Martian Gold Standard - Will Martian money be as good as gold?

Scott G. Beach · 2002-08-26 23:12:51

In an article titled "Social Decay and the Federal Reserve," Eric Englund reports that, "Since the Federal Reserve's founding in 1913, the dollar's purchasing power has depreciated by over 94%." He asserts that as a result of this monetary infaltion, "laborers experience ever-increasing difficulty in making ends meet and lose the means to hold a family together." He assertes "that monetary central planning (via the Federal Reserve) is a root cause of social decay" and he concludes that, "In order to change the United States' course for the better, it is mandatory that we abolish the Federal Reserve and restore a 100% gold standard." (Mr. Englund's article is posted on the web (click here).

This brings us to the question of Mars. Will the Mars Development Bank issue money that is made of or backed by gold? Or will the bank issue money that can be inflated to worthlessness as fast as a printing press can run?

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." Alan Greenspan, "Gold and Economic Freedom," 1967

I vote for gold.

Scott G. Beach

Byron · 2002-08-27 06:09:59

Hey...good idea on paper. But I wouldn't be so hasty to adopt a "gold standard" for Mars. Here's why: Mars, having been untouched by humans as opposed to the Earth being scoured for gold and other rare metals for the past 10,000 years, probably has copious amounts of the yellow metal just lying around for the taking. Now, if a Martian currency was established with the expectation that gold fetches, lets say $10 a gram, and the price of gold falls to $1 a gram due to the huge increase in supply that's been made available to humanity due to Martian mining efforts...then your gold-backed currency has just lost 90% of its value.

I once had an idea that money be based on hours of human labor, but as someone kindly pointed out, what do you do about the fact that some people work harder than others? Personally, I think the new Martian economy will be based on a comprehensive barter system, with high-powered algorithm-driven computers controlling a system of currency based on the current value of all the things that people need..air, water, food, land, etc. Money is just a "placeholder" of value, and as long as it's controlled in an objective manner (which is why computers are better than the whims of people in this aspect), there really shouldn't be any major problems with inflation or devaluation...

B

Pat Galea · 2002-08-27 11:42:54

This brings us to the question of Mars. Will the Mars Development Bank issue money that is made of or backed by gold? Or will the bank issue money that can be inflated to worthlessness as fast as a printing press can run?

I'm all in favor of gold money here on Earth, but I'm not sure that it'll be the currency of choice on Mars.

Anyway, as Mises pointed out, money is simply that commodity that is most exchangeable. In a barter economy, one item will emerge that can be most exchanged indirectly for other items. This item is money. No-one needs to define it thus, it simply emerges from its status as the most exchangeable item.

Someone will then come along and produce standardised versions of the item for convenience (e.g. coins with their weight stamped on them). But this happens after the item has already achieved its monetary status.

On Earth, gold and silver have emerged as money. They're probably not very suitable on Mars. I would guess someone would issue 'warehouse receipts' for air, water and grain.

But the Martians will probably confound us all and think up some new cunning system that will seem so blindingly obvious in retrospect!

Pat Galea · 2002-08-27 12:20:30

Personally, I think the new Martian economy will be based on a comprehensive barter system, with high-powered algorithm-driven computers controlling a system of currency based on the current value of all the things that people need..air, water, food, land, etc. Money is just a "placeholder" of value, and as long as it's controlled in an objective manner (which is why computers are better than the whims of people in this aspect), there really shouldn't be any major problems with inflation or devaluation...

OK, the trouble here is this: you said that the computers control the currency based on the current 'value' of things. But how do you know what that value is in the first place?

The only system I'm aware of that can work rationally is the free-market. That goes for money too. (The principal reason we have so many problems with our economy is due to the fact that we do not have free-market money.)

If you can come up with another system that solves the Economic Calculation problem, then I'll be very interested. However, I'm tempted to say that such a scheme is almost certainly impossible.

Scott G. Beach · 2002-08-27 14:52:11

I'm all in favor of gold money here on Earth, but I'm not sure that it'll be the currency of choice on Mars.

Pat:

What do you think of using census data as a foundation for a monetary system? The ordinances of a Martian settlment might provide that the amount of coin and currency in circulation shall be based on the number of people who live in the settlement. The ordinance could authorize the issuance of, for example, up to M$1,000,000 per person. This limit would prevent the settlement's government from causing monetary inflation.

Scott

Earthfirst · 2002-10-23 11:43:29

What make you think that there gold on mars any ways it is a dead plant. in order for gold ores to form the has to be oceans, erosin, and technochechs. None that has exist on mars, if only for a short time. That an ores would be spread out and not concentrated and would be very expensive to mine. If you prove to me the there could be ores on mars do so. But the likly hood would remote that any major mineral despost exist on the moon.

Scott G. Beach · 2002-10-23 19:40:24

In order for gold ores to form the has to be oceans, erosin, and technochechs.

Mr. Earthfirst:

You may be correct in asserting that placer deposits of gold may be few and far between on Mars. However, Mars may have plentiful lode deposits of gold and other valuable minerals.

Scott MarsNext

RobS · 2002-10-27 00:33:20

Some geologists are comparing Mars to Africa, where mineralization is concerned; and Africa is very rich in gold and other minerals. Mars has had extensive igneous activity throughout its history, and probably had an ocean's worth of water moving around its surface and subsurface for a billion or two years. There have been plenty of geological forces at work to concentrate minerals. This is in contrast to the moon, which is much, much drier. Venus may have minerals, but we may never be able to find out. Mercury may be in an intermediate situation, with extensive igneous activity but no water activity.

-- RobS

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#1 2002-08-26 23:12:51

Re: Martian Gold Standard - Will Martian money be as good as gold?

#2 2002-08-27 06:09:59

Re: Martian Gold Standard - Will Martian money be as good as gold?

#3 2002-08-27 11:42:54

Re: Martian Gold Standard - Will Martian money be as good as gold?

#4 2002-08-27 12:20:30

Re: Martian Gold Standard - Will Martian money be as good as gold?

#5 2002-08-27 14:52:11

Re: Martian Gold Standard - Will Martian money be as good as gold?

#6 2002-10-23 11:43:29

Re: Martian Gold Standard - Will Martian money be as good as gold?

#7 2002-10-23 19:40:24

Re: Martian Gold Standard - Will Martian money be as good as gold?

#8 2002-10-27 00:33:20

Re: Martian Gold Standard - Will Martian money be as good as gold?

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