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Comment Re:Not only that... (Score 1) 569

You may be right; the fall of Soviet communism may have been inevitable or (most generously) an accidental side effect of US policies. It's a tough slog, but I would recommend reading Goldwater's "Conscience of a Conservative", in which he outlines a plan for bringing down the Soviet Union. The policies he recommends were followed almost to a tee by the Reagan administration, and the fall of the USSR follows very closely what Goldwater predicted.

A lot of the policies call for things that are very questionable: supporting terribly repressive dictatorships to prevent communism from gaining a foothold in the Americas, pushing for escalation in arms development, etc., things that the US did engage in during that era.

Whether the ends justified the means, or if the ends were inevitable and the means were just an expression of a stupidly imperialistic US policy is a question that will probably never be answered, but the fact that the policy and expected results matched up so well is pretty interesting.

Comment Re:Bitcoin (Score 1) 709

You're not wrong. That is also true of most of the Austrian economists that I know. I also think that my statements about the negative aspects of gold would probably be enough to get me hanged in the wrong circles; and my statement of the positives of fiat money would likely get me shot as well (I'm sure that there's something else I said that could get me defenestrated for the whole Rasputin treatment). So even by Austrian standards, I'm somewhat heterodox. My reading of von Mises, though, centers more around the "why" of money arises from commodities. And if I really need to defend my view from first principles, I see no way that Bitcoins are not a commodity; they satisfy all the fungibility requirements that one would apply to a commodity.

Comment Re:U235 coin (Score 1) 709

I shouldn't let myself be dragged into this, but here goes. The serious part of my answer was the first one -- if uranium were in fact useless, then we could use uranium-backed paper notes; with the same caveats that apply to gold-backed paper notes. But uranium is not useless, so it doesn't fit my definition. So based on my criteria for a currency, uranium does not qualify prima facie, and for the same reason that coal doesn't.

The second part of my answer, which was a weak attempt at humor, has been addressed by your post, and I hereby retract. That said, many people do overestimate the danger of radiation, especially in small amounts, and much of the danger comes from refined radioactives or the attempt to refine them. Just be careful that you don't fall on the other side of that equation.

Comment Re:Bitcoin (Score 1) 709

Well, clearly the value of a currency doesn't disappear just because you cross a border. You and I disagree on why that is the case. It strikes me that collecting taxes in a currency is an impediment to its adoption, rather than facilitating it. That's why barter transactions are taxed based on their value in the local currency, and why legal tender laws were passed to force people to except these currencies. Because otherwise, people would never touch the currency so that they could legally avoid paying taxes.

Comment Re:Bitcoin (Score 1) 709

You're just defining currency to mean something that can be exchanged for goods and services. I don't think anyone is arguing that that is the meaning of the word. The question is, what makes a thing, or a concept, a currency? If the theory is "shared delusion" then that's fine but offers little power.

The real question remains -- are there things that are scarce, fungible, and useless, that do not serve as currencies?

Comment Re:U235 coin (Score 1) 709

Honest answer: It's not useless. The fact that it has applications means that the demand for it as a currency (as an exchange commodity) is competing heavily with the demand for it as a fuel. This means it tilts towards being a consumable commodity.

Also, it's dangerous to carry in your pocket.

Comment Re:Bitcoin (Score 5, Informative) 709

Let's be clear here -- no currency is backed by anything, ever. Sure, "old currencies" were backed by a precious metal. What was that backed by? The answer to "why do currencies have value" is that _nobody knows_. The different schools of economics all have different theories, but macroeconomics is not, despite what people say, a science.

The theory backing bitcoins is largely based on the (non-mainstream) ideas of Austrian economics; which claim that currencies have value almost entirely because they are scarce, fungible, and useless. That is, their value as an exchange medium far exceeds their value as physical objects. Incidentally, Austrian economics is pretty much the only school of economics to openly acknowledge that it is not a scientific theory.

Fiat money qualifies easily -- nobody is burning dollars for heat or using them for wallpaper, and the scarcity is guaranteed by the issuing government (although easily abused, and sometimes catastrophically, which is why Austrian's tend not to like fiat currencies).

Gold qualifies with caveats; it's clearly "money", but it suffers from portability and verifiability problems unless it's minted into a form that is hard to reproduce (the old-old-school approach) or vouchers are issued that can be redeemed for stored gold (the newer-old-school approach). The vouchers then become money in their own right, since their scarcity is tied to the scarcity of the underlying metal, and they're just as fungible and useless. But almost universally, governments (and unscrupulous banks, and sometimes even scrupulous banks) abuse the fact that the holder of a voucher can't see the gold to steal the gold; effectively disconnecting the scarcity of the two. Same goes for silver, though less dramatic.

It's surprisingly hard to come up with examples of things that are scarce, fungible, and useless that are have not been used as currencies. Even things that violate one of these things is often used as money in a barter sense or in the short term (i.e. cigarettes in prison, wampum among east-coast Native Americans, Facebook game fun-dollars, baseball cards, or the Iraqi Swiss Dinar).

So this is what Bitcoins are -- they are nothing but pure scarcity, fungibility, and uselessness. The portability is nice, except that transactions are tricky (since there's no real "receipt" mechanism -- verifying that a customer has paid his bill requires funky gymnastics), all use of it is dependent on the accessibility of the internet, and the scarcity is conditional on there being sufficient computing power applied to the problem. But aside from those, it really should work. And the fact that they are worth anything at all (that people are willing to buy them at any non-zero price) is a big deal.

In terms of price stability, this is a complicated phenomenon; Austrian's generally do not consider price increases to be the same as inflation (a purely semantic distinction). What causes price changes are complicated, and can not be reduced to a simple rule, because at any moment, technological progress and other myriad phenomenon are messing with prices that affect, to a small extent, everyone in the supply chain of every business in the world, and that effect get compounded over time. The most visible form of this is the supply chain of money itself, through the mechanisms of banking and credit.

So why is the Bitcoin value so volatile? (Now we're in the realm of pure speculation on my part) Because there's no supply chain to keep prices stable. No supply chain of any sort; a restaurant that accepts bitcoins can not buy silverware, or food, or paper cups, or cash register tape, or POS systems, or pay rent in Bitcoins. There are no mechanisms for loaning bitcoins; in either direction -- there are no banks that will pay you to lend them your bitcoins, and no banks that will assess your trustworthiness and income and lend you the money lent to them. So the price floats, while people try to figure out how to provide baseline services (like web hosting), so that they can tie their own supply chain to bitcoins. These rugged pioneers will undoubtedly be screwed royally -- their supply chains still require dollars, so they have to change their prices constantly to reflect the changing price of bitcoins in dollars; which means that services which use them can't rely on that price stability, and need to charge their clients more bitcoins.

So either the economy develops, and complete supply chains, including credit markets, evolve and have the effect of stabilizing the price, or the value drops to the point where the scarcity of the currency dissolves (that is, it becomes cheap to attack the system directly). But this story is far from written yet.

I'll close this rant with one more comment; the idea that money has value because it is used for taxation is laughable -- Euro's have value in the US despite the fact that the US will not accept taxes in them. You can run a business entirely on barter; the transfer to US dollars for tax purposes is based on the valuation of the barter goods in US dollars, so a 10% tax on dollars is the same as a 10% tax on sheep (or Euros, or Bitcoins). If the barter good becomes cheaper or more expensive (valued in US dollars) then so does the tax burden, in proportion to the change in price of the barter good.

Comment Re:Seems just as safe as ever... (Score 1) 1148

There is no way to design a coal plant so that the impact of a disaster would be as severe as what can result from a "poorly-designed" nuclear power plant. The fact of the matter is that nuclear power plants have been very carefully thought out to try to prevent disasters like this (and worse), but the nature of the beast is such that you can only do that within certain bounds of the things that you can predict.

I was fervently supportive of nuclear; now I'm luke-warm to negative. Maybe there's hope in these thorium-based reactors; maybe someone will perfect pebble-beds and risk whatever unknown risks go with that; but it's going to be hard to convince reasonable people to allow these anywhere near them until we have a nice, long period of no disasters that we can use to convince ourselves that the risk is gone.

Comment Re:Good online content? (Score 1) 315

I haven't seen GOOD journalism in a major newspaper in a VERY long time. That ship has sailed.

Agreed. What I want out of a newspaper (out of any news source) is facts. Here I'm not saying that the New York Times is inaccurate, just that they don't offer you direct information any more, just dressing around that information. As a result, someone who reads a variety of blogs (as much as a shudder to say it) and other news sources gets more informed about the facts, and can interpret the situation better.

I'm not just shooting off my mouth here; I went to the NYT website and grabbed the top headline -- "Jobs Report Signals a Long Haul for a Recovery". I know headlines are about attention-grabbing, but this doesn't tell me anything. The opening paragraph: "The year 2010 ended on a disappointing note, as the American economy produced just 103,000 jobs in December, suggesting that economic deliverance will not arrive with a great pop in employment." "Suggesting"? "Disappointing"? "Deliverance"? What are we comparing it to? Previous downturns? Last month? Last year? 1972? You don't even get that information until the 15th paragraph, and there as an anecdote: "In a speech at a factory in Landover, Md., on Friday, President Obama accentuated the positive, which was a year of private-sector job growth. 'That’s the first time that’s been true since 2006,' he said. 'The economy added 1.3 million jobs last year.'"

So if I want to be informed about this topic, I'm left to my own devices to find out where this data came from (they have a neat chart on the side with no sources) and to see if their interpretations makes sense. This is a wad of half-digested pap and I won't pay for it.

Comment Re:'Free Market'? What on Earth? (Score 1) 408

Why would you think that? Even in a libertarian utopia you wouldn't always get what you want -- you get what the market can provide. You can express preferences; but in the end, TV would have loud ads because people value the programming more than they hate the loud ads.

As for copyrights and patents, without them, the current television model gets harder to envision, so it's hard to make a direct comparison. But given that copyrights exist, you would expect that commercial-free sources of original programming would start to appear, offering network-like television on a premium basis, and other alternate media sources offering additional options on the internet, as well as home devices designed to circumvent the ads themselves.

There's a part of me that is pissed off at politicians for wasting time with this crap, but a much larger part that is happy they are doing this instead of fucking up more important things with unnecessary regulation.


Submission + - Ron Paul to head subcommittee overseeing Fed? (

iamthelaw writes: TheStreet reports that "Ron Paul (R., Texas), who wants to abolish the Federal Reserve, could end up overseeing it as part of the Republican takeover of the House of Representatives. Paul is the ranking member of the Subcommittee on Domestic Monetary Policy and Technology on the House Financial Services Committee, which has oversight for the Fed, the U.S. Mint and U.S. interaction with the World Bank, Politico points out." Let the good times roll...

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