Comments on: Arthurian Village Economics

By: David Gillies

David Gillies — Fri, 20 Mar 2009 21:13:11 +0000

To be usable as currency, something needs to be a) scarce and b) fungible. Thus cowrie shells were crap currency because although they satisfied criterion (b) they did not satisfy (a). Currencies based on commodities might or might not satisfy (a), but they rarely satisfy (b).

Also remember that money is not merely a medium of exchange, but a store of value. Investment and savings represent deferred consumption, which is why inflation is so catastrophic.

By: Ian B

Ian B — Thu, 19 Mar 2009 21:34:54 +0000

Wow, I’m famous! :)

By the way, this Guinevere, is she pretty..? I’ve got a couple of spare squeed…

By: Drexciya

Drexciya — Thu, 19 Mar 2009 17:47:18 +0000

Bella:

“So together we agree upon a unit of substitution for all of this stuff, and call it a squeed.”

It’s even simpler (and less organised) than that. One commodity simply becomes more suitable for indirect exchange than another, mainly owing to the fact that it holds its physical properties better over a longer period. Money is a commodity like any other, it just happens to be useful as a medium of exchange aswell. Bread, beer, meat could all potentially act as “money”, but all would lose their value over a period of time and thus would hinder trade.(In some parts of the world, tea, rice and cloth were used as money because they were easily divisible and kept longer than other money alternatives). Naturally, once one commodity becomes favoured by the market, it assumes a dominant position. No law or agreement is made, it’s just that “invisible hand” working its magic again.

Paper notes should be viewed as deposit slips. I deposit my 1oz of gold with you, and you keep it in return for a small fee. Even though my gold is physically in your vault, it remains my gold ; no transfer of property has occurred. This means that using my gold to lend to other people or to invest elsewhere is fraud. Once we start issuing deposit slips for gold that doesnt exist…well, you know the rest…

A small, and rather pedantic point:

More stuff is not, as Ian B puts it, “a good thing. Period”. And I’m sure he would concur with me in saying that creating more “stuff” in the short term thanks to coercive monetary and fiscal policy is not “good” at all.

Its not the stuff, or how much of it, but how the stuff is gotten!

By: bellagerens

bellagerens — Wed, 18 Mar 2009 20:54:37 +0000

@ wh00ps – I’m not sure that would’ve worked anyway, m’dear. The minute some undisciplined person got a bit peckish, you’d lose a part of your cash supply! You would’ve had to destroy all of the can-openers in the world…

By: wh00ps

wh00ps — Wed, 18 Mar 2009 20:50:01 +0000

it IS a good post, and a very good debate going on underneath it, but there’s no way i’m getting involved, my ideas of money are slightly less well developed than yours!
i did once have a dream in which i came up with a solution involving basing the money on tins of baked beans, but on waking i forgot all the details. bugger.

By: Dennis

Dennis — Tue, 17 Mar 2009 21:58:08 +0000

I drew a breath, set my teeth, gripped the starting lever with both hands, and went off with a thud. The laboratory got hazy and went dark. Mrs. Watchett came in and walked, apparently without seeing me, towards the garden door. I suppose it took her a minute or so to traverse the place, but to me she seemed to shoot across the room like a rocket. I pressed the lever over to its extreme position. The night came like the turning out of a lamp, and in another moment came to-morrow. The laboratory grew faint and hazy, then fainter and ever fainter. To-morrow night came black, then day again, night again, day again, faster and faster still. An eddying murmur filled my ears …

By: bellagerens

bellagerens — Tue, 17 Mar 2009 20:51:31 +0000

Well, I specified that Guinevere’s time is worth 10sq/hour. And a dozen eggs costs 3sq, at a price of 0.25sq per ovum. Thus an egg is worth approximately 1.5 minutes of Guinevere-labour. Not bad, for a pre-industrial society.

And Elaine doesn’t have to undercut her. Suppose Elaine is a nubile young beauty and Guinevere a raddled old strumpet. If Elaine opens up shop in Camelot and also charges 10sq/hour, Guinevere will have to undercut herself.

By: Dennis

Dennis — Tue, 17 Mar 2009 20:32:38 +0000

“I decide I’d quite like not only a pair of shoes, but also a half-hour with Guinevere …”

Supposing that eggs at Camelot were worth about the same as those in Tesco, that values her time at £6.50 an hour. And you say Elaine is going to undercut her?

Memo to self: where did I put that copy of The Time Machine? I seem to remember there was an appendix, with plans and instructions.