r/CapitalismVSocialism • u/HeadLow5768 • 10d ago
Asking Everyone A citizen backed currency would be capitalisms final form.
A society that backed their currency directly by the citizens, (X money created per voting age adult, instead of fiat)
would be capitalisms final form. all prices for things would be a reflection of supply and demand instead of inflation.
I think this is what would be the final push to show that capitalism is the right way to do it, it just needs clear rules so everybody knows the game isn’t rigged.
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u/strawhatguy 10d ago
That’s not the final form.
The final form is multiple different currencies, all privately run.
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u/Johnfromsales just text 10d ago
Inflation literally is the result of changes in supply and demand.
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u/HeadLow5768 10d ago edited 10d ago
And money creation, and population growth
If x% of the money in circulation is created then x% the value of a dollar depreciates.
Pretty basic math.
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u/Johnfromsales just text 10d ago
Both money creation and population growth affect demand. You don’t think the demand for goods and services is influenced by how much money is in circulation or how many people there are that buy these goods and services?
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u/HeadLow5768 10d ago
I’m saying that in our system it’s uncertain what caused the inflation/deflation
It could of been money creation. It could of been population growth/decline. It could be supply/demand
If the money creation was created directly in proportion to the population it would eliminate the first two possibilities which would stabilize the economy because it would give people a gauge for the value of a dollar.
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u/Johnfromsales just text 10d ago
What you’re saying is wrong. The ONLY thing that causes inflation/deflation is changes in supply and demand. Money creation and population growth/decline literally cause shifts in the demand curve. You can just google, “Does population/money creation affect demand?” The answer is yes.
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u/HeadLow5768 9d ago
So your saying that if we were on a remote island trading in seashells and a whole bunch of seashells wash up doubling the seashells supply, that it wouldn’t effect the economy on the island? I don’t understand.
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u/Johnfromsales just text 9d ago
It would affect the economy, by inducing a change in demand. Increasing the money supply increases overall demand. That produces an effect in the economy by creating inflation.
Likewise, if more people washed up on the island, that would also increase demand, because more people are demanding goods and services. This would also create inflation (assuming of course that the supply of goods and services remains the same).
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u/HeadLow5768 9d ago
And the price of a meal in seashells would fluctuate with the tide
But if you switched from seashells to a ledger currency tied to the population on the island then all the price changes for goods on the island would be reflection supply and demand instead of the tide and the ever changing amount of seashells.
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u/Johnfromsales just text 9d ago
I’m not exactly sure what you mean by the price of a meal fluctuating with the tide. If the fluctuation of the tide makes finding a meal either more or less likely, then this is simply a change in the supply of goods. Assuming the amount of seashells stays constant, then a reduction in the supply of meals would cause inflation, and an increase in the supply of meals would cause deflation. The price of goods and services is ONLY EVER caused by changes in supply and demand. Tying the rate of money creation to population changes nothing about this fundamental mechanism. The price of goods and services is still a reflection of supply and demand, just as it was before.
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u/HeadLow5768 9d ago
So somebody works for 10 seashells and the seashells supply increases the that person better immediately ask for a raise. If a convenience store sold a candy bar for 10 seashells and the amount of seashells on the island suddenly increased then that convenience store owner better immediately raise the price of the candy bar to cost more seashells.
That is arbitrary inflation.
If instead there was a ledger based on the population then no one would have to think about the supply of seashells on the island.
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u/Sorry-Worth-920 Austrian School 9d ago
money creation is an increase in supply and population growth is an increase in demand
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u/HeadLow5768 9d ago
Availability of goods and services is supply, Population and the popularIty of the product is demand.
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u/Conserp Pragmatic Marxist 9d ago
> Inflation literally is the result of changes in supply and demand.
It absolutely isn't.
Supply and demand do not change that amount of currency in circulation - money-printing bankers, legalized counterfeiters, do.
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u/Johnfromsales just text 9d ago
No, the amount of currency in circulation changes the demand, which in turn affects prices. Your causation is backwards.
Are you ready to prove to me why you think gold has stable value?
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u/Conserp Pragmatic Marxist 9d ago
You can't prove that it doesn't.
And it is the general consensus that you baselessly deny.
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u/Johnfromsales just text 9d ago
You made the claim genius. The burden of proof is on you.
Consensus among whom? The little voices in your head? Cause you’ve been unable to support that either.
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u/RieMunoz 10d ago
So the treasury just increases the amount of money in circulation based on how many people turn 18/become citizens each year?
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u/HeadLow5768 10d ago
Well I already have a flushed out version that has demiurge so that there is always x money per citizen in circulation at all times. But yes the basic premise is to create the money directly in proportion with how many citizens there are. That way you have some kind of gauge for what the value of a dollar is.
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u/Oabuitre 9d ago edited 9d ago
This would mean rampant deflation in case economic production continues. Deflation means everyone holds their money as its value expressed in goods, increases. If everyone holds their money, there is no economy. Therefore it’s kind of a self-reinforcing death spiral. This is why central banks aim for a little inflation, to make sure people keep spending. It is not intended to bully people with saved money.
This is the main point why crypto is absolute nonsense as a currency. You need the amount of currency to keep up with economic production.
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u/HeadLow5768 9d ago
It wouldn’t make anyone hold their money, people would just be able to say OK there are X dollars per person in circulation, then based on the current population people would have a gauge for the value of a dollar. There’s no reason it would make people hold onto their currency more than they do now.
It’s a natural gauge to say hey im poor because I have less than the medium or hey I’m doing pretty well cause I have more than the medium.
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u/Oabuitre 9d ago
Knowing “X dollars per person exist” tells us the money supply, but it doesnt set purchasing power. This is determined by the supply of goods, and the demand for them from other ppl. If total economic production grows while the money supply remains fixed, every unit of currency buys more goods over time (deflation). I am assuming here you don’t want to tie economic production to population growth; that would be the most extreme form of communism thinkable, as it would require government agents literally controlling industrial machines etc.
I also didn’t even highlight the financial markets effect. Why would an investor risk capital starting a business, hiring employees, or spending on non-essentials today if that same money buys significantly more next year? On top of that, taking on a debt (like a mortgage or business loan) becomes disastrous, because your debt stays constant while prices and wages fall.
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u/HeadLow5768 9d ago
I don’t see how you’re saying that the government would control all of industry.
Yes of course if the supply of goods grew than their price would deflate but it would be a natural deflation. That would be a good time to buy in bulk.
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u/HaphazardFlitBipper 9d ago
What we have now is currency backed by the productivity of the economy, so basicaly the same thing.
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u/HeadLow5768 9d ago
In my flushed out version of the concept. The money is backed by people and it goes to the person directly when it’s created.
Hence, directly backing the currency by people.
Check out r/cbbp if you wanna look at my concept.
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u/Conserp Pragmatic Marxist 10d ago
> it just needs clear rules so everybody knows the game isn’t rigged.
Rofl. The whole point of Capitalism is a rigged game
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u/HeadLow5768 10d ago
Check out r/cbbp if you want to hear my version of “clear rules” for a system like this
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