I'm not claiming that he is wrong.

I'm saying that you can develop a better understanding of the world by drawing the line in a slightly different place.


You are aware that you are making my point here, right?

I would like to add something to this discussion.

In the end it becomes semantics of course.
If you say that blue is the color of blood, then blue can be red :-)

It is funny but many years ago I also thought that money was debt, and I defended it in the same way as kjj is doing.  And then you come to such extensions of the concept of "debt" that you start realizing that your argument doesn't hold anymore.  Then I read von Mises and Rothbard.  And then things became much clearer ;-)

I went to say, against the solid argument "but a guy who digs for gold in his garden, and finds some, to whom does he have debt ?" and I started arguing something of "debt against the earth" or other nonsense.  That's when I knew I was in fact wrong :-)

The  core property of the word "debt" is that you have no choice but to do what your debt claim you signed, says, and the only exception is when you can't  or when you are a scammer, and law enforcement can be put to work to make you pay off your debt.  

However, the properties of "having earned it in return for something else" (or found it, or made it, or got it through a gift...), "having the right and possibility to trade it, to exchange it for something else", "having the right to hold it indefinitely (not having to give it back)", "not engaging in anything such as interest".... is nothing else but part of the definition of PROPERTY, ownership.

If you redefine debt as being a subset of the properties of ownership, and leave out its core definition of "having engaged and being forcibly obliged to do what you engaged to", then the word debt has become empty of meaning.

Then red is blue.

But it is true that modern monetary systems are full of debt-related assets, and for a long long time, government-issued bank notes where a theoretical debt of the government to issue gold for it (although practically, they couldn't and did everything to escape their obligation - being the law enforcement agency, they could get away with that scam, of course).  This is how the confusion between debt and money set in.  It is a very common confusion.  I can only point to Rothbard to get a clear view on it.  It is mindbogglingly clearly written.

Money can normally be made by people.  If you can find gold, or if you would in one way or another, be able to make gold (by nuclear transmutation of peanut butter, say :-) ), then you can do so.  It is ONLY the special thing of fiat money which is forbidden to make, because that's the very property of fiat money that only gets its scarcity by law enforcement forbidding to make more of it, except some privileged elite.  It is what is fundamentally wrong with it.

What makes an asset (something you own) "money" is the fact that it can very easily be traded for most or all other assets and that it is mainly, or exclusively used for that purpose.

Yes, the issuer still HAS TO give the holder of the bond something, at a given date.  
The bond is an asset, which is a debt of the issuer (government, company issuing the bond).

As an asset, you can try to trade it.  The one accepting the trade is accepting an asset (the bond), which is also in this case, a debt, and is probably the main reason why the person accepting to trade something (say a car) in exchange for the bond accepts it as a value carrier: he can cash in on the debt when the bond expires ; or he can trade it further.  In as much as such bonds are easily traded before they expire, they become money.


No, this isn't a debt anymore, because the original issuer (you) doesn't engage in doing anything with it anymore.

You created an ASSET, a piece of paper.  If people want to do something to obtain ownership of that paper, then that's their business.  It is a piece of paper that isn't worth anything in court (contrary to a bond): you cannot enforce anything.  Now, if you are a famous artist, and you swear on your mother's head that you won't sign more than 5 such papers a month, then these autographs may become collectables.  People may collect these assets as if they were famous paintings.  They may get value.  But they are not a debt at all.  You created an asset (a piece of paper).   Your friend was a nice, gullible man who did work (moving furniture) against an asset, your piece of paper.

But is not a debt anymore, because it doesn't contain the defining property of debt: liability !


You've just created some assets.  They are not "debt", because by definition, they do not engage in any liability.  You can desire to possess them, or not.  Nobody is obliged.  You could just as well have decided to have created paintings and issued those.  Your pieces of paper are just slightly less artistic assets than paintings you could have issued.

These assets are not debt.  And btw, you didn't do anything for society.  You just got seigniorage.  Your first piece of paper with IOU got you a free move of furniture from your friend.  His problem to be gullible :-)  

The day he would like you to move his furniture, and you tell him to shove his piece of paper where you think, you make him see the difference between a (worthless) asset, and a real debt :-)  If you had issued a bond, the guy would just go to court and you wouldn't tell the judge to shove it.


Finding "more money" does not do ANYTHING for society.  It does something for the creator of it: seigniorage !  It devaluates the rest of the money in circulation, that's all it does.

Really, read Rothbard now.  He considers all those issues and he's a much better writer than I am :-)

Bah. I've said what I needed to say, and I'm done.  The root of our disagreement is not that you haven't repeated your claim often enough, and I don't suspect that anything I write will cause you to think beyond repeating it yet again.

What makes you think I haven't?

Are you surprised that I don't agree with everything I read?  Shouldn't you be concerned that both you and Rothbard are incapable of using orthogonal categories?

Money is certainly a commodity, but that doesn't exclude it from other categories.  No one claims that an apple isn't fruit because it is a commodity, nor that it isn't food because it is round.

Further, an apple is still useful when detached from society, but money is not.  At least not in the abstract; a tangible manifestation of money might still be useful.  If you ignore or diminish the social aspect of money, you lose something.  The notion isn't necessarily wrong, per se, but it isn't as useful as it would be if it were complete.

Given that you've studiously avoided understanding my position, I find it hard to believe that you ever held it yourself.  Much more likely, you are assuming that I hold the same belief that you once held, and you are arguing against that.

For evidence of this, I point out that you have repeatedly countered arguments that I did not make, while ignoring what I actually have said.  In fact, that is about all that you have done here.

I don't know.

What I held as a position, was about this:
As money is a "token of value" you get when you do "good to someone else", this is a sign of a debt the society has towards you, and you can claim your debt by spending the money.

In other words, money would be the big ledger where all you do for others is written, and allows you to get it back from society ; instead of writing it in a central ledger, it is done by distributing tokens, called money.

That sounds nice, but cannot explain several properties of monetary assets.

Ok, we're getting somewhere.  I think this is the fundamental misunderstanding then.  True, bitcoin works with a public ledger.  That ledger is centralized in a way, because it is the only way to have collectables with data, as data can be copied.  (it is centralized not in the sense that a single group of people commands it, but it is centralized in the sense that all the data are within one single ledger).  Collectables and ledgers are mathematically equivalent in a way: a finite and immutable number of tokens, assigned to different owners, with only one owner at a time.  In other words, the fact that bitcoin works with a centralized ledger (the blockchain), and that other collectables work with a distributed ledger of OWNERSHIP (by just possessing the tokens without it being written down in a ledger) are simply two different ways of describing OWNERSHIP.

But that is not what I was talking about.  I was talking about a "ledger of debt of society with respect to individuals".  Now, that would be a ledger in which is written down value, not tokens.  If I had done 8 hours of a certain type of work in that ledger, then society would "owe me" the equivalent of 8 hours of work of a certain type", which I could claim at any moment into something equivalent.  That is not what bitcoin, nor any other property of collectables, writes down in his ledger. 


It is an asset !  The asset is a specific amount of satoshis of which there only exist so many.  The asset are the satoshis themselves, as collectables, in the same way as rare post stamps, or a quantity of rare metal, or Rembrandt paintings.  You can VALUE those assets as much or as few as you want, but they are assets.  You could number all the satoshis from 1 to 21 10^14, and then you are the proud owner of certain specific satoshis, which nobody else can own on the blockchain.  It is an abstract kind of possession, but it is a possession nevertheless. 

It would be similar to having a ledger of stars in the milky way.  You could own certain stars.  The only thing that makes up that ownership is the fact that you have bought that star in a ledger.  As long as there is no interstellar travel or any use for remote stars, your ownership of a star is equivalent to the ownership of a satoshi, with the sole difference that that ownership of a star has to be written down by trusted people in the star ledger, and the satoshis are protected by cryptography.  You can abstract away the physical star, and in the end you only possess a few tokens of which there are a finite and fixed number.  Like you can own a finite number of gold atoms.  Or you can own a finite number of Rembrandt paintings.

The difference with the "debt ledger" is that in a debt ledger, society is OBLIGED (because debt) to return to you the value of what you gave to society.  This is only possible in a totally communist system.


On the contrary.  Money as an asset you can possess, and for which there is a market with offer and demand, is EXACTLY what describes money.  No more, no less. That is the great lesson from Rothbard.  Money is nothing else but a very tradable asset, which, for that purpose, is also used as a store of value, and for which hence exists a demand, explicitly based on that demand for store of value.

With that "model" of money, you explain all its aspects.  You explain price, you explain exchange rates, you explain inflation.  Money is an asset that is used speculatively to be traded again.  That's all there is to it.


No, really not.  Money is an asset (that is, something you can possess and hold - so not a service for instance), which is mainly, or exclusively used speculatively to trade it later against other stuff, and which is in general traded very easily.  Not more, not less.

Some assets have monetary aspects, like real estate.  Some assets are essentially money, like gold (except for its usage in jewelry and industry).  From the moment that an asset is mainly used to store value in (that is, speculatively held to trade it against other stuff, and not for its usage as a capital good or consumption good) and are easily tradable, it is money.

With that concept, you explain all economic aspects of money.

Yes.  Of course, we agree here.  It is a speculative asset, which means exactly that.  It is something you are willing to do something for to obtain it, not for its use as a consumption good (bread), or for use as a capital good (a production machine), but with the main or sole idea to trade it later for something you do value as a consumption good or as a capital good (or service).


Then, again, what is *your* definition of debt, and in what respect is it then different from ownership ?  It is nice to talk about "the bigger picture" but as long as you don't use clearly defined terms, and logical deductions linking them to clearly stated starting hypotheses, there's no picture at all !


Absolutely.  But dollars are not collectibles.  They are assets that are produced and destroyed by privileged economic actors. 

A ledger can also treat non-collectables, but then it is a ledger with sources and sinks ("created asset" and "destroyed asset").   After all, a ledger is nothing else but a centralized database where ownership of assets is written down ; ownership which can also be distributed by simply owning the asset physically. 

The only reason why bitcoin has a public centralized ledger is that the asset is a piece of data, and that one WANTS them to be collectables.  Now, contrary to physical assets, data can very very easily be copied, and then these data are not collectables anymore.  To turn data assets into collectables, one needs a ledger.  Now, banks use "leaky" ledgers with sources and sinks, but bitcoin uses a non-leaky ledger.

The point is: ledgers are just other ways to describe PROPERTY.

Of course some assets are debt related.  But not all.  And what characterizes money, is not debt, but is what you wrote on top: it is a speculative asset you essentially only own because you speculate upon being able to trade it later for something useful.



With bitcoin, ownership is not a social concept anymore.  Ownership is only a social concept if you need social consensus to make your property rights work.  Ownership of a house is usually a social concept: if there is no social consensus that you own a house, then anybody can come into your house and live there.  You need social consensus to drive the others out (to appeal to the violence monopolist who is the state or its representative, the police).

But there always have been assets that do not need social consensus.  Usually physically small objects which you can hide don't need social consensus.  You just physically hold them, and you can hide them.  That's the way you can enforce your ownership of them without consensus.

With bitcoin, you don't need social consensus either (apart from the bitcoin protocol itself).  The "solution to the script" can normally only be found when you have the private key, and a private key is something you can hide.  Without that private key, no matter how much social consensus there is that those satoshis actually belong to someone else, nobody can find the solution to the script.  By definition, the owner is the one who has access to the private key.

If the private key is known to several people, then indeed, ownership is ill defined, and will turn out to be finally assigned to the first of those people using that key to solve the script.

Bitcoin doesn't use social consensus as means to enforce ownership, but cryptography.  A bit in a similar way as owners of physical objects can use a safe, locked doors, or hidden places to enforce their ownership, without social consensus.

If the protection fails, then ownership enforcement fails too.  That's the case when one breaks open your safe, or when one gets one's hands upon your private key.

But all this has nothing to do with your claim that money is debt.