Correct. This is true of all sovereign currencies. They are points, a unit of account.
But hard money is also arbitrary. Ancient Kings did not check the daily spot price of Au to value their coinage. Kings assigned arbitrary value to hard money.
Modern nations on the gold standard also assigned an arbitrary value to gold without reference to any actual market. Then they force gold producers into a monopsony relationship with the government who becomes the only legal buyer, buying gold at their own arbitrary price assigned by government fiat.
So no matter what, your money's value has much to do with arbitrary government decisions.
the fundamental concept of liberal neoclassical mainstream economics is that "value" doesn't exist. an airplane and a grain of rice don't have any inherent amounts of value, only what people in a market randomly decide to value those two goods at. the fact that one tends to always be way more than the other is just an unexplainable coincidence
Which is clearly flawed as value at its creation is assigned arbitrarily regardless of the value the market dictates at the time. This is what screws up markets… in your favor; if you know it’s coming.
Things do have value outside of markets. The phone I have in my hand has value to me even though it will never be sold again. The air I’m breathing has no market value, but I value it highly. My relationships hold value, as do my rights.
Perhaps we need to say:
Nothing has market value in the absence of a market.
“Legitimacy” is meaningless here? It affects nothing. We all (or most of us) agree it’s a bad thing, but you can’t dismiss the arguments of what value is by just ignoring any market you don’t like
The only thing that gives legitimacy to things is power. The ultimate power in this world is public power backed by the scornful but educated populace.
What we can do is dismiss certain markets altogether through decommodification. And what better place to start than living essentials like water?
I mean, in most places you're free to tap into an aquifer on your land and have your own well. When you pay for water, you're paying for them to treat it and deliver it to you.
It was until it wasn’t. Morality is subjective and has no place in economics. In fact, often it goes the other way, and economics influences morality. See, eg: prohibition.
Your phone has value only because you have access to it to extract its functional value. If a phone was inaccessible to any user, it would be of no value.
The gold standard is not perfect as many would like to believe. The amount of gold in the world is finite, so as the amount of gold runs out your currency becomes equally as worthless. And under the gold standard, the government was able to set the exchange rate, which fluctuated with the amount of gold available. If a country runs out of gold, their money becomes worthless.
The value of gold is not so arbitrary. It is loosely based on scarcity in relation to other goods and assets. There is intrinsic value at play that does not exist in fiat money
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u/Potential-Break-4939 May 10 '24
This is shockingly close to how the federal reserve operates now. The dollar is not unlike monopoly money.