Why does the state have a monopoly on money?

https://www.economicforces.xyz/p/why-does-the-state-have-a-monopoly

by liqudity • 2 years ago

14 26 2 years ago

economicforces.xyz

4ndrewl• 2 years ago

Weird article, no mention of tax or convenience.

Why does the government have a monopoly on time?!

Yizahi• 2 years ago

Because we don't want people like Giancarlo Devasini, Alex Machinsky, Sam Bankrun-Fraud, Vitalik Buterin, Changpeng Zhao, Saint Saylor and others to govern our money. That's why a lesser evil is used - the state.

quickthrower22• 2 years ago

Not just crypto too. Back in the day banks issuing their own gold promise notes didn’t end well because once you can promise you can make false promises.

The government can also do that and some countries currencies have collapsed but in general it is fairly solid! Inflation aside.

eviks2• 2 years ago

"it's fairly solid aside from situations when it's not"

sha-265• 2 years ago

In bitcoin (not crapto which is 99.99% scam) you can't make false promises and definitely can't "govern" bitcoin. Not even the charlatan "Saint Saylor". This is a huge difference.

hasty_pudding6• 2 years ago

Hence the gold standard

orwin5• 2 years ago

You should read about it a bit more if you believe that would help protecting against banksters and private money.

Hermel• 2 years ago

Technically, the state does not have the monopoly on money. The majority of the money supply is created by commercial banks through credit. But the commercial banks are so strictly regulated through capital requirements that the de facto decision about what purposes the banks are allowed to print money for is under centralized control. The ECB even thinks about using capital requirement rules to nudge banks towards green investments, which would be a departure from their mandate of monetary stability.

mo_42• 2 years ago

The main point of that previous post is that although economists tend to dislike monopoly and extol the virtues of competition, there is surprisingly little criticism of central banks among these same economists.

I think professional economist don't have "likes" or "dislikes". Also this statement doesn't seem correct in another way. I think economists try to understand what setting yields the most wealth. If a monopoly yields more wealth than competition, then, economists will recommend a monopoly.

For example, the metric system is similar to a monopoly. It doesn't make sense to have multiple competing systems here.

Same with a currency as it's a unit of accounting. Having multiple currencies would have higher transaction costs because people would have to convert back and forth daily for comparison and making purchases.

There's also the perspective from MMT, where money is a license to pay your taxes. So having multiple ways of paying your taxes doesn't make sense in this view either.

eviks2• 2 years ago

When presented in that light, it is not surprising that it would be treated as treasonous.

And if presented in a different light, it'd be surprising. But the more imporant question is why would you need to present anything based on that or another theory instead of validating it with data from those who actually make those rules and categorize it as treason?

hasty_pudding6• 2 years ago

Leaving the gold standard has been a disaster for the working class (i.e. anyone who has to work for a living)

https://wtfhappenedin1971.com/

temppppp• 2 years ago

Try again. Reaganomics and government interference to destroy the labor movement did significantly more damage. Bailing out failed corporations instead of the people they cheated did significantly more damage. Hell, irregular trade policy when there is a fragile supply chain has done more damage to working class people in the us. The working class, by design, was/is too cash poor to give a crap about what cash was based on.

hasty_pudding6• 2 years ago

Did you see the link I posted? The decline began well before Reagan, although Im sure Reagan didnt help.

orwin5• 2 years ago

Why take 71 and not 73? The graph are pretty bad, but it seems to me takin 1973 would be a more accurate date?

hasty_pudding6• 2 years ago

Doesnt change a thing. Learn to infer.

Towaway69• 2 years ago

The article puts it very succinctly:

As people like David Glasner have pointed out, the idea that the state monopoly on money is really about emergency financing for things like wars can also help us to understand why counterfeiting has historically been treated as treasonous.

Gave me a new perspective on money: as being a weapon of war. Of course it's not the only use of money but it does give food for thought.

logtempo• 2 years ago

Competition is nothing but economic war.

foinker• 2 years ago

A monopoly was developed because it's easier, and I'm sure that's why there isn't anywhere in the developed world that successfully made use of multiple currencies, or private printing of the dominant currency. For example, the American colonies operated without standards for the first few decades and it was a huge pain in the ass for everyone:

https://en.wikipedia.org/wiki/Early_American_currency

gus_massa• 2 years ago

Hong Kong has a strange system https://en.wikipedia.org/wiki/Hong_Kong_dollar

Apreche• 2 years ago

In the past there was a thing called company scrip. It was a big problem. State issued money sure as been a lot better.

That said, states do not have a monopoly on money. Ever heard of Robux? Gift cards? Airline miles? Arcade tokens? Credit card reward points? There are a lot of other moneys in our society even if you ignore bullshit crypto coins.

Theoretically these other currencies are pegged to the dollar, but not really. Even gift cards, which have a value expressed in dollars, have a different value. Sometimes the value is increased because they are untrackable dollars that can be used for scams/crime. The value and desirability of goods and services offered by the company that issued the gift card also affect its value.

Would you trade a $1000 Apple gift card for a $1000 Applebee’s gift card? Would you buy a $1000 Apple gift card for $1000? Would you buy an Applebee’s gift card for $1000?

Why does the state have a monopoly on money?

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