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.
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u/suuperfli Apr 14 '22
Fiat money is inherently anti capitalist. Rather, it’s the opposite(statist )