> Fiat money can be printed.
And inflation is a tax.
And inflation is a tax.
This is not provable.
You're leading me nowhere because you aren't actually saying anything at all. Try actually answering questions if you want to lead someone somewhere.
> How do you define "value"?
At a basic level, usefulness.
> Is labor worth anything?
Yes, I value (it is useful to me) being able to leave my house without everything being overgrown. I value (it is useful to me) having the yard not overgrown to the point wildlife take over my yard and invade my home. I value (it is useful to me) to not have the trees overgrow above my roof and eventually lose limbs on to my roof. The way I achieve these useful things is by labor. So the labor is useful, it has value.
> How do you find out?
I look at the usefulness of that labor. What would it cost for me to hire exterminators once rats and snakes and bugs take over the yard and then my house? What would I have to trade for a doctor to heal me once I get sick from the rodent infestation? How would I repair my home after the damage from the infestations? What does a new roof cost if I don't maintain my trees? How much do I have to work to ensure these things don't happen? Then finally, given the fact I only have 24 hours in a day and I have other wants, is it useful to me to exchange something with someone else (something they find use of) to do it for me.
But going back to "is past labor less valuable than current labor", well, today do I care more about the lawn being mowed and the trees trimmed properly or do I just value that I did it six weeks ago and that's good enough for me now? In the end, today the trees are overgrown. The lawn is getting tall. Rats are starting to live in the bushes. I need to get out there now, despite the fact I did it six weeks ago. The value of that work I did then is now less, because the realities of the world continued changing.
A baker baked a loaf of bread a month ago. Is that labor still worth something today? Is that labor worth the same, more, or less than if he baked a loaf of bread today?
Try answering any of these questions next.
We fundamentally do not agree on definitions. "Is useful to me" is subjective.
Value is subjective.
Allegedly a barrel of WTI crude is worth $76 today. I can go look up that price, and theoretically lots of people out there would trade at that price. If someone just dropped off a barrel of oil to my driveway, I wouldn't agree it is worth $76. It has no usefulness to me. I'd have to work (labor!) to move it off my lot someplace else. I'd have to find someone willing to take it and they'll probably want to buy it at a discount. Chances are, the value of a barrel of crude at my house is negative, not positive $76. Why is it worth negative to me while its worth $76 to others? Simple, its usefulness to those people. Those people buying it at $76 have the connections to trade it to the refiners. Those refiners have the knowledge and tools to turn it into other things more people find useful. And finally, I'll find use from it and buy something made or protected by the plastics or use the energy from the gasoline or diesel they get from it.
But how can that be? You're suggesting value isn't something subjective!
Lead me places buddy. Tell me your definition of value then. Explain to me how value isn't something subjective.
> You're assuming your questions are even answerable in the context you're providing.
Most would see it as a very simple answer. A baker wants $1 for him baking a loaf of bread. Would you pay him the same, more, or less today for his baking labor a week ago compared to the labor he just did five minutes ago? This shouldn't be a challenging question, most probably know which loaf they want.
> Lead me places buddy.
If, let's say, this baker was to create a new oven, that somehow magically, did not radiate heat, and so the input energy was DIRECTLY put into baking the bread. They, would be able to lower the cost to the consumer as they had less energy costs? They would be able, to make their process more efficient, by being less wasteful. (You could apply this to a new internal combustion engine too for instance.)
The bread does not become more valuable, but the difficulty to provide it has been lessened, because of entropy minimization.
Value, I believe, is a product of thermodynamics. Things are useful, because they allow you to be more efficient, and use less energy.
> I would want today's bread
So right there we see a difference in the value of what was produced a week ago to what was produced today. If the value of his labor was constant, why wouldn't you value his work put into that loaf the same? Shouldn't the two loaves be similar? Ah, maybe because the world continued on so the fact he made bread a week ago doesn't matter as much anymore, as if it's not as useful or valuable anymore. Hmm...
> I don't think this is really the same as your first mowing comment
It is precisely the same. Sure, the day it was mowed it was worth the same to me as a freshly mowed lawn today. But the usefulness of my mowing became less over time because the lawn and the trees continue to grow. I need to keep doing it.
The baker can't just bake all the bread a week ago and expect people still value it the same. The world marches on, the bread goes stale and moldy, the yard keeps growing.
But someone labors and makes a more durable good, and that labor (usually) holds its value a good bit longer. Not forever though, as that washing machine or car will also rust away and become less useful over time.
In the end though, everything we do will eventually be worth nothing. Everything you make will fall apart, everything you write will be forgotten.
> price is the consensus of "what people are willing to pay" vs "the difficulty in providing the item"
It's almost like you're describing usefulness here. How useful is it to the people buying it versus how laborious it was to make it. Funny how that usefulness metric still shows up here.
> Value, I believe, is a product of thermodynamics. Things are useful, because they allow you to be more efficient, and use less energy.
This does nothing to explain why that barrel of crude is worth negative dollars to me while its worth positive dollars to others. If it is some product of the laws of thermodynamics that make a barrel of crude worth $76, why do the laws of thermodynamics behave differently around me than some commodities trader? Or maybe this whole "iTs thErMoDynAmicS" is just fluff around "things have value because they're useful"?
It also fails to explain why you value that loaf of bread today more than the loaf of bread from a week ago. The energy cost for that loaf was the same. If it all boils down to energy, should the bread be the same price? Don't they have the same value? Why are you being so subjective about your valuation of the two loaves of bread?
I mean, your last sentence essentially points out that "product of thermodynamics" ends up being just a measure of usefulness...so...one could just say value is a subjective measure of usefulness?
And even then you argue things have value because they make me more efficient. So how does this explain the "value" of a rare baseball card or a fancy work of art? Does taking a vacation really make me more efficient? Maybe I just really like the color red, so I spend more on a red car that looks cool, it was more valuable to me, but did that make me more efficient? I like cinnamon raisin bread and sometimes pay a premium for it, did that somehow make me more efficient? No, but it's useful to me because I subjectively derive happiness from these things.
Some people hate raisin bread, and to them that loaf is worth less than a regular loaf of wheat or whatever. Or if I'm making a ham sandwich, I don't think I'd normally want to use raisin bread for that, so I wouldn't generally put a higher value on regular bread over raisin bread in that case. It's not anything about efficiency, it's about subjective measures of usefulness.
Metaphorically. In the way time spent commuting is a tax. Or taking your kid to a doctor is a tax.
If in January, you can buy something for $1, then in February because of inflation it becomes $1.10, that's a 10% tax increase.
It is, though largely due to confusion rather than intentional metaphor. (Exception: when described as a “shadow tax,” though that is still a close metaphor and only applies to debt-monetising monetary inflation.)
> If in January, you can buy something for $1, then in February because of inflation it becomes $1.10, that's a 10% tax increase
You’re confusing taxes and costs.
When Russia invaded Ukraine, they didn’t levy a tax on poor Egyptians even though Moscow’s actions raised their food costs. Cost increases are taxing [1]. Confusing something taxing with a tax [2] is a common mistake but still wrong. (And valiantly wrong in a policy context.)
If a government spends more than it takes in, in taxation, the difference has to come from somewhere, and invariably, it comes via inflation.
The choice to spend more than the governemnt has, is a choice, and is imposed, so is a tax.
Not all costs are taxes…
> If a government spends more than it takes in, in taxation, the difference has to come from somewhere, and invariably, it comes via inflation
Governments spent more than they earned before fiat currencies. They made up the difference by borrowing. Borrowing isn’t fundamentally inflationary; this is trivial to show with commodity money.
> choice to spend more than the governemnt has, is a choice, and is imposed, so is a tax
Every commemorative bill is a government choice. That doesn’t make National Talk Like a Pirate Day a tax proposal [1].
Consider the implications of your definition. Every cost and every government choice is a tax. At this point, taxes are so naturally occurring as to make the word meaningless.
You get a pay raise? A tax on your employer! Tesla stock goes up? Musk is taxing you! Governor went on a walk instead of driving? Taxation! Cat got sick? Mittens is taxing me with vet bills!
[1] https://en.m.wikipedia.org/wiki/International_Talk_Like_a_Pi...
I realize you have interpreted my comment as suggesting this, but that really wasn't my intent. It was really just about tax vs spend, and if they differ.
Consider a kingdom on the gold standard that borrows the gold it spends.
Their actions do not change the monetary base. They do increase the velocity of money, but by no more than had they taxed it (minus wealth effects).
I must be retarded because I don't see how this makes a difference. Even if you're getting 0% interest loan (unlikely) you still have to pay it back, which will eat into future taxation? And if you don't pay it back they would be justified adding duties to all exports, recouping that way, by inflated prices...
> Their actions do not change the monetary base.
Assuming they don't find more gold...
Yes. But the amount of gold in the system is always conserved. Monetarily, the fact that it's borrowed is irrelevant.
Also, if the borrowing is used to increase economic activity, it need not eat into future taxes for anyone. The classic example is borrowing to buy upgraded farm equipment, or to irrigate previously-fallow land.
> Assuming they don't find more gold
Orthogonal and thus irrelevant to the question of whether borrowing fundamentally causes inflation.