[Heal the Bern] Can Currencies have Intrinsic Value?
In this second installment to my Heal the Bern series -- explaining sound economics in everyday language -- I address a centuries-old argument, that one of the conditions necessary for an asset to be a valuable currency is "intrinsic value."
The idea of intrinsic value is that the substance used as a currency, gold for instance, is valuable because of its natural properties. Gold has some industrial uses, such as being an excellent conductor of electricity. Some argue that this is the origin of its value as a currency.
I contend that the value of gold is not based on its industrial uses, and that any asset can either be intrinsically valuable, or valuable as a currency, but never both at the same time. I discuss how this is also the case with salt and cigarettes, both of which are/have been used as currencies.
As always, feedback is welcome! I look forward to hearing your responses and any thoughts this may have triggered for you. :) Thanks for watching!
This is the 2nd video I've watched from @modprobe. His ability to explain complex ideas is quite amazing. Reminds me of Alan Watts in way, please continue to do more in the future. Steem Life Bra
I think gold has value for several rather practical reasons.
Early on, it was very clear that a currency was needed in order to facilitate trade and in order to do this a universal material was needed. Liquids or gasses were not very practical so they could be tossed aside.
First, the material would need to be rare, but not too rare that none could be found. It needed to be non corrosive so that it could retain it's value in appearance over long periods of time. It must have some weight to it, so that it's bearers believe that it has some value. It also must be able to be melted down so that it is easy to work with and so that things can be stamped into it for coin making purposes. Gold fits those needs better than just about any other material.
Plus it just looks so nice and shiny ;)
I thought this was really good; it definitely goes to debunking the idea of "intrinsic value" being a concern for a currency. The fact is, something is only currency because both parties in the exchange have a mutual -- often, if not usually unspoken -- agreement on the value that currency carries, regardless of any attempt to find an "objective" intrinsic value.
First off, love the steemit shirt you have. Where did you get it?
Agree with your contention and currencies in general not having intrinsic value is a very strong argument for crypto currency.
I'm not a history or economics buff, but imagine once widespread, fungible currency was available it's value was based on how much existed in society and what people decided it was worth, not anything intrinsic. When people would only barter there was no real currency: a horse is not equal to another horse, a lack of fungibility destroys a currency's efficacy. Gold was a useful one, but it's too rare and too heavy for use compared to cheaper metals.
Anyway, now I'm ranting about stuff I'm not well versed in, time to stop. Enjoyed the video and how it applies to crypto
Thanks for your comments. :) I got the shirt here: https://amzn.com/B01IL0V9CS
Value cannot be intrinsic. It is always relative to an application. Mises also talks extensively in Human Action about physical items as not being valuable for what they are but the services they can provide. Value is intrinsically intangible. Subjective.
Great video, friend. I learned a lot from this. I had a general idea regarding the difference between intrinsic value and value as a currency, but not with this kind of depth since it is not my speciality. Thanks, friend.
This is a great post, you sound very composed and address the topic well. You don't really seem to falter and your voice is confident. You also made really straightforward arguments that were easy to get on topics that are a little meta, which can be hard to talk about. Looking forward to seeing more.
Thank you; I am encouraged by your kind words. :)
Use. In the event that you can utilize it. Some have genuine worth and some like cash have fake quality. For whatever length of time that all concur it merits something it is, and that makes it helpful. Convenience changes esteem contingent upon circumstance. Gold which is regularly a standard of quality irregularity and value is not worth much on the off chance that you are conveying it over a desert or swimming with it over the channel. I generally get a kick out of the chance to recall when frankincense was worth more than gold. Very nice topic@modprobe, Cheers!
nice
Indeed, though I am not aware of any cases of frankincense being used as a currency. Frankincense is definitely intrinsically valuable to humans, though. I believe frankincense caravans in the middle east used to cross deserts, going weeks at a time without food, and survived simply by chewing frankincense resin. The medicinal properties of frankincense are also innumerable, and indeed it has been successfully used to combat cancer and many other serious maladies. The country of Oman, which is well known for its frankincense production (people there buy the resin in the markets and chew it like gum) doesn't even have a cancer ward, and last I heard, had only two known incidents of cancer, both of which in people coming from the US.
Disclaimer: The FDA regards the above information as harmful to their protection racket, and actively fights its dissemination. The above statements have not been evaluated by the FDA. This information is not intended to treat, prevent, cure, diagnose, or [all other words the FDA has cast legislative taboo spells on] any disease. I am not a doctor.
I started to educate myself about frankincense and many other cancer healing elements many years ago after surviving a lung fungi disease tuberculosis. Now on the market their are many oil forms of frankincense to heal and combat cancer.
That quote is from https://thetruthaboutcancer.com/frankincense-and-cancer/
TTAC is a great series. It's a bloody shame they reserve copyright on it; that kind of information needs to be distributed as far and wide as possible. I have a copy of it if anyone would like to, ahh, borrow it. :)
"...legislative taboo spells " ... nice, Hah!
:D Indeed. The government's tendency to pick certain words in the vernacular and claim by fiat the right to rob, kidnap or murder any who use them without first paying protection money (words like "cure" in medicine, "issue" in finances, "organic" in food, the list goes on and on) reminds me of Voldemort's taboo on his name in the last Harry Potter book. Anyone who uttered the name Voldemort would lose all of their magical protections and their location would immediately become known to the death eaters (who had, by that time, completely taken over the government). Curious parallel, don't you think? :P
" Frankincense is definitely intrinsically valuable to humans"
I don't even know what frankincense is, beyond a gift for a fictional demigod baby...
Sadly, most people in the west no longer know what frankincense, but it was highly valued as a medicine in the past, and still is in many places today. It's starting to make a comeback in the information age, though, and it's worth looking into; it's a hell of a lot cheaper and safer than chemo. Whether it's more effective or not... I encourage you to do your own research. :)
I'd love your opinion, mate:
https://steemit.com/capitalism/@thomas.shirk/money-is-not-the-root-of-any-evil
I finally got around to finishing your post here. On the whole, it looks like a clearheaded and reasonable analysis. The definitions you use are reasonable, and I think you've tapped into a level of "what is money?" that most people haven't yet attained. I'd like to address the nature of what money is (as opposed to why it's valued) in a future video. Money, properly implemented, is the decentralized quantification of created value.
I would say you didn't do proper justice to the biblical quote, though. You pointed out that "money is the root of all evil" is a nonsensical perversion of the original message, but you didn't go into what exactly the original message was and whether it was correct or not, which I think is a rather interesting discussion.
Thanks for your feedback!
I wanted to avoid getting hung up on the original biblical quote; I agree it would make a great discussion, though. In this case, however, I felt that it was more helpful to the point being made to address the common misconception on the biblical quote.
I think, in the crypto economy, we have both crypto currency and crypto asset. While, bitcoin & litecoin can be categorized as crypto asset, ether & steem should be categorized as crypto currency.