Why the Gold Standard Can Not Return

[ThomWV]

I just want people to understand the basic limitation to tieing the nation's currency to Gold. If you do that the result is that you also limit the total growth of all sectors of the economy to the speed at which you can extract new gold from the ground and your overall economic growth is limited to how much gold there is to mine. If the nation's economic growth is limited to the speed at which we can mine/refine gold and population grows at a faster rate then everyone's standard of living declines - except the guy who owns the gold mine.

[Odin2005]

1. I don't like fiat currency, but I don't like the gold standard either, for the reasons you mention.

Maybe tie the dollar to energy somehow?

[The2ndWheel]

2. Limits on a finite planet...makes sense

Another aspect being that if everyone didn't have to believe that gold had any actual value, then the guy who owned the goal mine would just be some crazy nut who would have to do all the work himself.

[ThomWV]

3. I would agree except for one thing - what limit is there on intellectual property?

And what limit is there on services that one sector of the economy might perform for others? A gold standard works well when you are considering the manufacture of pipe but it doesn't do so well when you need to hire a plumber. Every bit of gold devoted to labor removes it from the pile of gold that might have been used to make steel. See the problem?

[tama]

4. Intellectual property

is blasphemy. There is no intellectual property and there will never be, exept in idiot phantasies. That's the limit.

All economic activity consumes energy, and the whole system is using more than there is available on sustainable basis. Ecological footprint worth several planets.

[Donald Ian Rankin]

5. So people should be encouraged to invent or create how?

Or do you think that people would still invent medicines or write books or design computers at the same rates they do now if it wasn't possible to profit by doing so?

[tama]

8. They shouldn't

Children and child-like are creative by nature, without encouraging. Natural creativity is killed by the carrot-and-stick method.

It's usually the case that profit-driven greedy people (the truly insane people) believe that everybody else is the same, that is called "projecting". That is misanthropy.

But that is of course not the truth. I don't want a penny for the book I've created, you should get it paying for the printing and shipping costs. You can download Linux and Mozilla and othe Copyleft products and say buh-by to Micro$oft profit driven "creativity"... :)

[Cessna Invesco Palin]

11. Yeah, that's right.

Children and child-like are creative by nature, without encouraging.

And how many patents are issued to children each year?

I work for a company that makes stuff (yes, these actually still exist.) To develop a new product from scratch costs us somewhere on the order of $500,000 to $1,000,000. That includes salaries, but it also includes things like the cost of purchasing the equipment necessary to create the design, then validate the design, then manufacture the tooling needed to mass produce it. Try doing that with unpaid open source developers. In all likelihood they couldn't even acquire the equipment needed to do the design, let alone the equipment to get it through things like ESD testing, etc for FCC compliance.

You can download Linux and Mozilla

Can you download a satellite reciever? Can you download the $250,000,000 satellite needed to make the receiver work? Can you download a digital camera? Intellectual property isn't just for software. The only thing you need to work on Linux is a functioning knowledge of C or C++ and an internet connection. The same can't be said for most other endeavours. That's why there's no such thing as open source toasters.

[tama]

12. Intellectual confusion

seems to be your case:

"That's why there's no such thing as open source toasters."

AFAIK all toasters are open source, there's no toaster patent holder I should pay a percentage if a make and sell a toaster.

Inventing and manufacturing new gadgets is not very creative, it's merely living according to conditioning to the technocratic society. Mental and physical liberation from the slavery to The Machine (see Modern Times by Chaplin) on the other hand is a very creative process. :)

[Cessna Invesco Palin]

13. Perhaps the toaster was a bad choice.

But the point still stands. It's easy to do open source software, because anyone likely to be interested in helping out with Linux probably already has the only tool necessary to do it - a computer and an internet connection.

The same is not true of devices.

Inventing and manufacturing new gadgets is not very creative

Says you! I've been doing it for ten years and find it to be a highly stimulating, creative, and interesting line of work. The devices I help to design and test are used by professionals in their chosen line of work, which happens to be a very creative line of work (music) in its own right. So you can take your holier-than-thou attitude and shove it.

[tama]

14. OK, I shove it

building gadgets to open up new possibilities in music can be creative. Where the line is drawn is patenting those gadgets or claiming that music in any form should by considered intellectual property of a natural - or even worse - juridical person.

[Cessna Invesco Palin]

15. Without the patents and trade secrets we couldn't afford to make the gadgets.

And I have seriously unpleasant first-hand experience in this respect. Several years back, a rather unscrupulous person or group of people managed to get their hands on the design documentation and software source code for one of our devices. All of a sudden any company who wants to build the device in question is doing so, without any need to recoup the cost of the design. So as a result of this, we're undercut on price and it basically turned what had been a viable product for the company into a dud, leaving us with little chance of using the return from that product's sales to fund further development of similar products.

My company is fairly well known as an innovator in its particular field. Innovation carries risks as well as rewards, and having a patent is not a guarantee of profit if nobody wants to buy what you've patented. For every successful product we make, we might design one or two which fail, patent or no patent. But it's the patent on the one that succeeds that gives us the revenue stream to fund further innovation. If everything we designed were to go into the public domain, it wouldn't be a matter of a lack of incentive that stopped us from innovating. It would mean that financially it would not be possible for us.

Now, this is not to say that copyright, patent, and corporate secrets laws cannot be abused. They are. Generally speaking, I advocate a balance between the rights of individuals and the rights of companies. Case in point: The only reason you can buy a personal mp3 player today is because one of my former employers, the company that designed the original MP3 player, got taken to court by the RIAA over it and decided to fight back against the bastards. Another case is the constant extension to the term of copyright, effectively to protect Disney and a handful of other large companies who rely on individual pieces of copyrighted material for a huge amount of their profit. But the fact that the system can be abused isn't a reason to throw it out entirely. The system should be fixed. But you simply cannot start telling people that they shouldn't expect to be able to make a living based on their creative endeavors. Doing something for the love of doing it, and expecting to be able to have the opportunity to make a living if you're successful are not mutually exclusive concepts. You can sure as hell love what you're doing and still expect to get paid for it.

[tama]

17. In that case

the gadgets are hardly worth making. Especially since they tend to become more enviromentally harmfull the more complex the production becomes (electric chips from China etc. istead of just a tortoise shell and some hairs from a horse).

[Cessna Invesco Palin]

19. How do you mix an album with tortoise shells and hairs from a horse?

And what the fuck is an electric chip? I'm assuming you're referring to an integrated circuit. They're made of silicon, and they're nowhere as harmful as the lead that used to be used for solder on PCBs - a practice that has been outlawed in Europe already. Not sure what the status is in the states these days, but electronic products are definitely a lot less toxic and more environmentally friendly than they used to be.

[The2ndWheel]

7. Sure, the problem is that we don't like limits

Even the gold standard concept was a limit busting activity when it first started.

I'm not trying to say that we have to live within limits. It's not pretty to try to force someone to do so. Who gets to define what a limit is? However, you have to live with the consequences of those actions, whatever they happen to be. There will be consequences though(some of them unintended), since we do still exist within physical reality.

I do agree with your original point. Once you break through some physical limit, to confront it again would be more than difficult. That limit is always chasing us though, which is why we can't solve the problem. Look at the credit problem. We've gotten to the point where if we didn't have the credit as a society, this society wouldn't work. Since we already went through that wall, if this society didn't work, a lot more people would be out on the street(if we even had streets by then). So we have to keep running. We can't let the credit problem catch up, so we have to give people the ability to get more credit, even though more people having the ability to get more credit is what got us into this particular problem. Why does everyone need more access to credit? Because everyone has to live in the reality where gold must have value for everyone. We all have to live within the dominant way of life. The only way to keep that way of life going is to include more people in that way of life. If you include more people in a single way of living, you have to break the next limit so that more people can live that way of life.

Perhaps we can do that for as long as we want. On the other hand, when we get to the point where everyone is wealthy enough to where the population starts to actually decrease, other than pure greed, where is the growth going to come from if everyone has everything they need? If we don't grow, we stop running. If we stop running, what exactly is going to catch up to us?

[tama]

9. Heh

"I'm not trying to say that we have to live within limits."

Neither me. There is also the choice of dying.

[BraneMatter]

6. It would not solve the problem

The phony Fed is the heart of the fraud.

What is needed is honest money, regardless of whether it is paper or gold.

And as long as questionable financial instruments are running rampant, you are at great risk of massive fraud. But this is a trait of unregulated capitalism.

[pnutbutr]

10. Also

It would allow foreign nations to manipulate the value of US currency using the gold market.

Or there would need to be a new Bretton-Woods setup which would require other nations to readopt the gold standard as well.

[hunter]

16. I figure depleted uranium would make a pretty good substitute...

All we have to do is come up with a sexier name and sell the idea that it's "better than gold!"

Maybe even encase it in gold like Star Trek's "gold-pressed latinum."

:P

[garybeck]

18. and gold mining is not a very environmental practice

i used to buy gold coins but I'm switching to silver, although I need to research silver mining now too.

as if my tiny investment would have any kind of impact on mining...! still I like to have good investments that are environmental.

I'm thinking about buying some Euros instead of gold/silver bullion. Can't be too bad on the environment!?

i have not heard of ideas to tie the dollar to gold but I think it's a bad idea.