@Jacob: A minor quibble… the costs of digital reproduction are not exactly zero, even though it’s very close… this is important for the same reason it’s important that the cost of producing a grain of rice is not exactly zero, even though it’s very close. Status quo copyright law is being challenged by the rapid technological developments in copy technologies and this process will continue unabated for some time. Copyright law was already corrupt, even before the dawn of the personal computer but now that the costs of copying have gone down many orders of magnitude in just the last three decades the corruption of copyright law is unusually naked. Copyright law is certainly going to change whether the Establishment players like it or not. But the end result will not be libertarian, either, and I think that people who think that a mere technology (computers) can usher in a new era of justice in IP law are mistaken.
@Jacob: A minor quibble… the costs of digital reproduction are not exactly zero, even though it’s very close… this is important for the same reason it’s important that the cost of producing a grain of rice is not exactly zero, even though it’s very close. Status quo copyright law is being challenged by the rapid technological developments in copy technologies and this process will continue unabated for some time. Copyright law was already corrupt, even before the dawn of the personal computer but now that the costs of copying have gone down many orders of magnitude in just the last three decades the corruption of copyright law is unusually naked. Copyright law is certainly going to change whether the Establishment players like it or not. But the end result will not be libertarian, either, and I think that people who think that a mere technology (computers) can usher in a new era of justice in IP law are mistaken.
I agree that it is not exactly zero the infrastructural costs can get high if you really get into what they are and where they are going, but i don’t see Verizon et al. scaling back what is already there. Also, i think the cloud system is the only way they can effectiely stop ALL piracy, but that comes at the cost of major functions ofthe devices themselves (which i will die protecting haha) which is why i think the internet and computers does have a serious potential (as does the hacking community (assuming they do not get/are compromised by undercover authorities) to fight back against the state.) It requires the cooperation of people who have the ability to fight back, which is very unlikely, however. Lulsec and http://en.wikipedia.org/wiki/Anonymous_(group will help. They can never force us off of p2p. it is an impossibility save digging up the cables.
One thing to remember though guys, Bitcoin is still fairly new, so it is going to have its crashes. Sure when the crash first started, many people thought that the price dropped simply because people lost interest in Bitcoin, but the real reason why the value fell was because of a hacker messing around with one site, Bitcoins value is going back up now.
One can conclude that these crashes should make one even more skeptical of bitcoins but im not so sure that is a valid conclusion. Ebay had a crash in the late 1990s and people after that crash were saying stuff like, “See, I told you buying stuff online was inefficient and unreliable” or “See, I told you Ebay was a scam!”
The guy from BitCoin was on Peter Schiff’s radio show yesterday and Schiff let him speak for a pretty good amount of time. H e talked about how the code itself was secure and likened the ‘hacking’ to an irresponsible person losing a credit card and someone finding it and using it.
It did sound convienient as competition for PayPal. The real benefit is the ease of liquidation between currencies.
Not a good investment it is, but could prove useful in the future when im trying to buy MJ seeds from Amsterdam.
We need a worldwide Gold Standard (or commodity). Think if a pound of rice costs the same in New York that it does in Bangladesh (or just the purchasing power of a single unit of money was equal) there would be no need for labor exploitation or outsourcing of jobs because there would be no excess profit in it.
Thoughts on the Peter Schiff interview yesterday with Mr Bitcoin:
He treated the guy with kid gloves. Peter went to the heart of the matter with his first question, mainly “But Bitcoin has no intrinsic value.” Which should have ended the whole thing right there, but Mr Bitcoin mumbled some nonsense and Peter moved on.
LOL. Mt. Gox is not even accessible. I thought I was exaggerating when I said Bitcoin was a pump&dump. Turns out pump&dump wasn’t an exaggeration at all.
In an anarchic world market with a 100% gold standard.
Imagine a borderless market with a floating exchange commodity standard, such as gold. If i could take my gold ounce and pay for rice in NY or India with the same amount of gold then the distribution of necessary resources is everywhere equal. I’m assuming this is the market Hayek and Rothbard would envision if the market was truly left to decide. Does that make sense? Supply and demand would equilibrate rice and money everywhere in the world, cateris paribum.
EDIT: I mean nothing Marxist by ‘excess profit’ i should have said “profit opportunity” or “profit motivation.”
No, it doesn’t make sense. There’s no reason in the world why rice should be the same price in NY and Bangladesh. I think you are gravely confused about ECON 101 concepts if you think that fiat money is responsible for the local variation in prices of commodities around the globe.
FYI, you could exchange fiat USD for fiat Indian Rupee (and vice versa) on the open market today. So I see no reason why you couldn’t arbitrage such an obvious profit opportunity as the price of rice differential between NY and India right now.
There have been long threads about the phrase intrinsic value, many prominent Austrians quoted using it. IIRC, the no such thing as intrinsic value guys retreated.
You surely aren’t saying that everything people think of as a fad or a scam turns out to be another Ebay. There is a bridge near Brooklyn for sale, if you’re interested. I’ll introduce you to Bernie Madoff if you want.
Bitcoin indeed has no intrinsic value, a fatal flaw.
Someone argued that dollars have no intrinsic value either, but they are doing fine. To which Peter replied that the dollar has a value in that you have to pay your taxes in dollars. Artificial and propped by violence as that value is, bitcoin lacks even that.
The latest thing you hear from the bitcoin folks is that it’s not money, it’s a wallet. But my wallet doesn’t go from $17 to a penny in 5 minutes.
Others equate it with paypal, only a thousand times more safe. But paypal is indeed a wallet. I don’t buy paypal coins that go up and down in value. They just hold onto my digital dollars for me
Well I’m not blaming fiat currency directly for it, but the labor variations in each country. The point is to have production growth equal everywhere and I would assume that the reason why that is not the case is, for the most part, because countries manipulate their currencies through bank transactions.
If those bank transactions that create credit growth and give artificial flux to the prices, that is what creates the conditions that give rise to the necessity to produce or the incentive to import. So it is not fiat money in itself, but the implications that it gives for motivation, and especially in the political process, to try and cheat others. Gold , or any physical medium, prevents artificial forms of wealth from giving the illusion of growth or decline in conditions that define what is economic and where. I thought this was the point of it*.* To prevent out of control credit growth.
EDIT: "FYI, you could exchange fiat USD for fiat Indian Rupee (and vice versa) on the open market today. So I see no reason why you couldn’t arbitrage such an obvious profit opportunity as the price of rice differential between NY and India right now. "
That is the point; it doesn’t account for the true value of the labor everywhere. The labor of an American worker is worth more because when we work we create more money. But an Indian worker can work the same amount of time in India and not create as much paper wealth. There is no reason for this other than the currencies of the two countries, with value is measured funkily be the central banks and private banks.
EDIT 2: The only reason that business’s move overseas is because labor is cheaper. That is the case because of the percieved production and/or tax reciepts that will be created by the people there. This is the whole game of the IMF when they tell countries to print money to “encourage foreign investment” it makes resources and labor cheaper in the countries So the U.S. loses jobs to India et al. and the Fed monetizes debt and we expand our welfare system, subsidies, and trade deficit to accomodate for the disparity of imports to exports as well as consumption patterns to reinvestment/savings patterns. One money everywhere unmanuipulated other than by market conditions would command equal purchasing power everywhere respective to other goods.
Why? What point? Whose point? Why is this the point? Who says there is a point?
Production growth was unequal long before there were central banks or currency manipulation. Do you think that Papua New Guineans experienced lackluster growth by comparison to medieval Venice because of central bank inflation?
Nonsense. Inflation indeed subsidizes exporters on the backs of domestic non-exporters. It is not true that a country can gain an economic advantage against its peers by inflating its own currency. It only appears that this is the case since the subsidized exporters do better than their non-subsidized peers in other countries. The fact is that the enrichment of the exporters is not paid by foreigners but by domestic non-exporters.
No, that’s not the point. There is no point… free market money is just whatever satisfies the demands of consumers for use in indirect exchange.
We don’t have to measure the value of labor in dollars, we could measure it in gold or anything else. The fact is that the American worker is (or, at least, was) more productive than his Indian peer. His labor exchanges for more real goods… it is actually more valuable.
You are confused.
No, it’s because of our insane labor laws, inflated cost-of-living (housing bubble, etc.), Social Security/Medicare, and the gargantuan cost of our government.
OK, one word to clear up all this crap about things being the same price everywhere… transportation. It costs money to transport things from one place to another. Rice cannot be the same price everywhere because it’s cheaper to produce rice in the paddy fields of China than it is in the arid sands of the Sahara. Hence, the price of rice will never be the same in the two places because you have to transport it from where it’s cheap to grow it to where it is in demand for consumption. Please look over an introductory text on price theory and microeconomics.
@Dave: Valuation is something that a subject does to an object. “I value this old keepsake very much.” Value does not inhere in physical objects, it is not intrinsic. What is the value of the Sun? What is the value of the Universe? What is the value of a quark? These questions don’t make sense because valuation is not like electrical charge or quantum spin or physical age.
First off, let me say I am neutral in this debate… I am not arguing for or against Bitcoins. I am skeptical about it, but if others want to go and take the risk, more power to them. But I do not think that ‘intrinsic value’ has anything to do why I am skeptical about Bitcoins. It is contradictory to say such a term in my opinion because value is subjective. This reminds me of a topic on this forum a few months back dealing with this whole intrinsic value thing. If people value X, then X is going to have value, if people dont value X, then X is not going to have value.
