Money can take the basic interest from the wares. If the wares don't pay the interest, they aren't sold. And the wares lower its price until they're sold, that's their nature.
I'm stuck in the mindset that if wares don't cover fixed and variable costs (costs of producing the wares),
they aren't sold.They aren't produced.
If they do, they are sold even if profit is $0,
Even if the selling price is below the production costs.
simply because wares produce a benefit by their existence/use value. Interest doesn't come into this at all...
Yes, they don't need profit, but they need to pay the interest to be traded within the market. You could see interest as a distribution cost.
The supply of money is scarce (or that money concrete money dies by hyperinflation) and no sector has produced it (forget our current regulated financial system): the whole community has given it the value.
Money takes profit because its scarce and it (unlike wares and the time of workers) last forever at no cost.
So, essentially, a
representation of a good or a
representation of someone's time/work can be stored in a medium that lasts for ever at no cost. I think I'm getting this part, but where is the profit coming from? The difference between the retained value of money, and the decreased value of the expiring good it used to represent?
Yes, but not only that, even if the wares don't expire they are something that the producer doesn't want. They must find their way to the customer and they have to pay the "highway" tax.
The selling price must include the production costs, the proportional wage of the merchant and the tribute to money for letting all this happen. If the game stops, money is the only one immune, so it can exact a profit from its privilege.
There's two solutions:
1) A negative incentive to money for not stopping the game, Gesell's proposal.
2) Don't let money stop commerce, that is non scarce money like LETS or Ripple.
I think we should use both to have a more diverse and resilience monetary system.
Gesell only saw the first possibility, and though that government was the only one who could issue his freigeld.
Bernard Lietaer's Terra could be implemented privately and it has a demurrage that covers the storage costs.
I like Terra as a stable reference currency for contracts, but I don't like the "storage of a basket of assets" to back a currency concept.
In fact, I don't like the concept of backing a currency. Money doesn't need to be backed. The "intrinsic value" of gold is not needed.
The block chain shows us that private hands can issue "fiat" money. By fiat I mean unbacked here, "let it be" (that's what fiat means), not that is empowered by a state.
That's what I think is the best of bitcoin. Is a "fiat" money that doesn't "belong" to any state. And private currencies were usually backed before. I think there's also local currencies that are issued through charities.
I think non mutual credit (scarce) moneys should be all this way.
And I also think that between scarce moneys, wares would chose free moneys to not pay interest and be sold for less and faster. Faster, because the buyer has an incentive to think faster (or before having even sold his own wares) what he wants in exchange for (indirectly) his production.
By the way, money does not represent any particular ware/labor, it's like a wild card.