Properties of Money
Money's a matter of functions four,An entity to be called money is to have these 4 properties:
A Medium, a Measure, a Standard, a Store.
- Medium of Exchange
- For better efficiency than barter, a universal medium
- Unit of Account
- A universal unit that widely different things (eg fish vs a massage) can be reduced to
- Store of Value
- Should hold its value for a reasonable time
- Standard of deferred payment
From Commodity Currency to Fiat Currency
- ◉ fiat, n.: An authoritative but arbitrary order
- ◉ fiat money, : Money without intrinsic value
- The word fiat is by definition arbitrary.
- When applied to politics it is considered the antithesis of democracy
Yet most countries use fiat currency today, the more 'democratic' the more arbitrary, ie less intrinsic value…
Backed by elaborate systems of duping such as fractional reserves
And ultimately guns and nukes
- Most of the high offices of most of today's governments are staffed by criminals
Causes of Failure
- Cannot be universal when everyone does not accept issuing authority
- A standardized base unit makes sense if the conversions make sense to transacting parties, if there is any common ground between the parties.
What will a sub-saharan African with 10 children, most of whom will not live beyond infancy, transact with an European who gets free education, with an American who's biggest grouse with the government is the raising of medicare rates?