Jan

23

Capital, from George Parkanyi

January 23, 2009 |

 Many people misunderstand capital. Even if all our dollars are rendered worthless, that does not change the fact that land, buildings, roads, the tools of our trades and above all, human ingenuity is still all there. (True capital) Dollars have no tangible value. (Zimbabwe dollars have even less). The Emperor never HAD any clothes — we just all mutually agree to see clothes where there actually are none. Money is just a scoring system to determine how much of my efforts and the fruits of my efforts I will trade for your efforts and the fruits of your efforts. People who think they have value in cash, CDs or bonds, or to a large extent stocks, and park all their lifetime accumulated efforts there would be big losers if that particular scoring system fails. (Unfortunately, as traders in electronic blips, it would also probably suck to be us in this scenario.) People who retain control of physical assets through simple possession or specialized knowledge would end up the winners. (Look at who’s rich today in the pieces of the old Soviet Union and its satellites. Typically, yesterday’s communists are today’s big capitalists.)

If our currencies became worthless we would simply have to invent other media of exchange and new ways for re-mobilizing all the physical and intellectual capital that would still be there and at our disposal.

The concept of the potlatch is actually quite interesting. Purposeful wealth destruction had the social preventative/regenerative effect similar to say, fires deliberately set to prevent larger fires and/or regenerate land. The end of money, or the current form of it, is not necessarily the end of us.


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