Bitcoin, pearl, diamond, gold … and if we tried free money?
By Simone Wapler.
A currency must prevail by the qualities that the people who use it find. Money under the influence of power is often of dubious reliability.
We talk a lot about money, even more than usual, and very critically. Money, currency, economy, wealth, heritage, what is the thread?
The common thread is definitely money, “good servant but bad master” in the words of Alexandre Dumas.
What would be the money or the ideal currency in a free economy?
Do you really have an idea on this complex subject, dear reader?
If you answer yes, you are ripe to apply for the job of central banker or World Savior alongside Alan Greenspan, Ben Bernanke, Janet Yellen, Jean-Claude Trichet, Mario Draghi and others. However, before writing your application letter, I recommend reading Thomas Piketty’s Capital in the Twentieth Century in order to be totally at the forefront of modern economic and monetary thought. Be careful, at the slightest slumber you will be flogged.
If, on the other hand, you answer “no idea … you have to see”, then you belong to the Austrian Economic School . The currency could be seashells (but not crustaceans as too perishable), bitcoins, pearls, diamonds, papers, bark, whatever … Individuals choose what suits them best, the best servant. The most reliable currency would thus impose itself on the ground, by use, by its intrinsic qualities.
THE ADVANTAGES OF THE FREE CURRENCY: HONEST PRICES
Hayek, the founder of the Austrian School of Economics (Nobel Prize in Economics 1974) argued that “the market economy could better develop its potential if the government monopoly on the currency was abolished.” Simply because, For Hayek, if we let everyone free to use the information available on their land and pursue their own design, we mobilize the best of all the scattered knowledge. A mathematician would say that we then have the integration of knowledge that is scattered throughout society.
Depending on the price, the entrepreneur decides whether or not to invest, the employee decides whether or not to change jobs, the customer decides whether or not to buy. No human brain, no statistics can integrate all this information from the activity and personal experience of millions of individuals. The price is measured with the currency as the size is measured with a meter. But the Saviors of the World and other central bankers wish to cheat.
MONEY CHEATING ALWAYS TRIES POWER
Let’s forget money and money for a moment and think for example of a measure like the meter. What is a good meter? Easy, a child of the primary could tell you: a ribbon or a ruler graduated in a readable way and who keep their sizes, whatever the temperature or the humidity or even the tension which one applies to him (I see come the cheaters … ). A good meter is stable and invariable.
Now imagine a kingdom where the inhabitants are small. His king wants to become popular by unpacking his subjects. He orders the Central Measurers of the Royal Office of Measurements to shorten the standard meter and recalibrate all the measuring instruments of his kingdom. Miracle, as of the following month, all the subjects who pass by the fog have grown. With the new meter, the one measuring 1.70 m is 1.75 m. He who measured 1.80 m in height 1.85, … All feel a great satisfaction.
Our popular king is taking advantage of this good mood to introduce a small tax on growth. The “grandis” are happy to pay for it! The new tax easily enters the Treasury. Faced with this great success, our king repeats the operation. But his subjects travelers, when they cross a border and compare themselves with foreigners, finally find that their real size has not increased. Doubt spreads, satisfaction dissipates. And we realize that the growth tax is not based on anything real …
MONEY CHEATING, UNJUST ENRICHMENT AND TAXATION ARE AN INDISSOLUBLE TRINITY
To cheat on money, to multiply it by credit, is to cheat on value. In the beginning, the “rich” pay well for capital gains tax they believe they have made by contracting, for example, a mortgage. They are satisfied and feel intelligent to have acquired something whose value has risen. Yet this surplus value is not based on anything real. As for those who do not have access to credit, they get poorer without understanding why. Everything is increasing but they can not afford to follow.
The volume of credit is growing, inequalities are widening, useful idiots are denouncing capitalism, ultra-liberalism, neoliberalism and credit-giving rentiers are cashing in on interest.
But with the negative rates, this beautiful machine could it jam?