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Monetagium – monetary extortion in feudal Europe

jpkoning.blogspot.com

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Re: Monetagium – monetary extortion in feudal Europe

#41

Post by psychlops »

MadnessASAP wrote: post #22
TacticalCoder wrote: post #17

Earlier quoted context omitted.

> Breaking a system you don't like doesn't automatically get you a system that's better. At this point the US debt is growing by 1 trillion every... 100 days. The system is breaking by itself, not because of Bitcoin. > While taxes and inflation are generally unpopular they are also vital to the functioning of society and the economy. Some taxes and some inflation. We're way past these.

Pointing to a national debt without context does not make a point, much less prove the system is breaking. Global inflation has very little to do with any one governments choice in economic policy. However it should be said that the current state of inflation would make the problems caused by the widespread adoption of a inflation "proof" currency significantly worse. Tax rates and distribution are an incredibly subj…

> Pointing to a national debt without context does not make a point, much less prove the system is breaking.

Belief in magic is why the system will peacefully continue until it breaks. While it dollar enjoys the status of the least ugly girl in the room, it too will eventually follow the same pattern of all fiat.

Re: Monetagium – monetary extortion in feudal Europe

#42

Post by mndgs »

lifeisstillgood wrote: post #40
yowlingcat wrote: post #33

Earlier quoted context omitted.

How would a wealth tax solve a problem caused government management of interest rates and active management of money supply?

This is likely a problem of the differences in your and my mental models - so let’s start with Modern Monetary Theory (MMT) which I think has huge explanatory power. So starting with MMT - money is a token granting allocation of a portion of future productivity. Over COVID the UK printed 1 trillion dollars of extra furlough-like cash, the USA something like 10 trillion, the western world as a whole something like 25…

"tax the wealth to remove about 25 trillion dollars globally." And what do you think happens once the tax is collected by the government? It is spent. And the money goes back into market, which will earn its returns and will be taxed again. Rarely a government has enough willpower to terminate the money supply collected in the form of taxes...

Re: Monetagium – monetary extortion in feudal Europe

#43

Post by thaumasiotes »

OriPekelman wrote: post #36

For those interested, the practice of debasement actually predates the middle ages by, a lot. By 301 inflation was so bad Diocletian had to put out a price fixing edict. It didn't work. It took Constantine's Solidus (basically solid gold coin - that will stay stable for almost a thousand years) to stabilize the currency. By the early fourth century the denarius that used to have 50% silver contained almost no silver…

Between the years 150 and 100 BC, the Seleucid tetradrachm went from 95% silver to 65%. As the name suggests, it continued to weigh four drachms.

Debasement occurs any time the government runs out of money and can force people to take the debased money. The previous ~150 years of the same government minted tetradrachms that were all silver, probably because their main use of the silver was paying foreign mercenaries.

> By the early fourth century the denarius that used to have 50% silver

This is already a heavily debased coin. Nobody starts by adulterating their coins down to 50% monetary content.

> It took Constantine's Solidus (basically solid gold coin - that will stay stable for almost a thousand years) to stabilize the currency.

This isn't plausible; gold coins barely transact (gold is too rare). Minting coins that nobody uses won't affect the currency that people do use.

Wikipedia notes that, on issuance, Constantine's solidus was worth 275,000 denarii. The denarius was debased, but it was also a coin that people carried around and used to buy things. Think about the number of transactions that might plausibly have involved one or more solidi. If we underestimate the 4th-century denarius as being roughly as valuable as a US penny... how much use would you have for a $2,750 coin?

Re: Monetagium – monetary extortion in feudal Europe

#44

Post by jeltz »

g15jv2dp wrote: post #29
nradov wrote: post #20

Earlier quoted context omitted.

One of the other factors preventing people from starting small businesses is lack of affordable health insurance. They can buy coverage through state exchanges but those are still more expensive that group health plans offered by large employers.

Is your comment still about Europe...?

Starting a small business is hard in some European countries but not others. Here in Sweden it is trivial. In e.g. Malta and I believe Poland it is hard.

Personally I am not sure any of this discussion is relevant to Europe, especially not as a whole.

Re: Monetagium – monetary extortion in feudal Europe

#46

Post by jeltz »

TacticalCoder wrote: post #17
MadnessASAP wrote: post #12

Earlier quoted context omitted.

It doesn't in any way fix things. The underlying point of debasement and other schemes outlined in the article was to generate revenue for the government. Now governments use taxes to generate revenue and inflation to encourage circulation. While taxes and inflation are generally unpopular they are also vital to the functioning of society and the economy. BTC and many other token schemes implicitly or explicitly stan…

> Breaking a system you don't like doesn't automatically get you a system that's better. At this point the US debt is growing by 1 trillion every... 100 days. The system is breaking by itself, not because of Bitcoin. > While taxes and inflation are generally unpopular they are also vital to the functioning of society and the economy. Some taxes and some inflation. We're way past these.

Current inflation is mostly caused by fuel prices and that would affect BTC too.

Re: Monetagium – monetary extortion in feudal Europe

#47

Post by thaumasiotes »

Mistletoe wrote: post #9

Bitcoin fixes this for the first time in human history. I’m excited about a future without monetary debasement. How many wars have been started by the “print more money until it is worthless, oops I have to start a war to fix it” spiral? https://en.wikipedia.org/wiki/Debasement

> How many wars have been started by the “print more money until it is worthless, oops I have to start a war to fix it” spiral?

Not many. The more typical case is that you're in a war, and you want to spend more money than you have, so you make some up.

Re: Monetagium – monetary extortion in feudal Europe

#48

Post by ptsneves »

xandrius wrote: post #34
pavlov wrote: post #7

Earlier quoted context omitted.

Some democracies in the 20th century have tried a form of cash debasement to fight inflation. The example I’m familiar with is from Finland in 1946, when the most popular and largest circulating bills were required to be physically cut in half and lost 50% of their upfront value. The Wikipedia article seems to be only in Finnish: https://fi.wikipedia.org/wiki/Setelinvaihto The idea was that the left half of the bill…

That's just such an interesting idea and approach. It's one of those things you'd never think someone would go from ideation to actual implementation, and yet it happened.

Honestly it feels like a good idea in principle. Of course people are not rational economic actors and ignoring it has bad outcomes.

1. This is actually a politician’s job, to explain. If you don’t explain well you get kicked out and your electorate doesn’t buy your ideas. Don’t complain about the people being stupid, they are real and wishing they were different or demeaning the people is totally useless.

2. The idea of fostering savings in a time of inflation is really cool, and an original way getting people to buy in your policy. That it did not work sounds like a great topic for research, including experiments.

Re: Monetagium – monetary extortion in feudal Europe

#49

Post by qwytw »

thaumasiotes wrote: post #43
OriPekelman wrote: post #36

For those interested, the practice of debasement actually predates the middle ages by, a lot. By 301 inflation was so bad Diocletian had to put out a price fixing edict. It didn't work. It took Constantine's Solidus (basically solid gold coin - that will stay stable for almost a thousand years) to stabilize the currency. By the early fourth century the denarius that used to have 50% silver contained almost no silver…

Between the years 150 and 100 BC, the Seleucid tetradrachm went from 95% silver to 65%. As the name suggests, it continued to weigh four drachms. Debasement occurs any time the government runs out of money and can force people to take the debased money. The previous ~150 years of the same government minted tetradrachms that were all silver, probably because their main use of the silver was paying foreign mercenaries.…

> This isn't plausible

Why? Of course it wasn't accessible or particularly useful for the majority of people but it was central to the Byzantine economy/financial-system functioned. Soldiers were paid in gold (every 6 or 12 months so that simplified things) and taxes were also collected in gold whenever feasible.

Relying on gold as your primary currnecy of course wasn't ideal since the outcome was a partially demonetisation of the wider economy.

However while it was was basically entirely unavailable in Western Europe and there were almost no gold coins in circulation until the 13th or so it was much more widespread in the Eastern Mediterranean.

Re: Monetagium – monetary extortion in feudal Europe

#50

Post by qwytw »

mndgs wrote: post #42
lifeisstillgood wrote: post #40

Earlier quoted context omitted.

This is likely a problem of the differences in your and my mental models - so let’s start with Modern Monetary Theory (MMT) which I think has huge explanatory power. So starting with MMT - money is a token granting allocation of a portion of future productivity. Over COVID the UK printed 1 trillion dollars of extra furlough-like cash, the USA something like 10 trillion, the western world as a whole something like 25…

"tax the wealth to remove about 25 trillion dollars globally." And what do you think happens once the tax is collected by the government? It is spent. And the money goes back into market, which will earn its returns and will be taxed again. Rarely a government has enough willpower to terminate the money supply collected in the form of taxes...

> And what do you think happens once the tax is collected by the government? It is spent

Well yeah, I kind of thought that was the whole goal? If we assume/believe that governments generally are capable of spending that money in a more equitable way that would benefit a larger proportion of the society (while also resulting in higher productivity growth) than allowing it to be (effectively) hoarded by the wealthy.

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