re: Discussing the launch of Libra, "A new global currency" VIEW POST

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re: How can anyone not be skeptical and pessimistic about a "currency" developed and promoted by entities whose sole motivation is profit?
 

The whole principle of capitalism is that the selfish profit motivation produces a better outcome for the whole. All the evidence seems to show that capitalism is effective in that regard, and furthermore has often produced better outcomes than efforts driven via government guidance. Is there any reason to suspect that the management of a currency should behave differently?

 

Has the profit motive really produced a better outcome for the whole of society, or has it produced a better outcome for those in a position to profit at the expense of those not?

Outside the question of economic ideology -- on which I suspect we differ irreconcilably -- there's a clear conflict of interest when agents motivated by profit also control the/a medium of exchange. Look to the example of company scrip, which the US outlawed in the 30s for very good reasons.

That's possibly an excellent example. Governments all round the world tend to take a dim view of currencies they don't control. Well, wouldn't you, if you were in their position? That doesn't mean that they're right to do so, but it doesn't mean they're wrong either. Not being familiar in US economic history, was the company scrip used to defraud citizens of their savings, or were losses the result of poor or unlucky investment decisions?

Company scrip isn't about fraud or losses or anything like that. It's possibly best illustrated. In our dumb cyberpunk fifteen-minutes-into-the-future, you work for a company which pays your wages in FaceBucks instead of dollars. You can buy things with your FaceBucks or exchange them for dollars at the FaceStore; naturally, being a good profit-motivated capitalist, your employer marks up prices and charges exorbitant exchange fees, since when you pay forty FaceBucks for a twenty-dollar shirt that effectively means the company had to pay you twenty dollars less. And good luck finding an alternative, because in this example you're not an experienced worker whose particular skills are in high demand but, let's say, a humble content moderator; you've spent most of your savings in dollars on goods not available at the FaceStore (or even converted them to FaceBucks to supplement your salary); and if you try to take your resume to the next company over, they're just going to pay you in Twugerrands.

The practice has longer antecedents but was most famously adopted in the wake of the Great Depression of the late 20s and early 30s. Some corporations even ran whole municipalities as their own economic fiefdoms; you may have heard of the town of Hershey in Pennsylvania. It was immensely exploitative, but by god was it profitable!

The idea of a currency free from centralized control is noble, for all nobody's managed to really get it off the ground yet. But there are, at this point, centuries of precedent demonstrating that the only less trustworthy economic stewards than governments are profit-seekers.

Dian. Amazing. Exactly. Old history.

en.wikipedia.org/wiki/Company_scrip
en.wikipedia.org/wiki/Disney_dollar
en.wikipedia.org/wiki/Company_town

Devto dollars. Devtoville. Devtoland. Devtobank. "The Peter Kim Frank Museum of Devtoville History & Science are proud sponsors of Devgov TV. "

Only if you do all the work too.

 

No. The whole principle of capitalism is that selfish profit motivation produces a worst outcome for the whole. The global climate crisis and the massive species extinction that comes with it is the direct byproduct of capitalism.

Capitalism is effective in privatizing profits and letting all the costs on the side, where they can or cannot be absorbed by public or, in the case of the environment, natural entities.

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