Post Apocalyptic Economics

[exalted]

Originally Posted by vicky_molokh

Gift economies seem to require less stability than establishing and enforcing currencies.

Likely much less stability but a lot of shared culture that won't develop over night. I'd personally not peg western Europeans current culture as developing into a gift economy anywhere in less then several generations.

[Anthony]

Originally Posted by vicky_molokh

Gift economies seem to require less stability than establishing and enforcing currencies.

Creating a system of scrip is very fast; it's likely that any reasonably established market town, absent a currency system, will work out something of the sort.

[ericthered]

Gift economies can materialize quite quickly. They are the natural result of an insular community with a powerful leader, and in most situations we are discussing, such communities are a dime a dozen.

It happens like this: you have a group of about 50 people spread among a dozen families. A disaster happens and a family looses their supply of food. Jonathan Leader realizes these folks have to be fed, and organizes just how much each of the families in the group have to donate. He assures each of them that everyone else would do the same for them, and if someone bears the brunt of the hardship, he sweetens the deal with special concessions, privileges, or goods. A massive cache of food and guns are found by one of the families, and they want to keep it all for themselves. Jonathan sits down and talks some sense into the folks, pointing out all the bad feelings they're creating and that he'll make sure they still keep more of it than anyone else, and they eventually give in.

That's all of a gift economy you're going to get at first, but it is in essence, a gift economy. You have a single "Big Man" distributing goods. Yes, it only works because its small and everyone knows each other. But that's what makes it work and what makes it happen: everyone knows abd trusts each other, and no one expects to leave the community anytime soon.

[malloyd]

Originally Posted by vicky_molokh

Gift economies seem to require less stability than establishing and enforcing currencies.

More the reverse I'd say. Relationships in a barter economy (and species coin is similar) can be completely transient and anonymous - if you never see the guy that traded you something again, no problem, you've still got the thing. For a fiat currency, the person who gave it to you can vanish, and you are OK as long as the "issuer" can still be found to redeem the note.

Any other kind of economy though, and the transactions are personalized. You need to know who has an obligation toward you, and have reasonable confidence they are going to survive and be findable when you want something in return.

You don't "enforce" a currency. That isn't a cash economy, it's a game of pretend you force your slaves to play. Though sometimes people might take whatever you choose to call the game points voluntarily as a currency because they have confidence the issuer will extort something of appropriate value from his slaves to pay them back when they go to redeem it.

[vicky_molokh]

Originally Posted by malloyd

More the reverse I'd say. Relationships in a barter economy (and species coin is similar) can be completely transient and anonymous - if you never see the guy that traded you something again, no problem, you've still got the thing. For a fiat currency, the person who gave it to you can vanish, and you are OK as long as the "issuer" can still be found to redeem the note.

Any other kind of economy though, and the transactions are personalized. You need to know who has an obligation toward you, and have reasonable confidence they are going to survive and be findable when you want something in return.

You don't "enforce" a currency. That isn't a cash economy, it's a game of pretend you force your slaves to play. Though sometimes people might take whatever you choose to call the game points voluntarily as a currency because they have confidence the issuer will extort something of appropriate value from his slaves to pay them back when they go to redeem it.

1. Barter is not currency.
2. While barter reasonably workable for caravans coming to and from the town on rare occasions, it's very inconvenient on an everyday basis like "I wanna visit a baker every morning".

As for enforcement: yes you do. You somehow prevent counterfeits. You make sure that people accept the currency in a given town/etc. Probably some other stuff.

[malloyd]

Originally Posted by vicky_molokh

1. Barter is not currency.

No but it is an economic system.

You make sure that people accept the currency in a given town/etc.

That's something you can't really do. That's what I meant with the game you play with your slaves. If you force someone to take a "currency", you robbed them. If you compel a town to use it, you've effectively stolen everything they possess but "generously" allow them to still use some of it until you want to take it away on whatever terms you care to. Governments sometimes think they can do that, but it never works very well (if nothing else people will fall back on bartering stuff and not telling the government even if no de facto illegal currency appears), and it tends to make your currency worthless outside the range of your guns. People after all take money because they expect others will take it later. If you have to force people, you make it obvious that's at least partly false.

[ericthered]

Originally Posted by malloyd

More the reverse I'd say. Relationships in a barter economy (and species coin is similar) can be completely transient and anonymous - if you never see the guy that traded you something again, no problem, you've still got the thing. For a fiat currency, the person who gave it to you can vanish, and you are OK as long as the "issuer" can still be found to redeem the note.

Any other kind of economy though, and the transactions are personalized. You need to know who has an obligation toward you, and have reasonable confidence they are going to survive and be findable when you want something in return.

On a large scale, yes, gift economies require a great deal more stability that currency economies. On a small scale, its reversed. Gift economies thrive in the sorts of small communities that permeate post-apoc literature. Its useless for trading between communities, but that's really a special case. The currency the band of donkey flats uses is likely to be worthless to another community, and we're back to barter again.

To get a currency with wide spread acceptance, it has to be backed by someone big and trustworthy enough to be considered fair, accessible enough that its not a huge pain to cash in your goods, and stable enough that people think the money will hold its value. If you have that, you're 75% of the way to a stable sizeable government.

[Michele]

Originally Posted by vicky_molokh

You make sure that people accept the currency in a given town/etc.

Well, you may try, depending on how much of a police state you want to have. In reality, an authority trying to force everyone to accept a currency that few or no people would like to accept is a perfect way to quickly create a black market and possibly a parallel currency. Or two. Or a parallel currency plus barter, etc.

[jason taylor]

Originally Posted by malloyd

You don't "enforce" a currency. That isn't a cash economy, it's a game of pretend you force your slaves to play. Though sometimes people might take whatever you choose to call the game points voluntarily as a currency because they have confidence the issuer will extort something of appropriate value from his slaves to pay them back when they go to redeem it.

You can refuse to enforce debts that are not made in a given currency.

[tshiggins]

Just as an FYI , and you guys may already grok this without me saying anything, but when I mentioned the two ways to "enforce markets," I didn't mean forcing people to accept a currency. I meant providing the protection of legal force or application of social pressure so as to create the trust needed for people to feel confident that the market will function consistently, reliably and reasonably fairly.

That really has nothing to do with forcing people to accept a currency. I agree that's not really possible. For currency to exist, at least some minimal market standards (especially weights and measures) must exist. Before the standards exist, at least a rudimentary market must exist. Before any market can exist, at least minimal trust must exist.

Trust can come from behavior regulated by the application of social pressure based on shared cultural values, or through law-enforcement. The greater the cultural homogeneity, the fewer the number of needed laws. If people don't share enough in the way of cultural values, then they rely on litigation and law enforcement.