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Monetagium – monetary extortion in feudal Europe

jpkoning.blogspot.com

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Re: Monetagium – monetary extortion in feudal Europe

#51

Post by thaumasiotes »

qwytw wrote: post #49
thaumasiotes wrote: post #43

Earlier quoted context omitted.

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 demonet…

> and taxes were also collected in gold whenever feasible

Well, for one thing, most people wouldn't be able to afford a single gold coin. You might collect taxes from a province in gold; you're not going to collect taxes from a person that way.

> the outcome was a partially demonetisation of the wider economy

This is also an odd claim; the number of denarii kept going up.

> it was central to [the way] the Byzantine economy/financial-system functioned.

Any time you have a system that doesn't involve something, that thing that isn't involved also isn't central to the functioning of the system. There is no way for such a rare coin to be central to the functioning of the system - if it disappeared entirely, the system would continue exactly as before, since almost nothing would have changed.

Re: Monetagium – monetary extortion in feudal Europe

#52

Post by ffgjgf1 »

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

Bitcoin is basically the worst kind of currency I could imagine (well actually I couldn’t, if I didn’t know anything about it and someone told me to design the worst currency I can think of that would still be practically usable I wouldn’t be able to come up with something as bad…)

If due to some episode of mass psychosis everyone collectively decided to make bitcoin the default global currency it would result in the biggest economic/financial catastrophe in human history..

Extreme deflation, unlimited price volatility etc. but most importantly it destroys any reason for investing your money into anything potentially productive.

Why take any risk when you can just become richer and richer by hoarding cash?

Literally freeloading with zero effort whatsoever because you get a cut from anything that anyone does that might result in any economic growth (i.e. productivity increases -> prices constantly get lower -> if you’re an early “adopter” you just stay permanently rich with zero risk or effort). It’s basically if we just took some of the biggest flaws in our current economic/financial system and multiplied them by 10-100x for some insane reason).

Of course that whole problem is mostly hypothetical since there would be no real growth anymore and we’d just be permanently stuck in a severe economic depression…

It’s even much worse than gold/silver that was a compromise because no trustworthy and stable governments could exist in the premodern world and because economies were mostly static over multi-decade periods (of course there was still a huge amount or volatility year to year)

Re: Monetagium – monetary extortion in feudal Europe

#53

Post by ffgjgf1 »

MadnessASAP wrote: post #12
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

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…

> Now governments use taxes to generate revenue and inflation to encourage circulation.

They always used taxes primarily whenever they could. Significant debasement was almost exclusively an outcome of extreme desperation when you had no other options left. If anything expanding the monetary supply is much easier now than when specie money was used. Debasement of course never worked longterm anyway but it was really only feasibly useful when you had the monopoly on issuing currency (e.g. the Roman Empire). In medieval Europe you’d just stop accepting the coins issued by the the city/lord/king who did that, which would be pretty easy when they put both their stamp and the year of issue on it.

Re: Monetagium – monetary extortion in feudal Europe

#54

Post by reisse »

kmeisthax wrote: post #25
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

Bitcoin has debasement, it's called altcoins and hard forks. More generally, Bitcoin solves the wrong problem, because Austrian economics got the history of money wrong. Money wasn't invented to track scarce resources, money was invented to track who had paid taxes to the correct military invaders. The traditional / pre-money form of economic system (in the sense of it being a system to track the usage of scarce good…

> The primary source of liquidity in the Bitcoin ecosystem is businesses buying it to pay data ransoms.

Well, maybe you can explain then why most of the crypto liquidity is not in crypto itself, but in derivative products (mostly perpetual swaps and ETFs), which have no use to pay on-chain ransoms?

Re: Monetagium – monetary extortion in feudal Europe

#55

Post by lifeisstillgood »

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...

This is one of the main points of MMT - with modern economies (and possibly ancient) there is no need to tax in order to spend. The US gov is the only one able to create more US dollars. And they can do so without taxing - they just press buttons on the Fed’s laptop and they have a billion to spend.

Of course that can easily get out of hand so, lots of controls, but those controls should, IMO, be based around how money is created and flows not around some medieval ideas about taxation.

Anyhow, the point is money should equal production capacity else it creates inflation (or stifles demand) - it eventually balances out but the pain in eventually is real.

And is governments with poor willpower a problem - yes of course. But that’s like the manager blaming their employees - they work for us you know.

Re: Monetagium – monetary extortion in feudal Europe

#56

Post by lifeisstillgood »

qwytw wrote: post #50
mndgs wrote: post #42

Earlier quoted context omitted.

"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.

Yea that’s kind of the point as well - Jeff Bezos is unlikely to spend much on Mississippi’s rural road network.

Re: Monetagium – monetary extortion in feudal Europe

#57

Post by lazide »

lifeisstillgood wrote: post #56
qwytw wrote: post #50

Earlier quoted context omitted.

> 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.

Yea that’s kind of the point as well - Jeff Bezos is unlikely to spend much on Mississippi’s rural road network.

Is spending a ton of money on Mississippi’s rural road network a useful use of the money?

Re: Monetagium – monetary extortion in feudal Europe

#58

Post by imtringued »

Ah yes, taxes on money holding and land, two of the most evil taxes ever invented.

The average citizen prefers paying income taxes, payroll tax and sales tax and VAT to the government and paying the land tax aka rent to land holders and the money tax aka interest to money holders to maximize the dead weight loss. Then they complain that the government is bankrupt and is doing inflation.

The average citizen is incorrigible.

Re: Monetagium – monetary extortion in feudal Europe

#59

Post by bobthepanda »

pavlov wrote: post #7
readthenotes1 wrote: post #4

"democracies have not resorted to modern version of debasement as a revenue source due to the unpopularity of rising prices." The USA got rid of silver in its coins in 1964 and I believe copper in its pennies recently. The modern version of debasement is in the feds balance sheet, they've gotten so efficient there's no need to affect the physical substance.

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…

Probably the most successful was the Plano Real in Brazil: https://en.wikipedia.org/wiki/Plano_Real?wprov=sfti1

> According to economists, one of the causes of inflation in Brazil was the inertial inflation phenomenon. Prices were adjusted on a daily basis according to changes in price indexes and to the exchange rate of the local currency to the U.S. dollar. Plano Real then created a non-monetary currency, the Unidade Real de Valor ("URV"), whose value was set to approximately 1 US dollar. All prices were quoted in these two currencies, cruzeiro real and URV, but payments had to be made exclusively in cruzeiros reais. Prices quoted in URV did not change over time, while their equivalent in cruzeiros reals increased nominally every day.

Re: Monetagium – monetary extortion in feudal Europe

#60

Post by carom »

epicureanideal wrote: post #10
lifeisstillgood wrote: post #2

[flagged]

Although there are other things we can do, like simplify regulations for truly small businesses so people have a chance to start something without needing legal expertise, lots of paperwork, etc.

I think about this a lot. It should be really beneficial to have a progressive legal system for corporations where laws become more strict based on size or revenue.
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