From: rah@shipwright.com (Robert Hettinga)
Date: Wed, 1 Nov 1995 07:23:41 +0800
To: cypherpunks@toad.com
Subject: A final Huber-Spam: ON MONEY
Message-ID: <v02120d00acbc472b58a4@[199.0.65.105]>
MIME-Version: 1.0
Content-Type: text/plain


Note the URL.

There's more there for them as wants 'em.

Cheers,
Bob Hettinga


--- begin forwarded text

Date: Tue, 31 Oct 95 21:32:44 0500
From: Robert Hettinga <rah@shipwright.com>
Organization: Shipwright
MIME-Version: 1.0
To: rah@shipwright.com
Subject: 031692.html
X-URL: http://khht.com/huber/forbes/031692.html

http://khht.com/huber/forbes/031692.html>
 ON MONEY
>
> by Peter Huber
>
> Forbes, March 16, 1992 at Pg. 144
>
> Copyright 1992 by Peter Huber. Electronic copies of this document
> may be distributed freely, provided that this notice accompanies all
> copies.
>
> -------
>
> While Europe strains to give birth to a new currency, Boris Yeltsin
> toils to resurrect a dead one. With private markets triumphant
> everywhere else, however, the mystery is why governments still have
> to manufacture money at all.
>
> It is still often taken for granted that the one thing private
> markets cannot make is money itself: Only government can do that.
> But new governments of young nations, especially nations with
> turbulent histories, can't make money, either. Nobody quite trusts
> them, and without trust the paper lovingly engraved at the
> government mint is valueless.
>
> Until recently, people put up with a lot of government paper because
> even bad paper was more convenient than the alternative, which was
> barter. Every self-respecting capitalist knew that government paper
> was a perishable good, that it always decayed, slowly in
> Switzerland, fast in Brazil, and most just put up with it. But if
> capitalists can produce candies that melt in your mouth, not in your
> hand, why not currencies, too?
>
> Money, as I wrote here two years ago (FORBES, May 14, 1990), is just
> another network, our oldest medium of systematic communication. And
> new communications technologies are fast surpassing the old. The
> paperless bank, unlike the paperless office, is at hand.
>
> When it works, the old-fashioned paper we call money reliably
> records past effort and promises future return. It's all a matter of
> communication among stable communities of productive people. This is
> why individuals can issue currencies, too -- personal checks, IOUs,
> that sort of thing. Once it's established of an individual that her
> word is her bond, she can in fact issue private currency at will, at
> least among people who know her.
>
> But the trouble with private currencies has always been their
> informational overhead. Personal checks bounce, the "I" behind the
> IOU absconds to Monaco, Macy's defaults on its bonds. Private paper
> is also volatile; pegging current value requires specialized
> information from Wall Street, or a bank in Oshkosh, or a trading pit
> in Chicago. In the past, it's often been cheaper to put up with the
> steady but modest thievery of a central bank, which peels off 3%
> (will it soon be 6%?) of your dollar every year through inflation,
> than to sort out whose private paper is worth what at any given
> moment.
>
> Computers and fiber-optic communications are changing all that. Our
> new central bankers can be concerns like TRW and Dun & Bradstreet,
> which track who's solvent and who's a deadbeat and convey the
> information instantly, at the touch of a button, wherever it's
> needed. Our new mints and engravers can be companies like Visa and
> AT&T, which clear millions of transactions daily, both here and
> abroad.
>
> What enterprises like these supply are the informational ingredients
> of money. They already are far better than Alan Greenspan at
> stabilizing value by assembling baskets of private paper as varied
> and diversified as the global economy. Information about who earned
> a credit yesterday or who can be trusted to pay back a debt tomorrow
> can be passed around as easily as a dollar bill. More easily, in
> fact.
>
> Like religious liturgies conducted in some otherwise dead language,
> transactions may still be denoted in dollars or yen, but these
> vestiges of an earlier age will ultimately give way to a new
> financial vernacular. If everybody paid for everything (wages
> included) by credit card, for example, the accounts could just as
> well be denoted in pork bellies, IBM stock, quarterpounders with
> cheese, or (more likely) some very large basket of hundreds of
> different private goods and services, tangible and intangible.
>
> The Lynch, for example, might be a share in a standard pool of
> commodity receipts maintained by Merril Lynch. Nobody would fully
> trust the Lynch, of course, even if backed by 100% reserves, but
> nobody would have to. Nobody trusts his food supply to any one
> farmer, either. You diversify, you assemble baskets of baskets, and
> you constantly search for quality goods and reliable supply. Same
> with money. When the network and the computers behind it are
> powerful enough, no central authority can or should supply the
> currency, and no one will pay annual tribute by way of inflation to
> the government mint. And with private money, private fortunes will
> no longer be held hostage to public ineptitude in the Kremlin or on
> Capitol Hill.
>
> So back to Yeltsin and how we can help him. Despite the corrupting
> influences of the regulatory collectivist on our own shore,
> America's phone companies and banks are still the best in the world.
> Yeltsin needs them, far more than he needs the International
> Monetary Fund, Pizza Hut or Western investment in Russia's oil
> industry. Modern telefinancial enterprises can deliver the real oil
> of the economy: truly stable media of exchange.
>
> The biggest contribution Yeltsin can make to Russia's fiscal policy
> is to make way for currency capitalists. No exchange controls, no
> bank insurance, no loan guarantees, no criminal prosecution for
> ordinary bankruptcy, nothing but basic, narrowly interpreted laws
> against outright fraud.
>
> Will the new private banks sometimes fail? Of course they will. Will
> widows then be ruined? Certainly. So what else is new? In Russia
> today the only bank in town has failed miserably, and the one cold
> comfort for widows is that the ruin is universal. Give it a try,
> Boris. You have nothing to lose but your rubles.

--- end forwarded text


-----------------
Robert Hettinga (rah@shipwright.com)
Shipwright Development Corporation, 44 Farquhar Street, Boston, MA 02131
USA (617) 323-7923
"Reality is not optional." --Thomas Sowell
>>>>Phree Phil: Email: zldf@clark.net  http://www.netresponse.com/zldf <<<<<