I’m asked for evidence. Here is evidence of something important to me, the origins of money. I got it almost right! Not quite but close.
Yanis Varoufakis is a leftist economist former Minister of Finance of Greece. Here is what he had to say at 6:44
Varoufakis does not distinguish money, the concept, from money, the currency. He calls it a duality of money. Anything can be used as currency but money, per se, is just one thing, value rendered, a.k.a. debt.
Fiat money is currency with no value, a counterfeit – but it works as if it were real money until it blows up.
thank you. that was fantastic. i highly recommend listening to the whole thing.
Thank you! Indeed, Yanis Varoufakis is very knowledgeable and a good speaker. This talk is quite exceptional.
You mean I just bought a 2024 Honda Accord Hybrid with fiat money that has no value?
Boy, those folks at Honda and the Honda Dealership sure are fools.
If anyone wants to send me their no value fiat currency, I’m happy to help you get rid of it.
Captain, a great find, as I never this clip before, and Yanis V is one of my favorite of all times
usually stating horrible truths
hated by all powers that be,
and so a must read.
As you know most “Lefties” are brain dead fanboy idiots besotted with watered down Marxist tropes that were obviously totally obsolete by 1900, but Yanis is the real thing – and a visionary with a sense of humor!!, perhaps the rarest of all.
He also reveals the true source of any dogma: Moral Imperative.
Regardless of perspective, moral imperative is the entitlement to stay the course and do the deed.
Who’s morals are we to follow?
That micro observation aside, I enjoyed his deconstruction of the purpose of bankers and the metaphor of reaching forward in time to pull value from the present - until that value has been extinguished.
This leads to the cycle he describes in 2008, etc.
You guys might enjoy the book Debt: The First 5,000 Years. by the late anthropologist David Graeber. Pretty mindblowing discussion of money, what it is, and how it came about. He talks in detail about the Sumarian clay tablets mentioned by Varoufakis. It turns out the Sumerians almost never used coins, except for long distance trade. Almost all transactions were debit/credit exchanges recorded on clay tablets and the clay tablets themselves would circulate as money, as Varoufakis points out. Similar types of systems have arisen across the ages and across continents, sometimes even spontaneously. For example, after the fall of the Roman Empire, Roman currency slowly disappeared in northern Europe, but debit/credit transactions still denominated in denari continued for centuries. The transactions were recorded on tally sticks, and the tally sticks themselves circulated as money.
The standard narrative is that first there was barter and money was created to make trade easier. Graebner argues that debt and money arose before barter, and barter has only ever been a side show.
Graebner explains why governments began to issue their currency rather than just using weights of gold and silver (makes war easier). One time on this board I related Graebner’s story of how the (then private) Bank of England was founded in 1694, and was chastised because something so wild could not possibly be true. It turns out all the founding money was created out of thin air. There were no gold or silver reserves. The Pound Sterling was denominated in silver, but in reality has only ever been a fiat currency.
One of the most interesting parts is how our language (and other languages) are infused with terms related to debt and forgiveness. For example reckoning, redemption, etc. “Please” is short for “if you please” meaning there is no debt associated with the exchange. “Much obliged” means you acknowledged are indebted. “Obrigado” in Portuguese means the same thing. “Thanks” and “danke” are short for “thinking of you” which implies you will repay the debt in the future. “Merci” means have mercy on me for my debt. Saying “You’re welcome, my pleasure, or da dada (it is nothing)” means there is no debt.
In large part, this book is the reason why I am convinced that cryptocurrency will never function as a currency (it may continue to exist as a collectable, however): Cryptocurrency has no debt component.
Well worth a read if you are interested in what money is. It is fairly dense in some sections, so not a beach read but very rewarding.
I never could figure out how currency (money) could evolve from barter, the Sumerian clay tablets make more sense.
Typo? De nada (Spanish and Portuguese) for nothing.
Yes, it did not come into existence by creating value (debt). You seem to have missed…
but it works as if it were real money until it blows up.
Fiat money is a typical emergent property of complex systems. Just like fractional reserve bank loans it is indistinguishable from the real McCoy.
I didn’t miss it. It’s just meaningless.
Everything works until it “blows up.”
Your body works until it “blows up.”
The universe works until it “blows up”.
Does this mean your not sending me all your value-less fiat currency?
Some people are only interested in the practical, others want to know how things actually work.
Yanis has an interesting recent ook, Techno Feudalism.
“… Markets, the medium of capitalism, have been replaced by digital trading platforms which look like, but are not, markets, and are better understood as fiefdoms. And profit, the engine of capitalism, has been replaced with its feudal predecessor: rent. Specifically, it is a form of rent that must be paid for access to those platforms and to the cloud more broadly. I call it cloud-rent.”