Sean Andrews wrote: > maybe this isn't the same thing, but it seems > like, unless we are talking about some Platonic form of "gold," there > is some room for fiat.
exactly! the scarcity that makes gold a "natural" form of money (as opposed to a purely state-created one) also creates the incentive to cheat. This means that professional gold-assayers and the like get involved, but that means that there's an incentive for them to cheat (as with the bond rating agencies). So in comes the government. It also has the incentive to cheat, but with any luck its leaders will understand that sustained undermining of the currency hurts their interests too. In any event, the ability to cheat is limited (since the lead inside the gold coins is pretty obvious after awhile, etc.) But the use of gold money requires a superstructure of social institutions to work. It is not purely "natural," unlike in some _laissez-faire_ views. Even with nonconvertible paper money, state officials usually see running the printing presses as against their interests, especially since they are usually in alliance with (or in the pocket of) financiers, who hate inflation because it undermines the value of their paper claims on debtors. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
