do you know that he advocated "shock therapy" for people starving in third-world countries?

This is what I count under "conspiracy": that bogus scientists are just ass-licking power, and that all academics in the whole world nicely repeat that, and even though they could perfectly understand why it is wrong, they conspire in continuing to tell bullshit for their master's sake.

My simple point was that the Austrian vision, namely that a collectible is perfect money, has serious problems of stability. I don't even think the Austrians deny this. What the Austrians do, is to prefer this monetary stability over having central power that regulates its value, because they consider this regulatory aspect as a source of corruption. They are right of course that it is a source of corruption. But that doesn't mean that collectibles are good money: they simply revert to collectibles because they hate so much central control, that they couldn't think of anything else.

However, people have been thinking more about the ideal functions of money, what money should do and not do, if it were to accomplish its function better, and most probably Nash's definition comes closest to what ideal money's behaviour is. The reason is that if money behaves differently, it has undesirable consequences, essentially by replacing value in a non-ideal allocative way. Seigniorage is such an example. There is no "economic merit" in acquiring value from others, simply because one is printing money, or simply because one is sitting on a stash of money. This doesn't allocate means in any efficient way, and doesn't solve economic problems for anybody.

Money as an economic lubricant works best when it has a stable value on which one can count, that's essentially the conclusion of economists. However, it is not because an abstract model of money is like that, that one knows how to make an asset that works like this. The Austrians couldn't think of anything else but a collectible, but a collectible doesn't behave, by far, as ideal money, simply because it is an inelastic offer that confronts a variable demand.

If one could make a monetary system that has stable value, that would always be better money than a collectible. Fiat money tries to implement that. The problem with fiat money is when the regulator of the money supply also has political goals, and if one of these goals is to give seigniorage to the state, the compromise is to make a slightly inflationary money: that gives enough seigniorage to the political caste, while at the same time providing an asset to the market that approaches ideal money: its value is not entirely stable, but is predictable.

What crypto currrencies pretend to do, it to take the corruption of central control out of the system. However, bitcoin and most alt coins revert back to Austrian visions of collectibles, which are not stable. What crypto currencies should have done, was to take more advanced visions of money from modern economy, and implement that in a non-centrally controlled way. I've indicated a way to do that.

It is ironic that bitcoin, which wants to "fight" the "corruption" of central control (which comes down essentially to seigniorage, that is, giving loans to the state), has itself a HUGE seigniorage effect because of its instability. The seigniorage is not "during its life time" but "at its beginning", and is far worse than any central bank has ever done. If ever bitcoin achieves its goal of "replacing fiat", it will have made a few early adopters more rich due to early-printer seigniorage than the entire US government over many years !

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If you've read Austrian economists or any libertarian arguments you should know that there are many theories that aren't in concert with your line of thinking.

I know rather well Austrian economy, I'm actually quite favourable to many of their arguments. However, it is an OLD school. Understanding has evolved since. On the monetary issues, they only had embrionic understanding, and economists evolved since then. Austrian's vision on how money came about is simply wrong, and historically invalidated. Nowhere, ever, a rare commodity evolved into a currency all by itself and market forces. I know very well Rothbard's work, and it is appreciable as a critique of central control, but it is not a good theory of money. It is a theory of how we could do without central banks, and they could only think of collectibles.
You should also read David Graebers' Debt, the first 5000 years. It has a much better historical account of money than the Austrians.
In any case, bitcoin solved the issue of central control, but put in the wrong issuing function, to turn it into a rare collectible, with huge initial seigniorage, instead of turning it into a stable currency without seigniorage, even though all the technical elements were on the table. As such, it does behave as a rare collectible, and not as a stable currency, because that's how it was designed.

The problem with many of these theories is that they are conspirational. I also consider the state as the enemy of the people, but not as a conspiracy. The state is simply a powerful entity, made of humans, and as all humans are enemies of other humans, of course the state is a powerful enemy. There's nothing special about that. However, the "new elite" that would emerge if ever bitcoin became world currency, that is, the profiteers of early adoption, are most probably just as bad as current states are. Enemies are there were collectivity and community spirit is important. Whether that's a state, a corporation, a wealthy group of people or just a large collection of friends doesn't matter. The state is no exception to that. But the state has nothing special apart from being the current winner of the law of the strongest. Take it away, and another one will win the law of the strongest. There's nothing special about that: we are social animals, which means that we want to dominate, or be dominated, we want to abuse, or be abused, we want to extort, or be extorted. It is just our nature. No conspiracy. We're just like that.
As such, bitcoin, as it is designed, is only a palace revolution. It replaces the powerful and corrupt (that is, humans) by other powerful and corrupt. It is not a design of ideal money at all.