Thursday, November 17, 2011
Money Chemistry
An interesting Slate video on the chemical properties of different elements and why gold has been used as money.
I found the part about radioactive elements interesting. They had two reasons for rejecting them:
1. Health risk, and
2. Radioactive decay - as they say "your money would disappear!"
Now, to a Slate columnist those sound like bad things. But to an economist worried about liquidity preference, that would be a feature, not a bug! Who would want to hold on to money if it depreciated rapidly and posed a health risk?
Silvio Gesell enters the nuclear age!
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But to an economist worried about liquidity preference, that would be a feature, not a bug! Who would want to hold on to money if it depreciated rapidly and posed a health risk?
ReplyDeleteWhy is it bad if consumers want to hold money? What's wrong with money that retains value over time?
Because it's just paper. You're supposed to use it as a tool to acquire truly desirable goods.
ReplyDeleteAt least thats how I understand it. I'm sure theres much more nuanced arguments out there.
Those guys did a much longer version of this on their planet money podcast this summer or whenever. It really bugs me. Silver was used as the main currency and/or a perfect substitute for gold for a long, long time and the modern "gold standard" is only like 130 years old and it's dominance was kind of decided by a bunch of arbitrary decisions.
ReplyDeleteI mean, really? Something you make forks out of? What about using something you fill your cavities with?
Mat Von G-
ReplyDeleteHolding specie means that its not being circulated as capital and isn't available for investment or consumption. I.e. what Carl said.