[116646] in Cypherpunks
Re: E$ Barter 2
daemon@ATHENA.MIT.EDU (Secret Squirrel)
Tue Aug 17 07:52:28 1999
Date: 17 Aug 1999 11:30:47 -0000
From: Secret Squirrel <secret_squirrel@nym.alias.net>
Message-ID: <0eb21b2c9427329397bcc1c793eec470@anonymous>
To: cypherpunks@cyberpass.net
Reply-To: Secret Squirrel <secret_squirrel@nym.alias.net>
(continued from E$ Barter 1)
The USG is also keenly aware of barter "exchanges" that
attempt to provide liquidity in barter over the obstacle
that goods and services are not fungible. They get their
records, investigate the exchanges and their clients,
and generally make life miserable for organized barter.
Any barter system that avoids any of the IRS' monitoring
and enforcement will quickly come to be regarded as an
outlaw system. Unless you're planning on setting up nodes
in Libya, N. Korea, communist China and other such states,
you will find that allegations of fraud will be acted on
by foreign governments first and examined later if at all.
> 4. Chaum's algorithms will be nice to use...
> A desperate, distributed society won't worry about
> Chaum's lawsuits.
Methinks you underestimate the inertial mass of government.
No doubt even as the Allied and soviet tanks rolled into
Berlin, there were police detectives still executing arrest
warrants for things like murder, robbery, burglary, assault,
perhaps even parking tickets. Interpol, operated in its
occupied home country by the Germans throughout most of WWII,
never missed a beat all through the war. Its operation was
uninterrupted.
> 5. This system will be high risk.
This system is ill-conceived and stillborn.
> But, there will be a LOT of desperate, motivated
> people and State authority will probably not be
> strong everywhere. This makes the idea more practical.
Marginally. It now looks like Y2K will largely be
anti-climactic. At worst it may provoke a recession.
> In the old days, money was a receipt for valuable
> metal in a warehouse - not merely empty fiat as it is today.
Fiat money is not empty. If it were, there would be no
economies using it. What is the daily world volume of
business transacted in so-called U.S. Dollars? Get it?
Fiat money has value by fiat. That is why it is called
"fiat money." Only when the fiat authority and monetary
manager fall down on the job of managing the supply and
convertibility of fiat money does it fail. Fiat money
is given nominal value by means of legal tender laws,
which also have a practical purpose in intrinsic-value
monetary systems. Legal tender laws enforce payability
in the approved medium on pain of losing the amount
owed the creditor. It is also common that the approved
money is certified for payment of taxes and other
government obligations. In some cases it may be the
_only_ accetable form of such payments.
Fiat money is not bad because it is worthless or cannot
work. It usually is _not_ worthless, and obviously _can_
work. Fiat money is bad because it is so malleable and
subject to abuse and institutional fraud by the
authorities who manage it. Even the 20th-century
governments that seem to have managed their fiat money
supplies for apparent stability have systematically
looted 90-95% of the value stored in such money. It is
not a natural phenomenon that the candy bar that cost
1 cent in the 1910's now costs close to a "dollar."
The natural phenomenon, when money of intrinsic value
is used as the basis of prices, is just the opposite:
goods become cheaper in "price" terms as capital applied
between worker and product multiplies productivity
through machines and new technology. Instead of feeling
the lack of larger banknotes, such an economy would
feel the need for token units of smaller and smaller
denomination.
> Businesses that counterfeited and inflated the
> receipts (money) went out of business. There was
> competition and the strong and honest survived.
> The same thing can happen with E$ barter businesses.
Bullshit. Go back and learn something before trying to
propose systems to change the world. Holders of value
who counterfeited receipts for gold and silver were
probably lynched. Records are sparse. The main
competition in later banknotes was for confidence,
since _all_ were subject to human failings,
overprinting, embezzlement of the backing, etc. The
strong and honest did _not_ survive. Government stepped
in, seeing a racket too good to ignore, and systematized
the process of printing more receipts than there were
assets, making it legal, which the banks themselves could
not do. Banks are now permitted to participate in the
game under the fractional reserve oversight of
governments. Both governments and banks create money out
of thin air and either spend it or lend it at interest.
The core function of the Income Tax is to steal back the
excess from circulation, thus preventing the
hyperinflation syndrome. That is why the Fed and the I.T.
were created at the same time. When the I.T. applies
severely "progressive" tax rates, the process of stealing
back a sufficient amount to prevent hyperinflation is
largely automatic, requiring no new legislation -- a
perfect wealth transfer machine.
TruthMonger
