Quote:
Originally Posted by roachboy
interesting.
here's something i've never understood about the libertarian critiques of "fiat currency."
maybe you can help me out with it.
generally, such critiques are linked to a demand for a return to the gold standard.
how is the value of gold any more or less a matter of convention than is the value of paper?
best i can figure it, there's no particular difference at this level: rather the difference lay in the finiteness (in principle) of the stock of gold...
is that all there is to it?
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That is the basic difference, yes. We're currently running a global economy that is based on some fictional concept of inifinite economic growth, which is impossible given our finite resources. It doesn't matter what we use as the standard, but whatever arbitrary value is assigned must be representative of our resources, and not what people owe each other. You know a system is screwed up when you think about the fact that it would completely crash if everyone paid off their debts.
So yes, primarily because gold is finite. Also because it was the initial standard so it is a familiar one, and gold has a very stable market value compared to other resources.