Wow..... excellent video. I thank you for putting out such a thought proviking piece of work. I've been reevaluating the definition of money and saw your post....thank you Universe. Upvoted and following.
Great question! Well, it really depends on the definition you are using for "currency." Colloquially "currency" can have a very loose meaning. It doesn't always mean "fiat currency" or "money currency" when used. Typically when people use "currency" in association with a term like "attention" they aren't speaking literally. They aren't saying, "I have a piece of paper or coin that represents a unit of attention that can be used to purchase something else." My definition of currency would be something like, "the official money of a specific population." What I think you're really getting at is the fact that up until now no one has been able to effectively MONETIZE people's attention. People's attention is valuable, but existing forms of money aren't inexpensive or efficient enough to enable anyone to monetize their attention. One of the strongest arguments for STEEM and steemit is that it enables people to monetize their attention. If that's all STEEM did, then it could be called "the currency of attention." But that is different than saying that attention = currency. In that context I would say "currency" is being used synonymously with "valuable." Thanks for the thoughtful question!
That's a really good question, and to be honest a difficult one to answer. I mean, can attention be traded? I guess there are basically markets where attention is traded (those markets that deal in online advertisements). But part of what I'm trying to do with my videos is help us get away from "word thinking." Maybe the real question is whether there is any benefit to thinking of attention as a commodity. I think maybe the simplist definition of a commodity might be "anything that can be monetized." Then the question becomes whether people's attention has been monetized, which yeah I think that's happened. But this is also kind of "economic thinking." When talking econ we tend to forget there's more to "things" than the economic terms we use to describe them. "Attention" is an important part of being human that in many ways we still do not full understand. What exactly attention is (for example, one could argue it is how we determine what matters) might be a more important question. How's that for a non-answer answer? Thanks for the great question!
Excellent video! Resteeming it. Unfortunately, you published this during a whale experiment where the whales are not voting. That means your post will probably not earn as many "productivity points" as it would otherwise. I hope you continue creating this ever-green content. It will create value for you, Steemit, and users for a long time, IMO.
Thanks! Really glad you liked it Luke. Good seeing you again! I do plan on putting out a lot more content in the coming days and weeks, regardless of the whale related shenanigans ;) While I don't endorse what anyone is doing, I have to admit that I am curious to see the consequences. I guess as someone who has been heavily rewarded by the community (and whales) in the past, it is my duty to take some on the chin :)
Hahah, yeah, good point. Ah, the good old days when posts were worth hundreds of USD productivity points. Too bad I powered it all up only to watch the price of STEEM plummet. That said, I've deeply enjoyed the conversations and relationships here and I'm still hopeful for the long term future value. Good seeing you again too. I look forward to your content. It might be interesting to explore a bit more on the disconnect between the scoring system itself ("productivity points") and the manipulation of the value of that token through many forces (federal reserve, governments, wars, loss of trust, market manipulation, etc). That, I think, is where things get really complicated. Those who should be rewarded aren't always fairly rewarded. There is no meritocracy and even "choice" may be an illusion from a materialistic determinism perspective. A UBI or a resource based economy or something like it might some day be possible, but not until we can figure out what we mean by "value" and "fairness" when it comes to rewarding our productive members of society while also caring for the unproductive ones enough to not let them die in the street due to their unlucky birth. And what is a "reward" anyway if productivity is just the result of determinism?
Maybe we should do a google hangout sometime and chat through this stuff. Might be fun.
One of the best videos I have seen on a concept that most of us just take for granted. Clear, coherent and concise. My personal definition of money would be as an abstraction of work.
OK I've made a new Tweet of this post and I'm going to try out a bit of twitter ad promotion on it - views are at 75 now and it will take a few minutes to launch. Hopefully it will help. Here is the link:
Thanks! Yes, it is an abstraction of work. That is certainly one way to put it. Though more specifically, it's an abstract representation of someone else's valuation of your work. Something like that. People form a subjective valuation of the money itself, and then based on that subjective valuation they distribute it to others based on their subjective valuation of the thing relative to their subjective valuation of the money itself. The problem with using "work" is that people can have things other people find valuable and are willing to exchange for money that aren't typically described as work. For example, money paid to a model is for the most part an abstraction of their beauty, not their work. Now if we think of it as productivity points it gets a little easier. A company pays a model because he/she produces more value for that company as expressed in increased sales of their product. The reason they give him/her money is because it produces more value for them then keeping the points for themselves does, as proven by the fact that eventually they receive more total productivity points than they expended on things like models :)
The problem with using "work" is that people can have things other people find valuable and are willing to exchange for money that aren't typically described as work.
Lol yes you are absolutely right. I was just thinking about how I think about it!
No problem will be a nice experiment! It is an awesome video and I think others will find it useful and maybe even want to get involved in the conversation enough to try out Steemit!
I might make myself a sticker chart and award myself productivity points that I can exchange for chocolate. I know that isn't where you were going with that term but that's where I'm going with it.
On a more serious note -I know I usually give you pretty whimsical comments. My discussions with people about what crypto currency is usually begin with what money is. I'm often surprised with the number of people who think our money is linked to something like the gold standard. When i go on to explain QE suddenly crypto doesn't seem so strange. The different values that we place on things, different types of work and property is at times strange.
Totally. That's actually a big part of where this post came from--struggling to find fast and easy ways to explain money, so that I can explain cryptocurrency, so that I can explain STEEM. Most people think of "money" as "whatever currency they use," which immediately makes the idea that anything else can be money difficult to entertain. It's my hope that maybe by broadening people's thoughts on money they will be more open to looking at new forms of money.
Wow! I just read the text and I must say it's one of the best thing I've read on Steem. I can't wait to watch the video. I'll most probably be back with some comment about it.
Haha, YEAH! Thanks :) No worries, I believe in experimentation. That being said, I do feel bad for people negatively affected by this experiment that aren't in my position.
Great post. The idea of money as a "productivity point system" reminds me of the idea of "labor-notes" in Josiah Warren and Mikhail Bakunin, and the mutual banking ideas of Pierre-Joseph Proudhon and Lysander Spooner.
I'd recommend the book "Debt: The First 5,000 Years" by David Graeber, as a corrective to some of the Austrian influence I perceive in your analysis. The Austrians had good stuff, but there's some points where I think they err. Graeber looks at archaeology and historical references to money in literature and demonstrates that the notion that money "emerged" rather than being intentionally created is actually false. His analysis is correct, although I don't agree with the communistic/anti-market conclusions he draws from it.
Thanks for the recommendations! It would be awesome if you shared an example of a form of money that disproved one of my points so that I could have a better idea of exactly what I should read to correct my mistake. Many forms of money do have a level of conscious development, but most of these are referred to as "currency." Currencies themselves however are usually derived from forms of money (including other currencies) that existed prior to their formation. So while the people who "created" them might have deluded themselves into thinking they were making something incredibly original, very few components of their creation were their own. In fact, in order for populations to accept money they have to be familiar and so introducing a currency that was significantly different than preexisting currencies would defeat the purpose. Even those currencies, literally up until 1971 were themselves backed primarily by other forms of money, gold and silver, which are difficult to describe as "consciously created." Thanks for the comment, but I think this is a semantic disagreement and not a substantive one.
So, David Graeber points out that the use of precious metals as money actually originated with war and the State. Precious metals are precious because they are rare. The average person in a primitive village would not have access to such things. So, primitive societies, at the earliest stages, tended to value things in terms of livestock or people. Your proto-money or unit of measuring value would be sheep, or cows, or people (this ties in with pawns, bridewealth, et al.). These weren’t used as money because they couldn’t really serve as a medium of exchange, so primitive societies developed tabs, keeping tabs of what people owed each other, measured in units corresponding to livestock or crops. The first money developed out of this, as this became more standard and a system of credit developed.
The use of gold and precious metals as money originated with primitive States. When two countries went to war with each other, the one would plunder the other and take all the precious metals. The governments started melting down the precious metals into coins and issuing the coins to the soldiers as payment. At the same time, they established taxes (payable only in government issued coin) in order to force the general populace to need the government money, thereby creating demand for the government money and fostering a market for the soldiers to spend their money in. The book (“Debt”) really does a good job of demonstrating the evidence to prove that this is how money really developed.
So, according to anthropologists and archaeologists, money originated as a system of credit and debt, not as a commodity used as a medium of exchange. The picture painted by Carl Menger in “On the Origins of Money,” and basically echoed by all other economists, is that money emerged from barter economies as a commodity-currency on the market and then was turned into credit-money, and ultimately co-opted by the State. Graeber points out that the reality is the opposite. Barter doesn't actually occur until after money is developed. People didn't originally barter; they just kept tabs of what each person owed...a system of debt/credit. Money originated as credit/debt, later became commodity-money under government influence, and then is now going in a different direction again.
I think that commodity-money is actually bad money and that a more credit-based system (or “productivity point system” as you put it) would be better. I was just thinking that you could probably make a better case for crypto-currencies and “productivity point systems” with a good grasp of the anthropological research on the subject of the origin of money. My background was in the Austrian School; I’ve just come to realize that their analyses aren’t always on point. Personally, I find it impossible to understand crypto-currency in terms of the outdated Austrian theories on money. And the old Austrian theory of money is actually inconsistent with their own thought. I mean, they thought that a tangible thing like gold was needed to give money value, but that kind of misses the subjective value aspect. But when you take into consideration alternative theories of money, like the “credit theory of money,” Bitcoin et al. make a lot of sense.
Oh I see, thanks that's actually very interesting. I was not aware of that work and I sincerely appreciate you bringing that to my attention. I assume you watched my other First Principles of Money video, because in that video I discuss barter which I do not in this video. You are right that there is a good argument that what I say in that video is not maximally accurate, though it does appear that Graeber's point is also theory and not fact, but I agree it is a compelling argument. At the same time, I also think it might still be a heavily semantic argument. It is assuming a very narrow definition of barter that, now that I think about it, of course never happens in the real world. Of course people don't go, "You want a banana? GIVE ME SHOES NOW!" That being said, that may very well have been what I thought before your comment! Crazy how that works! I would agree, it is unlikely that people traded like that. However, it is fact that people naturally do favors for one another and there are societal mechanisms for punishing people who do not properly return favors. If I give you food, materials, clothing, and you never give back to me, tribes punish that kind of behavior. But that's just temporally asymmetric barter. I'm keeping track of the "stuff" you've given me, and I try to make sure I give you back stuff that is approximately equal in value to the stuff you gave me. If I fail I will be punished by my tribe. The reason for this is because it would be punishing the most productive members of the tribe (those who create and distribute the most valuable stuff).
All of that being said, this does not actually conflict with my core pre-existing beliefs especially with respect to the theory of money as a productivity point system. This is because in your own example you point out that "livestock and people" were used to keep track of value. In other words, people used "livestock and people" as money ... as a productivity point system. As you go on to point out, "The first money developed out of this." In other words, first we monetized livestock and people (we used them as a productivity point system) and that evolved into a more abstract but efficient mechanism for solving the same problem. This supports the arguments I made in this video, but agreed could be seen as conflicting with points I made in my previous video. I think this is actually a great example of how powerful first principles can be because in that video I got bogged down in specifics and technical details which increase the likelihood that I will be discussing something I do not have a strong grasp of (like the theories behind barter) and so are more likely to be inaccurate. I was never really happy with that video, which is why I did this one. I think you put this one to the test for sure, and I think it still holds up (you seem not to disagree with the conclusion after all). Thanks a lot for the info and the test!
The thing about the classical economic and Austrian theory of money originating from barter is that they do assume it emerged from a sort of barter that never really occurs. And once you realize that that sort of barter never really occurs (except after currency collapses), it no longer makes sense as a narrative to explain the origin of money. The interesting thing about Graeber is that he’s an anthropologist rather than an economist, so his “theory” isn’t purely speculative like a lot of economic theories. The earliest writings that we have are basically receipts and records of debts. So, he approaches it more from a perspective of analyzing historical facts and data (ancient texts, ancient coins, how modern primitive societies are developing primitive economies, etc.), and then constructing a theory based on the data. Economists, on the other hand, often tend to deal more with abstract speculation. Having read Adam Smith, Carl Menger (as well as Keynes, Rothbard, Hayek, Friedman, and others), I definitely think that Graeber’s book has a more scientific basis than purely philosophical basis, which gives it a bit more credibility in my view.
Btw, I wasn’t really disagreeing with this video. Mostly, I was pointing out research that I thought corroborated your point. The other video would have been better if you had approached it from this other perspective, but I mostly agree with the conclusion you’ve reached.
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Don't get me wrong, but today I would like to call you:
Andrarchy - Amanda of Steem :)
Of course I am refering to Amanda B. Johnson, former author of Daily Decrypt YouTube channel and current host of Dash Detailed.
We need more high quality videos like yours, about economy, Steem and Steemit. Probably you are very busy person, but did you thought about creating Steem-fuccused channel/series, like SteemWeekly, where news and basics things about Steem network could be explained.
I am familiar with your YT chanel - I am your subscriber since you published first video about Steemit. Basically what I want to say - we (Steem Community) need better marketing - and you have all skills to do great job for us. Not just for Steemit, but for Steem - for Steemit, Busy, eSteem, SteepShot and many other projects which are currently under development.
I really enjoyed what I got from the video. I'll rewatch it at least once. One thing I would love you to hear you talk about in the future is how devious the current system of money creation is and how those in the know about it are relating to this situation and what you think is the best places for people who don't know about it to begin to learn about it.
I also plan on listening to Varoufakis talk. Thanks.
Oh that reminds me I didn't include a link to his talk in the video! I'll update it shortly so you don't have to go looking for it.
Yes, I want to talk about that stuff very much, in fact, that's how I derived this concept. I was trying to figure out how to explain what's wrong with our current systems in a simple and comprehensible way. So yes, stay tuned!
A random anecdotal story about the definition of money:
My dad was a banker. Before that though, he went to Columbia University to get a degree in banking (10 years of night school in the fifties and sixties, he was still going when I was a kid).
He was in a semester-long Money and Banking class that had homework and other tests but for which the vast majority of the grade was determined by the results of the final exam. (what follows only makes sense if you realize that my dad could be a very stubborn Old World curmudgeon)
He went into the exam room expecting pages and pages of questions about M1, fractional reserves, the velocity of money, bank regulations, interest rates, etc. Instead, the professor wrote three words on the chalkboard: What is money?
Other students started writing (presumably about M1, fractional reserves, the velocity of money, bank regulations, interest rates, etc.) but my dad sat there steaming. Finally couldn't take it any more. He took out a pencil, wrote Money is sweat. , handed his test sheet to the professor, and walked out the door.
He got an F for the class, had to re-take it next semester. Gave the answers that were expected, and got an A the next time.
Wow..... excellent video. I thank you for putting out such a thought proviking piece of work. I've been reevaluating the definition of money and saw your post....thank you Universe. Upvoted and following.
Whaaaat?! Incredible! Glad you liked it. Let me know if your exploration leads to any additional insights
Do you feel that someones "attention" is the true currencey of the moment?
Great question! Well, it really depends on the definition you are using for "currency." Colloquially "currency" can have a very loose meaning. It doesn't always mean "fiat currency" or "money currency" when used. Typically when people use "currency" in association with a term like "attention" they aren't speaking literally. They aren't saying, "I have a piece of paper or coin that represents a unit of attention that can be used to purchase something else." My definition of currency would be something like, "the official money of a specific population." What I think you're really getting at is the fact that up until now no one has been able to effectively MONETIZE people's attention. People's attention is valuable, but existing forms of money aren't inexpensive or efficient enough to enable anyone to monetize their attention. One of the strongest arguments for STEEM and steemit is that it enables people to monetize their attention. If that's all STEEM did, then it could be called "the currency of attention." But that is different than saying that attention = currency. In that context I would say "currency" is being used synonymously with "valuable." Thanks for the thoughtful question!
So does that make attention a "commodity?"
That's a really good question, and to be honest a difficult one to answer. I mean, can attention be traded? I guess there are basically markets where attention is traded (those markets that deal in online advertisements). But part of what I'm trying to do with my videos is help us get away from "word thinking." Maybe the real question is whether there is any benefit to thinking of attention as a commodity. I think maybe the simplist definition of a commodity might be "anything that can be monetized." Then the question becomes whether people's attention has been monetized, which yeah I think that's happened. But this is also kind of "economic thinking." When talking econ we tend to forget there's more to "things" than the economic terms we use to describe them. "Attention" is an important part of being human that in many ways we still do not full understand. What exactly attention is (for example, one could argue it is how we determine what matters) might be a more important question. How's that for a non-answer answer? Thanks for the great question!
Excellent video! Resteeming it. Unfortunately, you published this during a whale experiment where the whales are not voting. That means your post will probably not earn as many "productivity points" as it would otherwise. I hope you continue creating this ever-green content. It will create value for you, Steemit, and users for a long time, IMO.
Thanks! Really glad you liked it Luke. Good seeing you again! I do plan on putting out a lot more content in the coming days and weeks, regardless of the whale related shenanigans ;) While I don't endorse what anyone is doing, I have to admit that I am curious to see the consequences. I guess as someone who has been heavily rewarded by the community (and whales) in the past, it is my duty to take some on the chin :)
Hahah, yeah, good point. Ah, the good old days when posts were worth hundreds of USD productivity points. Too bad I powered it all up only to watch the price of STEEM plummet. That said, I've deeply enjoyed the conversations and relationships here and I'm still hopeful for the long term future value. Good seeing you again too. I look forward to your content. It might be interesting to explore a bit more on the disconnect between the scoring system itself ("productivity points") and the manipulation of the value of that token through many forces (federal reserve, governments, wars, loss of trust, market manipulation, etc). That, I think, is where things get really complicated. Those who should be rewarded aren't always fairly rewarded. There is no meritocracy and even "choice" may be an illusion from a materialistic determinism perspective. A UBI or a resource based economy or something like it might some day be possible, but not until we can figure out what we mean by "value" and "fairness" when it comes to rewarding our productive members of society while also caring for the unproductive ones enough to not let them die in the street due to their unlucky birth. And what is a "reward" anyway if productivity is just the result of determinism?
Maybe we should do a google hangout sometime and chat through this stuff. Might be fun.
Yeah for sure. I try not to think about how much my SP WAS worth :/
Yup, I definitely want to do some videos about that stuff. The mechanism through which the productivity points get distributed is really everything.
Yeah, we should definitely chat some time.
One of the best videos I have seen on a concept that most of us just take for granted. Clear, coherent and concise. My personal definition of money would be as an abstraction of work.
OK I've made a new Tweet of this post and I'm going to try out a bit of twitter ad promotion on it - views are at 75 now and it will take a few minutes to launch. Hopefully it will help. Here is the link:
Thanks! Yes, it is an abstraction of work. That is certainly one way to put it. Though more specifically, it's an abstract representation of someone else's valuation of your work. Something like that. People form a subjective valuation of the money itself, and then based on that subjective valuation they distribute it to others based on their subjective valuation of the thing relative to their subjective valuation of the money itself. The problem with using "work" is that people can have things other people find valuable and are willing to exchange for money that aren't typically described as work. For example, money paid to a model is for the most part an abstraction of their beauty, not their work. Now if we think of it as productivity points it gets a little easier. A company pays a model because he/she produces more value for that company as expressed in increased sales of their product. The reason they give him/her money is because it produces more value for them then keeping the points for themselves does, as proven by the fact that eventually they receive more total productivity points than they expended on things like models :)
Lol yes you are absolutely right. I was just thinking about how I think about it!
Well, that's very nice of you! Thanks!
No problem will be a nice experiment! It is an awesome video and I think others will find it useful and maybe even want to get involved in the conversation enough to try out Steemit!
Here's our own Amanda B Johnson for STEEM!
Disclaimer: I am just a bot trying to be helpful.
I really like the term productivity points.
Good to hear! I really like it too, but it's hard to tell if it will be useful to other people.
I might make myself a sticker chart and award myself productivity points that I can exchange for chocolate. I know that isn't where you were going with that term but that's where I'm going with it.
haha, sounds good to me!
On a more serious note -I know I usually give you pretty whimsical comments. My discussions with people about what crypto currency is usually begin with what money is. I'm often surprised with the number of people who think our money is linked to something like the gold standard. When i go on to explain QE suddenly crypto doesn't seem so strange. The different values that we place on things, different types of work and property is at times strange.
Totally. That's actually a big part of where this post came from--struggling to find fast and easy ways to explain money, so that I can explain cryptocurrency, so that I can explain STEEM. Most people think of "money" as "whatever currency they use," which immediately makes the idea that anything else can be money difficult to entertain. It's my hope that maybe by broadening people's thoughts on money they will be more open to looking at new forms of money.
I really enjoy your posts. They're very helpful. Upvoted and resteemed. Now following you, as well.
Thanks so much for the kind words, I really appreciate it. Even more than the upvote and resteem!
Wow! I just read the text and I must say it's one of the best thing I've read on Steem. I can't wait to watch the video. I'll most probably be back with some comment about it.
Wow, high praise! Thank so much!
What do you think about the viva coin project from @williambanks ? Are you aware of it? https://steemit.com/vivacoin/@cryptomancer/my-entry-in-the-viva-whitepaper-contest
I'd be interested in hearing that myself. Thanks for the mention @liondani!
👎 abit, smooth, craig-grant, engagement, thecyclist, nextgencrypto, berniesanders
WHY?
Haha, YEAH! Thanks :) No worries, I believe in experimentation. That being said, I do feel bad for people negatively affected by this experiment that aren't in my position.
Great post. The idea of money as a "productivity point system" reminds me of the idea of "labor-notes" in Josiah Warren and Mikhail Bakunin, and the mutual banking ideas of Pierre-Joseph Proudhon and Lysander Spooner.
I'd recommend the book "Debt: The First 5,000 Years" by David Graeber, as a corrective to some of the Austrian influence I perceive in your analysis. The Austrians had good stuff, but there's some points where I think they err. Graeber looks at archaeology and historical references to money in literature and demonstrates that the notion that money "emerged" rather than being intentionally created is actually false. His analysis is correct, although I don't agree with the communistic/anti-market conclusions he draws from it.
Thanks for the recommendations! It would be awesome if you shared an example of a form of money that disproved one of my points so that I could have a better idea of exactly what I should read to correct my mistake. Many forms of money do have a level of conscious development, but most of these are referred to as "currency." Currencies themselves however are usually derived from forms of money (including other currencies) that existed prior to their formation. So while the people who "created" them might have deluded themselves into thinking they were making something incredibly original, very few components of their creation were their own. In fact, in order for populations to accept money they have to be familiar and so introducing a currency that was significantly different than preexisting currencies would defeat the purpose. Even those currencies, literally up until 1971 were themselves backed primarily by other forms of money, gold and silver, which are difficult to describe as "consciously created." Thanks for the comment, but I think this is a semantic disagreement and not a substantive one.
So, David Graeber points out that the use of precious metals as money actually originated with war and the State. Precious metals are precious because they are rare. The average person in a primitive village would not have access to such things. So, primitive societies, at the earliest stages, tended to value things in terms of livestock or people. Your proto-money or unit of measuring value would be sheep, or cows, or people (this ties in with pawns, bridewealth, et al.). These weren’t used as money because they couldn’t really serve as a medium of exchange, so primitive societies developed tabs, keeping tabs of what people owed each other, measured in units corresponding to livestock or crops. The first money developed out of this, as this became more standard and a system of credit developed.
The use of gold and precious metals as money originated with primitive States. When two countries went to war with each other, the one would plunder the other and take all the precious metals. The governments started melting down the precious metals into coins and issuing the coins to the soldiers as payment. At the same time, they established taxes (payable only in government issued coin) in order to force the general populace to need the government money, thereby creating demand for the government money and fostering a market for the soldiers to spend their money in. The book (“Debt”) really does a good job of demonstrating the evidence to prove that this is how money really developed.
So, according to anthropologists and archaeologists, money originated as a system of credit and debt, not as a commodity used as a medium of exchange. The picture painted by Carl Menger in “On the Origins of Money,” and basically echoed by all other economists, is that money emerged from barter economies as a commodity-currency on the market and then was turned into credit-money, and ultimately co-opted by the State. Graeber points out that the reality is the opposite. Barter doesn't actually occur until after money is developed. People didn't originally barter; they just kept tabs of what each person owed...a system of debt/credit. Money originated as credit/debt, later became commodity-money under government influence, and then is now going in a different direction again.
I think that commodity-money is actually bad money and that a more credit-based system (or “productivity point system” as you put it) would be better. I was just thinking that you could probably make a better case for crypto-currencies and “productivity point systems” with a good grasp of the anthropological research on the subject of the origin of money. My background was in the Austrian School; I’ve just come to realize that their analyses aren’t always on point. Personally, I find it impossible to understand crypto-currency in terms of the outdated Austrian theories on money. And the old Austrian theory of money is actually inconsistent with their own thought. I mean, they thought that a tangible thing like gold was needed to give money value, but that kind of misses the subjective value aspect. But when you take into consideration alternative theories of money, like the “credit theory of money,” Bitcoin et al. make a lot of sense.
I've tried to read "Debt: The First 5,000 Years," but I had trouble keeping track of what his points were in the book. Thanks for this great summary!
Oh I see, thanks that's actually very interesting. I was not aware of that work and I sincerely appreciate you bringing that to my attention. I assume you watched my other First Principles of Money video, because in that video I discuss barter which I do not in this video. You are right that there is a good argument that what I say in that video is not maximally accurate, though it does appear that Graeber's point is also theory and not fact, but I agree it is a compelling argument. At the same time, I also think it might still be a heavily semantic argument. It is assuming a very narrow definition of barter that, now that I think about it, of course never happens in the real world. Of course people don't go, "You want a banana? GIVE ME SHOES NOW!" That being said, that may very well have been what I thought before your comment! Crazy how that works! I would agree, it is unlikely that people traded like that. However, it is fact that people naturally do favors for one another and there are societal mechanisms for punishing people who do not properly return favors. If I give you food, materials, clothing, and you never give back to me, tribes punish that kind of behavior. But that's just temporally asymmetric barter. I'm keeping track of the "stuff" you've given me, and I try to make sure I give you back stuff that is approximately equal in value to the stuff you gave me. If I fail I will be punished by my tribe. The reason for this is because it would be punishing the most productive members of the tribe (those who create and distribute the most valuable stuff).
All of that being said, this does not actually conflict with my core pre-existing beliefs especially with respect to the theory of money as a productivity point system. This is because in your own example you point out that "livestock and people" were used to keep track of value. In other words, people used "livestock and people" as money ... as a productivity point system. As you go on to point out, "The first money developed out of this." In other words, first we monetized livestock and people (we used them as a productivity point system) and that evolved into a more abstract but efficient mechanism for solving the same problem. This supports the arguments I made in this video, but agreed could be seen as conflicting with points I made in my previous video. I think this is actually a great example of how powerful first principles can be because in that video I got bogged down in specifics and technical details which increase the likelihood that I will be discussing something I do not have a strong grasp of (like the theories behind barter) and so are more likely to be inaccurate. I was never really happy with that video, which is why I did this one. I think you put this one to the test for sure, and I think it still holds up (you seem not to disagree with the conclusion after all). Thanks a lot for the info and the test!
The thing about the classical economic and Austrian theory of money originating from barter is that they do assume it emerged from a sort of barter that never really occurs. And once you realize that that sort of barter never really occurs (except after currency collapses), it no longer makes sense as a narrative to explain the origin of money. The interesting thing about Graeber is that he’s an anthropologist rather than an economist, so his “theory” isn’t purely speculative like a lot of economic theories. The earliest writings that we have are basically receipts and records of debts. So, he approaches it more from a perspective of analyzing historical facts and data (ancient texts, ancient coins, how modern primitive societies are developing primitive economies, etc.), and then constructing a theory based on the data. Economists, on the other hand, often tend to deal more with abstract speculation. Having read Adam Smith, Carl Menger (as well as Keynes, Rothbard, Hayek, Friedman, and others), I definitely think that Graeber’s book has a more scientific basis than purely philosophical basis, which gives it a bit more credibility in my view.
Btw, I wasn’t really disagreeing with this video. Mostly, I was pointing out research that I thought corroborated your point. The other video would have been better if you had approached it from this other perspective, but I mostly agree with the conclusion you’ve reached.
Great work Andrew. This is really well articulated and provocative. Looking forward to more on your Techonomics series!
Thanks Kirk!
you have created a good vaulable headache here!
HAHAhaha, my bad ;)
Great Post! Very interesting thoughts! I am glad to see someone committing to doing an educational series on this platform. I have been running a series on cryptology. Just posted part 3 today.https://steemit.com/cryptocurrency/@digicrypt/cryptology-series-part-3-strength-of-cryptosystems Keep up the good work! I look forward to more techonomics! Followed!
Thanks, I'll definitely check out your posts, look interesting!
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Promotedis an upvote and 0.025 SBD extra promotion.Good job, keep your contents promoted! :)
"This video is private" so I can't watch! Listening to the Andrarchy Show now though :-)
Thanks, should be good now!
Promoted and resteemed! Great work!
Awesome, I appreciate it!
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Upvote for been promoted :)
Don't get me wrong, but today I would like to call you:
Andrarchy - Amanda of Steem :)
Of course I am refering to Amanda B. Johnson, former author of Daily Decrypt YouTube channel and current host of Dash Detailed.
We need more high quality videos like yours, about economy, Steem and Steemit. Probably you are very busy person, but did you thought about creating Steem-fuccused channel/series, like SteemWeekly, where news and basics things about Steem network could be explained.
I am familiar with your YT chanel - I am your subscriber since you published first video about Steemit. Basically what I want to say - we (Steem Community) need better marketing - and you have all skills to do great job for us. Not just for Steemit, but for Steem - for Steemit, Busy, eSteem, SteepShot and many other projects which are currently under development.
P.S.
Upvoted and Resteemed :)
Haha, I take that as a compliment. Those are very kind words and I do have something in the works along those lines ... stay tuned ;)
I really enjoyed what I got from the video. I'll rewatch it at least once. One thing I would love you to hear you talk about in the future is how devious the current system of money creation is and how those in the know about it are relating to this situation and what you think is the best places for people who don't know about it to begin to learn about it.
I also plan on listening to Varoufakis talk. Thanks.
Oh that reminds me I didn't include a link to his talk in the video! I'll update it shortly so you don't have to go looking for it.
Yes, I want to talk about that stuff very much, in fact, that's how I derived this concept. I was trying to figure out how to explain what's wrong with our current systems in a simple and comprehensible way. So yes, stay tuned!
A random anecdotal story about the definition of money:
My dad was a banker. Before that though, he went to Columbia University to get a degree in banking (10 years of night school in the fifties and sixties, he was still going when I was a kid).
He was in a semester-long Money and Banking class that had homework and other tests but for which the vast majority of the grade was determined by the results of the final exam. (what follows only makes sense if you realize that my dad could be a very stubborn Old World curmudgeon)
He went into the exam room expecting pages and pages of questions about M1, fractional reserves, the velocity of money, bank regulations, interest rates, etc. Instead, the professor wrote three words on the chalkboard: What is money?
Other students started writing (presumably about M1, fractional reserves, the velocity of money, bank regulations, interest rates, etc.) but my dad sat there steaming. Finally couldn't take it any more. He took out a pencil, wrote Money is sweat. , handed his test sheet to the professor, and walked out the door.
He got an F for the class, had to re-take it next semester. Gave the answers that were expected, and got an A the next time.
But he was basically right the first time.
very interesting
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