Crafting Money (was: RE: [MUD-Dev] Star Wars Galaxies: 1 characte r per server)

Timothy Dang tdang at BPA.Arizona.EDU
Fri Jan 10 09:00:10 New Zealand Daylight Time 2003


On Tue, 7 Jan 2003 bhoyt47 at hotmail.com wrote:
> On Thu, 02 Jan 2003 18:12:19 -0800
> "Andrew L. Tepper" <teppy at ironsoft.com> wrote:
 
>> A Tale in the Desert (www.ataleinthedesert) does this, sort
>> of. With some papyrus paper and ink, players can craft
>> un-forgeable money. They can name the currency "JoeBucks" or
>> "SteveShekels" or whatever. It takes the same resources to craft
>> a 1-SteveShekel note as it does a 1000-SteveShekel note.

> Fascinating system, Andy.  Though, I'm honestly not surprised to
> that it didn't receive widespread success.  Remember, the primary
> purpose of a fiat money system (such as coins, paper money, etc),
> is to replace the more cumbersome barter system.  The primary
> purpose of a money system is not to allow many individuals to mint
> their own money, but rather to create a universally accepted
> currency.  There exists a natural incentive to achieve a single,
> commonly agreed upon currency.
 
> If memory servers, this was one of the major factors that
> contributed to the replacement of the Articles of Confederation
> with the Constitution.  The colonies basically agreed that it made
> more sense to have a single US currency, as opposed to the 13
> colonial currencies.  As we can see today, having different
> currencies for the US, the EU, and all the other countries simply
> creates the need for complex exchange rates.

In the U.S., there wasn't a really solid uniform currency until the
civil war. For a fair amount of the time before that, rules for
banks issuing currency were left mostly up to the states, and
supposedly even barbers were issuing their own currencies in some
places. At times the central banks had more power, and placed
restrictions on the states, but bank notes were still issued by
banks, mostly under state charter.

I'm very interested to see how a game with mechanisms for
self-issued currency works out (although, as I understand, A Tale in
the Desert is going to have resets, which makes things
weirder). Amongst currency radicals, there's two competing ideals
for the "best" currency system. One is something equivalent to a
gold standard, not so much for the popular reason that "gold has
real value", but because if there's such a standard, there's (a) a
built-in fixed exchange rate, and (b) a restraint on how much
currency can be issued.

The alternative radical idea is to have competing currencies (a la A
tale in the Desert), with little regulation. Then it's up to the
users of a currency to decide how trustworthy and useful it is.

Both of these ideas come largely from the same motivation, that
government can't be trusted to manage the currency without inflating
it. And each has its own Nobel-prize winning economist behind it
(Mundell for the first, Hayek for the second).

So, seeing the competing-currency idea implemented in a game and
watching how it works out should be fascinating.

------------------------------
Timothy O'Neill Dang / Cretog8
520-884-7261
One monkey don't stop no show.



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