[H.M. Murdock]

I've been thinking about this particular idea a lot lately, and have developed a rather large beef with the structure of a capitalistic economy. So, for the purpose of making sure I'm right about it, I'll run it by you geniuses. But before I start I will say this; yes, I'm a bloody anti-capitalist. But I'm not a socialist. Well, not in the typical sense. I'm developing an odd little version of socialism that seems to work pretty well from all the macroeconomic games I've played with it.

I'll start out by giving a brief explanation of mass economics, or at least the general idea of it.
When any given item is introduced into the flow of any market in high quantitative amounts, the value of that item does down. Why? Because the item is no longer unique. A consumer will pay plenty of money for something that is hard to find because they will probably want it pretty badly. Like ancient artifacts- there are no two artifacts that are alike, so they are priceless.¹

Now ordinarily, I don't have a problem with that idea. In fact, it's really the only way to conduct a market fairly. Here is where the first mistake of capitalism is made; it makes a giant leap from applying this theory of estimable value to consumer goods to applying it to money. Because of this, the richer a nation becomes the poorer it really is. This is because people have a lot of dollar bills that, because there are so many, are not worth as much because hey! The market is flooded with green, yo.
Of course, this problem can be traced back to the founding fathers' unhealthy fondness of freedom- they created a market that was too free and engineered a democratic republic that allowed it to remain that way thus leaving us, inevitably, to the buzzards when the market becomes so saturated with worthless money that we collapse from poverty amongst millionaires.
Their misunderstanding was simple because they didn't grasp the concept of currency on such a large scale as is necessary to run a nation, much less a nation with such a brute-force setup as the United States posess.
Should not the currency of a sovereign nation also be sovereign, immune to the whims of an ignorant market of supply and demand? Yes. It is, theoretically speaking, the best way to ensure the value of any given currency over long periods of time. An example of this might be the fact that the Euro is vastly superior to the United States Dollar.

And that is where the second flaw comes into the light. The peculiarly un-sovereign state of the United States dollars, which relates to my aforementioned accusation of the founding fathers establishing a market that is too free. Private banking, in short, is the second flaw. The citizens decide how much the government's chosen method of financial interaction is worth, which is simply foolish. Should a sovereign currency not be held sovereign and be truly regulated by a sovereign state by being distributed through federal banking methods?

Now, I realize that this post is probably incoherent. Now that I have a rough version of it off my chest, I will write up a more refined one later if it is necessary. That having been said, rip it to shreds, boys and girls.



¹This concept in and of itself is somewhat fair when we apply mass industrialization to the equation, making time and effort invested into the product less significant because of the speed of production required to saturate a market with any given product. If there is less of it on the market, then it will not have taken as much time or effort, thus making it more valuable on both the market and personal level. Since anyone browsing this forum probably already has a firm grasp of the concept I just described, I won't worry about clarity.

[Qingu]

It sounds like you want us to go back to the gold standard or something, if I'm reading your argument right.

The problem is that when you get down to it, all money is trivial, even if it's made out of something that is supposed to have an infallible value, like gold. In the late 1600s, most of the countries of Europe--whose coins were made out of metal and were supposed to be as valuable as whatever they were made out of--basically "ran out of money." Their coinage became so adulterated with fake and chipped coins that the process of spending money became this huge deal (where you had to weigh and examine every coin) and in the end, few coins were worth even half of what they were supposed to have been worth. This also meant that countries with a steady supply of valuable metal -- like Spain, who imported silver from their monopoly on the mines in the New World -- had more money than the countries that did not have monopolies on silver and gold mines.

Of course, you see that gold and silver are just as trivial as paper, when you get down to it. The more gold or silver you pull out of mines in America, the less your friends' gold and silver is worth in Europe. And worse, whatever companies have the most mines -- even though having a lot of metal is not really tangibly "valuable" to your country -- were the richest countries!

What eventually happened in England (a country with notoriously poor coins and no money) in the early 1700s was that Isaac Newton became Master of the Mint. He manipulated the market so that gold became more valuable, subjectively, in England than in other European countries. This caused all the gold in Europe to gravitate towards England, where he collected it, melted it down, and made new and unadulterated guineas out of it. After Newton had his way with the Mint, England's coinage went from some of the worst in Europe to the best in the world -- England went from an incredibly poor country to an incredibly rich country. All because some crazy alchemist savant figured out how to manipulate the market and its value of gold.

"Money," whether it's gold, silver, or paper, is just a representation of value. The key thing that you're missing is that value is completely relative; it is not an absolute thing dependent on how much money a person has. In other words, a person with $100 in America in 1800 is just as rich as a person with $1000 in 2000 (or something close to that, I have no idea how the inflation rate has risen in 200 years). A person with 10 gold coins in England in 1699 was as rich as a person with 7 gold coins in England in 1720, or a person with 20 gold coins in 2000. Money will always be an arbitrary thing; it's just a representation of value. That's why the gold standard didn't work -- it was based on the faulty idea that the stuff the money was made out of should be valuable in itself, rather than representing value.

A nation's wealth is determined by how much it produces in goods and services and how much people want them, not how much money it has.

(For further reading about currency, you should check out the Baroque Cycle, by Neal Stephenson. It's a pretty quick read...)

[H.M. Murdock]

Originally Posted by Qingu

It sounds like you want us to go back to the gold standard or something, if I'm reading your argument right.

Not necessarily. As you brought up later on in your post, gold or any other physical standard of precious items that we might hold as a comparison to the value of currency is relative and futile, and I agree with you completely on that, which is the main problem I am having with the theory- the status quo is literally a retarded concept. It starts out sounding good, works okay for a little while, then slows down until it destroys everything dependant on it.
Can we not create an objective trade value? Such as saying "One dollar will always be worth one hundred pennies, and one penny will always be worth one hundredth of a dollar." The problem then lies in the value placed on those hundred pennies. Sticky situation, yes?

A nation's wealth is determined by how much it produces in goods and services and how much people want them, not how much money it has.

How then shall we measure production of goods? Right now we produce too much, and we have produced too much since as far back as anyone can remember. The goods are there, and their value is fixed, but the means by which we gain them are as unpredictable as a mosquito's flight to an uneducated tribal warrior.
Could the problem possibly lie in over-production of goods, thus leading to a detrimental gap in the ability to consume what has been made? Rather like food in a refridgerator; you make too much, you can't take in what's left over, and it eventually starts to smell. So you throw it away, which then takes up more space in the garbage, etc.

(For further reading about currency, you should check out the Baroque Cycle, by Neal Stephenson. It's a pretty quick read...)

Ah! Thank you. I'll see if I can get my hands on a copy.

[Qingu]

Originally Posted by H.M. Murdock

Not necessarily. As you brought up later on in your post, gold or any other physical standard of precious items that we might hold as a comparison to the value of currency is relative and futile, and I agree with you completely on that, which is the main problem I am having with the theory- the status quo is literally a retarded concept. It starts out sounding good, works okay for a little while, then slows down until it destroys everything dependant on it.
Can we not create an objective trade value? Such as saying "One dollar will always be worth one hundred pennies, and one penny will always be worth one hundredth of a dollar." The problem then lies in the value placed on those hundred pennies. Sticky situation, yes?

The objective trade value would not actually be objective. Just because someone says "this trade value is objective" or "this bar of gold is worth ten sheep" or "this piece of paper is worth two candy bars" does not mean that value will hold in all places in all time. Value is and will always be relative as long as humans are different from one another.

How then shall we measure production of goods?

The "market" -- i.e. the aggregate relative values -- determines (in theory) supply and demand. Obviously, people have screwed with the market and supply and demand lines, but generally that's how it works, and it's how it's always worked.

The goods are there, and their value is fixed, but the means by which we gain them are as unpredictable as a mosquito's flight to an uneducated tribal warrior.
Could the problem possibly lie in over-production of goods, thus leading to a detrimental gap in the ability to consume what has been made? Rather like food in a refridgerator; you make too much, you can't take in what's left over, and it eventually starts to smell. So you throw it away, which then takes up more space in the garbage, etc.

Property redistribution ... well, the way I look at it, you've got a sort of continuum of ideas on how to redistribute property. On the one side you have the extreme laissez-faire capitalists who think that property should never be redistributed. On the other extreme you have the communists who think that all property should be shared equally. All real-life countries are somewhere in the middle of these two extremes. In America, for example, everyone pays taxes and the government redistributes that money in various ways. In Canada, you pay more taxes, and the government redistributes it more (they have universal health care, we don't).

I think that if you could answer the question you're posing you would solve all of the world's problems.

Ah! Thank you. I'll see if I can get my hands on a copy.

You should! Although, when I said it was a "quick read" ... I was kind of lying. There are 3 books in the cycle, and each one is about 900 pages long.

But it's really good!

[guitarmonkey<><]

Originally Posted by Qingu

It sounds like you want us to go back to the gold standard or something, if I'm reading your argument right.

The problem is that when you get down to it, all money is trivial, even if it's made out of something that is supposed to have an infallible value, like gold. In the late 1600s, most of the countries of Europe--whose coins were made out of metal and were supposed to be as valuable as whatever they were made out of--basically "ran out of money." Their coinage became so adulterated with fake and chipped coins that the process of spending money became this huge deal (where you had to weigh and examine every coin) and in the end, few coins were worth even half of what they were supposed to have been worth. This also meant that countries with a steady supply of valuable metal -- like Spain, who imported silver from their monopoly on the mines in the New World -- had more money than the countries that did not have monopolies on silver and gold mines.

Of course, you see that gold and silver are just as trivial as paper, when you get down to it. The more gold or silver you pull out of mines in America, the less your friends' gold and silver is worth in Europe. And worse, whatever companies have the most mines -- even though having a lot of metal is not really tangibly "valuable" to your country -- were the richest countries!

What eventually happened in England (a country with notoriously poor coins and no money) in the early 1700s was that Isaac Newton became Master of the Mint. He manipulated the market so that gold became more valuable, subjectively, in England than in other European countries. This caused all the gold in Europe to gravitate towards England, where he collected it, melted it down, and made new and unadulterated guineas out of it. After Newton had his way with the Mint, England's coinage went from some of the worst in Europe to the best in the world -- England went from an incredibly poor country to an incredibly rich country. All because some crazy alchemist savant figured out how to manipulate the market and its value of gold.

"Money," whether it's gold, silver, or paper, is just a representation of value. The key thing that you're missing is that value is completely relative; it is not an absolute thing dependent on how much money a person has. In other words, a person with $100 in America in 1800 is just as rich as a person with $1000 in 2000 (or something close to that, I have no idea how the inflation rate has risen in 200 years). A person with 10 gold coins in England in 1699 was as rich as a person with 7 gold coins in England in 1720, or a person with 20 gold coins in 2000. Money will always be an arbitrary thing; it's just a representation of value. That's why the gold standard didn't work -- it was based on the faulty idea that the stuff the money was made out of should be valuable in itself, rather than representing value.

A nation's wealth is determined by how much it produces in goods and services and how much people want them, not how much money it has.

(For further reading about currency, you should check out the Baroque Cycle, by Neal Stephenson. It's a pretty quick read...)

Yes but if you have the GOvernment controlling the money it inevitably goes corrupt, and we lose all our freedom, the American dream is not hand over everything to the Government, and let them ration it out, but Free Trade, to be able to work hard and make something of your self regardless if you are rich or poor, thats what the scores of illegal immigrants ive ment, all want to work hard and make something of themselves. So, I take the stand that obviously capitalism has made our Country, The wealthiest, and most heard in the world. (no offense to canada, and aussies. ), And,my example in Russia, Even though they are shot through the back with the collapse of a country, there are stores and jobs poping up by the millions, and ask any russian, Free trade captalism is doing very nicely, if they work hrd they can be Anything they want. and while that sounds like a barney ism, its very true, look at all of the wealthiest people, Rockerfeller, a poor scottish immigrant who worked 14 hours a day as a boy, and became one of the Richest men to ever live, not by socialism, but by Capitialism, and there are countless others, while not as rich as he became.

[Casey]

Rockerfeller, a poor scottish immigrant who worked 14 hours a day as a boy, and became one of the Richest men to ever live, not by socialism, but by Capitialism, and there are countless others, while not as rich as he became.

Appeal to authority.

Case

[jfahler03]

I saw some comments here I just HAD to pick apart. Hope you don't mind too much

Originally Posted by guitarmonkey<><

Yes but if you have the GOvernment controlling the money it inevitably goes corrupt, and we lose all our freedom,

And does capitalism protect the government from going corrupt? Your history courses in school apparently haven't told you about political corruption in American history. Not only does it happen, but it's allowed to happen to sometimes larger extents because of the "Freedoms" of capitalism. More on this later.

the American dream is not hand over everything to the Government, and let them ration it out, but Free Trade, to be able to work hard and make something of your self regardless if you are rich or poor, thats what the scores of illegal immigrants ive ment, all want to work hard and make something of themselves.

OK... I agree on the notion of upward mobility. However, what happens to this so-called "American dream" if the government's lassiez-faire view on the economy ignore social and economic problems? How exactly does somebody move upward in society without the government's help, especially as cost-of-living rises and wages lower?

So, I take the stand that obviously capitalism has made our Country, The wealthiest, and most heard in the world. (no offense to canada, and aussies. ),

The wealthies? Does a record deficit define "wealthy"? Our per-capita income is higher than many nations, but it is beginning to slow down in light of European nations. At the same time, it sure is amazing that our taxes are being lowered as we fight a war in Iraq and talk about going to Mars (more political/unrelated of a point, I know, but interesting nonetheless), even as jobs are lost (200,000 in my state) and businesses are outsourcing.

And,my example in Russia, Even though they are shot through the back with the collapse of a country, there are stores and jobs poping up by the millions, and ask any russian,

As the government controls the media and inflation is out of control... so honestly I doubt that "millions" of jobs are "popping up".

Free trade captalism is doing very nicely, if they work hrd they can be Anything they want. and while that sounds like a barney ism, its very true, look at all of the wealthiest people, Rockerfeller, a poor scottish immigrant who worked 14 hours a day as a boy, and became one of the Richest men to ever live, not by socialism, but by Capitialism, and there are countless others, while not as rich as he became.

OK... your comment on Rockefeller made me want to pull my hair out... I think I'll talk about him now (as well as these so-called "freedoms" of capitalism):

John D. Rockefeller (b. 1839 d. 1937):
On your comment of coming from "nothing" you are correct: Rockefeller did in fact come from a modest family of around 7 children. By the age of 19, he had become an entrepeneur (sp?) and had entered the business world. Interestingly, he paid his way out of the draft during the Civil War ("American Dream?").

By 1870, he had started Standard Oil Company, which grew out of a need for oil for kerosene lamps. This "black gold" was widely used, and even as the electric lightbulb was invented (and lamps no longer used) had continuity through the invention of the 1900's: the automobile.

Yes, once he became wealthy, he donated millions (which would translate to some of the largest sums of money ever in today's dollars) via philantrophy to various organizations. However, as he did this, his business practices were ethically questionable at best, outright hypocritical and unChristian at worst (Rockefeller was a Baptist who never drank, smoked, or swore)

I'll finish this off with David Kennedy et al, author of The American Pageant , 12th Edition: (italics, etc are my own for emphasis)
"Pious and parsimonious, Rockefeller flourished in an era of completely free enterprise. So-called piratical practices were employed by 'corsairs of finance,' and business ethics were distressingly low. Rockefeller, operating 'just to the windward of the law,' pursued a policy of rule or ruin. 'Sell all the oil that is sold in your district' was the hard-boiled order that went out to his local agents. y 1877 Rockefeller controlled 95 percent of all the oil refineries in the country.

Rockefeller - 'Reckafellow,' as Carnegie had once called him - showed little mercy. A kind of primitive savagery prevailed in the jungle world of big business, where only the fittest survived."
(Kennedy et al, 2002).

So that's it. The "self-made" millionaire takes advantage of the same lower class he was once a part of. I won't even get into wages, community living, and "social programs" during this time. The fact is, unwatched capitalism is the largest flaw (in my opinion, larger than slavery ever was; or racism) in the history of the United States, because it became the rule, not the exception.

[Bryan]

Originally Posted by jfahler03

However, as he did this, his business practices were ethically questionable at best, outright hypocritical and unChristian at worst

I'll finish this off with David Kennedy et al, author of The American Pageant , 12th Edition: (italics, etc are my own for emphasis)
"Pious and parsimonious, Rockefeller flourished in an era of completely free enterprise. So-called piratical practices were employed by 'corsairs of finance,' and business ethics were distressingly low. Rockefeller, operating 'just to the windward of the law,' pursued a policy of rule or ruin. 'Sell all the oil that is sold in your district' was the hard-boiled order that went out to his local agents. y 1877 Rockefeller controlled 95 percent of all the oil refineries in the country.

Rockefeller - 'Reckafellow,' as Carnegie had once called him - showed little mercy. A kind of primitive savagery prevailed in the jungle world of big business, where only the fittest survived."
(Kennedy et al, 2002).

I'm looking for the unethical and unchristian business practices.

So that's it. The "self-made" millionaire takes advantage of the same lower class he was once a part of. I won't even get into wages, community living, and "social programs" during this time. The fact is, unwatched capitalism is the largest flaw (in my opinion, larger than slavery ever was; or racism) in the history of the United States, because it became the rule, not the exception.

wow, lots of claims and no credible proof.

[Bryan]

Originally Posted by H.M. Murdock

I've been thinking about this particular idea a lot lately, and have developed a rather large beef with the structure of a capitalistic economy. So, for the purpose of making sure I'm right about it, I'll run it by you geniuses. But before I start I will say this; yes, I'm a bloody anti-capitalist. But I'm not a socialist. Well, not in the typical sense. I'm developing an odd little version of socialism that seems to work pretty well from all the macroeconomic games I've played with it.

I'll start out by giving a brief explanation of mass economics, or at least the general idea of it.
When any given item is introduced into the flow of any market in high quantitative amounts, the value of that item does down. Why? Because the item is no longer unique. A consumer will pay plenty of money for something that is hard to find because they will probably want it pretty badly. Like ancient artifacts- there are no two artifacts that are alike, so they are priceless.¹

Now ordinarily, I don't have a problem with that idea. In fact, it's really the only way to conduct a market fairly. Here is where the first mistake of capitalism is made; it makes a giant leap from applying this theory of estimable value to consumer goods to applying it to money. Because of this, the richer a nation becomes the poorer it really is. This is because people have a lot of dollar bills that, because there are so many, are not worth as much because hey! The market is flooded with green, yo.
Of course, this problem can be traced back to the founding fathers' unhealthy fondness of freedom- they created a market that was too free and engineered a democratic republic that allowed it to remain that way thus leaving us, inevitably, to the buzzards when the market becomes so saturated with worthless money that we collapse from poverty amongst millionaires.
Their misunderstanding was simple because they didn't grasp the concept of currency on such a large scale as is necessary to run a nation, much less a nation with such a brute-force setup as the United States posess.
Should not the currency of a sovereign nation also be sovereign, immune to the whims of an ignorant market of supply and demand? Yes. It is, theoretically speaking, the best way to ensure the value of any given currency over long periods of time. An example of this might be the fact that the Euro is vastly superior to the United States Dollar.

And that is where the second flaw comes into the light. The peculiarly un-sovereign state of the United States dollars, which relates to my aforementioned accusation of the founding fathers establishing a market that is too free. Private banking, in short, is the second flaw. The citizens decide how much the government's chosen method of financial interaction is worth, which is simply foolish. Should a sovereign currency not be held sovereign and be truly regulated by a sovereign state by being distributed through federal banking methods?

Now, I realize that this post is probably incoherent. Now that I have a rough version of it off my chest, I will write up a more refined one later if it is necessary. That having been said, rip it to shreds, boys and girls.



¹This concept in and of itself is somewhat fair when we apply mass industrialization to the equation, making time and effort invested into the product less significant because of the speed of production required to saturate a market with any given product. If there is less of it on the market, then it will not have taken as much time or effort, thus making it more valuable on both the market and personal level. Since anyone browsing this forum probably already has a firm grasp of the concept I just described, I won't worry about clarity.

so you want the government to control price levels across the board? because the government does control the supply of money.

[bobthecockroach]

I'm totally confused. How could the value of money possibly be objective?

[Bryan]

Originally Posted by bobthecockroach

I'm totally confused. How could the value of money possibly be objective?

it's not, and never will be.

[bobthecockroach]

Originally Posted by Bryan

it's not, and never will be.

But is that not what Jason is advocating?

[H.M. Murdock]

Originally Posted by Casey

Appeal to authority.

I was going to say Red Herring...

Originally Posted by Bryan

I'm looking for the unethical and unchristian business practices.

You should try reading "Nothing Like it in the World: The Men who built the transcontinental railroad," by Stephen E. Ambrose. A superb example of what free enterprise does, and the unethical and unchristian business philosophies which are "okay" under our "Godly" system of Capitolism.

wow, lots of claims and no credible proof.

Agree on principle, disagree on your rebuttal. Try finding something that refutes it before you pass it off as mere claim.

so you want the government to control price levels across the board?

Price levels, no. The value of the currency that those prices are based on, yes. Unless you view them as the same, in which case I say "yes."

because the government does control the supply of money.

Not necessarily. They supply the original pool of money, but the rest is in the hands of businesses, citizens, banks and other areas of commerce.

Originally Posted by bobthecockroach

But is that not what Jason is advocating?

It is what Jason is formulating an opinion on.

[bobthecockroach]

Originally Posted by H.M. Murdock

Price levels, no. The value of the currency that those prices are based on, yes. Unless you view them as the same, in which case I say "yes."

Value relative to what? I mean, you can say a dollar is worth 100 pennies and a penny worth 1/100 of a dollar but that's meaningless. Money's value has to be relative to something you can buy with the money. Money has no value in and of itself; its only value is its exchange value. In order to set the exchange value, don't you HAVE to set price levels?

[jfahler03]

Originally Posted by Bryan

I'm looking for the unethical and unchristian business practices.

Maybe eating up the opposition? Does "95%" ring a bell? Rockefeller's company would actually work hand-in-hand with the ever evolving railroad industry, make a "trust" settlement with them, and create a monopoly on any new oil stores that would eventually be found. Economically, Rockefeller... again termed "Reckafellow" by Carnegie... was known for his lack of care for his opposition and the extent he would take to destroy them. How can this be "Christian?" how can this be "ethical?"

What about his treatment of employees? This is certainly unChristian as Rockefeller was known for his "Gospel of Wealth" (proclaiming that "God gave me my money"... better emphasized by Andrew Carnegie ). Interesting, as his workers were striking not only against ridiculously low wages (a system was set that they could live in company housing... but precious few actually got out because of the debts they owed), but a lack of health care (who can afford a doctor if you're struggling to buy food?), child labor (education? what?), 14 hour workdays, and unsafe working conditions, all the while as Rockefeller soon became one of the richest men in human history with his oil empire.

Could the government do anything? Of course not. Our government's lassiez-faire form of economy (and monetary gifts from the robber barons) forced our government to keep its mouth shut. Please, actually read your history and realize what is being talked about before you wonder about unethical and unChristian business practices. Astute economics is Christian (and smart), reckless and selfish economics is not. Especially when people's lifes are in danger (eg: The Triangle Shirtwaist Fire for the most common example).

wow, lots of claims and no credible proof.

History, my friend, is the best proof available , and I must say I have it on my side (against lassiez-faire capitalism).

Literary works throughout the 20th century give voice to this proof, for example
The History of Standard Oil Company by Ida Tarbell (Wikipedia link), The Jungle by Upton Sinclair, and Octopus by Frank Norris were all contempoaries of each other, answering with progressive political style of the day to the unjust conditions and lack of control on big business in America. Take a look at Rockefeller's record of no-nonsense economics... I believe my statement by Kennedy et al has plenty of non-specific proof if you want "real" proof go here. Rockefeller was in violation of the Sherman Antitrust acts, but the government did nothing to prevent his exponential growth.

Please... before you say I have no credible proof, read the history of the day first. I suggest Kennedy et al's account of the robber barons and corrupt politics of the day, at the same time The Jungle by Sinclair is a good way to see how a simple work of "fiction" (based on actual families in early 1900's Chicago) changed the nation's policies.