All money is fiat money, regardless of what material you use. If you use printed paper, it’s fiat money. If you use precious metals, it’s fiat money. It makes no difference because no metal (or any material) has “intrinsic” value. There is no such thing as “intrinsic” value because value is an opinion, not a fact. Money is not a fact; money is a symbol.
It makes no difference because no metal (or any material) has “intrinsic” value. There is no such thing as “intrinsic” value because value is an opinion, not a fact.
You are misunderstanding the term.
Something with intrinsic value is generally useful even if you strip it of its symbolic value. A sheep can be used as a money unit, but even if people stop using sheep as money the sheep is still useful—you can shear its wool, milk it, or just eat it. A banknote, on the other hand, is quite useless if it loses the ability to be exchanged for other things of value.
It’s still paper, though. Post-WWI Germans used devalued Mark notes as wallpaper and fuel. Those notes might have had other uses to beings with other preferences. In your example, the sheep is only valuable to beings who like/want to wear wool and can digest animal protein. That’s why value is never intrinsic. There’s no case where the value is a property of the thing itself; it depends on whom you ask.
The words “intrinsic value” when applied to money have a well-known and sufficiently defined meaning. You are welcome to insist that the term is wrong, but I don’t see much point if you want to talk to other people.
I understand what you are saying and you are correct that value is not a property of a “thing itself”, it’s just that this observation is irrelevant in the context.
All money is fiat money, regardless of what material you use. If you use printed paper, it’s fiat money. If you use precious metals, it’s fiat money. It makes no difference because no metal (or any material) has “intrinsic” value. There is no such thing as “intrinsic” value because value is an opinion, not a fact. Money is not a fact; money is a symbol.
More details at:
http://www.forbes.com/sites/pascalemmanuelgobry/2013/01/08/all-money-is-fiat-money/
http://www.alternet.org/story/146150/have_you_caught_gold_fever_the_value_of_that_shiny_metal_is_as_artificial_as_paper_money?paging=off¤t_page=1
You are misunderstanding the term.
Something with intrinsic value is generally useful even if you strip it of its symbolic value. A sheep can be used as a money unit, but even if people stop using sheep as money the sheep is still useful—you can shear its wool, milk it, or just eat it. A banknote, on the other hand, is quite useless if it loses the ability to be exchanged for other things of value.
It’s still paper, though. Post-WWI Germans used devalued Mark notes as wallpaper and fuel. Those notes might have had other uses to beings with other preferences. In your example, the sheep is only valuable to beings who like/want to wear wool and can digest animal protein. That’s why value is never intrinsic. There’s no case where the value is a property of the thing itself; it depends on whom you ask.
The words “intrinsic value” when applied to money have a well-known and sufficiently defined meaning. You are welcome to insist that the term is wrong, but I don’t see much point if you want to talk to other people.
I understand what you are saying and you are correct that value is not a property of a “thing itself”, it’s just that this observation is irrelevant in the context.
Can you explain or link to more info about:
Wikipedia: “Intrinsic value (numismatics)”
See also use value and exchange value.