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An ounce of gold is as good as any other ounce of gold. A strip of land is not as good as any other strip of land.
An ounce of gold is as good as any other ounce of gold. A strip of land is not as good as any other strip of land.
Gold is a commodity, while land is not.
You say the value of gold fluctuates, which you probably believe because its price in paper money is so wild, probably because you don't understand that the value of paper money is what is fluctuating.
No, we buy and sell specific goods and services, of which time is neither. You've just said something that's wrong, that's all that's happened.
I'll be a little bit rude and let you know that I don't think you're really up to the speed with this subject.
That's quite a rude post of me, I guess, but I don't mind shooting back a little at people who pop up on this thread just to ridicule.
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He just doesn't get it.
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Didn't need my contributions to make it a ridiculous discussion.
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You are one post away from my ignore list.
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Hugs?
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lol. sure.
Go back to gold standard - Scotsman.com News
"In response to Gavin McCrone (Debate & Opinion, 2 February), the way to ensure a financial crisis does not happen again is not to have the government regulate the economy further but to return to an objective standard which does not allow the state to spend recklessly and to debase the currency: gold.
It is not true that banks and big business necessarily support capitalism. Banks are quite happy to accept the existence of a central bank such as the Federal Reserve or the Bank of England, as it allows them to inflate the currency and lend with impunity. The current bail-out of failed banks is proof enough of that.
What is needed is a balanced budget, the scrapping of central banks and a return to a free banking system, such as Scotland enjoyed for two centuries – the longest period of free banking in history."
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All other things being equal, an ounce of gold is as good as any other ounce of gold. All other things being equal, a strip of land is as good as any other strip of land. The whole weight of the comparison rests on the various ways in which things can be other than equal. One might think that there are more ways in which land can vary than in which gold can vary, but it hardly follows that there are no ways in which gold can vary. A single ten-ounce bar of gold may be more or less valuable to you than ten single-ounce bars of gold, depending on whether one wishes to be able to divide the gold or wishes for it to be more difficult to pick up and steal. A bar of gold here (or today), may be worth more or less than a bar of gold far away (or tomorrow). A pure bar may be worth more than a bar with impurities, even if the amount of gold involved is the same. A decorative piece of gold may be worth more than a simple bar, again even if the amount of gold involved is the same. There are all kinds of ways in which the same amount of gold can have different values (as with land).
Now, we might say that the store of value in which we're interested is just the mass of gold atoms - all other feautures may be somewhat relevant to certain kinds of value, but not to the stored value with which we are presently concerned. But, if that's the case, then land (or, more accurately, I suppose, 'space' or 'area') has a similarly 'pure' form against which we can measure value. Suppose we were to simply designate a 100 square kilometres of Leitrim, and only that area, to serve as a reserve currency; all notes would be backed by shares of this fixed and perfectly fungible commodity.
As far as I can see, it's a fairly straightforward extension of a subjective theory of value. The argument, roughly, is that the things we value are mental states, specifically, the experience of mental states; experience is a time-dependent phenomenon - one experiences a mental state over time; all of the other things we buy and sell are employed towards the end of generating particular mental states at particular times, for particular durations. All trades are expressible as a product of something like 'utility' and time.
Excellent post, stringjack.
"The whole weight of the comparison rests on the various ways in which things can be other than equal. One might think that there are more ways in which land can vary than in which gold can vary, but it hardly follows that there are no ways in which gold can vary."
Exactly right.
But I can hire a man who will mint me a standardised gold coin or bar which is physically indistinguishable from any other of that design.
Let's take your example of 100 sq. km, and compare that with 100 physically identical bars of gold stored in a vault. The currency you propose are notes, let's say entitling each bearer to 1 sq km. The currency I propose are notes entitling each bearer to a bar of gold.
My currency is superior because the people who hold my notes do not have to worry about being the last to redeem. They will get a bar of gold the same as everybody else.
But if you are the last to redeem your land banknote, you will probably find that you get the piece of land with the worst views, the furthest distance from the main roads, etc. The problem of location means that different pieces of land can't be made homogenous like metals can, and thus simply is not a commodity, and has never been a suitable form of money (portability is also a standard criterion for something to be a money, by the way).
You raise an excellent point, though. The valuable service provided by a mint is to make fungible our various forms of gold. Perfect fungibility is impossible, though.
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Well, it can. If you don't like the idea of making a hundred square kilometres of Leitrim (functionally) homogenous, fair enough - instead, tie the currency to a two-dimensional area at sea level somewhere in the Atlantic (or, to complete the reduction, a sphere of radius ten kilometres located at, or suitably near, the centre of the sun, or just encompassing the space occupied by a particular neutron - space being infinitely divisible, any amount greater than zero will do).
(Portability has upsides and downsides - it's a more useful characteristic in a society that lacks telecommunications and reliable record-keeping.)
Libertarians (or anarchists, really) haven't any reason to be interested in a gold standard, per se, as far as I can see. Insofar as the complaint is inflation of supply, a purely abstract commodity could be absolutely fixed in extent - the advantage of gold over such a currency is that gold exists in the world, and the amount that exists can't be altered by fiat. The purpose of the land example is to show that, so long as one can commit to a fixed-supply currency, gold has no advantage. One doesn't inflate the currency in the land example by creating more land, one does so by altering which land counts as currency-related. That is, one departs from the commitment not to inflate the currency, just as one departs from the gold standard.
The real difference between land (as currency) and gold is that when a society agrees to designate certain land as backing the currency, it has complete control over the supply. If it designates gold as the currency, then anyone who has (or finds) some gold has currency. The objection to fiat currencies is an objection to socially-controlled (re?)distribution of wealth; all currencies are promissory notes, and what interests libertarians is the absence of a monopolistic enforcement mechanism.
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