It has long been a rule of thumb to have $1 million saved for a comfortable retirement; but, thanks to inflation, the youngest generation of workers likely will need three times as much. According to...
fiat money has no intrinsic value. Doubling or tripling the supply doesn’t change it’s value. Halving it doesn’t make it suddenly more valuable.
If you double the currency, and each dollar has the same value, then you’ve doubled the total value available to each person
Of course that’s nonsense, money printing doesn’t create value.
So the only way to actually make it make sense is that the total value stays the same, and doubling the currency means each unit has half the value it did before.
How do you think each dollar can have the same value if there’s twice as much? That would mean there’s more value just from money printing, which again, is nonsense.
Have you read Capital? It goes through money and velocity pretty thoroughly early on and I think addresses some pretty big assumptions econ classes tend to present.
I’ve read volume 1, and Marx doesn’t imply you can print more money and keep the purchasing power the same after.
The intrinsic value of fiat currency is 0. Double, halve, quadruple 0 all you want makes no difference. It’s function and value is as a medium of exchange.
Imagine a copper based currency. If supplies of copper increase, the intrinsic value of copper falls, so the total value of the currency falls. The extrinsic value is not affected.
If I buy a widget for $1 and my labor is $2, I can be paid in 2 widgets. The money supply doesn’t change that my labor is 2 widgets. If prices are increased on widgets by a capitalist, then I would expect an increase in my labor price (in dollars), regardless of the money supply, because money has no intrinsic value.
I’ll state again that this difference (capitalists choosing to raise prices vs blaming external factors like “money supply”) is not just pedantic. Capital mentions it few times, the fetishization of money and capital accumulation/hoarding cause this belief that money has a function outside of exchange.
To put it mathematically: the rate of accumulation is the independent, not the dependent variable; the rate of wages is the dependent, not the independent variable. Thus, when the industrial cycle is in its phase of crisis, a general fall in the price of commodities is expressed as a rise in the relative value of money, and, in the phase of prosperity, a general rise in the price of commodities is expressed as a fall in the relative value of money. The so-called Currency School* conclude from this that with high prices too much money is in circulation, with low prices too little. Their ignorance and complete misunderstanding of the facts are worthily paralleled by the economists, who interpret the above phenomena of accumulation by saying that in one case there are too few, and in the other, too many wage-labourers in existence.
That’s the entire reason reason it’s value is dependent on the amount in circulation. If it has no intrinsic value, then it’s value is dependent upon it rarity and acceptedness.
Double, halve, quadruple 0 all you want makes no difference.
It makes all the difference. If it’s only value is in how rare it is to get, then more of it means each dollar is easier to find and it takes actual wealth to get money.
It’s function and value is as a medium of exchange.
Yes, which means if suddenly there’s more of it going around, and it has no instrinsic value to act as a “floor” to it’s value, then it will drop in how much you can exchange it for.
Imagine a copper based currency. If supplies of copper increase, the intrinsic value of copper falls, so the total value of the currency falls. The extrinsic value is not affected.
That’s not what intrinsic value is. Intrinsic value is the value it has regardless of the rarity or market price. Copper can be used for electronics and other applications, even it is abundant.
If I buy a widget for $1 and my labor is $2, I can be paid in 2 widgets. The money supply doesn’t change that my labor is 2 widgets. If prices are increased on widgets by a capitalist, then I would expect an increase in my labor price (in dollars), regardless of the money supply, because money has no intrinsic value.
The fact that is has no intrinsic value is what allows it to drop in price.
If prices don’t adjust, there will be shortages because more money ey is being spent buying widgets, or other things that take up the same inputs to make widgets (land/labor/raw materials).
I’ll state again that this difference (capitalists choosing to raise prices vs blaming external factors like “money supply”) is not just pedantic. Capital mentions it few times, the fetishization of money and capital accumulation/hoarding cause this belief that money has a function outside of exchange.
Except I’m saying it has no intrinsic value and that’s what allows it to lose value.
You’re acting like there’s some force that would prevent that, despite more money circulating making the money less rare.
Money is a credit in the economy that allows the holder to demand resources from the economy. If you double the claims to resources, without increasing the resources, you either get shortages or price increases.
Intrinsic value refers to the inherent worth of something, usually based on its fundamental qualities or attributes. Copper has intrinsic value because it possesses useful properties for various industrial applications, such as electrical conductivity, heat resistance, and corrosion resistance. This value is not dependent on any external factors or perceptions. On the other hand, paper money is not valuable on its own. Its worth is derived from societal consensus and its function as a medium of exchange, making it reliant on people’s faith and confidence in its purchasing power.
If you double the currency, and each dollar has the same value, then you’ve doubled the total value available to each person
Of course that’s nonsense, money printing doesn’t create value.
So the only way to actually make it make sense is that the total value stays the same, and doubling the currency means each unit has half the value it did before.
How do you think each dollar can have the same value if there’s twice as much? That would mean there’s more value just from money printing, which again, is nonsense.
I’ve read volume 1, and Marx doesn’t imply you can print more money and keep the purchasing power the same after.
The intrinsic value of fiat currency is 0. Double, halve, quadruple 0 all you want makes no difference. It’s function and value is as a medium of exchange.
Imagine a copper based currency. If supplies of copper increase, the intrinsic value of copper falls, so the total value of the currency falls. The extrinsic value is not affected.
If I buy a widget for $1 and my labor is $2, I can be paid in 2 widgets. The money supply doesn’t change that my labor is 2 widgets. If prices are increased on widgets by a capitalist, then I would expect an increase in my labor price (in dollars), regardless of the money supply, because money has no intrinsic value.
I’ll state again that this difference (capitalists choosing to raise prices vs blaming external factors like “money supply”) is not just pedantic. Capital mentions it few times, the fetishization of money and capital accumulation/hoarding cause this belief that money has a function outside of exchange.
That’s the entire reason reason it’s value is dependent on the amount in circulation. If it has no intrinsic value, then it’s value is dependent upon it rarity and acceptedness.
It makes all the difference. If it’s only value is in how rare it is to get, then more of it means each dollar is easier to find and it takes actual wealth to get money.
Yes, which means if suddenly there’s more of it going around, and it has no instrinsic value to act as a “floor” to it’s value, then it will drop in how much you can exchange it for.
That’s not what intrinsic value is. Intrinsic value is the value it has regardless of the rarity or market price. Copper can be used for electronics and other applications, even it is abundant.
The fact that is has no intrinsic value is what allows it to drop in price.
If prices don’t adjust, there will be shortages because more money ey is being spent buying widgets, or other things that take up the same inputs to make widgets (land/labor/raw materials).
Except I’m saying it has no intrinsic value and that’s what allows it to lose value.
You’re acting like there’s some force that would prevent that, despite more money circulating making the money less rare.
Money is a credit in the economy that allows the holder to demand resources from the economy. If you double the claims to resources, without increasing the resources, you either get shortages or price increases.
Intrinsic value refers to the inherent worth of something, usually based on its fundamental qualities or attributes. Copper has intrinsic value because it possesses useful properties for various industrial applications, such as electrical conductivity, heat resistance, and corrosion resistance. This value is not dependent on any external factors or perceptions. On the other hand, paper money is not valuable on its own. Its worth is derived from societal consensus and its function as a medium of exchange, making it reliant on people’s faith and confidence in its purchasing power.