>The use of money is the purest act of faith; no anchorite who has followed
>a vision into the desert has acted on an idea as far-fetched as our belief
>that if we put a dollar in a machine we will be drinking a Diet Coke in a
>minute.
This act of faith is hardly pure; it's based in practical experience. It's
an act of faith in the sense that we assume that others will accept our
money which, since it is based on long experience, is a much smaller act of
faith than that about the vending machine not malfunctioning. Our
experience in seeing money as having value (ability to purchase useful
stuff) is due to its scarcity. In the case of paper or fiat money, it's the
power of the state that we have having faith in it, since the state --
through its proxy, the central bank -- uses its power to maintain that
scarcity. In places where the state is falling apart, unable to cut
spending, collect taxes, or borrow (as in early Weimar Germany), we see
money rapidly losing its scarcity-value. That is, prices take off into
outer space.
Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~JDevine
