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The Cult of the Golden Calf

“The consumer’s good is always the 1st order, regardless of how far back we push the analysis, even if we go back to axes carved by prehistoric men.” – Robert Murphy

Wrong! Victor Aguilar sees the source of value in the future use or exchangability of goods, not in their past costs of production.

“Investors seek the intrinsic value of gold to protect themselves from inflation.” – Ron Paul

Wrong! Victor Aguilar believes in the subjective theory of value; nothing has intrinsic value.

“All political truth can be found in a coin shop.” – Jeffrey Tucker

Wrong! Victor Aguilar believes that coin shop owners are hucksters, preying on weaklings and paranoids.

Do you believe in Austrian Economics? He whom you dread awaits: www.axiomaticeconomics.com/golden_calf.php



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We have endless options of choice with regards to goods ...

We have one option to pay for those goods, a central bank issued note.

Make it legal to accept other currencies, freedom will be ours.

WAHOR!!
http://www.dailypaul.com/node/48994

mathematicians always forget

the human factor. Economics is more than equations.

So is this what they are going to sell to us as what backs the

world currancy "energy" and we will be taxed on energy also. Like a carbon tax. hahahaha

Running it by the old paulites to see the resopnce you get. Well here is one for you. We want all your gold and we want to be the producers of the electricity and you can have all the shells you rich people can pick up off the creek bed.

I agree

that gold has value only when it is valued. The native Americans were surely familiar with the tiny yellow flecks of gold in the streambeds of California but they saw no reason to amass quantities of it. Some tribes used rare dentalium shells as money. They could have used gold instead but it probably never occurred to them. The gold lay where it was until people arrived with a culture that placed a great value on gold.

The past usually holds our best indications of the future. While there is no guarantee that gold will have great value in our future, its repeated use as a medium of exchange throughout the history of civilization leads us to accept its future value as a working premise. Same with silver.

New Hampshire and Ecuador.

I just started a new thread titled,

“'Fiat Money' has two definitions – let’s not talk past each other!"

Be the first to post a comment!

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Shaka, you so crazy! www.axiomaticeconomics.com

The link:

www.dailypaul.com/node/58740

Thanks, Phoobaar, I guess that was kind of obvious.

____________________________________

Shaka, you so crazy! www.axiomaticeconomics.com

Uh, why don't you link to

Uh, why don't you link to it?

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Liberty for Dummies

Republicae's picture

Let’s take a good look at

Let’s take a good look at what it means to have intrinsic value. Intrinsic value would indicate that if, and only if it has some type of value in and of itself based on some factor outside of a utilitarian use.

Now, taking that into consideration, does gold have intrinsic value outside of utilitarian use? I would say that to find that answer we would have to naturally look into the deep recesses of the historical record. What first caused mankind to look upon gold and then to value that metal? Certainly, there was something intrinsic within the metal itself to cause it to be noticed in the first place, the same is true with other metals such as silver, and copper. If you look at Neolithic and bronze-age civilizations therefore, there was something about the metal that caused it to not only become a sought after commodity, but one that could be traded. My contention is that gold did not serve prehistoric man in an area which he needed most, to perform a utilitarian value because it was not suited for tools or weapons, the things he needed most to survive the harsh realities of the period.

So, was this indeed just a subjective valuation of the metal based upon utility or an objective valuation of the metal based upon the nature of the material itself? Why was value placed upon gold in the first place? What would cause Neolithic and bronze-age man to seek it out if he didn’t consider it of some value in and of itself outside a utilitarian need? If prehistoric man saw no utilitarian use for the metal, why did he value it? Was it simply because it was shiny, perhaps, but more likely it was the natural attributes of the metal itself that came to be valued, as well as the possible symbolic attributes that caused the Neolithic and Bronze-age people to look upon gold as valuable?

Therefore, as far as gold is concerned, it has far more intrinsic value based upon historic evidence than just about any other metal used. Certainly copper was valued, but its value was almost purely utilitarian, gold, on the other hand was not. The value of gold predates its use and value as money by thousands of years, therefore to say that it has no intrinsic value is to preclude the evidence of history itself.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Intrinsic Value. ... The kilo-watt hour

No matter which side of the intrinsic value of gold you are on, one thing is certain, gold has no real utilitarian use in today's society. That said, we still need something to back our currency with. Something that we have a steady supply of and that the supply can grow enough to keep up with the monetary expansion of the currency, based at a minimum, to keep up with population growth plus a percent or two.

The kilo-watt hour backed dollar, based on our coal, natural gas and new solar and wind powered resources could be the answer. We no longer produce much gold in the US and silver production is declining. Renewable energy sources are getting less expensive every day and by definition, renew. I propose that instead of spinning our wheels with word definitions we consider putting serious thought into 3 important issues: energy independence, a sound currency, and global warming. A kilo-watt hour backed dollar could possibly hit 3 birds with the same stone.

Republicae's picture

Have you ever wondered why

Have you ever wondered why people have always tended to gravitate toward the use of gold and silver for money? Have you ever wondered why “Statists” are always antagonistic toward the use of gold and silver as money? You will find a universal hatred of the use of gold as money by all autocrats, dictators, fascist, communist, Statist, etc.; no matter what political persuasion, gold is hated by most governments that seek to limit the freedom of their people, there is a good reason for that hatred, of course. It is interesting to note that sovereignty has always been associated with the use of gold as money; it promotes a type of independence that cannot be found otherwise and the reason for that is that once gold and to a degree silver, is filtered through a society the government no longer has a great deal of control over that money. As a commodity specie it has some very peculiar properties, most of which deal with the relationship between societal structure and political structure. The utility of gold as money is absolutely inseparable from economic and social freedom. Unlike any money devised in the history of man, gold has tended to promote more liberty in a society than any other form of money, perhaps that is why most kings, dictators, autocrats and Statist hate gold so much, it restricts their power in a very discernable way.

Its rarity also served a very important function as a monetary utility; it was not common therefore there was a perceived value within the commodity itself outside its use as money. As money, a gold dollar can never be a liability, it is always a positive asset, this is extremely important for commerce and government budgetary restraint, and you simply can’t fudge the books when gold is used as money. Gold is a protector of private property because it cannot be easily manipulated once in circulation as money.

As Mr. Greenspan said back in 1966 long before he sold his soul to the Monetary pirates:

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.”

“Men do not willingly read unpalatable truths of themselves. The people like those best who fool them most by pandering to their vices and flattering their foibles”—Admiral Raphael Semmes.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Republicae's picture

Strange, gold is one of the

Strange, gold is one of the most useful commodities known to man. It is used in electronics, computers, medicine, dentistry, aerospace, glassmaking and amalgamated high tinsel ceramics, etc, etc, etc....

“Men do not willingly read unpalatable truths of themselves. The people like those best who fool them most by pandering to their vices and flattering their foibles”—Admiral Raphael Semmes.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

"gold has no real utilitarian use in today's society."

That's about as brilliant as the "patriot" who said "I was a Ron Paul delegate, but for the sake of party loyalty, I decided to vote for John McCain...and they gave me great tickets to the Rage concert!"

Here is a little something to help you with your education.

http://www.science.gold.org/

"Those who make peaceful revolution impossible will make violent revolution inevitable."

John F Kennedy

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"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."
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People are Assets

material things have NO intrinsic value

Principle #5 - People Are Assets

One of the 13 Key Principle to Prosperity
http://fcd.freecapitalist.com/the-13-principles-of-prosperity

Principle #5
People are Assets; material things have NO intrinsic value

http://fcd.freecapitalist.com/category/principles/principle-05

and Rick Koerber’s other website…

http://freecapitalist.com/index.php

You're focusing on the wrong

You're focusing on the wrong point. Yes, gold has intrinsic qualities. It is shiny and malleable. But that gives it value only because we like shiny things that can be easily formed into pretty trinkets. And shiny trinkets only have value when we have leisure time to spend gazing at them.

Value is subjective and contingent on circumstance.

If gold had intrinsic value, other animals would desire it. They share our desire for food and water; why not gold? Because it is human desire that gives it value in the first place, and human circumstance that determines its position in the hierarchy of desires.

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Republicae's picture

Well, that makes no logical

Well, that makes no logical sense whatsoever, since animals to not sense value of any type, they only "sense" the requirements of their own survival.

Based upon your criteria then nothing has intrinsic value, whether it be a relationship or an idea, does for instance, the principles upon which the Constitution were founded have intrinsic value or is it simply subjective and contingent on circumstance? If that is the case then, according to your arument, the Constitution is based upon de facto or arbitrary interpretation since such interpretation would be contingent upon present circumstances instead of the de jure law of natural rights.

The Paleolithic, Neolithic and Bronze-age people knew nothing of value in terms of monetary utility, they didn't value gold based upon some notion that it had a value based upon a utility for exchange, although that did eventually take place, they valued it for what it was and for the attributes inherent within it. If that does not describe intrinsic value then I don't know what does.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

I can tell that a debate

I can tell that a debate with you would be futile, since you don't appear to consider Homo-sapiens to be a species of animal. That's going to be a major stumbling block to our discussion, because it means that we view things from completely different perspectives. At any rate, I'll respond to the above...

...animals to not sense value of any type, they only sense the requirements of their own survival.

Not true. We're not the only animal that values non-essentials. We're not even the only animal that values shiny things. Ever seen a crows nest after Christmas?

Based upon your criteria then nothing has intrinsic value....

Nothing does. Food and water have the appearance of intrinsic value, since you're not likely to have a lifetime supply of those essentials, but if you do happen to have a lifetime supply then they're no longer rare. Again: value is contingent on circumstance.

...does for instance, the principles upon which the Constitution were founded have intrinsic value...?

Of course not. The value of the principle of liberty is utterly subjective. Haven't you ever met a person who prefers to be told what to do? Menial jobs are full of them (that's not to say that only such people hold such jobs). Not everyone values individuality, either; some people prefer collectivism. History is replete with the tools and dupes of various leaders and causes.

...according to your arument, the Constitution is based upon ... arbitrary interpretation [and is] contingent upon present circumstances....

The argument of intrinsic value has nothing to do with constitutional interpretation. I'm not sure why you've dropped this red herring in my path. At any rate, the constitution is interpreted arbitrarily, as evidenced by the differences of opinion on the matter, and it is contingent on circumstances, as evidenced by the changes in interpretation over time. I'm not happy about it, but that's the reality.

[Ancient] people ... valued [gold] ... for the attributes inherent within it.

Yes, and their valuation of those attributes was subjective and contingent on circumstance.

Some people prefer dull metals. Most happen to prefer shiny. That doesn't mean gold has intrinsic value. Nothing does. Value is in the eye of the beholder, like beauty.

Moreover, our valuation of gold will drop sharply if our needs are not met. Again: value is contingent on circumstance.

If that does not describe intrinsic value then I don't know what does.

You've mistaken intrinsic qualities for intrinsic value. Qualities are intrinsic to objects, but our valuation of those qualities is not necessarily intrinsic to us.

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Liberty for Dummies

Republicae's picture

Actually, I don’t consider

Actually, I don’t consider any rational debate futile, however there is a huge difference between Homo-Sapiens than other animals, since, to the best of my knowledge Homo-Sapiens are the only animals which are fully self-aware, well most of them, well some of them, anyway. I fully understand what you are saying and the perspective from which you view the subject.

Please, do not confuse a crows attaction to shiny things the same as an interpretation or understanding of value, that is a stretch by any leap, even animal behaviorists will tell you that is not a part of an animal’s conscience based upon behavioral studies. They don’t distinguish value even though they may be attached to certain things manmade. I mean throw a tin can in the cage with a polar bear and he will play with it, but in terms of placing a value on such an object the bear has no means of such a determination. In fact, it has been shown that if you place such objects in with animals and then remove them after a certain period of time there is no change in behavior, they don’t “miss” the object.

If nothing holds an intrinsic value, as you state, then why does a person place value on objects in the first place? If we are simply animalistic then we would not work at all, we would not strive, we would not care. It is not a matter of needs, it is a matter of the value placed upon something, not only based upon likes and dislikes, but upon just the opposite of crows or bears or any other animals, we miss things, we miss having them in our lives, we despise loss.

I realize that the subjective theory of value, based upon the usefulness and potential rarity of an item does hold some sway, especially in economic circles, but even that theory misses some very fundamental facts found in history, particularly pre-history.

Now, intrinsic values have everything to do with the Constitution, the whole principle behind Natural Rights is based upon intrinsic values that cannot be either granted or removed. It is not a red herring at all, in fact it goes to the heart of the meaning of intrinsic value. For such value crosses the material and immaterial world, if that were not the case then I doubt that people would have either the need or the ability to have faith in religions, it would be impossible if there such values were based upon subjectivism.

At any rate, the constitution is interpreted arbitrarily, as evidenced by the differences of opinion on the matter, and it is contingent on circumstances, as evidenced by the changes in interpretation over time. I'm not happy about it, but that's the reality. As you said, you are not happy with the subjective and therefore arbitrary interpretation of the Constitution, the fact is that the Framers intended it to be a static document based upon de jure principles, instead those who love the ideals of subjectivism also seem to be the very ones who advocate and press for de facto law and seem all too happy to subvert the Constitution based upon those ideals. Our laws are based upon the probative value of objective evidence, not subjective evidence.

Basically, it appear to me that you are saying some people like dull metal, some like shiny, that is a proof that there is not intrinsic value, but your example was not a delineation of intrinsic or non-intrinsic value, but an example of preferences. It should be obvious that some values are instrumental and some are not, some are non-instrumental and therefore intrinsic. If there are no intrinsic values then it would be impossible to have instrumental values. In other words, it is apparent that some objects, whether they be gold or not, must contain value within themselves because they are not necessarily valued as a means to other ends. For some object to have intrinsic value, it would not be necessary for that object to be used in any other function but being, though it could function in other capacities.

Gold, while used for a multitude of products and has instrumental value in the making of those objects, but it also must therefore have an intrinsic value otherwise it would not be of concern to us in its pure state, even before it was used for money, it was valued in a pure state outside of any instrumental function. Beauty may well be in the eye of the beholder, but beauty again is a preference, like art, likes and dislikes abound, but intrinsic value is not based upon the likes or dislikes of anyone.

The fiat value of gold may drop, but it will never lose its intrinsic value for if that were the case then people would readily toss it aside if their needs were not meet, at lease according to your theory. People don’t throw away things with intrinsic value, they do throw away things with subjective value.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

You are verbose and

You are verbose and indirect, which means I have to work hard to dissect your posts in search of points and counterpoints. I took great pains in my last post to address each of your points directly and concisely, but you did not reciprocate.

Rather than do all the work in this exchange, I'll reply to your last post with a simple definition, a simple example, and a simple question:

1. "Intrinsic" means "inherent to the nature of"; if something is intrinsic, it is objectively so, independent of observation.

2. Water is wet whether we are there to observe its wetness or not; it is intrinsically, objectively wet.

3. In the absence of humans, what is the value of gold?

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Liberty for Dummies

MY answer to phoobaar's #3...

Without people, there is no need for property.

Human Life Value is the source and creator of All Property Value. What would our property be worth if everyone died tomorrow?

Dollars Follow Value/Value Follows Value

What is money? It's an exchange between people. Dollars are only a representation of money. Money is created the moment you have a life changing idea, a trade of value between people, or a profitable exchange of knowledge.

In other words: There is

In other words: There is none.

I agree. Too bad Republicae can't bring himself to concede the point. Stubbornness is no virtue.

In a final attempt to illustrate it for him, since I know he's reading:

Imagine a very rich man with a large pile of gold. Now imagine he dies suddenly. Does his gold lose value? No, his heirs inherit the gold and its value is retained. But what happens to the value of his gold if everyone dies suddenly?

It should be perfectly clear that value is contingent on valuation. It is not an intrinsic quality like "shiny" or "malleable" or "golden," all of which were qualities of gold before the dawn of man and will remain qualities of gold after the eve of man.

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Liberty for Dummies
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Democrats want to be your mommy.
Republicans want to be your daddy.
Libertarians want to treat you like an adult.

Republicae's picture

As I have said, it does not

As I have said, it does not matter whether gold has intrinsic value, whether you believe it does or doesn't, whether I believe it does or doesn't. It doesn't matter one iota. What matters is that gold makes really good money, it has been shown to be a store of value, whether that value is intrinsic or not. It has proven to be have had a long, successful track record as a monetary commodity, more so than any other. It has been proven over thousands of years, through various civilizations; gold is far more than just your average garden-variety commodity, as six millennia of human history have undisputedly proven that it is the emperor of currencies.
The price of gold is the exchange rate between the real and the fictional, a timeless tangible metal with value that stands on its own versus fleeting intangible paper backed by nothing but faith in or fear of flawed, fumbling human governments that always lose control over the money they create out of thin air.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

It matters because when you

It matters because when you refuse to concede the point you had previously argued strongly against, it brings your credibility into question.

You took a position. It was shot down. Now you say it makes no difference either way. If it never made any difference, why did you argue it in the first place?

If you would openly and humbly concede the point that gold has no intrinsic value, we could move on to the meaningful discussion you are now calling for.

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Liberty for Dummies
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Democrats want to be your mommy.
Republicans want to be your daddy.
Libertarians want to treat you like an adult.

Republicae's picture

Actually, my point is that

Actually, my point is that whether you are right or I am right or we are both wrong it does not affect the monetary mechanics of gold either way. It is virtually a moot point that you have been making and an equally moot point that I have been making when you judge the monetary functionality of gold as both a unit of exchange and a store of value. My position or your position cannot adequately explain the nearly 6000 years of monetary use of gold, nor why it was found to be such a “perfect” monetary material throughout those thousands of years. So, your argument or mine, doesn't matter one iota and to continue with such rounds accomplishes absolutely nothing for either side of the argument.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

I haven't been arguing that

I haven't been arguing that the lack of intrinsic value negatively affects the monetary mechanics of gold. That's your straw man.

My argument has been, quite simply, that there is no intrinsic value. How that affects gold as money is a completely different discussion.

We could have that other discussion if you'd rescue your credibility by conceding this simple fact.

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Liberty for Dummies
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Democrats want to be your mommy.
Republicans want to be your daddy.
Libertarians want to treat you like an adult.

Republicae's picture

Actually, read again, you

Actually, read again, you are totally mistaken on that matter, I have never said that whether gold has intrinsic value or not that the monetary mechanics are affected either way, because they’re not. I am not sure where you got that idea from, but I don’t believe, nor have I ever believed that there is any effect on the monetary mechanics of gold based on values either perceived or real. In fact, I have stated that the only thing necessary for monetary gold is a fixed weight and fineness, not a fixed value. Go back and read it…I have never said that the lack of intrinsic value is either detrimental or not to the monetary utility of gold, it doesn’t matter.

It has been you who have hogged this issue, rooting around over and over to the point, at least it comes across as totalitarian in spirit… my responses were just that, simply responses. Whether we are to assume that there is absolutely no value in the world except that which man, in his mental capacity, determines, then I must wonder why we bother at all.

If all value depends on the subjective values of man, then people are a sad lot indeed. I am not even talking on a “religious” ground, since I don’t adhere to religious beliefs or superstitions, but on a rational foundation. I happen to believe that there is intrinsic values in the world, in mankind and in the earth itself, otherwise this whole thing is just an experiment in utter futility. If nothing contains an inherent value, whether we place value on something or not, then we are leading a very nihilistic existence.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

No no no: A "straw man" is

No no no: A "straw man" is an argument falsely attributed to an opponent.

So when I said "that's your straw man" I meant that you had attributed something to me that I didn't say. I didn't mean that it was your argument.

Ugh!

Frankly, I'm offended that you've called me a "totalitarian" for holding to the facts. Would it be totalitarian of me to insist that the world is round rather than flat?

You can believe that there are intrinsic values, but that's all it is: your belief. And yes, that is effectively a religious position, because it's a choice of irrational faith over rational logic and reason.

Your last point is an appeal to consequence. If reason and logic did lead to nihilism, then it would be absurd to reject it simply because it depresses us. That's what religious people do; they reject reason and logic because they derive comfort from the irrational.

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Liberty for Dummies
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Democrats want to be your mommy.
Republicans want to be your daddy.
Libertarians want to treat you like an adult.

Republicae's picture

As I have said, it does not

As I have said, it does not matter whether gold has intrinsic value, whether you believe it does or doesn't, whether I believe it does or doesn't. It doesn't matter one iota. You can continue to mentally masturbate all you want to, but it is absolutely meaningless. What matters is that gold makes really good money, it has been shown to be a store of value, whether that value is intrinsic or not. It has proven to be have had a long, successful track record as a monetary commodity, more so than any other.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

I have heard a similar argument about the basis of morality

Interesting post. Here is a similar argument that I was given about the basis of morality (paraphrasing, here.)

If there is no standard to which we base right & wrong, (eg, if a deity does not define everything that is right and wrong), then morals do not exist either. Similar to how money has no value, if there is no gold standard to which to rely on.

My objection to your post is that since gold is limited, and people use it, then it has value. Period.

Morality is likewise

Morality is likewise subjective, yes.

Gold has value because women like shiny things and men like women.

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Liberty for Dummies

gold actually is more valuable than that

gold serves a functional purpose. we use it in manufacturing, for example, because it carries certain properties that other metals lack.