Debt is created when a commitment is accepted by any party of a trade.
1a. Debt takes on the definiton of money when this commitment can be traded in the market because it is now spendable.
Goods are created when man mixes labor with land to produce something tangible
2a. Goods take on the definition of money when tangible things or representations of tangible things can be traded in the market because it is now spendable.
There are two irreconcileable definitions. Why do austrians use the term money when the bankers have already pulled off the greatest hoax labeling something that has two parts only to mean spendable?
Since mankind has been divided, categorized, and thereby controlled through the use of labels for centuries how come austrains have not thought up a simple replacement label to bring the absurdity of this two part only one half is important label out of the shadows?
I think austrians should consider letting the bankers have the label money and let it be fully defined as: Debt or commitments that are spendable.
Label goods that are spendable as something else and further label _________ that are spendable as something else.
Starting to wonder if I am on or off the reservation with my line of thought. I have previously witnessed this forum quickly tear apart assertions about anything related to money or economics that doesn’t belong with prejudice
If someone wants to accept gold as a payment for a good or a service, its fine with me, and it gives gold the role of money.
If someone wants to accept a bond as payment for a good or a service, its fine with me, and it gives the bond (debt) the role of money.
Would you really have a problem if someone voluntarely wants to accept a bond as a payment for some good or service he/she is selling?
The real problem its not the debt, the real problem is that the bankers enjoy the monopoly on money granted by the government and therefore they can over extend themselves “all they want” and without suffering competition. Without the monopoly the bankers would not be able to do all this they do now. And if they did they would go bankrupt and disappear.
I think there is “fiat money” and “commodity money” to describe the two things you mention.
I also think you are saying that in the current system fiat money is always created as part and parcel of some kind of loan, which is true. But the Austrian understanding is that that is not relevant. What counts is that the money is not a commodity, but forced on people by law.
I think there have been a few threads here talking about the debt is ruining us idea, and why Austrians disagree.
The Gold Standard representation of the story
Some scholars[6] have theorized that the images and characters used by Baum and Denslow closely resembled political images that were well known in the 1890s, specifically the debate of the day regarding monetary policy: the “Yellow Brick Road” represents the gold standard, the silver slippers (which were ruby slippers in the film version) represent the sixteen to one silver ratio (dancing down the road). Many other characters and story lines represent identifiable people or circumstances of the day. The wicked witches of the east and west represented the local banks and the railroad industry, respectively, both of which drove small farmers out of business. The scarecrow represents the farmers of the Populist party, who hoped that their indebtedness would reduce if the dollar were to be partially exchangeable with silver. The return to bimetallism would increase inflation, thus lowering the real value of their debts. The Tin Woodman represents the factory workers of the industrialized North, whom the Populists saw as being so hard-pressed to work grueling hours for little money that the workers had lost their human hearts and become mechanized themselves (see Second Industrial Revolution). Toto was thought to be short for teetotaler, another word for a prohibitionist; William Jennings Bryan, the fiery popular candidate (possibly the Lion character) from the Populist Party, was a teetotaler himself. Bryan also fits the allegorical reference to the Cowardly Lion in that he retreated from his support of free silver after economic conditions improved in the late 1890s. It has also been suggested the cowardly Lion represented Wall Street investors, given the economic climate of the time. The Munchkins represented the common people (serfdom), while the emerald city represented Washington and its green-paper money delusion. The Wizard, a charlatan who tricks people into believing he wields immense power, would represent the President. The kiss from the Good Witch of the North is the electoral mandate; Dorothy must destroy the Wicked Witch of the West—the old West Coast “establishment” (money) with water (the US was suffering from drought). Moreover, “Oz” is the abbreviation for the measuring of these precious metals: ounces.
Two Bits Four Bits Six Bits a Dollar all for a Silver Dollar stand up and holler!
The monopoly on money is real. Imposed by the government and benefiting both bankers and politicians, because both can spend more than they could otherwise (banks lending, politicians spending).
Legal tender laws and taxes are the main ways that government use to impose the monopoly on money.
Try doing some transaction in other currency and see how the government sets the exchange. You will get to pay more taxes than if you payed in dollars, because the government will set the exchange favorable to itself. F.e. if you buy a house with gold, the government will set the exchange between gold and dollars very favorable to itself, and you will end up paying a lot more in taxes than you would if you just sold your gold for dollars in the market and bought the house with dollars.
Also, legal tender laws basically give the judicial branch the capacity of breaking a contract. F.e. you specify that you want some service you provide to be payed in silver. If they guy does not pay or refuses to pay in silver, and you go to a judge he will ask the guy to pay you in dollars, even when your contract specifies that you only want silver. Legal tender laws stablish that any debt can be settle in dollars, so you migh as well accept dollars directly and avoid the judge part, since that is going to be the outcome anyways.
The law gives the paper dollar an unfari advantage over any other money, creating a de facto monopoly. Yes, you are not forced to use paper dollar, but the law makes it difficult enough for you to use any other currency. And I am sure that if people found a way to go arround the present laws and the system got big the government would enact laws to stop it. And as long as the government has the monopoly on money, they can really abuse the system and create the boom and bust cycles.