It is why the Austrian economists insisted that investment must come from savings. Assuming a gold-based capitalist economy in which each new product or service increases the value of existing money, savings is rewarded by the "natural" improvment in society. In order to get your money, a banker must offer you more than it will appreciate if you do nothing. So, the banker pays interest. In order to get the banker's money, the entrepreneur or investor must be able to pay more by means of superior production. This is very mainstream. A manufacturer borrowed money to make the payroll because that was cheaper than taking cash away from the capital investment or raw materials accounts. Conversely, sellers seek the utility of cash. We know that it not that X is "worth" Y but that X and Y are worth relatively more to each party in the exchange. Like real gold, game gold is just a counter. You can buy with it, of course, but at the end of the game, your ranking is based on your skill level, plus your inventory of tools, weapons, scrolls, etc., including your gold. Even those of us who know the theory of capitalism often fall into the easy vernacular of "spending" money to "buy" goods or services. It is just as true that you are selling money to people who are spending goods and services. This week the American Numismatic Association is celebrating their annual Worlds Fair of Money convention, again in Chicago. At the height of activity on the bourse floor you will see a thousand people buying and selling all kinds of money in exchange for all other kinds of money. The Australian Mint and the Austrian Mint both will be there, selling their "worthless" gold coins hoping to get very many very "valuable" US Dollars. The ANA makes its money by providing the bourse space. That is another point from Joseph's article. The middleman is a transmission medium who lowers the costs of those transactions, usually by decreasing the timespan of transactions. In order words, valuable goods (whether armor or game gold; whether wheat or steel) spend less time idle and are put into production sooner. (Edited by Michael E. Marotta on 8/08, 6:04am)
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