Money in Galt's Gulch
In the "Fort Knox" topic is a set of sub-posts on how a true hard money free market currency would work. What would money be like in Galt's Gulch? In the book, John Galt paid Dagny Taggart with a $5 Liberty struck in the Gulch and claiming the authority of the United States of America. It was a nice gesture, but not how a truly free market money medium works.
In that other thread, I made these comments:
The epistemology of capitalism expects that gold, silver, copper, etc., etc., will all fluctuate in price relative to each other every moment of every day, as do oil, lumber, sugar, and soy.
It is still possible to have a general or even universal "money of account." In the Middle Ages, probably 1000 different authorities struck silver and gold coins, the silver often debased. Bankers invented "pounds shillings pence" as an abstraction to deal with that.
Calling coins by the name of "money of account" (dollars, pounds, francs) caused no end of troubles and led directly to fiat. Note that the UK Gold Sovereign has no denomination on it. The very first US Gold coins had no denomination. The second series had it in the rims only. Later in silver, only an abbreviation such as QUAR. DOL. was added as a legend on the reverse. Today, a plethora of free market silver rounds and bars simply say "1 ounce .999 fine." That is all that is needed.
Coins in gold, silver, etc., would be known by weight and might have convenient nicknames - Liberty, Arrow, Lightening, or whatever, but their "value" would be exactly their weight and fineness.
Given a plethora of these, some common tables would be handy. In the early 19th century, the US Mint published a regular table showing the dollar values of common European and Latin American gold and silver coins. Again, the coins were "worth" their metal value. The average mercantile firm might regularly see British Pounds Sovereign gold or shillings of silver, and then be paid in Brazillian "joes." So, the conversion tables were handy.
Issue Rate
Gulch Libs 1.000
Atlantis Ships 1.000
Atlantis Sloops .244
Atlantis Dingies .091
D'Anconia Gold Shields 1.010
D'Anconia Silver Shields .0153
D'Aconia Copper Shields .0025
Larken Lead Larks .00000000001
However, with reliable banking and low transaction costs from high market confidence, it is not necessary for coins to circulate. In 1930, Neil Carothers published "Fractional Currency" based on his doctoral dissertation. Assuming ready conversion, it is more convenient to make circulating media out of durable materials for which precious metals are always available.
This was actually the case in America in the late 19th century. US Paper, private banknotes, base metal subsidiary coins (1- , 2- , 3-, and 5-cent in base metal) and minor coins (3-cent, 5, 10, 20, 25, 50) in silver and standard coins (dollars) in silver and standard coins in gold (1, 2-1/2, 5, 10, 20, 50 (patterns only)) all circulated at face and at par. However, occasionally in times and places, merchants found themselves short of coins or awash with them and then paid a premium or sold for a discount.
in addition to these, from about 1830 to 1852, private gold struck by the Bechtlers and Templeton Reid in North Carolina and Georgia also circulated, apparently widely. After the California Gold Rush, such issues blossomed. Over a dozen varieties are known. Typically, they are larger denomination ($20). The actual use of small private gold dollar, 50-cent, and 25-cent is a popular topic widely discussed, but not firmly attested by commercial records of the time. The greatest incentive is the apparent dearth of small silver coins, coupled with gold inflation in the source lands. This all indicates, first, that in The Gulch, money is whatever anyone wants it to be. Coins can be of any convenient size and shape. No one authority has to issue them, or would that be expected.
Today, you can buy small gold bars, 10-gram, down to 1-gram, encased in plastic and certified by a recognized issues such the Austrian Mint, Pamp Suisse, and Engelhard.
Objectivist Paul Hibbert, who writes under the name "Sam Erica" is an engineer who has a convenient design for even smaller amounts of gold, similarly sealed and easily validated at a point-of-sale.
Moreover, in "Francisco's Money Speech" Ayn Rand makes the cogent point that even gold is only worth what you can buy with it. Therefore, it is not out of bounds for money to be denominated in hours of labor, with each issuers time being differently evaluated. In fact, if you consider the markets for securities common stocks typically have no par value and yet are highly sought or readily dumped. Dated 1737 are a series of copper "three pence" from Granby, Connecticut, struck by Dr. Samuel Higley. When his neighbors complained that his first issues are light, his later coins said merely: "I am good copper. Value me as you choose."
In that other thread, I made these comments:
The epistemology of capitalism expects that gold, silver, copper, etc., etc., will all fluctuate in price relative to each other every moment of every day, as do oil, lumber, sugar, and soy.
It is still possible to have a general or even universal "money of account." In the Middle Ages, probably 1000 different authorities struck silver and gold coins, the silver often debased. Bankers invented "pounds shillings pence" as an abstraction to deal with that.
Calling coins by the name of "money of account" (dollars, pounds, francs) caused no end of troubles and led directly to fiat. Note that the UK Gold Sovereign has no denomination on it. The very first US Gold coins had no denomination. The second series had it in the rims only. Later in silver, only an abbreviation such as QUAR. DOL. was added as a legend on the reverse. Today, a plethora of free market silver rounds and bars simply say "1 ounce .999 fine." That is all that is needed.
Coins in gold, silver, etc., would be known by weight and might have convenient nicknames - Liberty, Arrow, Lightening, or whatever, but their "value" would be exactly their weight and fineness.
Given a plethora of these, some common tables would be handy. In the early 19th century, the US Mint published a regular table showing the dollar values of common European and Latin American gold and silver coins. Again, the coins were "worth" their metal value. The average mercantile firm might regularly see British Pounds Sovereign gold or shillings of silver, and then be paid in Brazillian "joes." So, the conversion tables were handy.
Issue Rate
Gulch Libs 1.000
Atlantis Ships 1.000
Atlantis Sloops .244
Atlantis Dingies .091
D'Anconia Gold Shields 1.010
D'Anconia Silver Shields .0153
D'Aconia Copper Shields .0025
Larken Lead Larks .00000000001
However, with reliable banking and low transaction costs from high market confidence, it is not necessary for coins to circulate. In 1930, Neil Carothers published "Fractional Currency" based on his doctoral dissertation. Assuming ready conversion, it is more convenient to make circulating media out of durable materials for which precious metals are always available.
This was actually the case in America in the late 19th century. US Paper, private banknotes, base metal subsidiary coins (1- , 2- , 3-, and 5-cent in base metal) and minor coins (3-cent, 5, 10, 20, 25, 50) in silver and standard coins (dollars) in silver and standard coins in gold (1, 2-1/2, 5, 10, 20, 50 (patterns only)) all circulated at face and at par. However, occasionally in times and places, merchants found themselves short of coins or awash with them and then paid a premium or sold for a discount.
in addition to these, from about 1830 to 1852, private gold struck by the Bechtlers and Templeton Reid in North Carolina and Georgia also circulated, apparently widely. After the California Gold Rush, such issues blossomed. Over a dozen varieties are known. Typically, they are larger denomination ($20). The actual use of small private gold dollar, 50-cent, and 25-cent is a popular topic widely discussed, but not firmly attested by commercial records of the time. The greatest incentive is the apparent dearth of small silver coins, coupled with gold inflation in the source lands. This all indicates, first, that in The Gulch, money is whatever anyone wants it to be. Coins can be of any convenient size and shape. No one authority has to issue them, or would that be expected.
Today, you can buy small gold bars, 10-gram, down to 1-gram, encased in plastic and certified by a recognized issues such the Austrian Mint, Pamp Suisse, and Engelhard.
Objectivist Paul Hibbert, who writes under the name "Sam Erica" is an engineer who has a convenient design for even smaller amounts of gold, similarly sealed and easily validated at a point-of-sale.
Moreover, in "Francisco's Money Speech" Ayn Rand makes the cogent point that even gold is only worth what you can buy with it. Therefore, it is not out of bounds for money to be denominated in hours of labor, with each issuers time being differently evaluated. In fact, if you consider the markets for securities common stocks typically have no par value and yet are highly sought or readily dumped. Dated 1737 are a series of copper "three pence" from Granby, Connecticut, struck by Dr. Samuel Higley. When his neighbors complained that his first issues are light, his later coins said merely: "I am good copper. Value me as you choose."
The only thing that continually - and irreversably - loses value against these tangables is the looter Fiat Dollar. The only time it doesn't is when it's even more artificially propped up - "pegged" to a quantity of real monetary value, such as we have now, to give the appearance of more value than it has...
Which just proves how worthless the Fiat funnymoney is. When you can assign a false number to give it a false value to prop up its image, to lead people to think it has a value which is picked, like dust motes, out of thin air, it's over. Sure, it will have some trade value for a while, but in the end, it's the reichsmark of 1923.
Even with the gold standard 1841-1914, different coins came in different values: UK Pound .2354 oz; French 20 F .1867 oz; German 20 M .2304 oz. Silver coins were a jungle.
We think that decimal is natural but it is not; and our own "decimal" coins have a quarter dollar but no fifth (20 cent). Thirty German states struck their own preferences in silver, usually by thirds and fourths so that a 1/12 thaler was the common denominator. The thaler was originally (1600s) a fourteenth of a mark when the mark was about 8 troy ounces of silver. But by the time trains were common, the mark was a small coin, about 1/3 of a thaler. Again, the coins came from 30 different German states all on their own, plus all the other countries, plus Italy was a bunch of independent cities and states.
In the UK, pounds-shillings-pence had other coins with other names. The gold pound was 20 silver shillings, but the gold guinea was 21. To bring themselves into a decimal world from 1848 the florin was 1/10 of a pound, 2 shillings, easily enough. Th'pence, farthings...
It is "confusing" if you accept being dumbed down by federal money. But in days gone by, even illiterate people kept track of all those moneys well enough.
Which goes to show just how horribly adulterated and worthless money gets when you throw out the anchor of the currency. Of course, no one born after the degradation and adulteration of the dollar really sees this - they're well conditioned to believe that .021 cent piece of base metal is worth a quarter, just as a .001 cent printed piece of special paper is worth a hundred dollars becasue "Someone says so".
It just reminds me so much of the bully that told a kid in Junior High School "This is what it is because I say so" and the sheep said "Uh, yes, miss bully"...
The theory that it should be illegal to melt coins assumes that they always belong to the government and never become your property. That was the theory of the English crown, for instance. Thus, if you found any coins on your land, you had to give them to the king.
Melting coins "for the metal value" requires also recovering the cost of that work. Also, coins have a utility value above their metal content. Not only are they marked as known quantities, but they work in coin-operated machines. On the frontier coins were cut into gears. In machine shops, coins serve other purposes. A new 5-cent nickel weighs exactly 5 grams. Put "coin sculpture" into your browser for images and see what artists have done. Should that be illegal?
You are under no obligation to accept US Government money. Most people misunderstand the legal tender laws. If you want to be paid in silver or gold (or apples), just say so.
I agree with the basic sentiment about money as an objective value. But "objective" does not mean "absolute" or "intrinsic."
Even fiat money could serve the purpose, except that politicians cannot be counted on to keep the supply stable.
The only historic record I know of where bartering came back (briefly) was England in 1696-1697 when the Great Recoinage failed before Newton took over the Mint.
I have heard that perhaps bullets would be currency. But see Susanne above: what is the exchange ratio 45s to 9mm? Which should you stock? .3006 is common for hunting rifles. And so on. That kind of situation does not last long.
It is too easy to suggest the Dark Ages after the collapse of the Western Roman Empire as a time without money. Subsistence was meager, but coins from imperial Rome circulated for centuries and new issues were known, as well. One of the key points was Charlemagne's rationalization of the coinage of his empire. The new rules were needed just because of the existing plethora.
Consider, though, that for a hundred years, the Spanish "dollar" was the international trade coin, even though most of them were minted in Mexico and neither Spain nor Mexico were world powers. Therefore, in a free market, It may be as you suggest that the most reliable and common currencies come from entities that ONLY issue currency. Currency is their business.
But see above to Susanne: perhaps a dozen currencies would be common.