Money did indeed emerge out of state action, and when analysed properly, in many societies it's nonsensical to think otherwise. In many societies the first documented money is gold or silver coins. But gold and silver mines were exclusively owned by the kings. Both the evidence and common sense say that the kings introduced the money (and subsequently, market economies as a by-product) as a way of paying soldiers.
@CounterLeft No, actually, that's not true at all. As much as it may shock you, money is an evolutionary result of humans needing a medium of exchange to facilitate trade among larger groups of people outside a family or tribe. It came about (like many things in evolution) through spontaneous emergent order (basically a long series of trial and error).
But you apparently have a partisan agenda to push, so don't let things like facts and logic stand in your way.
@NinjaHydra And your evidence for this is? Nothing, of course, because there isn't any. Based on what you say, either i)100% of recorded societies must have had money (quite easily proven wrong) or ii) 100% of non-money economies must be barter ones. Apart from the cases I pointed out where money already existed and people were used to it, the actual proportion of documented non-money economies being barter economies is 0%.
@robertetaylor This is precisely the normal origin of coinage as money - soldiers. As states grew from city-states (who could normally rely on volunteer soldiers) into empires, they needed some way of persuading people to become or remain soldiers. The solution states came up with was to pay them in coins, and then impose a tax only payable in these coins, so that everyone would need to acquire them.
@CounterLeft Statists would love to make it sound like government is god, except kings and gold mines did not spontaneously appear on this planet, so you aren't actually working from first anything. You're starting your point in the middle and think you're debunking a theory of fundamentals. What an idiot.
@JaceJohanson Personally, my conclusion is an anti-money rather than pro-state one, but distort if that's how you think you 'win' arguments.
So, based on your logic, how do you explain that the first states existed long before the first coins? If everyone was already using gold or silver (and making no record of it whatsoever), why did it take kings so long to come up with the idea of stamping them into coins and bringing them under their control?
@CounterLeft How do YOU explain it? I don't explain it, cause I didn't propose it. What exactly is the problem with money, anyway? If you're not pro-state, then an appeal to antiquity or ad populum is doubly useless. These theories can be recreated and tested today, and they are, ever day. But let's cut right to that: what the thesis against money?
@JaceJohanson No explanation will be universal, but the most common one is the one based on the need of states to pay soldiers, mentioned above.
You can't test a theory of the invention of money in a society where money has already been invented. And as I've stated, barter does occur in some societies that are already used to using money and then the money disappears for some reason.
@CounterLeft What exactly is the criterion for the definition of money as you are using it here? If you watch the video, the criterion is anything that is used to facilitate indirect exchange is acting as money. So, under that criterion, yes, you absolutely can test money creation, at any time and under any circumstances.
But what does the state have to do with money creation? The state is not all-powerful, and people trade indirectly all the time, using many mediums.
@JaceJohanson The problem with commodity money (probably what you mean when you say 'money') is that it tends to promote a way of thinking of it as 'actual money' (at least in modern society) and subsequently credit as not so. The idea that there can be such a thing as 'actual money' tends to promote debt absolutism, i.e. that debts MUST be repaid and cannot be renegotiated.
@CounterLeft Again, I take money to be anything used to facilitate indirect trade. But this point of debt absolutism and that debts do NOT at some point have to be paid, is idiotic. Debts can certainly be renegotiated, but this is just putting payment off, not proving to be unnecessary. Debt is not a money; debt is an agreement of an obligation towards someone to be satisfied with money. Indefinite refinancing of any deal is why 2008 was a hellish year, and why we're STILL F'd.
@JaceJohanson OK, well under this video's explanation, how exactly would credit emerge?
Actually, there's a long history of debt simply being written-off as a matter of culture. 'Jubilee' was common in some ancient societies where when a new ruler came to power, all debts would be cancelled, in order to prevent the social and economic meltdown that happened otherwise (which de facto forced the cancellation of debts anyway).
@CounterLeft Eeeeeeexactly, thus proving that debt, in and of itself, is not a replacement for value. "Debts were forgiven" doesn't mean that goods didn't change hands. You just can't have debt based upon itself as money. Credit can only come from the surplus thrown off by the subjective value principle. Person A values object 1 more than object 2, which he has. Person be has object 1, but values 2 more. Both net a profit by trading. Continued....
@JaceJohanson "crado" meant "to believe." It takes a foundation of previous trustworthy interaction on the basis of money to give rise to extending another party a line of credit. Who gives credit cards to people with tanked credit scores? Why would they? Promises, whether of payment in a monetary scenario, or promises of showing up on time to pick of your kids, are only as good as the record proves them to be. Continued....
@JaceJohanson Why did the housing crisis happen? The conditions were set to allow irresponsible lending to untrustworthy people who over-extended themselves, by untrustworthy banks. The wealth of humanity is measured in the level of it's character, through the barometer of money, because only money illustrates how two strangers can conduct trustworthy trade with each other without requiring any prior interaction or mention of future interaction. Credit is purely abstract.
Good video, Praxgirl, but I'd like to raise one technical detail with a comment you made at 4:30 - "True barter economies are an imaginary construction. There is no evidence they have ever existed."
If we are to accept that things like money and language are "results of human action but not human design" - or even the biological theory of evolution - then there must necessarily be a "pre-money" era in which humans engaged in nothing but barter and loose communication of grunts and poo-flinging.
Great job with the videos. I remember a lot of this stuff from reading Human Action many moons ago. The fact that these are short and sweet is perfect; I'm going to encourage my girlfriend to watch!
Praxgirl I love your videos, but do you find any irony in that you're providing this service whereby millions of people can watch it for only the cost of a few minutes' time??
@djb5255 Why would there be any irony? She's doing this because she expects a return in the form of greater understanding of praxeology in her audience.
I buy everything except the "lonely teacher" part. I find it hard to imagine you would be at a loss for company. Good company might be the problem, but no doubt you must be beating men off with a stick. Good work, and keep it coming.
Sorry, but this is bull. Money never originated from barter. The "cigarettes in prison" scenario emerged only AFTER money did. The "original" money was debt, an IOU. Read Graeber's book on debt.
@juliaisafilmbuff123 Pffff! What?! Why read a book trying to prove that which is patently ludicrous? Anything used to facilitate indirect trade is a money. Debt may be used, except this merely renders the trade as un-resolved until the IOU is filled. The current collapse is proof that debt by itself is not actually money, it's a promise to pay a money. Where do people get this stuff....?
@JaceJohanson Sorry if the facts contradict the 'homo economicus' ideological theory, but they are still facts. And the facts are that apart from societies already used to money that suddenly lose it (like the 'cigarettes in prison' or 1990s Russia), there is no evidence that barter was ever the basis of any economy anywhere, and plenty of evidence that it was not.
@CounterLeft Wow, you are truly ignorant. Go research the history of medical care. Doctors were very often paid "in kind" (that is, via barter) by patients who did not have money. Feel free to call that a gift economy, but if you do, then you are implicitly denying the possibility of barter by simply renaming it as a gift.
@nelsonrn You've just proved my point yourself : 'patients who did not have money', i.e. a society where money already exists and people are used to using it, as I noted.
@JaceJohanson Most economies started off as gift economies, and there was no 'debt', as we would think of it, just a vague, unquantified concept of 'owing someone one'.
Nothing is 'actually' money. Money is a measurement. You can't 'have' a dollar any more than you can 'have' a centimetre - only something worth a dollar or something a centimetre long. What generally becomes accepted as 'money' does so primarily because the state taxes in it and makes it payable for debts in legal tender laws.
@CounterLeft I was right. You need to watch the video a few more times. Yes, the money that is usually used comes from state action. However, without a state, money will emerge from the impracticality of direct exchange. Watch the video.
@nelsonrn And there are precisely zero cases of this ever happening in recorded history, along with plenty of evidence of it not happening.
'Direct exchange' is an irrelevant red herring. Apart from a few merchants (for whom direct exchange worked fine and money would, if anything, have been a handicap), economies simply didn't work like that. Usually, as I've pointed out, they were gift economies (though occaisionally credit ones).
@juliaisafilmbuff123 What constitutes money in society is always a task of the historian. Clearly if a society was using something like butter or coco beans as money, that sort of historical evidence won't be found with the money itself, right? It seems to me you're conflating an action spent on someone else (a gift) on real exchange.
@robertetaylor But you'd expect some sort of record, no? Some indication of prices in cocoa beans, for example? But there's nothing. Apart from the societies confirmed as not having money, you're saying that all the other societies had perishable currencies and kept no record of ever using them?
Exchange, as we would think of it, didn't occur in most early societies. It was generally gift economy.
Is it necessary to have a commodity money in order for a workable price system to arise? The question pertains to the possibility of a modern "barter" system which uses valueless trade credits (not pegged to $), in which case prices would represent rankings of all goods relative to each other and not one good (money) to every other thing. Can a ranking system produce real market prices, or are prices ultimately based on commodities no matter what?
@MillionthUsername unless you mean "commodity" as something other a good, Praxgirl was pretty clear in defining money as a commodity. What I take from that is that "commodity money" is redundant and "trade credits" would not work as money because they would not have the fundamental characteristic necessary for economic calculation: being a good used as a common denominator.
@robertetaylor I'm not trying to argue definitions of money, just exploring a question I haven't heard addressed. In modern trade exchanges, they use credits which are merely substitutes for dollars. I'm asking a theoretical question about whether you could discover prices using a pure ranking system starting from scratch. I think you could, but I'm not sure. This is the only other possible way I can think of to price goods besides commodity money, and I don't know if anyone ever proved it.
@MillionthUsername well the answer seems obviously: no. This is for a number of reasons. First off, I'm pretty sure Praxgirl should have covered this, but prices are merely the exchange ratios between two goods. What that means is that your hypothetical "clearing house" would only have a list of historical prices rather than the establishment of prices for the future with the discount of time and the personal valuation of billions of people. Praxgirl said it clear: value cannot be measured.
@robertetaylor I know what prices are. Are you trying to say that there are no prices in barter? That's not true. It's just that the ratios are not calculated using the same denominator (money), but every good is measured against every other good (in reality, the good at hand being traded for).
Every pricing system starts with historical prices, but before money trade begins with barter.
Why are you saying "value cannot be measured"? I'm not making a claim about objective value.
@MillionthUsername the whole point for money being a good rather than "trade credits" is that they become money through a natural process rather than some centrally planning authority deciding what the "trade credits" or useless tokens are.
@robertetaylor I don't mean fiat money/credit. I mean a "barter" exchange (it's really a step above barter) where you simply record A buying from B on credit: B sells a bike for 100 credits, so he is +100, while B is -100 and owing 100 in kind to the system. It's multilateral time-separated barter using no money. I'm just wondering whether you could price everything using credits to rank the goods. It still requires economic calculation, & real values are exchanged via the placeholder credit.
@MillionthUsername you keep thinking that prices measure something: they don't. Economic calculation only comes about through the natural process of people trading until one good becomes the common media of exchange. Then people can calculate their resources and whether or not they're consuming their capital, but they can never measure the value of these resources on the market. This is why Praxgirl also said that all actions are inherently speculative in nature. Entrepreneurship is an art.
@robertetaylor "Economic calculation only comes about through the natural process of people trading"
That's what barter is. Trading. I trade one thing for another. I don't have to use money. Money solves the problem of simple barter, certainly, but you can also solve it through a system of credits in a large exchange. Instead of pricing every good in one good (money), you rank goods (which money also does).
You'd know you're profiting if you had a positive balance on the exchange.
@MillionthUsername you're clearly quite confused. Ranking is done through performative action. What this means is that "credits" to you won't mean the same to me because I have to "rank" all goods myself. How exactly is that as efficient as money? Economic calculation MEANS having a common denominator. You're taking that thing out and assuming someone can just add multiply and subtract apples and oranges. Human action cannot be categorized like the functions of mathematics.
@robertetaylor Modern trade exchanges usually employ a dollar substitute which serves to set prices by mimicking dollar prices. It's quite easy to remove the dollar completely from this process, just as the dollar supplanted gold by hijacking its price system. But my question was about the ability of a pure barter system to establish prices without money. I think I answered my own question, but are you now claiming that prices can't be set through barter alone? That's what it sounds like.
@MillionthUsername Here's where we agree: a price is the exchange ratio between two goods. Here's where we disagree: a useless token will communicate this information to someone not yet engaging in an exchange. WHY? Because prices are the exchange ratios between two goods.
@robertetaylor It sounds like you're saying that money must always be a good (or service). And yet paper dollars are not any kind of a good; it is a useless token. If I issued scrip, and people trusted that they could always buy something with that scrip, then the value of the scrip is tied to the value of that thing they could always buy.
@robertetaylor Traders in the system have to rank the value of all goods relative to each other rather than based on the exchange value of one good - money. The credits are a judgment of value and a placeholder till the trade is completed. Since this is done in barter, I don't see a problem with economic calculation. In barter, a seller judges that his bike is worth 3 hours of a plumber's time or 15 chickens, etc. But this requires a clearinghouse to facilitate trade and keep account.
@MillionthUsername it is important to note that all exchange, even when attenuated by a monetary system, is in the end, about exchange of real goods and services. if money's only function was to provide a unit of account, then credits would work as well as any other type of system. However, money, as just another good, should be grounded in real goods and services, because credit created arbitrarily out of thin air commands goods and services having provided nothing in return.
@gergenheimer I wasn't talking about creating credit out of thin air to act as a money. If I mentioned credits, I was talking about trade credits in a so-called "barter" (it's not really barter) exchange system where they typically use some stand-in for the dollar. I originally had a theoretical question about barter prices which I answered myself once I thought about it. This other person responded to me but didn't understand what I was saying, and that probably confused you too.
@gergenheimer No. Money is anything which will always be accepted in trade. The value of money comes from people's willingness to accept it. Thus, money can be anything, grounded or not in real goods and services. As long as people expect that they will be able to trade it away, people will be willing to accept a money, no matter its form.
@nelsonrn You are correct that anything that comes to be accepted as a medium of exchange is a "money". But my point is, a good-quality money serves functions besides merely facilitating exchange. What's more, those pieces of paper in our pockets do not qualify as money under our definition - the unbacked paper money systems we have today were not chosen voluntarily - the only reason everyone accepts them is because superior, non-fraudulent forms of money have been made illegal.
@gergenheimer I sorta agree. However, if you think about how a profit-making money would work, it would be unbacked paper money which the owner inflates by way of making a profit. For example, if Lucasfilm was to issue quatloos, you can be reasonably confident that, with Gandalf standing behind them, people would accept them in trade.
But as you say, that would be voluntary money, not fiat money. So I'm not disagreeing with you.
Thanks for posting this. Learning from an extremely beautiful woman, is always a good idea!! ;-)
What's scary is, this is all not completely obvious to some (most?) people. I remember when (for example), perfectly "intelligent" people could NOT see WHY the site "napster" could not be allowed to continue. Boggles the mind!
@DeanApril14 She's basically summarising Mises' Human Action which Rothbard used as a base for a lot of what he wrote, also making sure to explain the theories and not assuming his audience was already familiar with the arguments of Mises.
I think people often only look at the ‘good’ sides of the money system, but overlooking (or even neglecting) many ‘bad’ sides, in fact perhaps much more than the ‘good/positive’ of the money system! that is IMHO where lies the main problem of all the constant debates & misunderstandings.
The fall of U.S & Europe financial crisis (and soon perhaps the world’s economic collapse, in 2012) have somewhat really proved about this.
Google: Resource Based Economy (RBE), Venus Project, Zeitgeist, and/or Paradism. They’re all might be different names, but essentially share the same (or very similar) philosophy & value, and the main thing is: to get away from the current Monetary system (and it’s NOT even about communism, if you study deeper about them).
These might actually be the solution to many of humanity’s current interlinked & complex problems. Once again, it’s the System.
@nikiwonoto It is the system, and free markets are the answer. Austrian economics (an offspring of the praxeological method of inquiry) is simply an economic defense of free market. It is NOT a system, rather it is a theory on how free markets work.
All that other stuff you listed is united nations propaganda. RBE relies on virtual free markets to determine distribution. Simply Complexity, by Neil Johnson, explains how a virtual free markets would work to determine distribution.
@nikiwonoto Thus, RBE would take us from one tyrannical system to another even more coercive & tyrannical system. The whole argument for a virtual free market system is a contradiction, it says "humans are irrational & cannot think long term, so we need humans to develop a rational system of resource distribution that's sustainable".
Also, Johnson rejects the notion of an invisible hand as characterized by Adam Smith while ignoring the elegant characterization by Stuart A Kauffman.
@nikiwonoto And the most obvious flaw is, well human action cannot be quantified, as Mises has undoubtedly proved.
A system like RBE could only work by force and would have to assume perfect knowledge of the past, present, & future. I don't even have to get into what a ridiculous notion this is. Even the perfect knowledge/approximations of the weather would be required.
I SAW THIS WOMAN ON TV AND SHE WAS SITTING BEHIND A DESK AND SOME WOMAN GAVE HER SOME FILES AND THEN SHE TELEPORTED FROM BEHIND THE DESK AND WAS STANDING RIGHT NEXT TO THIS GUY FROM LAW & ORDER OR SOME OTHER SHOW BUT HE WAS A LAWYER IN THIS PROGRAM... BUT THE PEOPLE RECONGISED HIM FROM THE TV PROGRAM EVEN THOUGH HE WAS IN A TV PROGRAM... IT WAS SO CONFUSING
@ Praxgirl, are you going to make a video about the zeigest style 'resource based' economy ? I have people on the internet who are wrong that I need to argue with.
@wacabby the concept of a "resource-based" economy is a collection of age-old fallacies, dressed up in sci-fi trappings - I doubt Praxgirl would waste the time and resources on the subject, but if she did, I'm 99% sure it would be to refute the idea. Without a monetary system and the matrix of prices derived within that system, it would be impossible to efficiently allocate resources to their best uses - end of story.
@wacabby the most fascinating thing to me about "resource-based economy" is that those who advocate it are blind to communism by just another name. The exact same criticisms as were brought forward in the 1920's still against communism still apply. 1. Mises calculation problem. 2. Hayek information problem and of course the age old incentive problem that even they recognized.
When the supposed good that becomes the medium of exchange is imaginary, then we accelerate our own destruction. Stop promoting monetary values and begin focusing on the resources and social relationships that are the basis for a better world for all people.
Why would a baker want a sword? You're examples need a basis in modern reality in order to have any educational value. This goes for all levels of education from k-12 and into higher education. Confusing the student with misrepresented reality causes a loss of value in what you are offering as an educational product.
@savvysymbiont Human values are subjective - the point being that it is not your place to question the desire of a baker to want a sword. (I'm an artist, and I own 4 swords, btw) The fact is, if he wants and/or needs it, and is willing to trade his wares for it, he will increase his wealth by exchanging for it. The other point is to highlight the fact that a sword cannot be divided into pieces to facilitate exchange, at least not without rendering it useless as a sword.
The Baker is also a Renaissance Fair participant in his free time. Pwned.
P.S. It really doesn't matter what goods/professions she chooses to represent parties A, B and C in her Direct/Indirect exchange examples. All that matters is that the viewer understands practical the problems of Direct Exchange and the solutions provided by Indirect Exchange and Money.
@praxgirl where did you learn all of your knowledge on praxeology?
printo69 1 week ago
You put the hubba in L. Ron Hubbard.
madeinmexicoband 2 weeks ago
I love Praxgirl ;-)
ronwandell 3 weeks ago in playlist Lessons
Very nicely done, didn't anticipate the caliber of the material presented. :))
wisdomtrek 1 month ago
Money did indeed emerge out of state action, and when analysed properly, in many societies it's nonsensical to think otherwise. In many societies the first documented money is gold or silver coins. But gold and silver mines were exclusively owned by the kings. Both the evidence and common sense say that the kings introduced the money (and subsequently, market economies as a by-product) as a way of paying soldiers.
CounterLeft 1 month ago
@CounterLeft Really? REALLY?? Maybe you need to watch the video a few more times.
nelsonrn 1 month ago
@CounterLeft No, actually, that's not true at all. As much as it may shock you, money is an evolutionary result of humans needing a medium of exchange to facilitate trade among larger groups of people outside a family or tribe. It came about (like many things in evolution) through spontaneous emergent order (basically a long series of trial and error).
But you apparently have a partisan agenda to push, so don't let things like facts and logic stand in your way.
NinjaHydra 1 month ago
@NinjaHydra And your evidence for this is? Nothing, of course, because there isn't any. Based on what you say, either i)100% of recorded societies must have had money (quite easily proven wrong) or ii) 100% of non-money economies must be barter ones. Apart from the cases I pointed out where money already existed and people were used to it, the actual proportion of documented non-money economies being barter economies is 0%.
CounterLeft 1 month ago
@CounterLeft let me ask you this simple question: if what you're saying is true, why would soldiers have accepted gold and silver as payment?
robertetaylor 1 month ago
@robertetaylor This is precisely the normal origin of coinage as money - soldiers. As states grew from city-states (who could normally rely on volunteer soldiers) into empires, they needed some way of persuading people to become or remain soldiers. The solution states came up with was to pay them in coins, and then impose a tax only payable in these coins, so that everyone would need to acquire them.
CounterLeft 1 month ago
@CounterLeft Statists would love to make it sound like government is god, except kings and gold mines did not spontaneously appear on this planet, so you aren't actually working from first anything. You're starting your point in the middle and think you're debunking a theory of fundamentals. What an idiot.
JaceJohanson 1 month ago
@JaceJohanson Personally, my conclusion is an anti-money rather than pro-state one, but distort if that's how you think you 'win' arguments.
So, based on your logic, how do you explain that the first states existed long before the first coins? If everyone was already using gold or silver (and making no record of it whatsoever), why did it take kings so long to come up with the idea of stamping them into coins and bringing them under their control?
CounterLeft 1 month ago
@CounterLeft How do YOU explain it? I don't explain it, cause I didn't propose it. What exactly is the problem with money, anyway? If you're not pro-state, then an appeal to antiquity or ad populum is doubly useless. These theories can be recreated and tested today, and they are, ever day. But let's cut right to that: what the thesis against money?
JaceJohanson 1 month ago
@JaceJohanson No explanation will be universal, but the most common one is the one based on the need of states to pay soldiers, mentioned above.
You can't test a theory of the invention of money in a society where money has already been invented. And as I've stated, barter does occur in some societies that are already used to using money and then the money disappears for some reason.
CounterLeft 1 month ago
@CounterLeft What exactly is the criterion for the definition of money as you are using it here? If you watch the video, the criterion is anything that is used to facilitate indirect exchange is acting as money. So, under that criterion, yes, you absolutely can test money creation, at any time and under any circumstances.
But what does the state have to do with money creation? The state is not all-powerful, and people trade indirectly all the time, using many mediums.
JaceJohanson 1 month ago
@JaceJohanson The problem with commodity money (probably what you mean when you say 'money') is that it tends to promote a way of thinking of it as 'actual money' (at least in modern society) and subsequently credit as not so. The idea that there can be such a thing as 'actual money' tends to promote debt absolutism, i.e. that debts MUST be repaid and cannot be renegotiated.
CounterLeft 1 month ago
@CounterLeft Again, I take money to be anything used to facilitate indirect trade. But this point of debt absolutism and that debts do NOT at some point have to be paid, is idiotic. Debts can certainly be renegotiated, but this is just putting payment off, not proving to be unnecessary. Debt is not a money; debt is an agreement of an obligation towards someone to be satisfied with money. Indefinite refinancing of any deal is why 2008 was a hellish year, and why we're STILL F'd.
JaceJohanson 1 month ago
@JaceJohanson OK, well under this video's explanation, how exactly would credit emerge?
Actually, there's a long history of debt simply being written-off as a matter of culture. 'Jubilee' was common in some ancient societies where when a new ruler came to power, all debts would be cancelled, in order to prevent the social and economic meltdown that happened otherwise (which de facto forced the cancellation of debts anyway).
CounterLeft 4 weeks ago
@CounterLeft Eeeeeeexactly, thus proving that debt, in and of itself, is not a replacement for value. "Debts were forgiven" doesn't mean that goods didn't change hands. You just can't have debt based upon itself as money. Credit can only come from the surplus thrown off by the subjective value principle. Person A values object 1 more than object 2, which he has. Person be has object 1, but values 2 more. Both net a profit by trading. Continued....
JaceJohanson 4 weeks ago
@JaceJohanson "crado" meant "to believe." It takes a foundation of previous trustworthy interaction on the basis of money to give rise to extending another party a line of credit. Who gives credit cards to people with tanked credit scores? Why would they? Promises, whether of payment in a monetary scenario, or promises of showing up on time to pick of your kids, are only as good as the record proves them to be. Continued....
JaceJohanson 4 weeks ago
@JaceJohanson Why did the housing crisis happen? The conditions were set to allow irresponsible lending to untrustworthy people who over-extended themselves, by untrustworthy banks. The wealth of humanity is measured in the level of it's character, through the barometer of money, because only money illustrates how two strangers can conduct trustworthy trade with each other without requiring any prior interaction or mention of future interaction. Credit is purely abstract.
JaceJohanson 3 weeks ago
As much as it may shock pro-capitalists, this theory has been well and truly debunked quite a few times over, most recently by David Graeber.
CounterLeft 1 month ago
Good video, Praxgirl, but I'd like to raise one technical detail with a comment you made at 4:30 - "True barter economies are an imaginary construction. There is no evidence they have ever existed."
If we are to accept that things like money and language are "results of human action but not human design" - or even the biological theory of evolution - then there must necessarily be a "pre-money" era in which humans engaged in nothing but barter and loose communication of grunts and poo-flinging.
NinjaHydra 1 month ago in playlist More videos from praxgirl
Great job with the videos. I remember a lot of this stuff from reading Human Action many moons ago. The fact that these are short and sweet is perfect; I'm going to encourage my girlfriend to watch!
aaronjgardner 1 month ago
@aaronjgardner help me get more women interested in Praxeology! We're underrepresented!
praxgirl 1 month ago 2
@praxgirl No bloody kidding.
JaceJohanson 1 month ago
Praxgirl I love your videos, but do you find any irony in that you're providing this service whereby millions of people can watch it for only the cost of a few minutes' time??
djb5255 1 month ago in playlist Lessons
@djb5255 Why would there be any irony? She's doing this because she expects a return in the form of greater understanding of praxeology in her audience.
nelsonrn 1 month ago
@nelsonrn Aha!! Very true!! ;-)
djb5255 1 month ago
What is this bitch talking about ..... lol jk but seriously she's HOT
brohmbomber 1 month ago
@brohmbomber It's OK, she doesn't know either.
forgetfulmuse 1 month ago
Why spend 5 minutes explaining something that everyone already understands?
littlelea86 1 month ago
@littlelea86 If everyone understood money then we wouldn't have the problems we have now...
DeanApril14 1 month ago
@littlelea86 Many people are patently confused about money. Just read some other comments here and you'll see.
nelsonrn 1 month ago
I buy everything except the "lonely teacher" part. I find it hard to imagine you would be at a loss for company. Good company might be the problem, but no doubt you must be beating men off with a stick. Good work, and keep it coming.
JaceJohanson 1 month ago
this stuff is suprisingly simple
capi7al 1 month ago
Sorry, but this is bull. Money never originated from barter. The "cigarettes in prison" scenario emerged only AFTER money did. The "original" money was debt, an IOU. Read Graeber's book on debt.
juliaisafilmbuff123 1 month ago
@juliaisafilmbuff123 Pffff! What?! Why read a book trying to prove that which is patently ludicrous? Anything used to facilitate indirect trade is a money. Debt may be used, except this merely renders the trade as un-resolved until the IOU is filled. The current collapse is proof that debt by itself is not actually money, it's a promise to pay a money. Where do people get this stuff....?
JaceJohanson 1 month ago
@JaceJohanson Sorry if the facts contradict the 'homo economicus' ideological theory, but they are still facts. And the facts are that apart from societies already used to money that suddenly lose it (like the 'cigarettes in prison' or 1990s Russia), there is no evidence that barter was ever the basis of any economy anywhere, and plenty of evidence that it was not.
CounterLeft 1 month ago
@CounterLeft Wow, you are truly ignorant. Go research the history of medical care. Doctors were very often paid "in kind" (that is, via barter) by patients who did not have money. Feel free to call that a gift economy, but if you do, then you are implicitly denying the possibility of barter by simply renaming it as a gift.
nelsonrn 1 month ago
@nelsonrn You've just proved my point yourself : 'patients who did not have money', i.e. a society where money already exists and people are used to using it, as I noted.
CounterLeft 1 month ago
@JaceJohanson Most economies started off as gift economies, and there was no 'debt', as we would think of it, just a vague, unquantified concept of 'owing someone one'.
Nothing is 'actually' money. Money is a measurement. You can't 'have' a dollar any more than you can 'have' a centimetre - only something worth a dollar or something a centimetre long. What generally becomes accepted as 'money' does so primarily because the state taxes in it and makes it payable for debts in legal tender laws.
CounterLeft 1 month ago
@CounterLeft I was right. You need to watch the video a few more times. Yes, the money that is usually used comes from state action. However, without a state, money will emerge from the impracticality of direct exchange. Watch the video.
nelsonrn 1 month ago
@nelsonrn And there are precisely zero cases of this ever happening in recorded history, along with plenty of evidence of it not happening.
'Direct exchange' is an irrelevant red herring. Apart from a few merchants (for whom direct exchange worked fine and money would, if anything, have been a handicap), economies simply didn't work like that. Usually, as I've pointed out, they were gift economies (though occaisionally credit ones).
CounterLeft 1 month ago
@juliaisafilmbuff123 What constitutes money in society is always a task of the historian. Clearly if a society was using something like butter or coco beans as money, that sort of historical evidence won't be found with the money itself, right? It seems to me you're conflating an action spent on someone else (a gift) on real exchange.
robertetaylor 1 month ago
@robertetaylor But you'd expect some sort of record, no? Some indication of prices in cocoa beans, for example? But there's nothing. Apart from the societies confirmed as not having money, you're saying that all the other societies had perishable currencies and kept no record of ever using them?
Exchange, as we would think of it, didn't occur in most early societies. It was generally gift economy.
CounterLeft 1 month ago
So you spend all your donation money on pies and swords, hmm?
sharperguy 1 month ago
I have a question, if there are any takers.
Is it necessary to have a commodity money in order for a workable price system to arise? The question pertains to the possibility of a modern "barter" system which uses valueless trade credits (not pegged to $), in which case prices would represent rankings of all goods relative to each other and not one good (money) to every other thing. Can a ranking system produce real market prices, or are prices ultimately based on commodities no matter what?
MillionthUsername 1 month ago
@MillionthUsername unless you mean "commodity" as something other a good, Praxgirl was pretty clear in defining money as a commodity. What I take from that is that "commodity money" is redundant and "trade credits" would not work as money because they would not have the fundamental characteristic necessary for economic calculation: being a good used as a common denominator.
robertetaylor 1 month ago
@robertetaylor I'm not trying to argue definitions of money, just exploring a question I haven't heard addressed. In modern trade exchanges, they use credits which are merely substitutes for dollars. I'm asking a theoretical question about whether you could discover prices using a pure ranking system starting from scratch. I think you could, but I'm not sure. This is the only other possible way I can think of to price goods besides commodity money, and I don't know if anyone ever proved it.
MillionthUsername 1 month ago
@MillionthUsername well the answer seems obviously: no. This is for a number of reasons. First off, I'm pretty sure Praxgirl should have covered this, but prices are merely the exchange ratios between two goods. What that means is that your hypothetical "clearing house" would only have a list of historical prices rather than the establishment of prices for the future with the discount of time and the personal valuation of billions of people. Praxgirl said it clear: value cannot be measured.
robertetaylor 1 month ago
@robertetaylor I know what prices are. Are you trying to say that there are no prices in barter? That's not true. It's just that the ratios are not calculated using the same denominator (money), but every good is measured against every other good (in reality, the good at hand being traded for).
Every pricing system starts with historical prices, but before money trade begins with barter.
Why are you saying "value cannot be measured"? I'm not making a claim about objective value.
MillionthUsername 1 month ago
@MillionthUsername the whole point for money being a good rather than "trade credits" is that they become money through a natural process rather than some centrally planning authority deciding what the "trade credits" or useless tokens are.
robertetaylor 1 month ago
@robertetaylor I don't mean fiat money/credit. I mean a "barter" exchange (it's really a step above barter) where you simply record A buying from B on credit: B sells a bike for 100 credits, so he is +100, while B is -100 and owing 100 in kind to the system. It's multilateral time-separated barter using no money. I'm just wondering whether you could price everything using credits to rank the goods. It still requires economic calculation, & real values are exchanged via the placeholder credit.
MillionthUsername 1 month ago
@MillionthUsername you keep thinking that prices measure something: they don't. Economic calculation only comes about through the natural process of people trading until one good becomes the common media of exchange. Then people can calculate their resources and whether or not they're consuming their capital, but they can never measure the value of these resources on the market. This is why Praxgirl also said that all actions are inherently speculative in nature. Entrepreneurship is an art.
robertetaylor 1 month ago
This has been flagged as spam show
@robertetaylor "Economic calculation only comes about through the natural process of people trading"
That's what barter is. Trading. I trade one thing for another. I don't have to use money. Money solves the problem of simple barter, certainly, but you can also solve it through a system of credits in a large exchange. Instead of pricing every good in one good (money), you rank goods (which money also does).
You'd know you're profiting if you had a positive balance on the exchange.
MillionthUsername 1 month ago
@MillionthUsername you're clearly quite confused. Ranking is done through performative action. What this means is that "credits" to you won't mean the same to me because I have to "rank" all goods myself. How exactly is that as efficient as money? Economic calculation MEANS having a common denominator. You're taking that thing out and assuming someone can just add multiply and subtract apples and oranges. Human action cannot be categorized like the functions of mathematics.
robertetaylor 1 month ago
@robertetaylor Modern trade exchanges usually employ a dollar substitute which serves to set prices by mimicking dollar prices. It's quite easy to remove the dollar completely from this process, just as the dollar supplanted gold by hijacking its price system. But my question was about the ability of a pure barter system to establish prices without money. I think I answered my own question, but are you now claiming that prices can't be set through barter alone? That's what it sounds like.
MillionthUsername 1 month ago
@MillionthUsername Here's where we agree: a price is the exchange ratio between two goods. Here's where we disagree: a useless token will communicate this information to someone not yet engaging in an exchange. WHY? Because prices are the exchange ratios between two goods.
robertetaylor 1 month ago
This has been flagged as spam show
@robertetaylor "Here's where we disagree: a useless token will communicate this information to someone not yet engaging in an exchange."
That's supposed to represent the question I'm asking? I don't even know what that means. Just forget it.
MillionthUsername 1 month ago
@robertetaylor It sounds like you're saying that money must always be a good (or service). And yet paper dollars are not any kind of a good; it is a useless token. If I issued scrip, and people trusted that they could always buy something with that scrip, then the value of the scrip is tied to the value of that thing they could always buy.
Money is about trust.
nelsonrn 1 month ago
@robertetaylor Traders in the system have to rank the value of all goods relative to each other rather than based on the exchange value of one good - money. The credits are a judgment of value and a placeholder till the trade is completed. Since this is done in barter, I don't see a problem with economic calculation. In barter, a seller judges that his bike is worth 3 hours of a plumber's time or 15 chickens, etc. But this requires a clearinghouse to facilitate trade and keep account.
MillionthUsername 1 month ago
@MillionthUsername it is important to note that all exchange, even when attenuated by a monetary system, is in the end, about exchange of real goods and services. if money's only function was to provide a unit of account, then credits would work as well as any other type of system. However, money, as just another good, should be grounded in real goods and services, because credit created arbitrarily out of thin air commands goods and services having provided nothing in return.
gergenheimer 1 month ago
@gergenheimer I wasn't talking about creating credit out of thin air to act as a money. If I mentioned credits, I was talking about trade credits in a so-called "barter" (it's not really barter) exchange system where they typically use some stand-in for the dollar. I originally had a theoretical question about barter prices which I answered myself once I thought about it. This other person responded to me but didn't understand what I was saying, and that probably confused you too.
MillionthUsername 1 month ago
@gergenheimer No. Money is anything which will always be accepted in trade. The value of money comes from people's willingness to accept it. Thus, money can be anything, grounded or not in real goods and services. As long as people expect that they will be able to trade it away, people will be willing to accept a money, no matter its form.
nelsonrn 1 month ago
@nelsonrn You are correct that anything that comes to be accepted as a medium of exchange is a "money". But my point is, a good-quality money serves functions besides merely facilitating exchange. What's more, those pieces of paper in our pockets do not qualify as money under our definition - the unbacked paper money systems we have today were not chosen voluntarily - the only reason everyone accepts them is because superior, non-fraudulent forms of money have been made illegal.
gergenheimer 1 month ago
@gergenheimer I sorta agree. However, if you think about how a profit-making money would work, it would be unbacked paper money which the owner inflates by way of making a profit. For example, if Lucasfilm was to issue quatloos, you can be reasonably confident that, with Gandalf standing behind them, people would accept them in trade.
But as you say, that would be voluntary money, not fiat money. So I'm not disagreeing with you.
nelsonrn 1 month ago
Please pass this video on to people who have joined the Zeitgeist cult and push their "RBE" on you.
MoneyIsSilver 1 month ago
One of the best videos yet that I've seen on the nature of money.
MoneyIsSilver 1 month ago
Blacksmiths do horse shoes and such. Swordsmiths make swords.
Ishpeck 1 month ago
please remove your shirt..........for science
surroscape 1 month ago
but praxgirl wut abowt talley sticks?????
KagarBeardtooth 2 months ago
2 dislikes? What is to dislike?
Jack95912 2 months ago
praxeology has never looked so attractive
alistairproductions 2 months ago
@alistairproductions +1
bogdanseme 1 month ago
Thanks for posting this. Learning from an extremely beautiful woman, is always a good idea!! ;-)
What's scary is, this is all not completely obvious to some (most?) people. I remember when (for example), perfectly "intelligent" people could NOT see WHY the site "napster" could not be allowed to continue. Boggles the mind!
Cheers.
TimothyWenk 2 months ago
It sounds like you're summarizing Rothbard's What has government done with our money? :p
DeanApril14 2 months ago 13
@DeanApril14 She's basically summarising Mises' Human Action which Rothbard used as a base for a lot of what he wrote, also making sure to explain the theories and not assuming his audience was already familiar with the arguments of Mises.
sharperguy 1 month ago
This has been flagged as spam show
People need to seriously look at the Bigger Picture of things, to be very objective, of what Money (system) also caused to humanity.
nikiwonoto 2 months ago
This has been flagged as spam show
I think people often only look at the ‘good’ sides of the money system, but overlooking (or even neglecting) many ‘bad’ sides, in fact perhaps much more than the ‘good/positive’ of the money system! that is IMHO where lies the main problem of all the constant debates & misunderstandings.
The fall of U.S & Europe financial crisis (and soon perhaps the world’s economic collapse, in 2012) have somewhat really proved about this.
nikiwonoto 2 months ago
Google: Resource Based Economy (RBE), Venus Project, Zeitgeist, and/or Paradism. They’re all might be different names, but essentially share the same (or very similar) philosophy & value, and the main thing is: to get away from the current Monetary system (and it’s NOT even about communism, if you study deeper about them).
These might actually be the solution to many of humanity’s current interlinked & complex problems. Once again, it’s the System.
nikiwonoto 2 months ago
@nikiwonoto It is the system, and free markets are the answer. Austrian economics (an offspring of the praxeological method of inquiry) is simply an economic defense of free market. It is NOT a system, rather it is a theory on how free markets work.
All that other stuff you listed is united nations propaganda. RBE relies on virtual free markets to determine distribution. Simply Complexity, by Neil Johnson, explains how a virtual free markets would work to determine distribution.
jaeLAX23 2 months ago
@nikiwonoto Thus, RBE would take us from one tyrannical system to another even more coercive & tyrannical system. The whole argument for a virtual free market system is a contradiction, it says "humans are irrational & cannot think long term, so we need humans to develop a rational system of resource distribution that's sustainable".
Also, Johnson rejects the notion of an invisible hand as characterized by Adam Smith while ignoring the elegant characterization by Stuart A Kauffman.
jaeLAX23 2 months ago
@nikiwonoto And the most obvious flaw is, well human action cannot be quantified, as Mises has undoubtedly proved.
A system like RBE could only work by force and would have to assume perfect knowledge of the past, present, & future. I don't even have to get into what a ridiculous notion this is. Even the perfect knowledge/approximations of the weather would be required.
jaeLAX23 2 months ago
I'm gonna have to turn the monitor off to actually focus on what she's saying..
Daydream2142 2 months ago
Get a productive job..
EKEKOPE 2 months ago
I SAW THIS WOMAN ON TV AND SHE WAS SITTING BEHIND A DESK AND SOME WOMAN GAVE HER SOME FILES AND THEN SHE TELEPORTED FROM BEHIND THE DESK AND WAS STANDING RIGHT NEXT TO THIS GUY FROM LAW & ORDER OR SOME OTHER SHOW BUT HE WAS A LAWYER IN THIS PROGRAM... BUT THE PEOPLE RECONGISED HIM FROM THE TV PROGRAM EVEN THOUGH HE WAS IN A TV PROGRAM... IT WAS SO CONFUSING
DreadsideNubune 2 months ago
bUT, BUT, BUT, TEH POST-SCARCITY!!1!!!!!1
mikemat3307 2 months ago
This has been flagged as spam show
I ♥ Praxgirl
VTaylo 2 months ago
Comment removed
VTaylo 2 months ago
I think this is your best video yet.
carlosjhr64 2 months ago
@ Praxgirl, are you going to make a video about the zeigest style 'resource based' economy ? I have people on the internet who are wrong that I need to argue with.
wacabby 2 months ago
@wacabby Create a system where people have an incentive to share, and you will have your 'resource based' economy.
triforcelink 2 months ago
@wacabby
Watch episode 9.
timonViejo 2 months ago
@wacabby the concept of a "resource-based" economy is a collection of age-old fallacies, dressed up in sci-fi trappings - I doubt Praxgirl would waste the time and resources on the subject, but if she did, I'm 99% sure it would be to refute the idea. Without a monetary system and the matrix of prices derived within that system, it would be impossible to efficiently allocate resources to their best uses - end of story.
gergenheimer 2 months ago
@gergenheimer And, the resources for such efforts by praxgirl would be scarce and better allocated to other ends ;), like teaching praxeology.
Goodatconnect4 2 months ago
@wacabby the most fascinating thing to me about "resource-based economy" is that those who advocate it are blind to communism by just another name. The exact same criticisms as were brought forward in the 1920's still against communism still apply. 1. Mises calculation problem. 2. Hayek information problem and of course the age old incentive problem that even they recognized.
mbarkhau 2 months ago
When the supposed good that becomes the medium of exchange is imaginary, then we accelerate our own destruction. Stop promoting monetary values and begin focusing on the resources and social relationships that are the basis for a better world for all people.
Lightrider4444 2 months ago
love
cankorgbr 2 months ago
Why would a baker want a sword? You're examples need a basis in modern reality in order to have any educational value. This goes for all levels of education from k-12 and into higher education. Confusing the student with misrepresented reality causes a loss of value in what you are offering as an educational product.
savvysymbiont 2 months ago
@savvysymbiont What an incredibly fallacious argument. Please tell me that you're not actually in education.
jskelton440 2 months ago
@savvysymbiont What? How is that confusing?
cbl2988 2 months ago
@savvysymbiont Face palm.
rumco 2 months ago
@savvysymbiont Human values are subjective - the point being that it is not your place to question the desire of a baker to want a sword. (I'm an artist, and I own 4 swords, btw) The fact is, if he wants and/or needs it, and is willing to trade his wares for it, he will increase his wealth by exchanging for it. The other point is to highlight the fact that a sword cannot be divided into pieces to facilitate exchange, at least not without rendering it useless as a sword.
gergenheimer 2 months ago
@savvysymbiont
The Baker is also a Renaissance Fair participant in his free time. Pwned.
P.S. It really doesn't matter what goods/professions she chooses to represent parties A, B and C in her Direct/Indirect exchange examples. All that matters is that the viewer understands practical the problems of Direct Exchange and the solutions provided by Indirect Exchange and Money.
KagarBeardtooth 2 months ago
Good video, I guess one can come to their own conclusions that govt. forced fiatcurrency isn't any good. :)
VeridisQuoTube 2 months ago
So sexy! And informative.
Question for you. Who do you consider the greatest economist of all time?
DigitalShaolin 2 months ago
HA!! End-of-Video shoulder bounce! Thank you! Merry Christmas praxgirl!!! @_@
freelancewhore 2 months ago
Great video! Now, what's the difference between government fiat paper money and a free market derived money?
XulChris 2 months ago
@XulChris Give her time, give her time!
nelsonrn 2 months ago
Sound leads picture.
ShwangShwing 2 months ago
@ShwangShwing That's usually a video player problem.
nelsonrn 2 months ago
Merry Christmas to you, Praxgrl :) (or just happy holidays, if you prefer)
SotonaMIIT 2 months ago
Thank you very much Praxgirl. And Merry Christmas. I am looking forward to episode 40 sometime in the New Year. You Go Girl!
samargull 2 months ago
Please keep up the great work, praxgirl. I just had an argument regarding the "invention" of money and indirect exchange the other night.
Goodatconnect4 2 months ago
This has been flagged as spam show
Episode 15 QuickTime H 264 ????
KSX387 2 months ago