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Comment by RobertoG | Hacker News Reader

Of course, you are right that it depends on how you define money.

Money as debt, that I would argue is the modern conception of money, as opposite to an asset (like cigarettes in a prisoners camp or gold), comes from the state.

For examples of this I would recommend the book "Making Money: Coin, Currency, and the Coming of Capitalism" by Christine Desan.

Also, accounting (and maybe even numbers and writing!) were invented initially as a way as registering debt in Mesopotamia by what today we would call 'the state'

>> It's the idea that markets know what is better for us what many reject. >"I don't understand who is making that argument."

I don't understand what you say here. Maybe I misunderstand, but it's not the whole point that markets deliver better solutions for everybody that any kind of central planning?

I'm not sure how what I mean for 'us' is difficult to grasp. Human societies?

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The modern conception of money is that something is the a good of exchange and a good of account. I would argue both of those have been invented independently both in various decentralized ways and by a state.

You can also keep accounts in your head. The concept stays the same if you write it down or not.

If the notes you are circulation are IOUs for that good then that does not change the underlying concept.

> Maybe I misunderstand, but it's not the whole point that markets deliver better solutions for everybody that any kind of central planning?

Markets come about as soon as you have property rights. Property rights come about in many ways (I have other comments in this thread making this point).

When you of course go impose a property rights solution on a society then that is of course a form of central planning.

So I would say again, you can have both, you can central plan a market, but not all markets are centrally planed.

Frankly all of them seems to be invented privately, and then gets backed by the state as a last resort when private parties gets into a dispute and risk taking a large part of the economy down with them.

And apparently the notion of debt exited long before the notion of money. And even afterwards money was something used between individuals that didn't know each other (different tribes effectively).

Some think that money in the form of shells existed back to at least 75,000 B.P.[1]. Language and controlled fire arose around the same time. Money (easily transferable anonymous debt) may have been used by (proto?)humans before the notion of words. Money may have been one of the few keys to the rise of human dominance.

[1]http://nakamotoinstitute.org/shelling-out/

How do you explain free banking then? Banks issued their own notes (fiat debt instruments) to gold depositors. This was not a good system in the end, which is how central banking and the national note as the only legal currency arose. But it lasted anywhere between 20-100 years in most countries. I too think the state has a role in defending its currency but saying they invented debt money does not square up with history.

Piketty and others have covered this. Debt is primarily a political obligation - in the sense that it's a reified power imbalance in which one person with power "lends" it to another in the hope of making a bet that increases the status and influence of the lender.

It may or may not increase the status of the borrower at the same time. As long as the lender's status and standing are increased, either outcome is acceptable.

But if the status of the borrower increases while the status of the lender is decreased - because of a "default", or some other outcome that damages the lender - the transaction is considered morally offensive.

Banks are simply professional lenders. If the transaction were purely numeric and not political they'd be peripheral to the economy instead of central to it.

> Debt is primarily a political obligation

This is question begging to say the least. Political obligation [0] is "the moral duty to obey the law". Debt is money owed to someone [1]. Is that a political obligation? Yes, if the laws concern themselves with debts. But what if the law didn't concern itself with debts do you cease to owe money to someone? Not if they are able to enforce the contract of the debt in some other manner.

> Banks are simply professional lenders. If the transaction were purely numeric and not political they'd be peripheral to the economy instead of central to it.

Yes, state intervention in money markets is of monumental importance in achieving the system we have now. But it wasn't always like this and those systems were far from peripheral [2]. Free banks put themselves in debt every time they issued currency and the state was absent from the interactions.

To clarify, I'm not advocating against the state's importance in defending debt money. The free banking days of multiple competing notes was one of volatility and disastrous crashes. What we have now is strictly better than before. But to say that fiat currency "comes from the state" as OP did is simply not a historical fact. Period.

0: https://plato.stanford.edu/entries/political-obligation/ 1: https://en.wikipedia.org/wiki/Debt 2: https://en.wikipedia.org/wiki/Free_banking

> I'm not sure how what I mean for 'us' is difficult to grasp. Human societies?

I think the idea they're getting at is that collective preference isn't always well defined / well-define-able.

You're aware of Condorcet's paradox, right?

(Generally, one expects a person's preferences to be transitive, I.e. , if you prefer a to b, and you prefer b to c, then it is generally expected that you will prefer a to c. However, if you have a collection of people, all of whom satisfy that property, and have the group vote on what the "group preference" is between each pair of options, the "preferences of the group" will not always satisfy the property.)

This, along with a number of similar things, seem to suggest that maybe, at least sometimes, there is no "group preference". That the group cannot be treated as if it is an individual with coherent preferences.

So, if "we" can't always be treated as an individual who has coherent preferences, then maybe there's no coherent way in which "we" prefer something else to what the lawnmower does, in some cases.

Now, maybe in many practical cases, this isn't an issue. Idk. I mean, it certainly seems like humanity would "collectively prefer" not to be destroyed by nuclear war, or tortured to death, or whatever. Maybe even for most important things. I think the question would then be "in which cases are societies 'collective preferences' well defined, such that there is an achievable outcome which is 'collectively preferred' to what the market outcome would be?". This seems like an important question to me.

Another thing I find relevant is the VCG mechanism for social choice.

> I'm not sure how what I mean for 'us' is difficult to grasp. Human societies?

This is actually a kinda fundamental thing. I think one big (if not the biggest) reason people often talk past each other on such topics is that the concept of a society as an entity that is endowed with agency and preferences seems natural to some people and absurd to others, and it rarely explicitly comes up precisely because both beliefs are so fundamental.

Also, few people literally hold that markets provide "better solutions for everybody that any kind of central planning", at least in the short run. Trivially, a central planner who imposes a 1% tax on all incomes and keeps all proceeds for himself is going to be much better off with central planning :)

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