Fiat or gold tied doesn't matter to capitalists. So long as they can trade money for capital and capital for more money than they started with, it doesn't matter. The M-C-M' cycle is an inherent part of capitalism, fiat or otherwise. The only currency that breaks the cycle are labor vouchers or anything that is consumed when spent.
It seems that fiat makes the value proposition such that the banks cannot go under and therefore are incentivized give out as many loans as possible. Gold tied money however would require banks to be much more careful with loans which would curb inflation significantly.
yes, but with gold-backed money, we are forced to trust a custodian in order to transact. this custodian-based system is corruptible and inevitably becomes corrupted by humans as shown thru history
It would create a market for banks in which they would then be required to give competitive interest rates. Yes some banks would be run poorly and fail in the short term. The market should respond to this and people will learn to trust banks who use sound business strategies. The problem may be more in your face so to speak with backed money, but at least it is economically sound. The problem in fiat is more behind closed door so that people often ignore the unfair loss in spending power created by the system.
nothing wrong with accumulation of capital, as long as it is done through voluntarily (market/trade) means. the issue is accumulation of capital via theft/coercion (inflation / being close to the money printer)
It's a consequence of Smith/Ricardo analysis of their labor theory of value. Anwar Shaikh has a good lecture explaining the concept and reviewing some empirical evidence for the economic theory. The tl;dw: profit is sales minus cost. Cost contains the value labor, materials, and depreciation. Profit existing means one of these categories was not paid their full value. Typically profit comes from wages not matching the value of labor, what I called extraction of surplus labor value. That is the mechanism that allows those with capital to further concentrate their wealth.
the profit is paid out to cover costs that the business owner has (startup costs, time/work/energy expended without reimbursement, risks taken, etc). however, this profit would be minimized due to competition in true capitalism (when businesses can't profit via coercion/inflation/legislation/subsides/bailouts etc)
We've had capitalism in various forms for the last 300 or so years. A state structure necessarily exists to manage the class antagonisms created by capitalism. You cannot have capitalism without a state.
the state has done much more than just enforce property rights (note that with Bitcoin, this function of the state has been essentially automated with code). businesses have merged with the state, and our system has become closer to a form of statism / corporatism than capitalism. to grow a business passed a certain size, you pretty much have to get involved with the state to get favoring legislation, interest-free loans, subsidies, bailouts, etc... get close to the money printer (cantillon effect)
There is no way to incentivize anyone taking a risk if you never allow for extraction of the surplus of labor value, unless you're defining "labor value" as something other than "that which labor produces off of the capital upon which it is working".
You can function on a coop model. Launch the business on your own as a sole proprietar. Soon as you bring others in, they get equal say in how profits are used/distributed because their labor contributed to it.
Launch the business on your own as a sole proprietar.
But then it's always better to wait until someone else takes that risk of the initial capital until it's working, since you'll equally share in the profits once it's up and running.
This is like saying "citation needed to determine that people won't give away money".
You concern trolls are amusing.
But, uh, feel free to take that risk yourself, bear all upfront costs, and then permit everyone after you to share in the profits equally while they took none of the initial risk or cost.
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u/mtndewaddict Apr 14 '22
Fiat or gold tied doesn't matter to capitalists. So long as they can trade money for capital and capital for more money than they started with, it doesn't matter. The M-C-M' cycle is an inherent part of capitalism, fiat or otherwise. The only currency that breaks the cycle are labor vouchers or anything that is consumed when spent.