Monday, March 26, 2012

Paper in our Pockets

Up until this point, Frank has addressed a wide variety of different issues and has attempted to defend his perspective through various arguments. In Chapters 8 and 9, Frank comes to one of the key concepts of any economy: money and the way individuals feel about their incomes. I was intrigued by Frank’s perspectives and also found myself agreeing with him in many ways, mostly in the way he addressed common beliefs.
Beginning in Chapter 8, Franks addresses the idea of an, “It’s my money…” mentality. He presents the argument that this common sentiment among individuals often does little good since it is in fact the infrastructure paid for by taxes which allows individuals to prosper as much as they do. For without tax structure, Frank argues, the very fabric of the system is stunted because nothing is maintained, allowing entropy to ensue.

In many aspects, I understand where Frank is coming from, and I think his logic is valid in many ways. The whole idea behind taxes is that citizens who consume basic services like road usage, postal services, and military protection (among other things) must pay for those services since obviously, nothing in life is free.

There is the other option of privatization which for many instances would make sense, but personally, I think there has to be a healthy balance in both scenarios simply for the reason that not every prescription will result in accurately remedying the situation. Balance again is tricky if not impossible to be decided by one entity alone, but it is also helpful to remember that current systems exist for reasons, not because they are the most efficient but because they were believed at one time to be the best compromise in an attempt to establish equilibrium.

 I personally, have no desire to fund my own army or attempt to manage my own highway which makes me grateful that the government has taken the initiative to recognize that this is indeed the case. I can only imagine the chaos which would ensue if in fact American citizens were responsible for national security. There are many situations where privatization could potentially work but there is also the distinct possibility of minor civil wars breaking out which really would do little to keep a country united in my mind. Nevertheless, national security still comes at a price. As it is consumed, it must be paid for.

 It is noteworthy to remember that those green paper bills we carry around aren’t really “money” but currency. There is no intrinsic worth in those bills because we use a fiat currency (which personally I find really ironic!). So why do we still trade worthless paper? …Probably because its’ primary function at this point is to serve as a measure of potential consumption later on and also because no one wants to carry around bulky objects to barter anymore. It’s just not practical. The promise is that consumption is really what individuals work for, not the tangibility of the bills themselves. After all, most measures of currency only exist as numbers in a bank account which is constantly fluctuating, never to be seen in its entirety by the individual who actually owns the currency. Therefore, the concept of currency is in fact a creation of the government, and while this creation obviously doesn’t give the government power to absolutely control the objects which the currency purchases, investing in the government as long as they do provide the services they do, makes sense to some extent as long as we as consumers indulge in those services.

Understandably, there will always remain the argument that the government is simply inefficient and therefore doesn't  deserve to have money poured into it, especially if the collective believes it may concoct a more efficient way to spend that money. While this may be true, life unfortunately does not always derive the most efficient ways of living, and as long as the government is in control of certain commodities, those commodities must be paid for.

In all reality, living in a privatized world could be interesting, but just as a totalitarian society is a little over-kill on government, anarchy isn't necessarily the best solution to solving tax woes either. Franks touches on various issues in both chapters and is really in the process of building a vocabulary, vocalizing common mentalities, and establishing a bridge to his audience in hopes that they may better understand the reasons certain structures are in place. There is obviously more to the issue than just the amount of little green pieces of paper in our pockets, but of the additional responsibilities which accompany wealth, in our the desire to understand how it may best be spent.

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