Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Resources to understand deeply how money works?

news.ycombinator.com

Post reply on HN
Print view View original

21–26 of 26 posts

Re: Resources to understand deeply how money works?

#21

Post by squillion »

The problem with this topic is that it's highly contested. Be prepared for foundational and often ideological controversies. You know, a lot's at stake.

To get an idea of the mainstream and where the general mood is, I'd start from Wikipedia.

For bank money:

- https://en.wikipedia.org/wiki/Endogenous_money

- https://en.wikipedia.org/wiki/Monetary_circuit_theory

For central bank money (basically cash):

- https://en.wikipedia.org/wiki/Money_creation

- https://en.wikipedia.org/wiki/Chartalism

Note that both monetary circuit theory and chartalism are considered _heterodox_ economics. Yes, "regular" economics is called _orthodox_!

I personally think Modern Monetary Theory nails it. The MMT Podcast (http://themmtpodcast.com/) is accessible, entertaining, and non-dogmatic. A beautiful introductory book is "1000 Castaways: Fundamentals of Economics" by Clint Ballinger.

Re: Resources to understand deeply how money works?

#22

Post by imtringued »

Read Keynes' "general theory of employment interest and money" and Silvio Gesell's "natural economic order".

After that you will have to update your understanding of money to the modern system of deposits being created through debt which is a simple result of money being equivalent to accounting aka MMT. I recommend reading Wolfgang Stützel's "balance mechanics" just to get a basic understanding about global mathematical identities in accounting and dividing the economy into large sectors that interact with each other and "Money Syndrome" by Helmut Creutz.

If you are lazy and don't have time you can also watch the root bug videos on YouTube. https://m.youtube.com/watch?v=xkQn56Dtslk

Re: Resources to understand deeply how money works?

#24

Post by imtringued »

steve22209 wrote: post #12

What has Government Done to Our Money - Murray Rothbard. Read it and you will understand money better than 99.9% of the population, including most economists.

I can't find a summary of the contents but if I doesn't address liquidity preference, holding costs of different classes of assets, the fact that money abstracts over time and space and often is used to ignore the microscopic details of the real economy then I would say that someone like that has completely missed the point of money.

"Murray N. Rothbard's most famous essay on monetary theory.

Buffoonish and evil politicians, the banking cartel, the cabal that established the Federal Reserve, Lincoln's greenbacks, FDR's stealing of the gold, the Fed and the Great Depression, and so much more." is the only summary I have found so far and it doesn't it inspire confidence.

Edit:

"Fiat currency became the new star of the show. To Rothbard, the Fed is nothing more than a massive counterfeiting operation that forces Americans to pay ever-growing interest on money that continues to be worth less and less. In Rothbard’s opinion, the only way to stop this vicious cycle is “by the return to a free market commodity money such as gold, and by removing government totally from the monetary scene.”"

Yep, completely missing the point. A reintroduction of the gold standard isn't going to stop either inflation nor the "interest spiral" because the real return on deflating money is still positive as if there was a debt spiral. It also doesn't get rid of the inflation deflation volatility.

Re: Resources to understand deeply how money works?

#25

Post by squillion »

unmole wrote: post #15
specialist wrote: post #13

Earlier quoted context omitted.

Anthropologist writes anthropology book about the anthropology of debt, currency, and money. Graeber's great crime is debunking the myth that barter predates money. The historical and anthropological records show that debt precedes currencies. Further, known instances of barter emerge when a society's monetary system implodes. Academia and pundits should update their narratives accordingly. Among many impact observat…

> Anthropologist writes anthropology book about the anthropology of debt, currency, and money. In which he misinterprets the history and ideas of mainstream economics, calls the safest securities on the planet a debt that will never be paid and spins bizarre conspiracy theories about the Iraq invasion. > Graeber's great crime is debunking the myth that barter predates money. This bullshit defense again. And the peopl…

I completely agree that Graeber's barter myth "debunking" is bullshit. However, even as a thought experiment, the barter story was never very enlightening - actually more confusing than anything. It suggests that money is a commodity (salt, gold, cigarettes or whatever), while we know that's not the case. The gold standard is long gone and bank lending creates money. These facts are very hard to explain starting from barter.

I still recommend Graeber's book. If you already have a decent grasp of macroeconomics it can provide perspective and depth.

Re: Resources to understand deeply how money works?

#26

Post by specialist »

unmole wrote: post #15
specialist wrote: post #13

Earlier quoted context omitted.

Anthropologist writes anthropology book about the anthropology of debt, currency, and money. Graeber's great crime is debunking the myth that barter predates money. The historical and anthropological records show that debt precedes currencies. Further, known instances of barter emerge when a society's monetary system implodes. Academia and pundits should update their narratives accordingly. Among many impact observat…

> Anthropologist writes anthropology book about the anthropology of debt, currency, and money. In which he misinterprets the history and ideas of mainstream economics, calls the safest securities on the planet a debt that will never be paid and spins bizarre conspiracy theories about the Iraq invasion. > Graeber's great crime is debunking the myth that barter predates money. This bullshit defense again. And the peopl…

The anthropologists vs economists slap fight is at least decades old. (Barter and Economic Disintegration [1985]) So economists have had time to adjust.

Sure, Begg now knows it's a myth. But even he concedes the myth continues to do a lot of heavy lifting.

The criticism is that "mainstream economics" is wrong. Which is trivially verifiable. I found a handful of contemporary statements that barter precedes money in just a few minutes.

The point is such a minor part of Graeber's thesis. And yet it triggered pundits.

Getting fluffed up about nonissues serves to push serious consideration to the side. For all the usual reasons.

--

> ...spins bizarre conspiracy theories about the Iraq invasion.

What?

Post reply on HN