thegreatdivide wrote on Mar 11^th, 2024 at 11:13am:


No I am not. Try again.

freediver wrote on Mar 11^th, 2024 at 11:47am:


First question (which you ignored, in true fraudiver mode):

Can you describe the basis of the  'shared belief' in the value of the currency?

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Not really. These days, most people probably just take it for granted. They believe it because their experience tells them that it is true. But the history of it would be fairly complicated. It is actually quite a remarkable, and on first appearance fragile, belief.

As with all intersubjective realities, it does not matter why people share the belief or where it comes from. What matters is that they believe. Everyone believes that if you walk into a shop with some cash, the owner will accept it in exchange for something of real value, like a loaf of bread. Even if every single person had their own unique, incorrect and absurd reason for this belief, it would still work.

Consider what would happen if a significant portion of the population suddenly stopped believing in the value of money, due to some new ideology, fad or mania. They would stop accepting it as payment, which would mean that anyone who wanted to pay them for any reason would not be able to use money. They would get rid of all the money they have, which would cause sudden deflation of the value of money (conventional inflation). If enough people were involved, these two effects - money losing it's value and doubt about whether you could even use it to pay someone, would cause the panic to spread, like a run on the bank, and more and more people would refuse to accept money, just in case it became unusable or continued to rapidly lose value. I think the only thing preventing this from happening is the convenience of money, which makes people want to believe it has value. It is easy to imaging this sort of panic and loss of belief to set in in simpler times, maybe over a century ago, but in those times a barter economy probably coexisted alongside a money economy quite happily. However the complexity of the modern economy demands the convenience of money. To even question the value of money would be to question your entire financial and professional future, as most modern jobs would not be viable with the added burden of a bartered payment.

freediver wrote on Mar 11^th, 2024 at 12:09pm:


So far so good, we are in furious agreement...but we have problem; you can't describe the basis of what you are asserting.

Note re "experience": for generations people thought the earth was flat, because that's what their "experience" told them; later they thought the earth was the centre of the universe because the sun and planets appeared to circle around the earth. etc.

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Refuted above: awareness of reality is important, for men to advance in the universe. 

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Well .....for the sake of the argument, yes - IF the nation is able to supply sufficient bread; otherwise they will find a barrow load of money won't buy a loaf of bread. 

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MMT teaches the currency-issuing governments can create money out of thin air to fund government services, limited only by the resouces constraint (to avoid inflation).

I suppose this is an example of "some new ideology, fad or mania".....a bit rich, coming from someone who admitted he  "can't really" describe the basis of the 'shared belief in a currency's value'.....but let's read on:


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The convenience of money is a separate issue to belief in the currency's value, (which you admitted you  can't explain). 

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That's the challenge faced by MMT economists.

But be happy; the Oz dollar will maintain its value so long as Oz can maintain its productivity and produce much of the things it needs (and flog iron ore to China...).

You cannot create value out of thin air.
Money represents value.

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I said the basis of the belief is irrelevant. I am sure if I was interested enough, I could dig it up, but why bother?

freediver wrote on Mar 11^th, 2024 at 1:25pm:


And I proved you wrong; if we still believed the earth is the centre of the unverse, we wouldn't be landing craft on Mars. 

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Why bother?

So that we can grow the economy more efficiently (without economic cycles), and have the currency-issuing government better fund the building of schools, hospitals, and vital infrastucture, instead of letting the self-interested "invisible hand" private sector overly  determine the  allocation of the nation's resources eg, building more casinos.

thegreatdivide wrote on Mar 11^th, 2024 at 2:09pm:


You are confused. No-one else is arguing that belief can change the shape of the earth. This is merely yet another example of your idiotic strawmen.