What would a world be like where monetary value was abolished?

[jamie4281]

What would become the new "currency"?
Would we still need a Government? If so, how would they be elected without money?
What would happen to education, law, medicine and generating electricity?

[rov1100]

There is or was a system operating somewhere in the UK where cash is not used. Instead you got a credit note to use elsewhere for your services rendered. I don't know what the taxman thought of it!

[wildwood]

The bartering system worked in Ye Olden Days to some extend because there was no transport to speak of. Without this it would be a bit difficult to send a cow to Taiwan to swap for a new TV.

Some form of government is always needed with gregarious animals, even if it is just a pecking order.

[jake-the-peg]

So you go and work for someone - say a baker and in return he gives you 20 loaves - you can't eat 20 loaves before they go o soe gives you an IOU for each one.

Now someone comes and does some work for you and you give him some of the bakers IOUs because you don't have anything else he wants.

Now we have a currency going on.

But there are problems with it - maybe the worker has enough bread or doesn't know or trust the baker not to go bust so we have a central clearing house set up on a bench in the town - the guy's Italian so he calls his bench a Banc.

The Banc exchanges IOUs from different people and determines how much one is worth compared to another but this is troublesome so the Banc starts issuing it's own IOUs and because they have so much clout everybody trusts them and just starts using these Banc notes instead.

This clout is what iportant - the Banc controls the supply of them and everybody trusts it - if it loses the trust the whole system falls apart and we start from scratch again.


It's all about trust and bank notes, bonds, futures, rov's credit notes all of it is just promisses being exchanged by people and tracking those promisses

[New Judge]

And it usually works quite well within a single economic area (usually a nation state). Where the problems begin is when the banc’s IOUs are taken elsewhere. Banks in other areas may not value the banc’s notes in quite the same way, placing either a higher or lower value on them. This is probably because the “output” from all the bakeries in that area is not quite the same as the area where the IOUs originated. (Workers in the second areamay only be given 10 loaves for their week’s work).

Of course, if the second area is forced to use the IOUs issued by the first banc (and only them) they will initially be overjoyed. After all, those notes are worth twice as much as their equivalent. But the people in the first area soon get fed up with this because those who only earn ten loaves a week are being given IOUs worth twenty which they can come and exchange in the first banc.

A bit complicated, I know. But I think you can see what I’m getting at.

[jake-the-peg]

No I can't

Your desperately trying to make an Anti-euro point and the analogy is failing dismally.

it's as if you imagine that a factory worker in Poland gets paid the same (number of loaves) as one in Germany.

However we don't live in a centrally managed economy like that so the analogy fails

[Elderman]

As this is happening in all over world, One time germany was not without its money problems. Before World War I, the value of the German mark was flying high. But by the year 1923, I, as a German mark, had so deflated in value that a wheelbarrow full of money would not even buy a newspaper. People were cashing in 20-year paid-up insurance policies for a single loaf of bread. What one American dollar would buy, it took a trillion of my German counterparts. When the one-thousand-billion-mark note came out to make it more convenient for the spender, it was so worthless that few bothered to wait for their change. It finally took a whole new monetary system to bring the nation to some kind of stability.

How well this illustrates the devastating effect ,But it also exposes the illusory power of money. What is here today can be gone tomorrow. As the Bible realistically warns: “Your money can be gone in a flash, as if it had grown wings and flown away like an eagle.” (Proverbs 23:5)

[jomifl]

What bible would that be Elderman? I can't seem to find that quote in the regular one

[New Judge]

No that’s not what I imagine at all jake. Quite the contrary in fact and you will note in my earlier answer that I mentioned the disparity in the number of loaves earned.

As Poland does not yet use the Euro and is now probably never likely to do perhaps we should use somewhere like Estonia – GDP per capita half that of Germany. It is precisely because a factory worker in Poland – or Estonia - is not paid the same number of loaves as one in Germany (coupled with the fact that their tax and spend strategies are so diverse) that the single currency cannot work. The lack of a centralised economy is the very problem the Eurocrats are desperately trying to overcome. So desperate are they in fact that they have recently overseen the removal of two democratically elected heads of government and seen them replaced with unelected Eurocrats who are more “on message”. Last week’s “summit” was about nothing other than fiscal convergence. Unfortunately such a regime is unlikely to be introduced at all and certainly not in time to avert further and greater chaos.

I think it is widely accepted by people who are far more well versed with these matters than I am that without a single fiscal regime a single currency cannot work. The Euro adequately and disastrously demonstrates this. Just about the only people who will not accept this are the politicians who launched the whole shambles and those around now who are trying to perpetuate it.

Your analogy of loaves to currency works perfectly. So perfectly that my extension of it to demonstrate how a single currency without fiscal union is flawed also works.