Fiat

Money is weird. I can understand the shift from pure barter to the use of money. It is very useful to have a medium of exchange. Precious metals are the obvious choice. Gold and silver make sense. But these days money has no value in itself at all. Money is just what the government says is money. A pound used to be a real pound of silver. Now a pound is just whatever the government says is a pound. It’s all a bit abstract.

It’s not clear that this is a good thing either. Apart from being aesthetically unpleasant, at least to me, it isn’t obvious that fiat money is any better than money backed by physical goods. In fact, it may be much worse. Or it may be better. What the hell do I know about economics?

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Published in: on November 8, 2008 at 9:29 pm  Comments (3)  

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3 CommentsLeave a comment

  1. By a curious irony i picked up Terry Pratchett’s ‘Making Money’ from the local library – it’s as if it was written in the last month in commentary on the financial collapse and coming War to End Civilisation.

  2. I like Pratchett. Did you read ‘Going Postal’ first?

  3. i have. i often think of recommending Pratchett but realise some of his best works (Feet of Clay was, i thought, magnificent) would only really make sense if you’d read the preceding 20 or so books.

    i spent a miserable few months in Blackburn in 2007, trying and failing to get even a minimum wage temp job. One of the few consolations was reading my host’s Pratchett books.


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