John Nash's Ideal Money: The Motivations of Savings and Thrift

post by Flinter · 2017-01-17T03:58:27.342Z · score: 0 (0 votes) · LW · GW · Legacy · 33 comments

This is a link post for http://sites.stat.psu.edu/~babu/nash/money.pdf

33 comments

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comment by calef · 2017-01-18T05:53:26.145Z · score: 4 (4 votes) · LW(p) · GW(p)

Hi Flinter (and welcome to LessWrong)

You've resorted to a certain argumentative style in some of your responses, and I wanted to point it out to you. Essentially, someone criticizes one of your posts, and your response is something like:

"Don't you understand how smart John Nash is? How could you possibly think your criticism is something that John Nash hadn't thought of already?"

The thing about ideas, notwithstanding the brilliance of those ideas or where they might have come from, is that communicating those ideas effectively is just as important as the idea itself. Even if Nash's Ideal Money scheme is the most important thing in the universe, if you can't communicate the idea effectively, and if you can't convincingly respond to criticism without hostility, no one will ever understand that idea but you.

A great modern example of this is Mochizuki's interuniversal Teichmuller theory, which he singlehandedly developed over the course of a decade in near complete isolation. It's an extremely technically dense new way of doing number theory that he claims resolves several outstanding conjectures in number theory (including the ABC Conjecture, among a couple others). And it's taken over four years for some very high profile mathematicians to start verifying that it's probably correct. This required workshops and hundreds of communications between Mochizuki and other mathematicians.

Point being: Progress is sociological as much as it is empirical. If you aren't able to effectively communicate the importance of an idea, it might be because the community at large is hostile to new ideas, even when represented in the best way possible. But if a community--a community which is, nominally, dedicated to rationally evaluating ideas--is unable to understand your representation, or see the importance of it, it might just be because you're bad at explaining it, the idea isn't all that great, or both.

comment by dropspindle · 2017-01-18T18:29:25.178Z · score: 0 (0 votes) · LW(p) · GW(p)

I am nearly certain Flinter is just Eugene's new way of trolling now that there aren't downvotes. Don't feed the troll

comment by gjm · 2017-01-18T23:35:29.207Z · score: 2 (2 votes) · LW(p) · GW(p)

I'm pretty sure not. There are lots of things elsewhere on the internet that show every sign of being written by the same person, whose preoccupations seem quite different from Eugine's.

comment by TiffanyAching · 2017-01-18T23:48:16.242Z · score: 0 (0 votes) · LW(p) · GW(p)

I'm dying to know, who the heck is this Eugine character? I keep seeing the name but I don't know the backstory.

comment by gjm · 2017-01-19T14:54:54.973Z · score: 5 (5 votes) · LW(p) · GW(p)

OK, here's the back story.

Once upon a time, there was an LW user called Eugine_Nier. (Not, I believe, the person's actual name, but a pun on "engineer".) Eugine was on the whole a valued LW contributor. There was at least one respect in which his positions tended to be some way from those of the typical LW user; he was considerably to the "right" on various sociopolitical issues, and quite outspokenly so.

Eugine got into arguments about race, gender, feminism and the like from time to time. After a while, some people noticed that after getting into such arguments they were mysteriously getting an awful lot of downvotes: it seemed that someone was going through their old comments and voting them down regardless of content. It didn't take long to figure out that it was almost certainly Eugine doing it. The people this happened to were mostly ones who had had arguments with Eugine, but in some cases the trigger seemed to be merely expressing views markedly different from his. (Anything smacking of feminism or "social justice" was liable to attract the Wrath of Eugine.)

After a while, Eugine got banned from LW; I think it was for a combination of this mass-downvoting behaviour (which is generally considered improper; votes are "meant" to be expressions of opinion about particular comments rather than particular users; but note that this opinion is not universally agreed with on LW). Soon after, another account popped up whose behaviour was notably similar to Eugine's, and the mass-downvoting was observed not to have stopped.

Eugine's new account was banned. Another one appeared. That was banned. Another appeared. After a while, new Eugine accounts were appearing faster than the old ones were closed down.

While this was going on, Eugine's behaviour changed a bit too. More and more of his comments were on those sociopolitical issues, they were more and more consistently hostile in tone, and he had less and less to say about anything else. And his mass-downvoting became (at least for some of his targets) more aggressive, with sockpuppet accounts used to downvote people multiple times.

Immediately before downvoting was disabled altogether a little while ago, a few LWers (I was one; I think a couple of the mods were, too) were being mass-downvoted by Eugine's sockpuppets according to the following principle: Make sure that anything these people post has a negative net score. If you look at my user page and go back a few months, you will probably see that almost everything is at -1; if you hover your mouse over the scores and do the necessary calculations, you will see that many of them are at +6-7 or +7-8 or something of the sort. (Not, I think, because these were really excellent comments that would have been at +6 or +7 without Eugine; but because they were perfectly decent comments that would have been at 0 or +1 or thereabouts, and that got upvoted by others when Eugine's sockpuppets voted them down.)

I think Eugine's goals were (1) drive away people with the "wrong" sociopolitical views by making posting to LW an unpleasant activity for them, (2) make people with the "wrong" sociopolitical views look worse (it's hard to ignore those karma scores completely when looking at a comment), and later on perhaps just (3) burn the whole thing down because it's a nest of those awful feminists and social justice types.

There are various fairly obvious technical measures that could be taken against this sort of behaviour. Unfortunately, digging in the LW database and modifying the LW code are both very awkward, because the people who actually run it and have control over the data and the code are not LW participants and have more urgent calls on their time, and also because the code (basically an old version of Reddit) is a bit strange (the way the database is organized is not very convenient for manual investigation). So the moderators' actions have mostly been limited to playing whack-a-mole with Eugine's accounts.

I've been a little vague about Eugine's actual opinions above, partly because describing the opinions of someone with whom you strongly disagree is perilous and partly because the conflict between Eugine and most of the rest of LW is as much about values and attitudes as about factual opinions, but here's a rough sketch of how I think he sees the world. The racial prejudices commonly found in e.g. the US are based on fact; black people are systematically stupider and worse behaved than white people, and to a good approximation no black person has ever done anything truly impressive and admirable. Concern about police mistreatment of black people is nonsense; the police are just reacting appropriately to black criminality. Women are less intelligent than men, and if they are less likely to get hired by academic departments or promoted to executive positions or whatever then that, again, is simply a rational response to their inferiority. Talk of black, or gay, or transgender, "pride" is stupid: the perverts and trannies have nothing to be proud of. "Social justice" is basically a power-grab by groups without the ability to get power and respect by actually earning them. The best social structures are ones that put those people in their place and favour the genuinely superior. In case anyone's been skim-reading, I will reiterate that that's my attempt to sketch Eugine's position; my own is quite different.

comment by TiffanyAching · 2017-01-19T20:00:35.017Z · score: 0 (0 votes) · LW(p) · GW(p)

Thanks gjm! Once again you have used your presumably-valuable time to give me a really thorough explanation. Jeez, what a story.

Eugine's new account was banned. Another one appeared. That was banned. Another appeared. After a while, new Eugine accounts were appearing faster than the old ones were closed down.

There's movie material here. A dark psychological indie-thing about obsession and rage. "Troll", starring... Steve Carrell? He was dead creepy in Foxcatcher.

I mean, to mess with a community once or twice is one thing. To keep coming back and back, unable to let it go or move on, is the stuff of tragedy.

Here's a rough sketch of how I think he sees the world...

Good thing I joined after downvotes were disabled. I do not think we would be pals.

comment by Lumifer · 2017-01-19T20:25:22.430Z · score: 0 (0 votes) · LW(p) · GW(p)

There's movie material here.

...that's a very plain-vanilla story with little drama -- compared to the baseline of 'net forums and online communities in general.

I do not think we would be pals.

It would be... regrettable if LW turned into an ideologically homogeneous place where everyone sees the world in a basically similar way.

comment by TiffanyAching · 2017-01-19T20:41:56.164Z · score: 0 (0 votes) · LW(p) · GW(p)

...that's a very plain-vanilla story with little drama -- compared to the baseline of 'net forums and online communities in general.

Well yeah, I suppose that's true. But the screenwriter can zhuzh it up a bit, throw in a murder somewhere.

It would be... regrettable if LW turned into an ideologically homogeneous place where everyone sees the world in a basically similar way.

Absolutely. I didn't come here for everyone to agree with me. But disagreement, even passionate ideological disagreement, isn't the same as obsessively following people around to downvote everything they say. That's just plain old batshittery. I'll probably disagree with you at some point but I'm not going to put your name down on my List of Enemies Who Must Be Destroyed. It's getting cluttered anyway.

comment by Flinter · 2017-01-17T04:00:31.528Z · score: 1 (1 votes) · LW(p) · GW(p)

The quickest way to understand Nash's proposal is through these two threads:

This first link introduces the concept of a stable metric for value and starts to show how it could be used to solve many complex problems (especially ones discussed on this forum):

http://lesswrong.com/lw/ogp/a_proposal_for_a_simpler_solution_to_all_these/

This thread questions our shared meaning of ideal, if we have one, and if we can have one:

http://lesswrong.com/lw/ogt/do_we_share_a_definition_for_the_word_ideal/

comment by username2 · 2017-01-18T10:25:34.442Z · score: 0 (0 votes) · LW(p) · GW(p)

What does this have to do with rationality?

comment by TiffanyAching · 2017-01-17T19:01:57.628Z · score: 0 (0 votes) · LW(p) · GW(p)

Flinter, I'd like to know what you want to happen here. I know that people aren't reacting to you the way you think they should. So what if they did?

Say everyone here shut up and let you make as many posts as you need to give us this important information. Then what? What do you want everyone to do then? It seems to shock and upset you when anyone raises a counterargument or looks for flaws in the argument or even expresses doubt. And it appears to be tantamount to heresy to suggest that John Nash might have had an idea that is imperfect or inapplicable.

So what is there left for us to do, if we're not supposed to argue or debate the question?

comment by MrMind · 2017-01-17T13:37:37.619Z · score: 0 (0 votes) · LW(p) · GW(p)

Are there any other documents by Nash on the subject other than this lecture?

comment by gjm · 2017-01-17T13:54:04.864Z · score: 0 (0 votes) · LW(p) · GW(p)

The lecture mentions an earlier paper with "Ideal Money" in the title and indicates that some of the things you might expect Nash to say about "ideal money" are not covered in the lecture because they're in the earlier paper. If you have access to JSTOR you can find it there. It's from 2001.

comment by Flinter · 2017-01-17T15:41:12.858Z · score: 0 (0 votes) · LW(p) · GW(p)

Yup thx! There are a few lectures by him that have varying points. There are also MANY versions of "Ideal Money", some slight different, others that are wholly different.

comment by Flinter · 2017-01-17T04:02:38.370Z · score: 0 (0 votes) · LW(p) · GW(p)

Here are two summaries one long one short:

https://thewealthofchips.wordpress.com/2015/07/12/a-general-summary-for-john-nashs-proposal-ideal-money/

https://thewealthofchips.wordpress.com/2015/07/09/the-totality-of-the-proposal-ideal-money/

comment by moridinamael · 2017-01-17T15:28:55.098Z · score: 3 (3 votes) · LW(p) · GW(p)

It would be neat to have a currency that was firmly pegged to ICPI, it would at the very least provide a good testing ground to determine whether some of Nash's predictions are correct. However, one problem that I don't see addressed in Nash's work (at least the papers that I've been able to find) is that of political uncertainty. No nation-state can give a meaningful guarantee that the currency will remain perfectly pegged to ICPI. Leadership and policies evolve over time. Even if we could formulate some philosophical basis for a perfectly calibrated ICPI, a currency can still collapse due to political instability in the sponsoring nation-state. It can even be manipulated by manipulating the commodities in the ICPI portfolio. This is a cool idea but far from perfect.

comment by Flinter · 2017-01-17T16:48:50.363Z · score: 0 (0 votes) · LW(p) · GW(p)

You think Nash didn't think of "political uncertainty" and "political corruptibility"?

While you rad these quotes:

I think of the possibility that a good sort of international currency might EVOLVE before the time when an official establishment might occur.

…my personal view is that a practical global money might most favorably evolve through the development first of a few regional currencies of truly good quality. And then the “integration” or “coordination” of those into a global currency would become just a technical problem. (Here I am thinking of a politically neutral form of a technological utility rather than of a money which might, for example, be used to exert pressures in a conflict situation comparable to “the cold war”.)

Here, evidently, politicians in control of the authority behind standards could corrupt the continuity of a good standard, but depending on how things were fundamentally arranged, the probabilities of serious damage through political corruption might becomes as small as the probabilities that the values of the standard meter and kilogram will be corrupted through the actions of politicians.~Ideal Money

We have to seek to understand him.

This is a cool idea but far from perfect.

Do you think that because you haven't wholly understood Nash that it is appropriate to tell him that he is wrong and his idea has a flaw? I think you judged it and made your conclusion too fast.

comment by moridinamael · 2017-01-17T17:16:17.436Z · score: 0 (0 votes) · LW(p) · GW(p)

Here, evidently, politicians in control of the authority behind standards could corrupt the continuity of a good standard, but depending on how things were fundamentally arranged, the probabilities of serious damage through political corruption might becomes as small as the probabilities that the values of the standard meter and kilogram will be corrupted through the actions of politicians.

"Depending on how things were fundamentally arranged" is doing an implausible amount of work in that quote. Depending on how the atoms in my desk are fundamentally arranged, my desk may be a fully general nanoassembler, but the scientific and engineering work needed to turn my desk into a nanoassembler hasn't been done.

Also, why do you think it is so unlikely that the value of the standard kilogram could be corrupted by the actions of politicians? It is improbable but not impossible. In fact, the definition of the "standard units" has evolved over time.

If

  • economists figure out a way of defining a standard portfolio of commodities that is inherently resilient against technological change, global disasters, market fluctuations, Soros-esque currency manipulation, or any other conceivable force that causes it to deviate from a perfect reflection of human value and

  • some entity implements this scheme in such a way that the standard is perfectly immune to institutional corruption, and

  • assuming the prior two (extremely difficult and maybe impossible) objectives have been accomplished, we further assume that, at the moment we turn on an AI, all knowledge potentially relevant to human value has already been in some sense encoded in this magical currency,

    ... then this might have a shot of working.

However, if there is any chance at all of the system that defines the currency being manipulated in any way, shape, or form, it's pretty likely that a superintelligent AI will just manipulate the currency such that the most "economically correct" actions happen to coincide with the actions that are simplest and most certain, and in about three steps you have a paperclip maximizer.

comment by Flinter · 2017-01-17T17:26:35.802Z · score: 0 (0 votes) · LW(p) · GW(p)

"Depending on how things were fundamentally arranged" is doing an implausible amount of work in that quote. Depending on how the atoms in my desk are fundamentally arranged, my desk may be a fully general nanoassembler, but the scientific and engineering work needed to turn my desk into a nanoassembler hasn't been done.

Firstly you are calling Nash dumb, which is stupid and ignorant. Do you think maybe you don't understand what he is saying and especially WHY he is saying?

2ndly you are not using the standard accepted definition of the word Ideal: http://lesswrong.com/r/discussion/lw/ogt/do_we_share_a_defintion_for_the_word_ideal/

Also, why do you think it is so unlikely that the value of the standard kilogram could be corrupted by the actions of politicians? It is improbable but not impossible. In fact, the definition of the "standard units" has evolved over time.

Are you seriously addressing me as if I wrote Nash's Ideal Money? Listen, Nash isn't dumb, he explains how the standard units evolved over time and he is making fun of your for not considering a unit of value could do the same. He also explains how the standard unit of value needs to be adjusted over time.

economists figure out a way of defining a standard portfolio of commodities that is inherently resilient against technological change, global disasters, market fluctuations, Soros-esque currency manipulation, and

Nash perfectly defined it, don't be silly.

some entity implements this scheme in such a way that the standard is perfectly immune to institutional corruption, and

Yes Ideal Money is immune (so is bitcoin I might add)

assuming the prior two (extremely difficult and maybe impossible) objectives have been accomplished, we further assume that, at the moment we turn on an AI, all knowledge potentially relevant to human value has already been in some sense encoded in this magical currency,

Your assumption AI won't also evolve into existence is asinine.

... then this might have a shot of working.

Would you dare say that to Nash, that his idea MIGHT work? I don't believe you, because no one had the guts to say when he was alive. You don't look tough here, you look like a coward for this.

However, if there is any chance at all of the system that defines the currency being manipulated in any way, shape, or form, it's pretty likely that a superintelligent AI will just manipulate the currency such that the most "economically correct" actions happen to coincide with the actions that are simplest and most certain, and in about three steps you have a paperclip maximizer.

No this is silly and irrational. If Nash showed that the levation of ideal money is the intelligent thing to do, then why would and AI corrupt the process considering its smarter than us? You are afraid of technological advance. Any intelligent life form, knows AI is the first goal of a level 1 civilization.

AI will just manipulate the currency such that the most "economically correct"

The currency itself defines what is economically correct. You are misunderstanding the nature of money and the problem it solves. The AI cannot do what you are saying because its not logical.

comment by moridinamael · 2017-01-17T17:50:49.854Z · score: 2 (2 votes) · LW(p) · GW(p)

As general feed back: On Less Wrong we actually tend to have pretty thick skins, so it doesn't bother me too much when you call me stupid. It only makes you look bad. Furthermore, we are uniquely unimpressed by appeals to authority around here. Isaac Newton did a tremendous amount of work in the occult. Despite Isaac Newton's obviously superior intellect, I see no reason to drop what I'm doing and become an occultist. Likewise, I will defer to Nash on the particulars of abstract Game Theory, but see no strong reason to accept claims beyond his domain of expertise. I suggest you stop insulting people and stop ostentatiously worshiping John Nash, and I make this suggestion because it's inhibiting your ability to communicate in general, not because it particularly effects me one way or the other.

You did not actually provide any arguments in your post except this line:

The currency itself defines what is economically correct. You are misunderstanding the nature of money and the problem it solves. The AI cannot do what you are saying because its not logical.

  • If the currency defines what is economically correct, and but does not perfectly capture human value, then human value will not be preserved when the AI tries to optimize for the parameter defined by the currency.

  • If there is any way of manipulating an objective function, an AI will try to do that in order to conserve resources while still maximizing its objectives. If there is any way of manipulating the currency -- for example, hacking into whatever global database defines the value of the currency and literally changing the numbers -- the AI will do that. This will almost always be easier for the AI, and the AI will have no inclination to follow the "spirit rather than the letter" of its programming.

comment by Flinter · 2017-01-17T18:00:56.312Z · score: 0 (0 votes) · LW(p) · GW(p)

As general feed back: On Less Wrong we actually tend to have pretty thick skins, so it doesn't bother me too much when you call me stupid. It only makes you look bad.

Calling you stupid is a short cut. I know it doesn't hurt you, and I don't care if I look bad. I bring content that is truth.

Despite Isaac Newton's obviously superior intellect, I see no reason to drop what I'm doing and become an occultist.

I know but the thing is that Newton was an alchemist too, and their famous endeavor is to effectively turn math into gold, which I am claiming has been achieved now. Also in Ideal Money Nash notes Newton pegged the pound to gold as/when he was master of the mint.

Likewise, I will defer to Nash on the particulars of abstract Game Theory, but see no strong reason to accept claims beyond his domain of expertise. I suggest you stop insulting people and stop ostentatiously worshiping John Nash, and I make this suggestion because it's inhibiting your ability to communicate in general, not because it particularly effects me one way or the other.

People are insulting us, and I am not worshiping him just because I am pointing out his logic here is obviously infallible. And it is not intelligent to say you defer to him on game theory and not Ideal Money. His discovery was Ideal Money all along. The others proofs and insights are artifacts of him trying to express Ideal Money. Ideal Money is what he spent his whole life on. Its the big problem he solved and all his works is related and an expression of that.

If the currency defines what is economically correct, and but does not perfectly capture human value, then human value will not be preserved when the AI tries to optimize for the parameter defined by the currency.

I don't know what you mean to say. In the future humans will get paid the most for contributing the most value to society (and at the same time pursing their own selfish interests). AI will do the same. The prices will tell us what to do. AI won't corrupt that because its obviously optimal and it is smarter than us.

If there is any way of manipulating an objective function, an AI will try to do that in order to conserve resources while still maximizing its objectives. If there is any way of manipulating the currency -- for example, hacking into whatever global database defines the value of the currency and literally changing the numbers -- the AI will do that. This will almost always be easier for the AI, and the AI will have no inclination to follow the "spirit rather than the letter" of its programming.

No you cannot manipulate ideal money because its conceptual. You are being silly. Also when Nash was a kid he sent a letter to the NSA explaining a conjecture for unbreakeable encryption. AI can't hack bitcoin. The encryptor always wins.

comment by moridinamael · 2017-01-17T18:18:03.025Z · score: 0 (0 votes) · LW(p) · GW(p)

You are conflating at least four senses of the word "value" into one concept and then assuming that those four things are the same thing.

  • What we call "human value" is the actual, abstract, difficult-to-know set of things that human beings want, and the things that we don't know that we want but we would want if we knew about them, and maybe even the things that we wouldn't want but that we might be glad we had after we got them. Discovering the content of "human value" is an enormous, unsolved philosophical problem.

  • What you might call "economic value" is purely defined in terms of trades between agents and can only be grounded in relative comparison between commodities.

  • In your post you throw in a reference to "value to society". Something might be very valuable to society but individuals fail to coordinate and pay for that thing. This is known as the tragedy of the commons.

  • Individual humans are known to value weird, idiosyncratic things. You might call these "individual values". Perhaps it would be valuable to society for some person to be put to death, but this would be contrary to that person's individual values.

"Value to society" is not identical to "value to an individual" is not identical to "economic value" is not identical to "human value", and none of these are identical to "Ideal Currency value". There is certainly no apparent reason why Ideal Currency would converge on "human value", which is the one that I would say should be optimized. Swapping these various senses of the word in your rhetoric as though they are interchangeable is leading you to make large errors. Assuming that an AI will just get what you mean and know instinctively which definition you mean is crippling to your thesis.

comment by korin43 · 2017-01-17T16:00:34.067Z · score: 1 (1 votes) · LW(p) · GW(p)

The argument here seems to be that if currencies were freely tradable on a market, they would all converge to an optimal currency. But don't we already have a global currency market?

comment by Flinter · 2017-01-17T16:44:24.714Z · score: 0 (0 votes) · LW(p) · GW(p)

You figure that is the extent of John Nash's argument he spent 20 years defining for us? And you just defeat it in a sentence:

But don't we already have a global currency market?

Do you know who John Nash is? He is the guy that it took 40 years for us to recognize the significance of his works. Do you think maybe the significance has simply gone over your head?

comment by korin43 · 2017-01-17T19:12:34.149Z · score: 2 (2 votes) · LW(p) · GW(p)

Yes, I think the significance has gone over my head. That's why I asked the question rather than making an assertion.

comment by James_Miller · 2017-01-17T23:09:46.202Z · score: 1 (1 votes) · LW(p) · GW(p)

Flinter, do you know who John Nash is? He had a brilliant mind and produced some remarkable works but he also had mental illness that occasionally caused him to misunderstand reality and so we can not just assume something he passionately believed in is right.

comment by moridinamael · 2017-01-17T17:34:33.891Z · score: 1 (1 votes) · LW(p) · GW(p)

Do you know who John Nash is? He is the guy that it took 40 years for us to recognize the significance of his works. Do you think maybe the significance has simply gone over your head?

This is not actually an argument. Could you provide a reason why korin43's observation does not invalidate your proposal?

comment by Flinter · 2017-01-17T17:47:14.672Z · score: 0 (0 votes) · LW(p) · GW(p)

Its not my proposal.

The answer to your questions is too big. There is an intrinsic problem with our gobal financial system. Essentially the triffin dilemma. Governments, because self interested, cannot act for the good of the citizens. It is the nature of the problem.

Nash proposes the introduction of a "good" money, but it is good not in the conventional sense, but rather the "gold" sense (which again he defines because not many understand).

With the introduction of this international "gold money", there is now a new stage set or game created. Governments now have to respond to the fact that citizens can CHOOSE, and so the markets start to (let's say) "hyper-reflect the quality of our money.

The ultimate result is a limit towards what Nash calls Ideal Money, which is money comparable to an optimally chosen and adjusted basket of industrial commodity prices.

…although that scheme for arranging for a system of money with ideal qualities would work well…it would be politically difficult to arrive at the implementation of such a system.

…for the government of a state, acting on its own independently of other states, to rationally contemplate the evolution of the inflation rate for its currency towards zero there are clearly some very relevant considerations relating to tax revenue expectations.

I think of the possibility that a good sort of international currency might EVOLVE before the time when an official establishment might occur.

To be quite respectable, in a Gresham-advised sense, money needs only to be AS GOOD as other material commod-ities that might be hoarded. Starting with the idea of value stabilization in relation to a domestic price index associated with the territory of one state, beyond that there is the natural and logical concept of internationally based comparisons.

The currencies being compared, like now the euro, the dollar, the yen, the pound, the swiss franc, the swedish kronor, etc. can be viewed with critical eyes by their users and by those who maybe have the option of whether or not or how to use one of them. This can lead to pressure for good quality and consequently for a lessened rate of inflationary deprecation in value.

And so the various currencies managed with “inflation targeting” would be comparable by users or observers who would be able to form opinions about the quality of the currencies. And what I want to suggest is that “the public” or the users, those for whom a medium of exchange functions as a basic utility, may develop opinions that are critical of currencies of lower “value quality”. That is, the public may learn to demand better quality of that which CAN be managed to be of better quality or which can be manged to be lof the lower quality observed in so many of the various national currencies in the 20th century.

“Keynesian” players in this game have natural opponents (or co-players, beyond zero-sum perspectives) who are interested in not being themselves “outsmarted” by those who control the options that determine, say, the quantity supplied of the national currency.

comment by moridinamael · 2017-01-17T17:56:39.210Z · score: 1 (1 votes) · LW(p) · GW(p)

With the introduction of this international "gold money", there is now a new stage set or game created. Governments now have to respond to the fact that citizens can CHOOSE, and so the markets start to (let's say) "hyper-reflect the quality of our money.

Please elaborate. We can already exchange currencies or even use cryptocurrencies. Governments already respond to the fact that citizens can choose what currency to keep their assets in and what currency to trade in internationally. This is true without a "gold money", and I fail to see how the presence of a "gold money" would improve the picture. Or in another framing, if Nash is right, then we are already evolving toward "gold money" as governments have to respond to these incentives. However, the technical definition of a "limit" that Nash is using only implies that the goal will be reached at the "limit" of time, meaning, we will never actually reach that ideal state.

comment by Flinter · 2017-01-17T18:03:54.776Z · score: 0 (0 votes) · LW(p) · GW(p)

Gold money means that the VALUE is relatively stable (relative to other options) in comparison to Ideal Money (which is money comparable to an optimally chosen basket of stable global commodity prices). We have never had that option, other than gold that Nash explains failed for reasons, and is not a good idea to re-instate for reasons.

Also the governments heavily restrict our ability seek better alternatives.

comment by moridinamael · 2017-01-17T18:07:37.498Z · score: 0 (0 votes) · LW(p) · GW(p)

Please continue. Why is competition between international currencies not sufficient to emanetize the eschaton?

comment by Flinter · 2017-01-17T18:11:40.708Z · score: 0 (0 votes) · LW(p) · GW(p)

Because it leaves the market participants with no basis for valuation. Every time they find one there is pressure for self interested actors to corrupt it. And also it doesn't matter, if I don't give an argument then the suggestion is still that competition will tend the currencies towards ideal.

comment by moridinamael · 2017-01-17T18:21:04.454Z · score: 1 (1 votes) · LW(p) · GW(p)

Which is it? Competition evolves currency toward an ideal, or competition provides pressure driving self-interested actors toward corrupting currencies?