Economics as Politics
Preamble
Have tried to make sense of Economics, from time to time. I am an Engineer, educated as a Scientist, so not really my area. Problem is, though there is a great deal written, there is a great deal more myth than fact. Economics as a field feels very pre-Science.
Decades ago, tried to read an Economics text book. Could not get past the opening chapters, as the starting assumptions seemed quite improbable. (Something about humans as rational actors. Apparently the authors had not met the human race.)
There are many myths and theories around Economics (and not easy to tell apart). While some fragments seemed to fit together, the whole did not make sense. Then pieces of the puzzle starting falling into place.
- Wealth is not Money
- Money is a function of Government
- Economics is National Policy
- Cost of Context frames Taxation
- Taxation as a balance
- Over-accumulation of Wealth
- Expanded not of Property is recent
Conclusions:
- Money only works when backed by a stable government.
Puzzle-piece - Cryptocurrency and Money
Read the Satoshi/Bitcoin paper when it first came out. Boils down to:
- An implementation of a distributed ledger.
- The claim that somehow a line in that ledger could serve as "money".
The notion of a distributed ledger, backed by strong cryptography, is entirely reasonable (the so-called "blockchain"). Though the proposed implementation looked to have a problem with scale, at least.
Could it work (as a ledger)? Sure.
As a ledger, would it work well at scale? Unclear.
What brought me to a stop was the claim that this could serve as money.
We all know what money is, right?
We get paid in money.
We buy things with money. Simple.
But how do we fix the value of money?
Will admit, I did not understand money.
The more I thought about the topic, the less I understood.
So went off an read. One good book on the topic:
Making Money: Coin, Currency, and the Coming of Capitalism
Came to a single conclusion from reading through the complicated and messy history of money:
Money only works when backed by a stable government.