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**Reincarnate** · 12-23-2010, 08:27 AM

Money is a standardization. It's a way we can judge the relative worth and value of things in a form that everyone can exchange on. Even in ancient civilizations, economies existed without money ("If you kill these boar for me, I'll protect your family"). The "problem" arises when people start trying to maximize their utility functions. Am I really getting a fair deal in this boar/family protection exchange? Is protecting a family worth this price in boar? How much boar? How much protection? Am I working too hard for what I'm providing or getting? Could I be getting a better deal elsewhere?

When you start adding entire societies into this mix, you have a wide range of services intermingled amidst the supplies and demands. The easiest thing to do is to make an intermediary -- money -- as a way to normalize it all.

Without money, you're basically operating on this sort of premise that suddenly everything will be easier to acquire. Just because you eliminate money, that doesn't mean you're making everything free. NOTHING is "free" because there's always an underlying cost. That cost comes in the form of underlying RESOURCES which are usually scarce (and therefore more valuable). Rarer materials are scarce. Skill is scarce.

A lot of people would opt out of doing work because, well, why bother if everything's free? Even if you require that people work something, people will take the route of least effort. Why bother going to school for years and years to become a banker/doctor/lawyer who works 24/7 if you can just test video games all day and be just as wealthy? Why invest anything for no return? A lot of the things we would WANT to acquire for free would no longer be available because nobody would bother making them anymore. The products we COULD acquire would be of ****ty quality because the few people that would bother to make such products would have no incentive to optimize their performance.

Limiting what people can own doesn't work in practice, either. In communism, everyone gets equal share of the fruits of labor and the government controls everything. It's not exactly a great life.

We need currency as a way to fix most of these issues.

12-23-2010, 08:27 AM	#8
Reincarnate x'); DROP TABLE FFR;-- Join Date: Nov 2010 Posts: 6,332	Re: A world without money. Money is a standardization. It's a way we can judge the relative worth and value of things in a form that everyone can exchange on. Even in ancient civilizations, economies existed without money ("If you kill these boar for me, I'll protect your family"). The "problem" arises when people start trying to maximize their utility functions. Am I really getting a fair deal in this boar/family protection exchange? Is protecting a family worth this price in boar? How much boar? How much protection? Am I working too hard for what I'm providing or getting? Could I be getting a better deal elsewhere? When you start adding entire societies into this mix, you have a wide range of services intermingled amidst the supplies and demands. The easiest thing to do is to make an intermediary -- money -- as a way to normalize it all. Without money, you're basically operating on this sort of premise that suddenly everything will be easier to acquire. Just because you eliminate money, that doesn't mean you're making everything free. NOTHING is "free" because there's always an underlying cost. That cost comes in the form of underlying RESOURCES which are usually scarce (and therefore more valuable). Rarer materials are scarce. Skill is scarce. A lot of people would opt out of doing work because, well, why bother if everything's free? Even if you require that people work something, people will take the route of least effort. Why bother going to school for years and years to become a banker/doctor/lawyer who works 24/7 if you can just test video games all day and be just as wealthy? Why invest anything for no return? A lot of the things we would WANT to acquire for free would no longer be available because nobody would bother making them anymore. The products we COULD acquire would be of ****ty quality because the few people that would bother to make such products would have no incentive to optimize their performance. Limiting what people can own doesn't work in practice, either. In communism, everyone gets equal share of the fruits of labor and the government controls everything. It's not exactly a great life. We need currency as a way to fix most of these issues.