Yea, it took me awhile to understand it myself. I've been making a crash course on Youtube for understanding this, and you can check out my feed to see some of them.
Essentially, because the government has a monopoly on money creation and there is nothing slowing it down from creating money (it's a "floating system" where the money isn't pegged to anything like gold or another currency), the only place money can come from is the government.
What this means is that if the government doesn't create the money, there isn't any money to be had (counterfeiting being illegal and all that). It's an incredible blunder to assume that the federal government needs to tax in order to spend. It actually spends in order to tax. Totally bizarre, I know. But if you want to learn more, check out my Steemit feed.
Gold and silver were historical moneys because those are the materials the state decided to demand for taxes. The archaeological evidence points to no evidence of these things ever "arising naturally" through market exchange. Saying gold or silver is money because coins were made of gold and silver is like saying inches are wood because rulers are made of wood.
The history of money is that it's all been fiat, as the ability to create money is jealously guarded by the state. It's only with the recent evolution of cryptocurrency that we're really seeing a non-state money, mostly because there is no one to shoot and no doors to kick down to stop it.
Of course government creates money by force, but that's the money we have to work with right now (crypto is too early to know what the hell is going on). If we want to create a better solution, we need to understand how it works properly. Modern Monetary Theory is the only economic theory out there right now offering an accurate description of money.
Gold and silver arose naturally through barter. You're confusing "coinage" with gold and silver dust and nuggets that were first traded in markets, especially in Africa, as money.
"Gold and silver arose naturally through barter." Did you mean to have the word money in there? Because if not, gold and silver arose naturally through a super nova.
Barter isn't the same thing as money and there is no archaeological evidence of an economy, even a small one, operating on barter. If gold and silver were intrinsically valuable for barter, why was it not valued by the entire societies on the American continents before the Spaniards arrived?
The reason gold and silver were used as money is because the state demanded it in taxes. There is evidence that this may have had religious reasons--gold may have been hoarded by temples and brought by worshipers, and thus may have had a divine nature attached to it.
People gathered gold and salt across the Sahara before it was collected as taxes. The barter system arose to a monetary level over time.
It was never contingent on taxes.
Taxes were only a mechanism for furtherance of what was already subjectively valued and used to trade among people across the Arabian peninsula and into Africa.
Sorry, but that's just plain wrong. If money is created by states, then it's because they claimed a monopoly on it by force.
There are countless examples of free people coming together and using other things as money. Or they create their own community currency. It's not that hard to find.
Of course they have a monopoly on it by force. That's all the state does.
It doesn't change the nature of money though.
Outside of crypto, which is relatively new on the human landscape, what is an example of people creating money outside of the state? I know about the communities that make tokens that are exchangeable within a small certain of people committing to it, but that's hardly useful enough to be considered money; if only select members of the community will use it and outside that community you can't... eh... not exactly a "medium" exchange.
Nonsense. A community doesn't need your admission to consider something as money. If people use something as a medium of exchange, it is a medium of exchange. That's that, regardless of the scale of it.
The scale absolutely matters. If I can't use my medium of exchange to buy something because it's only accepted by certain members of my small community, then it's hardly a "medium". Obviously there is no such thing as a money that buys absolutely anything anywhere, but there has to be a critical mass reached where the money can buy everything necessary to keep a society's economy moving. None of these community moneys even come close to that. Especially: you couldn't pay taxes with them.
Let me ask you then: what must this magical minimum scale be for something to be called money? Would the currency used in small countries like Andorra, Liechtenstein, or Vatican City not be called "money" just because you determine the community to be too small?
This scale you talk about is completely arbitrary and subjective. If a currency is used as a means (i.e. medium) of exchange, it is a medium of exchange. Your perception of it doesn't change how people use it. If they think it's convenient to use a currency, they do it. Thus it becomes money.
I honestly don't know what the scale would be. People have been asking that about bitcoin since its inception. "At what point are enough people accepting this where we can call it money?" It has made massive strides, and it's still not there, yet. You can't hold BTC and expect to use it as money in the same way you can with fiat.
So yes, scale matters. And you're right: my perception doesn't change it.
Yea, it took me awhile to understand it myself. I've been making a crash course on Youtube for understanding this, and you can check out my feed to see some of them.
Essentially, because the government has a monopoly on money creation and there is nothing slowing it down from creating money (it's a "floating system" where the money isn't pegged to anything like gold or another currency), the only place money can come from is the government.
What this means is that if the government doesn't create the money, there isn't any money to be had (counterfeiting being illegal and all that). It's an incredible blunder to assume that the federal government needs to tax in order to spend. It actually spends in order to tax. Totally bizarre, I know. But if you want to learn more, check out my Steemit feed.
Government only creates "fiat," forced money.
Historical "money" is that which is most commonly traded among a demographic.
This is why gold and silver were historical monies - they arose naturally through market exchange.
Government can create a money by force, but it isn't ethical and it is not the most natural.
Gold and silver were historical moneys because those are the materials the state decided to demand for taxes. The archaeological evidence points to no evidence of these things ever "arising naturally" through market exchange. Saying gold or silver is money because coins were made of gold and silver is like saying inches are wood because rulers are made of wood.
The history of money is that it's all been fiat, as the ability to create money is jealously guarded by the state. It's only with the recent evolution of cryptocurrency that we're really seeing a non-state money, mostly because there is no one to shoot and no doors to kick down to stop it.
Of course government creates money by force, but that's the money we have to work with right now (crypto is too early to know what the hell is going on). If we want to create a better solution, we need to understand how it works properly. Modern Monetary Theory is the only economic theory out there right now offering an accurate description of money.
Gold and silver arose naturally through barter. You're confusing "coinage" with gold and silver dust and nuggets that were first traded in markets, especially in Africa, as money.
"Gold and silver arose naturally through barter." Did you mean to have the word money in there? Because if not, gold and silver arose naturally through a super nova.
Barter isn't the same thing as money and there is no archaeological evidence of an economy, even a small one, operating on barter. If gold and silver were intrinsically valuable for barter, why was it not valued by the entire societies on the American continents before the Spaniards arrived?
The reason gold and silver were used as money is because the state demanded it in taxes. There is evidence that this may have had religious reasons--gold may have been hoarded by temples and brought by worshipers, and thus may have had a divine nature attached to it.
People gathered gold and salt across the Sahara before it was collected as taxes. The barter system arose to a monetary level over time.
It was never contingent on taxes.
Taxes were only a mechanism for furtherance of what was already subjectively valued and used to trade among people across the Arabian peninsula and into Africa.
Sorry, but that's just plain wrong. If money is created by states, then it's because they claimed a monopoly on it by force.
There are countless examples of free people coming together and using other things as money. Or they create their own community currency. It's not that hard to find.
Of course they have a monopoly on it by force. That's all the state does.
It doesn't change the nature of money though.
Outside of crypto, which is relatively new on the human landscape, what is an example of people creating money outside of the state? I know about the communities that make tokens that are exchangeable within a small certain of people committing to it, but that's hardly useful enough to be considered money; if only select members of the community will use it and outside that community you can't... eh... not exactly a "medium" exchange.
Nonsense. A community doesn't need your admission to consider something as money. If people use something as a medium of exchange, it is a medium of exchange. That's that, regardless of the scale of it.
The scale absolutely matters. If I can't use my medium of exchange to buy something because it's only accepted by certain members of my small community, then it's hardly a "medium". Obviously there is no such thing as a money that buys absolutely anything anywhere, but there has to be a critical mass reached where the money can buy everything necessary to keep a society's economy moving. None of these community moneys even come close to that. Especially: you couldn't pay taxes with them.
Let me ask you then: what must this magical minimum scale be for something to be called money? Would the currency used in small countries like Andorra, Liechtenstein, or Vatican City not be called "money" just because you determine the community to be too small?
This scale you talk about is completely arbitrary and subjective. If a currency is used as a means (i.e. medium) of exchange, it is a medium of exchange. Your perception of it doesn't change how people use it. If they think it's convenient to use a currency, they do it. Thus it becomes money.
EDIT: Oh, and taxes has nothing to do with this.
I honestly don't know what the scale would be. People have been asking that about bitcoin since its inception. "At what point are enough people accepting this where we can call it money?" It has made massive strides, and it's still not there, yet. You can't hold BTC and expect to use it as money in the same way you can with fiat.
So yes, scale matters. And you're right: my perception doesn't change it.