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  1. #1
    Alexander the Terrible yenom's Avatar
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    Post money in capitalism

    Alot of people are saying that money is just a medium of exchange. I disagree with this definition. Alot of people are willing to exchange something for money(sell), but they often refuse to exchange their money for something (buy) other than the basic commodities. This makes it mucxh harder to trade something for other people's money. So even as a medium of exchange, there is an inbalacne of trade.

    alot of people WOULD exchange their money for food, energy water heat and electricity But other than this, it is very difficult for people to cough their money.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  2. #2
    pathwise dependent FDG's Avatar
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    This doesn't change anything, untypable. They want money on their hands precisely because it has purchasing power (= it is a medium of exchange). Another property of money (that, if you had read your economics texts with some attention, you would know) is that it's a stock of value, so it serves as a way to store the value you have created with your labor in a compact and readily expendable way.
    I think you should really understand these things better before proposing these whacky theories.
    ENTj 7-3-8 sx/sp

  3. #3
    / booyalab's Avatar
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    Quote Originally Posted by FDG View Post
    They want money on their hands precisely because it has purchasing power (= it is a medium of exchange).
    Yeah, exactly. I would love to sell some used gum off the bottom of my shoe for $100, but most people would consider that amount of money to have higher purchasing power. And they'd be right.
    Quote Originally Posted by untypable
    This makes it mucxh harder to trade something for other people's money. So even as a medium of exchange, there is an inbalacne of trade.
    Do you imagine we live in a world where businesses are somehow being forced to sell certain items that the market doesn't want or need? That might happen in centrally planned economies, but those businesses don't last in a free market. So what does this have to do with capitalism?
    I don't wanna!

  4. #4
    Alexander the Terrible yenom's Avatar
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    You say that money is a medium of exchange, and that you can exchange money for anything.

    This is true, but there is a flaw in the exchange systyem.

    Money can be exchanged for anything
    But not anything can be exchanged for money

    And in the present day monetary economy, things have value only when they can be traded for money. This is the problem I want to point out.

    Yeah, exactly. I would love to sell some used gum off the bottom of my shoe for $100, but most people would consider that amount of money to have higher purchasing power.
    You cannot sell somethingabove the market price, you can only sell below it.
    And this points out to what I said, not anything can be exchanged for money.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  5. #5
    Alexander the Terrible yenom's Avatar
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    Well generally , I start this because I wanted to know the role of money in capitalism.
    How does money drive the capitalist system into prosperity? and different from other economic system as per say mercantilism or central planning.

    How do some people's income keep multiplying, while other poeple grows poorer and poorer and poorer.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  6. #6
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    Quote Originally Posted by booyalab View Post
    Do you imagine we live in a world where businesses are somehow being forced to sell certain items that the market doesn't want or need? That might happen in centrally planned economies, but those businesses don't last in a free market. So what does this have to do with capitalism?
    Oh... you mean like the companies that go under that the government bails out?

    I'm just pointing out how anti-capitalist this practice of government bailouts and nationalization is, because as you said, businesses will be forced to sell items that the market doesn't want or need and will not be allowed to fail and be replaced by companies that truly support what the public needs/wants.

  7. #7
    Oberon
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    Quote Originally Posted by untypable View Post
    You say that money is a medium of exchange, and that you can exchange money for anything.

    This is true, but there is a flaw in the exchange systyem.

    Money can be exchanged for anything
    But not anything can be exchanged for money

    And in the present day monetary economy, things have value only when they can be traded for money. This is the problem I want to point out.

    You cannot sell somethingabove the market price, you can only sell below it.
    And this points out to what I said, not anything can be exchanged for money.
    Premise: If you sell your goods below market price, you're either being altruistic, being foolish, or you're working a strategy. That isn't the money's fault, or the goods' fault.

    And there's really no imbalance to the equation, either. Money is useful for trade precisely because it can be exchanged for everything else that is bought or sold in the economy. That is its purpose, its use. If it were somehow legally limited in its utility, we'd have to reinvent it.

    But just because money has a utility value doesn't mean that other items do not. Let's say I have a truckload of shoes, and you have money, and we agree to exchange some of my shoes for some of your money. Let's say we both know the current market value of both the money and the shoes, so we both know exactly what the exchange rate is in terms of dollars-per-shoe.

    If you give me more value in dollars than my shoes are worth, you're being either altruistic or foolish, or you're working a strategy (see the premise).

    If I give you more value in shoes than your dollars are worth, I'm being either altruistic or foolish, or I'm working a strategy (again, see the premise).

    See the symmetry?

    There's no reason to be hung up over the fact that I can't buy a dozen donuts with one of my shoes.

  8. #8
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    Quote Originally Posted by untypable View Post



    You cannot sell somethingabove the market price, you can only sell below it.
    And this points out to what I said, not anything can be exchanged for money.
    In capitalism (I hope you have had an economics class, at least one), the prices of goods are determined by the demand. The higher the demand, the higher the price. If something is not considered valuable or or scarce, then it cant be sold for much money. This is what drives people to create things of value that people want and need, because that is what allows individuals to make money. As a result, everyone does well because people have the incentive to innovate.

  9. #9
    Oberon
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    Quote Originally Posted by untypable View Post
    Well generally , I start this because I wanted to know the role of money in capitalism.
    How does money drive the capitalist system into prosperity?
    That's your problem right there. Money doesn't drive anything into prosperity. It's value that leads to prosperity.

    All money is is a piece of paper that represents an IOU. It's a symbol of debt. In our case, it's an IOU from the Federal Reserve to the bearer of the note. That in itself cannot lead to wealth. Money isn't in itself wealth, apart from its utility value. It has no intrinsic value, except the penny or so worth of paper in the note. Real wealth, real value, is in commodities, goods, services, return on investment. All money is is the medium of exchange.

    Here's an analogy for you: Electrical current is a flow of electrons from an anode to a cathode. Pick up a scrap of wire and look at it... embedded in its surface are trillions of electrons. Why can't you extract electrical power from the wire? It's not for lack of electrons. It's because the power of the electrical current was never in the electrons to begin with, any more than the power of a steam engine is in the water, or the power of an economy is in the money.

    Quote Originally Posted by untypable View Post
    How do some people's income keep multiplying, while other poeple grows poorer and poorer and poorer.
    Because, as they say on Wall Street, money always returns to its rightful owners.

    People who are wealthy generally have the habits of wealthy people, and continue to do the things that made them wealthy. People who are poor generally have the habits of poor people, and continue to do the things that made them poor.

  10. #10
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by untypable View Post
    Money can be exchanged for anything
    But not anything can be exchanged for money
    Because MONEY is a medium of exchange, not all the other stuff! hello? First you need the exchange, then the medium. If you can't find anybody willing to exchange your goods with you, then the medium doesn't even enter into the equation.
    ENTj 7-3-8 sx/sp

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