Units of Account: Part I
What is a unit of account? It is the measuring stick for value in an economic system. How do economic systems determine said value? Via bioelectrochemical interactions between sentient beings. This is how all systems dependent on biology grow – Metcalfe's law, or the network effect.
What is difficult to process is that any variable can be used as a unit of account. Throughout history this has been the case as far back as we can find on record (the link references figures 1 and 2, snippets of an infographic showing the different types of money throughout history). Over the last few centuries, our use of fiat currency as money has been consistent, unfortunately. What is most interesting to note, given the evidence of fiat currency being horrible to use for money, we use fiat yet and still. Fun fact: fiat currency is not money, therefore, what you think of as money – what you earn your income in – is not money.
Per human nature, comfort is detrimental to growth, but why? If we consider the nature of the human experience, staying static is the same as staying stagnant. Furthermore, we know that the lack of use of muscles degenerates them. Therefore, we are to always be doing something, while recharging here and there. We are born knowing nothing, and receive things to learn, but seeking out information outside of what is given is what leads to growth. Comfort is being complacent, and complacency kills.
If we look at current worldwide events, all the pain and suffering is self-imposed. How so? Simply due to lack of knowledge. All relevant woes are economic or derive from economic situations. Consequently, we end up at the measuring stick for economic value once again – the unit of account.
All fiat currencies are predicated on the population believing a narrative. Once that narrative is nullified, the fiat currency begins to fade in terms of conditions for use. This is one of the fundamental areas where fiat currencies always fail, as it is an inevitable result due to the mathematics that underlies fiat currencies. The math underlying anything manufactured is critical because it is not natural, or not created by nature. As such, there will be errors in its elemental make up, whether man likes it or not.
Stay tuned for the follow up parts to this series. Thanks for reading.