Bringing back the Somali shilling • Hacker News Board

Re: Bringing back the Somali shilling

#141

Post by dmoy » Thu, May 25, 2017, 3:02 PM UTC

rljy wrote: post #65

dmoy wrote: post #31

Earlier quoted context omitted.

People actually argue that Somalia is better than it was back when it had a functioning government? Have they talked to anyone who grew up or lived through that? Nobody I've talked to from Somalia (I grew up in Minneapolis, a good chunk of my classmates from elementary and uni were Somali), nobody thinks it was a good change. The amount of death and fear is just staggering. That article reads a little tone deaf, a lo…

It is very common for foreigners to hate their homeland. People who move from Kuba tend to say it sucks. I moved from America to Prague and I tell everyone that America sucks. My Russian friends say Russia sucks. The Ukrainians I know say Ukraine sucks. The Kyrgyzstanies I know say Kyrgyzstan sucks. I live among foreigners, and the only ones that I've met that actually like their home country are rich ones from total…

Almost every single one of my Somali peers loves Somalia, and would much rather go back, except they can't because of the fear of getting shot to death / starving.

Re: Bringing back the Somali shilling

#142

Post by wyager » Thu, May 25, 2017, 3:27 PM UTC

semi-extrinsic wrote: post #64

wyager wrote: post #56

Earlier quoted context omitted.

Libertarians don't posit a precise optimum. They are generally of the opinion that the optimum is quite a bit lower than what we have right now. > Don't libertarians understand or accept that there are market failures that government is needed to solve? The only credible "failure" I'm aware of is the need to internalize of public externalities, which can be achieved in a number of liberty-friendly ways. See, for exam…

> See, for example, the Coase theorem Which only holds when transaction costs are negligible, i.e., never. Which was precisely Coase's point in that work - he showed that mathematically, it doesn't matter what initial distribution you put on something (his example was radio broadcast frequency allocations), since the final Pareto-optimal distribution is independent of initial conditions. This is the Coase theorem. Bu…

> Which only holds when transaction costs are negligible,

That's why I said these models are not exact. They still work ok; instead of being Pareto optimal we're epsilon-Pareto optimal. With some form of small government managing large-scale many-party contracts, we can bring the overhead of Coase-style externality management down very low.

> Too little being done to reduce CO2 emissions,

Again, via Coase, we could find an approximately correct internalization incentive via increasing the purview of trespass law. Polluting would involve the purchase of easement rights. This would be very hard to organize with no government, but feasible with a small government.

> Microsoft monopoly in the late 90s

The government didn't solve this problem, they contributed to it. One of the reasons MS got so huge was federal procurement contracts. The MS monopoly got busted up because other companies (namely Apple) started making better computers, and now we also have Google and Linux in the fold in a major way.

> Broadband providers in the US

This is the fault of regional government line leasing rules, which prevent competition by only allowing one company (maybe 2) to service a building at a time. If the government were behaving optimally, either from a social good or profit-making perspective, we would have more ISPs per building in most places, leading to actual competition.

> EpiPen pricing

FDA's fault. http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...

> Essentially every Health and Safety regulation ever exists to fix a market failure. In the small government world, employers see no cost of workers dying of lung cancer in their 60s from breathing asbestos, etc.

This was fixed because of legislative pressure by labor unions, not out of the charity of the government. If the government decided they weren't responsible for this, unions would just have taken a different approach. Probably just some sort of insurance contract internalizing the risk of contracting a work-related injury or illness.

> I could go on.

Please do; nothing you've said so far has been very compelling.

Re: Bringing back the Somali shilling

#143

Post by ithkuil » Thu, May 25, 2017, 3:43 PM UTC

hashkb wrote: post #140

gumby wrote: post #118

> As I pointed out in my old post, there's an old and nagging question in monetary economics that has never been satisfactorily answered: why is fiat money valuable? I've always been surprised by questions like this. Why is (say) gold valuable? The gold supply fluctuates unpredictably depending on gold strikes and without any consideration for creation of underlying economic value (so is inherently inflationary, exce…

> let's not forget that you "create" money when you use your credit card and "destroy" it when you pay your bill Can you elaborate on that? My understanding is: when you swipe your credit card, Visa loans you money and pays it to the merchant. When you pay your bill, Visa gets money from your bank. How is that creation or destruction of money? Seems like value is conserved to me.

I believe the parent poster was mentioning the modern ability of commercial banks to actually create money through loans. There are many places to read about it, I quickly found http://positivemoney.org/how-money-works/advanced/how-commer... but there might be better sources

Re: Bringing back the Somali shilling

#144

Post by petters » Thu, May 25, 2017, 3:53 PM UTC

r00fus wrote: post #49

petters wrote: post #45

Earlier quoted context omitted.

That is similar to have e.g. gold coins as currency. That is inefficient because it is hard to create enough of the currency for the economy to function optimally. It is also quite expensive.

Not only that, it's relatively easy to counterfeit - a modern currency note is probably harder to counterfeit (easier to validate) than a gold coin.

Yes, tungsten has a density surprisingly similar to gold.

The original example in the grandparent comment would be expensive to counterfeit, though.

Re: Bringing back the Somali shilling

#145

Post by wyager » Thu, May 25, 2017, 3:54 PM UTC

postozoan wrote: post #85

wyager wrote: post #56

Earlier quoted context omitted.

Libertarians don't posit a precise optimum. They are generally of the opinion that the optimum is quite a bit lower than what we have right now. > Don't libertarians understand or accept that there are market failures that government is needed to solve? The only credible "failure" I'm aware of is the need to internalize of public externalities, which can be achieved in a number of liberty-friendly ways. See, for exam…

Besides externalized costs, which is gigantic issue that is not easy to solve. These problems are also clear market failures: Large scale goals with large public benefits but which come at high costs will not be achieved without high level cooperation. For every individual market participant, the public education system, the public highway system, the public energy system, etc. have costs far exceeding their means. Y…

I had a longer response written out, but my phone browser crashed and I have to go soon. This will be brief.

> externalized costs

Coase theorem and strong trespass law.

> Large scale goals with large public benefits but which come at high costs

Assurance contracts.

> public education system,

Private schools perform better across the board. If public schools didn't exist, I would expect to see more parochial and charity schools.

> public highway system

Replacing the IH system with privately operated toll roads is well within the reach of US investment banks, and it would be a safe bet. Plus they would be incentivized to actually do repairs quickly, unlike on public roads. Wins all around!

> public energy system,

Sure, this is a hard good to privatize due to line easement requirements. There are ways around this, but I think practically libertarians would agree with the government managing things like water pipes or electrical lines. This will become less of an issue in the near future as being off-grid on solar becomes practical for more people. (Or if we end up with small-scale community nuclear, like some are working towards.)

> Yet every market participant benefits enough that they are happy they exist.

If you think they'll still be happy after being made aware of how much they're paying (instead of it being obfuscated via taxes and respending) then there's no problem.

> armies

PMCs and military insurance. This would almost certainly be more efficient than the current bloated military we have in the US.

> disasters/disease

Insurance again.

> Would microsoft or walmart vaccinate everyone?

Does the government vaccinate everyone now? (No, they do not.)

Re: Bringing back the Somali shilling

#146

Post by IanDrake » Thu, May 25, 2017, 4:47 PM UTC

I always hated fiat currency, but I think I've come to grips with its necessity. The one thing a gold standard currency can't seem to do is control demand for it, thus its value can skyrocket.

When you think of currency as a commodity, under a spiking demand their is no way to control supply so you get deflation.

Rampant deflation maybe more destructive than inflation unless negative interest rates were to become socially acceptable, which I don't think is realistic.

Without negative interest rates deflation makes repayment of loans impossible and rewards hoarding which will continue the deflation cycle.

Re: Bringing back the Somali shilling

#147

Post by Dunan » Thu, May 25, 2017, 4:48 PM UTC

skywhopper wrote: post #130

snarf21 wrote: post #122

Earlier quoted context omitted.

Very interesting comments. I've been thinking a lot about UBI and the one thing I still can't work out is if we are going to just have to print tons of money to be able to make it actually universal (meaning not for people < $50K). Some will still be creating real value for their income so how much is that money devalued by the amount that is given for free via UBI? Will this just cause massive inflation? (I guess I…

Consider that in many western economies, inflation has been perilously low for a decade or more. Japan, Europe, and the US all have extremely low inflation today. This leads to some problems we don't usually hear economists worry about--namely that debt-financed personal investments like a home mortgage or a student loan become much more onerous to people who have taken on that debt in the last 20 years. Since such d…

It sounds from your post like you have borrowed money to buy something (a home, perhaps) and are hoping that inflation will make it easier to pay back that debt. Your arguments work exactly in reverse for someone who is saving money for future large purchases and for whom inflation would be a disaster.

Without inflation, the working class is able to accumulate savings and better their lives. They don't need to put their money at risk in the markets or negotiate raises at work just to keep from falling behind.

Better still, all that money will get spent by all these people with more money and better jobs on buying better housing, newer cars, better food, more luxuries, and that money can make our corporations more profitable and faster-growing...

Maybe, maybe not, but all of these things can definitely be had by having a strong, stable currency that does not lose value.

The "go into debt and then have inflation devalue your debt" system creates a divide between people who are eligible to go into such debts, and people who are unable to and thus see their savings eroded by inflation. It would be much better to have stable consumer prices and to keep debt manageable by maintaining low interest rates.

Re: Bringing back the Somali shilling

#148

Post by BurningFrog » Thu, May 25, 2017, 5:20 PM UTC

beefield wrote: post #53

BurningFrog wrote: post #37

Earlier quoted context omitted.

Libertarians typically want a small state that uses its monopoly on violence solely to protect citizens from aggression.

I have never quite understood why libertarians think that is the precise optimum for the amount of government activities and their "theft" of my money via taxation. Don't libertarians understand or accept that there are market failures that government is needed to solve? Or do they think that in every case government makes more bad than good when trying to solve market failures? Or is it just that freedom of individu…

> Don't libertarians understand or accept that there are market failures that government is needed to solve?

There are levels of insight here.

1. Free markets create wealth and make everyone better off. Go libertarianism!

2. Economics shows the are market failures in the real world. Go socialism!

3. Public Choice theory shows there are major government failures in the real world. Go...?

Once at level 3, reasonable people can disagree in what cases imperfect real markets are superior to imperfect real government.

But if you you're only at level 2, which is how I read your post, you're comparing imperfect real markets with idealized perfect government.

Re: Bringing back the Somali shilling

#149

Post by shitgoose » Thu, May 25, 2017, 5:38 PM UTC

hashkb wrote: post #140

gumby wrote: post #118

> As I pointed out in my old post, there's an old and nagging question in monetary economics that has never been satisfactorily answered: why is fiat money valuable? I've always been surprised by questions like this. Why is (say) gold valuable? The gold supply fluctuates unpredictably depending on gold strikes and without any consideration for creation of underlying economic value (so is inherently inflationary, exce…

> let's not forget that you "create" money when you use your credit card and "destroy" it when you pay your bill Can you elaborate on that? My understanding is: when you swipe your credit card, Visa loans you money and pays it to the merchant. When you pay your bill, Visa gets money from your bank. How is that creation or destruction of money? Seems like value is conserved to me.

"Visa loans you money"

edit: Visa doesn't loan the money, participating bank does. and when bank loans the money, most likely it is money that bank doesn't have, i.e. created money.

Re: Bringing back the Somali shilling

#150

Post by beefield » Thu, May 25, 2017, 5:52 PM UTC

BurningFrog wrote: post #148

beefield wrote: post #53

Earlier quoted context omitted.

I have never quite understood why libertarians think that is the precise optimum for the amount of government activities and their "theft" of my money via taxation. Don't libertarians understand or accept that there are market failures that government is needed to solve? Or do they think that in every case government makes more bad than good when trying to solve market failures? Or is it just that freedom of individu…

> Don't libertarians understand or accept that there are market failures that government is needed to solve? There are levels of insight here. 1. Free markets create wealth and make everyone better off. Go libertarianism! 2. Economics shows the are market failures in the real world. Go socialism! 3. Public Choice theory shows there are major government failures in the real world. Go...? Once at level 3, reasonable pe…

Well, in my second sentence I admit that government can do bad:

> Or do they think that in every case government makes more bad...