Pericles

"In the sense that diesel is a fuel derived from a mineral, and gold is also a mineral, both are equally valid as means of exchange. Or "money", in the vernacular."

You seem to be confusing means of exchange with money, and vice versa.

"I can't see too many people getting excited about choosing a different currency, even if were simple to do so."

The question is not whether you think so, it's whether everyone else does. Obviously they don't agree with you, or it wouldn't be necessary to forcibly restrict their freedom to choose, would it?

"All that would happen is that we would be constantly bartering, working out how many cans of oil we would need in order to buy a car."

That sentence shows a confusion over basic monetary theory. On the one hand, you're confusing means of exchange with money; hence your identification of barter goods with money and vice versa; and hence your confusion of a barter economy with a money economy.

On the other hand, you're confusing fiat currency with money in general, thinking that, just because fiat currency performs the function of money, therefore nothing else would or could, and geting rid of fiat money would mean going back to a barter economy. The shortage of understanding is yours, not mine.

"Or did you have something else in mind?"

Please you answer my question first. What, according to you, is the point of legal tender laws?

I am sure you are making some very important points here, Jardine K. Jardine. Unfortunately, I can't make head nor tail of them.

>>You seem to be confusing means of exchange with money, and vice versa<<

Are you suggesting that money is not a means of exchange? In my estimation, money is one of the most efficient means of exchange so far invented. And surely, you must accept that the phrase "means of exchange" has to include money, as well as barrels of diesel, cowrie shells etc.?

Put slightly more bluntly: what's your point?

>>The question is not whether you think so, it's whether everyone else does. Obviously they don't agree with you, or it wouldn't be necessary to forcibly restrict their freedom to choose, would it?<<

Hint: that's not logic. They might agree with me for a hundred other reasons. In fact, it might not even cross their minds that they are being "forced" to do anything against their will.

>>On the one hand, you're confusing means of exchange with money<<

As above. Why don't you tell me what you think the difference is?

>>...you're confusing fiat currency with money in general, thinking that, just because fiat currency performs the function of money, therefore nothing else would or could<<

Precisely the opposite. I even suggested alternatives. Only when you rejected those did I propose barter. Which is a genuine means of exchange, by the way, operating in many parts of the world even as we speak.

>>Please you answer my question first. What, according to you, is the point of legal tender laws?<<

To provide a point of reference for the people, that the government can guarantee is an accepted means of exchange that is available to all, and backed by the law of the land.

What it patently does not do, is to restrict trade to that single medium.

Your turn.

My point is that just because a thing is a medium of exchange, doesn’t mean it’s money. I do buy services using diesel. But that doesn’t mean diesel is money does it?

There’s no point discussing it any further if you’re defining money to be any means of exchange. According to that theory, anything exchanged is money, and a barter economy is a money economy. I think it’s incorrect.

“To provide a point of reference for the people, that the government can guarantee is an accepted means of exchange that is available to all, and backed by the law of the land.”

And … what’s the point of that? Putting aside your apparent assumption that government is doing it as some kind of disinterested or benevolent service, why would the persons to whom government is making the guarantee, want or need a guarantee that there is a means of exchange “available to all, and backed by the law of the land”?

For example if you’re buying a loaf of bread, or a house, and the medium of exchange you tender is acceptable to the seller, what do you, or he, care whether the same or a different medium is acceptable to all and backed by the law of the land?

“What it patently does not do, is to restrict trade to that single medium.”

I didn’t say it did, and I know it doesn’t. It restricts *money* to that medium.

But I’m defining money to be the generally accepted medium of exchange; and if it’s a promise redeemable in some other medium, and disputes are settled by payment in that other medium, then it’s that other medium that’s money, not the promise. The promissory instrument is a money substitute.

I think what the legal tender laws do, is establish a government monopoly of the supply of money. I think government has a perpetual interest in inflating the money supply, that fiat currency is one of the means by which it achieves this end, and that in doing so, the state has a conflict of interest with society in general.

That's just silly, Jardine K Jardine.

>>There’s no point discussing it any further if you’re defining money to be any means of exchange. According to that theory, anything exchanged is money, and a barter economy is a money economy. I think it’s incorrect.<<

That's the same logic as "I define dogs to be animals. Cats are animals. So my dog is a cat". Money is not "any means of exchange", just one means of exchange. There are others, it just happens that money is the most convenient.

>>I think what the legal tender laws do, is establish a government monopoly of the supply of money. I think government has a perpetual interest in inflating the money supply, that fiat currency is one of the means by which it achieves this end, and that in doing so, the state has a conflict of interest with society in general.<<

That would explain why you need to define money in such a narrow fashion. If you accept it as simply a convenient means of exchange, all your ideas on what government's motives are will fly out of the window.

I still prefer my explanation. Easier to understand, and far less prone to conspiracy theory.

How is my process of reasoning like that?

You're projecting onto me your own process of reasoning:
“I define a dog to be an animal (I define money to be a species of the general category ‘medium of exchange’). A cat is an animal (another species of medium of exchange is a member of the general category ‘medium of exchange’.) Therefore a cat is a dog (therefore another species of medium of exchange is money.)”

There are a number of problems with your theory:
It defines diesel, and oranges, and eggs, and nails, and TVs, and sticky tape, and farms, - anything that is a means of exchange - as “money”. And it means a barter economy is a money economy. I’ve asked you whether it means that. You haven’t answered. Does it?

Your definition is inconsistent with the definition of money used in the Currency Act; mine isn't. For example, assuming that eggs, being a means of exchange, are “money”, then Section 9 reads: “Every contract… relating to [eggs]… shall be done according to the currency of Australia.”. But according to you, eggs are already money! How does that make sense?

“I still prefer my explanation. Easier to understand…”

If it’s easier to understand, then you should have no problem answering: what’s the point of legal tender laws? If you’re buying a loaf of bread, or a house, and the medium of exchange you tender is acceptable to the seller, what do you, or he, care whether the same or a different medium is acceptable to all and backed by the law of the land?

“and far less prone to conspiracy theory.”

I haven’t said anything about government’s motives or any “conspiracy”. That legal tender laws establish a government monopoly of the supply of money does not depend on their motives. Even if, and whether they are creating a general benefit, is a factual issue in its own right that doesn’t depend on their motive.

If we demolish the government's monopoly on the supply of money and someone else supplies money and I want some of that money? What do I buy it with? Whose money?

I'm sure I'll work it out… Along with Hayek's claim that "it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business… "

Extremely profitable? How so? What, in the money that they've issued? That can't be right…

Because this good money can't be the same thing as the government's bad money so it must be something different and therefore would not be a lowest common denominated currency.

Anyway whilst I sort through that, use the benefit of the fact Australia is a participatory democracy.

Everything is changeable, up to and including the Constitution – by simply convincing sufficient voters of the efficacy of your concepts, Jardine. Since everyone's supposed to act only in their maximal self-interest this should be pretty simple if it's all as hunky dory as you intimate. Exercising their user preferences as it were.

What you should get past is that the legal tender laws existed in Australia before you did. It's not as though they were imposed just to get up your nose. I'm not aware that you're being denied the prospect of emigration – though I am aware from Ludwig's comments that the planet is apparently over populated which would make the prospect of free range homesteading unlikely. Plus, these days most indigenes have, at best, smart phone cameras and Internet access with which to protest invasion or at worst, AK-47s.

Maybe there are some things worse than fiat currency.