Re: "Money" and the free market

On Sun, 15 Feb 2009 13:55:39 -0600, "Mark M." <mark@xxxxxxxxx> wrote:

royls@xxxxxxxxx wrote:
On Fri, 13 Feb 2009 10:00:36 -0600, "Mark M." <mark@xxxxxxxxx> wrote:

There is no such thing as natural money independent of government.

Of course there is. Commodity money arises naturally where government
does not even exist.

A commodity is a commodity and as such trades for its current value. Money is
not a commodity, even in places where it has commodity value independent of its
money value.

Wrong. Anything generally accepted in trade is money. If a given
commodity -- cattle, gold, cowrie shells, etc. -- is generally
accepted in trade, it is money.

If coins are worth more as commodities than face value money, they
will be melted down. This is reason governments have purposely made precious
metal money's face value greater than commodity value. Obviously, cowrie shells
had little commodity value.

Wrong. The reason they became money was that they had great commodity
value: like gold, they were rare, hard to obtain, and widely used for
decorative purposes.

That is why cowrie shells functioned as money
over much of the world for thousands of years with no government
support whatsoever.

Not so. Cowries were official fiat currency for hundreds of years in China

Uh, are you perhaps referring to the bronze _replicas_ of cowrie
shells that circulated as currency by government fiat? Real cowrie
shells are of course not a fiat currency, as their supply cannot be
augmented nor their value fixed by fiat.

and were accepted in payment of taxes up to the 14th century.

The Chinese government accepted cowrie shells because they were
_already_money_anyway_, and were not easily counterfeited as the
government's own fiat currencies were (on occasion, the majority of
all the money circulating in China was counterfeit -- but scammers
couldn't counterfeit cowrie shells).

-- Roy L
.

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