It annoys me that it’s taken me this long to start figuring out, I think, why and how money works.
I started writing a long rambling post here on the subject, but it’s too much of a mess so I’ll just skip to the punchline.
Our modern currencies are so-called “fiat currencies”. It used to be that, for example, “a dollar” actually represented and could be traded for a specific amount of refined metallic gold. Now, it’s not really redeemable for any pre-specified amount of anything. I don’t really see this as a huge problem unlike some people, but there is a lot of noise lately about how we need to go back to “the gold standard” (i.e. back to the time when a “dollar” was directly redeemable for some fixed amount of gold). My problem with this is that gold is mostly useless, really. If there were really some sort of horrible society-destroying catastrophe, about the only thing you’d be able to use the gold for is as a bludgeon to club people with (gold is quite heavy, at least), or maybe as radiation shielding if you’ve got enough of it stacked around your basement. If we’ve got to go back to an “asset-backed” currency, I think it ought to be pork-bellies. Or wheat. Or maybe heads of lettuce.
Better still, make it a “basket” of all three, so that fluctuations in the value of one of those three things doesn’t screw up the value of the currency. Plus, then you could redeem 3 $1US bills for a BLT sandwich.
What prompted me to start typing, though, was the thougts of how badly at the mercy of economic parasites we are in the modern world though – I’m thinking here mainly of abusers of “intellectual property” monopolies like broad idea patents and eternal copyrights, who demand tribute before you’re allowed to participate in just about any modern activity using the internet or other digital medium. And then the shocking, horrifying thought came to me: “mp3-download-backed currency”.
If anyone needs me, I’ll be over there in the corner, curled up in fetal position, rocking back and forth, and whimpering occasionally.