Monetary inflation is NOT taxation \ stacker news ~econ

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1540 sats \ 43 comments \ @SpaceHodler 27 Jul econ

Money printing is not hidden taxation. Taxation is coercive, and money printing is the production of a good, which in itself is non-coercive.

The monopoly on the issuance of fiat is coercive, and there are other coercive aspects to fiat (like taxation), but the issuance itself is peaceful.

If you own a house and suddenly a housing development pops up, diluting the housing stock in your area and lowering the monetary premium on your property, you don't scream you're being taxed or stolen from.

Similarly, if you store your wealth in potatoes, thinking they will retain their purchasing power, and suddenly someone opens a potato farm and floods the market with those things, you don't scream you're a victim of extortion or robbery.

Everyone has the right to manufacture goods - build houses, grow potatoes etc. And everyone has the right to choose what to use as a store of value.

The monopoly on fiat printing is a violation of property rights, because it restricts your right to use your legitimately (i.e. peacefully) acquired printer, paper and ink, effectively implying they're not really yours (which in and of itself can be considered theft).

But it doesn't matter that much, because even if this monopoly didn't exist and anyone could print dollars, it wouldn't make them less crappy or more crappy. They would be equally crappy.

Your first thought may be that fiat derives some of its monetary premium from coercion (e.g. the requirement to pay taxes in it, or capital gains tax on non-fiat). But it loses even more value to inflation than it gains from coercion - otherwise people wouldn't want to dump it for better things. If you're coerced into paying CGT it's because you're doing better than holding fiat, and having to pay taxes in fiat means your tax rate is lower in real terms than if you had to pay your taxes in something better.

Since value is ordinal, not cardinal, money still emerges from the market, even in the presence of this coercion.

And by the way, the state is under no obligation to issue a non-crappy form of money, just as it is under no obligation to exist.

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25 sats \ 2 replies \ @Undisciplined 27 Jul

Well argued. I've made a similar point on occasion. It's fine if someone wants to describe inflation as being like a tax, just like it's fine to describe it as being like debasement. The effects are similar, but technically it's not either of those things.

You could even use more direct comparisons: for instance, on a gold standard gold mining is not taxation and it seems silly to suggest it is.

21 sats \ 1 reply \ @SpaceHodler OP 27 Jul

for instance, on a gold standard gold mining is not taxation and it seems silly to suggest it is.

Exactly, but we don't even have to be on a gold standard. Gold still has a monetary premium and is used as a SoV. If printing fiat were theft because some people store their wealth in fiat, then mining gold would be theft because some people store their wealth in gold.

It looks like some people got triggered emotionally. It wasn't my intention and I think they missed the point.

0 sats \ 0 replies \ @Undisciplined 27 Jul

From what I read, they did mostly miss the point.

43 sats \ 1 reply \ @TheWildHustle 27 Jul

money printing is the production of a good

Everyone has the right to manufacture goods

Everyone has the right to print money?

And most Americans have no idea about dollar debasement, they think prices are rising due to the greed of evil CEO's, at least that's what their tv family and friends are telling them.

Similarly, if you store your wealth in potatoes, thinking they will retain their purchasing power, and suddenly someone opens a potato farm and floods the market with those things, you don't scream you're a victim of extortion or robbery.

If my potatoes aren't holding their purchasing power and I don't see any other potato farms........and they convince me through commercials that the problem is with the air, and that we need more air regulation.......I've just been scammed.

0 sats \ 0 replies \ @SpaceHodler OP 27 Jul

Everyone has the right to print money?

No, and I said it's one difference. But it's an irrelevant one. The problem with fiat is not that someone can print it, but not everyone. The problem with fiat is that someone can print it at no cost. Because if they can do that, they will, which precludes it from being a SoV.

And most Americans have no idea about dollar debasement, they think prices are rising due to the greed of evil CEO's, at least that's what their tv family and friends are telling them.

What most Americans think is solely their responsibility.

If you've recently heard a government official state officially that dollars are still backed by gold and decided to hoard them as a result, then yes, you've been scammed.

21 sats \ 0 replies \ @iam_jerry 27 Jul

Monetary taxation = Inflation = Theft

21 sats \ 15 replies \ @ZezzebbulTheMysterious 27 Jul

My position is that monetary inflation is stealth taxation through debasement, and indeed can not occur through other means that would be politically palatable.

It is coercive that we must exist under such a regime.

10 sats \ 14 replies \ @SpaceHodler OP 27 Jul

Why do you think printing dollars is taxation, but growing potatoes isn't?

All both do is increase the supply of a good.

21 sats \ 6 replies \ @02bcd3eeb0 28 Jul

The issue is the exclusive control. Anyone can look for gold or grow potatoes, no one except the state endorsed banking cartel can change the fiat ledger.

0 sats \ 5 replies \ @SpaceHodler OP 28 Jul

But why is it an issue? Do you think the world would be a better place if everyone were allowed to print dollars or change the USD ledger?

Just the fact someone can do that makes it unfit for the purpose, regardless of whether it's one person or 8 billion.

0 sats \ 4 replies \ @02bcd3eeb0 28 Jul

You're asking why it's different than potatoes, and I'm saying that's why.

The world absolutely would be a better place If anyone could create USD since it would massively accelerate the transition to a hard money system.

0 sats \ 3 replies \ @SpaceHodler OP 29 Jul

Anyone can print Monopoly money, so we already have something that matches the level of shittiness you want a money to have. You just need to convince everyone to switch from US dollars to Monopoly dollars, and then people's transition to a hard money system will accelerate.

0 sats \ 2 replies \ @02bcd3eeb0 29 Jul

You seem to be missing my point completely..

0 sats \ 1 reply \ @SpaceHodler OP 29 Jul

I understand you want to control outcomes, just like the left wingers do.

People will use what they want to use. You can only influence their decisions by adding products to the market, not by taking someone else's products away.

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0 sats \ 6 replies \ @ZezzebbulTheMysterious 27 Jul

Potatoes are consumed once. Potatoes are perishable. Growing excessive potatoes does not cause monetary expansion. Excess potatoes affects no price other than that of potatoes.

It’s like dollars and potatoes — different things.

10 sats \ 0 replies \ @SpaceHodler OP 27 Jul

Excess potatoes affects no price other than that of potatoes.

Excess potatoes affects the price of literally everything expressed in potatoes. It's just that not many people choose to use potatoes as money. Most people choose to instead use a particular other thing equally unfit for the purpose.

Perishability is not that relevant here. Real estate is also used as a SoV and it doesn't last forever.

10 sats \ 4 replies \ @Undisciplined 27 Jul

How about mining gold on a gold standard? Is mining gold taxation somehow?

69 sats \ 3 replies \ @ZezzebbulTheMysterious 27 Jul

Closer, in that if a gold standard of money existed, the government mining more gold would be similar to a stealth tax in practice (with an expansion of the monetary base), but not a tax, because of the lack of exclusive production rights. Except the US -- where it was illegal in 1933-74 to own gold, other places in the world could dig it up any time, this was not coercive, and did not 'tax' other gold standard countries.

Potatoes or any other non monetary instrument can be produced by anyone. Fiat money can only be produced by an organization with a monopoly on violence. Potatoes and gold can be mined by private corporations, and their production is not a tax.

Ultimately the purpose of a tax is to offset monetary creation by the state. if the debt cannot be settled by a direct tax, the state will settle the debt by debasement.

20 sats \ 2 replies \ @Undisciplined 28 Jul

Obviously, I disapprove of the state's monopoly on violence, so we can leave that aside.

There's no plausible argument that you have a property right in the purchasing power of your monetary savings. Purchasing power is based on the subjective valuation of sellers and you have no claim over that. All you can have a property right to is the units of money in your possession.

Since you have no right to purchasing power, you aren't being expropriated when your purchasing power is reduced via inflation.

Where your rights are being violated is in not being allowed to produce your own money. When the state enriches itself through inflation, it's really rent seeking off of that abridgement of your rights.

42 sats \ 1 reply \ @ZezzebbulTheMysterious 28 Jul

I disagree with that core premise that you do not own the PP, that it isn’t a core part of a modern advanced economy.

This is like one of the most important things that a stable society is said to provide, without it, commerce degrades to subsistence barter. One cannot have an advanced economy without stability in at least one of your trade instruments.

I think it’s all about life, and time. Too many potatoes rarely ever eat into the stored value of a societies savings.

0 sats \ 0 replies \ @Undisciplined 28 Jul

Just because it's important doesn't mean you can own it. Other people are fundamental to an advanced economy, too, it doesn't imply that you can own them.

You didn't contend with my point. Purchasing power consists of thoughts in other peoples minds. What is your argument for being able to own other people's thoughts?

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21 sats \ 0 replies \ @ZezzebbulTheMysterious 27 Jul

“Since value is ordinal, not cardinal”

Can you explain this? Order implies lack of fungibility.

21 sats \ 2 replies \ @jp305 27 Jul

What makes you think issuance is peaceful?

Pushing economic issues into the future to stabilize your country's economy is a peaceful SHORT TERM action that borrows from the violent future.

0 sats \ 1 reply \ @SpaceHodler OP 27 Jul

No one is pushing anything. They're just printing their shitcoin that no one is forced to use.

If I print Monopoly money according to my master plan to stimulate or cool the economy, am I pushing anything?

Are the Shiba Inu people pushing anything?

21 sats \ 0 replies \ @Bell_curve 27 Jul

People are forced to use the currency in their countries

Most lack ability to opt out of fiat

Most lack time to pontificate nonsense on SN

Check your privilege Stop being elitist

21 sats \ 0 replies \ @didiplaywell 27 Jul

Specifically fiat emission is a form of taxation by every means, for taxation is money the state collects compulsorily, and that's exactly what fiat emission is.

21 sats \ 0 replies \ @BTCExecutor 27 Jul

Semantics

21 sats \ 5 replies \ @Bell_curve 27 Jul

How is currency devaluation a production of a good?

How is currency devaluation non coercive?

Or hyper inflation?

0 sats \ 4 replies \ @SpaceHodler OP 27 Jul

Carl Menger notes in "Principles of Economics" (1871) that money is a good. It emerges naturally as a medium of exchange and is valued as a good due to its usefulness in facilitating trade.

By issuing dollars, you're producing a good, just like you do by growing potatoes. Just like you can use the good that are potatoes to satisfy your hunger, you can use the good that are dollars to make a kite out of them for your entertainment, or as kindling, toilet paper, or a medium of exchange. It so happens that some people, due to a lack of education, use it as a store of value.

How is devaluation coercive? Someone puts a gun to your head and says "Accept this shitcoin of mine or I'll pull the trigger"?

Are the people behind Shiba Inu coercers too?

0 sats \ 3 replies \ @Bell_curve 27 Jul

From Brave search AI: According to Carl Menger, money originates from the marketplace, not from government edicts. In his work "On the Origin of Money" (1892), he argues that individuals decide what the most marketable good is for use as a medium of exchange. This medium of exchange solves the difficulty of exchanging goods directly, as exemplified by a chicken farmer trading chickens for gasoline.

Key Insights

Money develops spontaneously through the actions of individuals in the marketplace, rather than being imposed by authorities. The most marketable good becomes widely accepted as a medium of exchange, facilitating indirect trade. Menger rejects the idea that government decrees or agreements between individuals create money.

Example

To illustrate this concept, Menger uses the example of a chicken farmer who wants gasoline. Instead of trying to find another farmer who directly needs chickens and has gasoline to spare, the farmer finds it easier to trade chickens for a widely accepted good (money) and then use that money to acquire gasoline.

Influence**

Menger's theory of the origin of money has had a lasting impact on economics, particularly in the development of the Austrian School. His ideas continue to influence contemporary discussions on the nature of money and its relationship to the market.

Menger believed that gold and silver were the precious metals that were adopted as money for their unique attributes like costliness, durability, and easy preservation, making them the "most popular vehicle for hoarding as well as the goods most highly favoured in commerce."[11] Menger showed that "their special saleableness" tended to make their bid-ask spread tighter than any other market good, which led to their adoption as a general medium of exchange and evolution in many societies as money. https://en.wikipedia.org/wiki/Carl_Menger#Money

Ask the people in countries suffering from hyper inflation like Argentina.

Dollars are not potatoes.

Anyone from Argentina? @didiplaywell

21 sats \ 0 replies \ @didiplaywell 27 Jul

Indeed! Yet while hyperinflation makes the issue more evident, it's not less of a theft in any fiat system.

0 sats \ 1 reply \ @SpaceHodler OP 27 Jul

How do dollars differ from potatoes?

21 sats \ 0 replies \ @Bell_curve 27 Jul

Your question is an insult to people who are starving, who live in penury, who struggle to make ends meet such as food and shelter

21 sats \ 2 replies \ @Bell_curve 27 Jul

Down zap for confusing money with goods and services

0 sats \ 1 reply \ @SpaceHodler OP 27 Jul

Downzap Menger.

0 sats \ 0 replies \ @Bell_curve 27 Jul

I downzap your misguided interpretation of Menger

0 sats \ 3 replies \ @clr 28 Jul

There might be no coercion, but there is deception. Do you believe deception is OK? The deceived bears part of the responsibility, sure, but so does the deceiver.

0 sats \ 2 replies \ @SpaceHodler OP 28 Jul

But where is the deception? Does anyone say the dollar is somehow scarce, e.g. backed by gold?

0 sats \ 0 replies \ @clr 28 Jul

Oh, and, by the way, the dollar is scarce. The amount of dollars in circulation is not infinite. And we could say it is somewhat backed by gold. There is gold in their vaults. It is even redeemable for gold; you can buy gold with it or sell gold and receive dollars. It is not redeemable for a fixed amount of gold at the federal reserve or the treasury, however, but that's just a technicality. Don't worry about it. Everything is fine, isn't it?

See how I can troll if I set myself to it? :)

0 sats \ 0 replies \ @clr 28 Jul

Well, the deception is in the gaslighting. Just look at your comment.

Maybe you are super enlightened or you have great enlightened parents and you know the truth since you were a toddler. I always knew that there was something wrong with the money system, but I couldn't know what the problem was. It took me >30 years to find out the truth. How could one find the truth if one doesn't even have a clue of what the truth looks like because it's not allowed to even mention it? That's the deception. The constant brushing aside of the fact that the problem even exists when you mention the real problem. They keep doing it now. They admit that there are problems, but they point you to the wrong things: CO2 emissions, intolerance or whatever.

Look up, down, left, right, look to whatever we say is the problem-du-jour, but don't look to the beep. What are you talking about? What is the problem? There is no problem.

0 sats \ 1 reply \ @IamSINGLE 28 Jul

I agree.

Money printing is a product for inflation! US prints so much money and sells it everywhere and in return people get inflation while remaining under debt.

I'm not that sound in Economics but this is how I view printing of money by US.

0 sats \ 0 replies \ @SpaceHodler OP 28 Jul

That's a different point to the one I made, but I agree with it too.