I always had an impression that all the money everywhere was always something issued by the government and its supply effectively controlled by the governments: even many centuries ago there were laws that forbade forging the money, even at the times when the money was made of gold. The way I understand it, the worth of money was seldom, even in old times, the weight of the metal. Otherwise nobody would have cared about the forgeries?

So the question is, is there any historical example of money long enough disconnected from the issuers "messing" to be even able to argue there is such thing?

If I understand the more modern thinking of economists, it's not that the money in older times functioned differently (that there wasn't a "trust" component), it's just that there were limits due to the dependence on metals availability. But the economy was never "just a sum of the issued money".

Of course not; the economy is all economic transactions, not just the quantity of money.

No. Government having a monopoly on the issuance of money is a relatively recent development.

> even many centuries ago there were laws that forbade forging the money

That forbade forging/counterfeiting money issued by the government, yes. But not issuing different money altogether.

Historically, government-issued money has not always been available everywhere people wanted money, so other forms of money would be created to fill the gap. It is only in recent history, with the advent of paper (and later electronic) fiat money, which removes all practical limits on how much of it governments can create, that government issued money has become available everywhere to the point where the incentive to create private forms of money to fill a gap is basically gone.

> The way I understand it, the worth of money was seldom, even in old times, the weight of the metal.

The worth of the money was always supposed to be based on the weight of the precious metal, such as gold, that it contained.

However, once you've gotten everybody to believe that, say, all your gold coins contain some standard quantity of gold, which determines their value, the temptation is irresistible, judging by the historical record, to then secretly debase the coins by substituting a much cheaper metal for gold for part of them, so the actual weight of gold in them is less than the standard amount, but still telling everybody that they're the standard gold coins so they will continue to be accepted at the same value, based on the standard weight of gold instead of the debased weight.

Of course, such a secret never actually keeps for very long, and once word gets out that you're debasing your coins, their actual value in the marketplace goes down. Or, to put it another way, prices in terms of your coins go up--it takes more of your coins to buy the same goods and services. This is why monetary debasement always leads to price inflation.

> Otherwise nobody would have cared about the forgeries?

Governments always care about forgeries because they don't like competition in the business of issuing money, since that business is a source of revenue (look up the term "seignorage").

> is there any historical example of money long enough disconnected from the issuers "messing" to be even able to argue there is such thing?

The incentive to debase the money you are issuing, once you've gotten everyone to accept it at a certain value, is certainly not limited to governments. Fractional reserve banking comes from the same incentive: if you've gotten everybody to believe that, say, every gold note your bank issues is backed by a standard quantity of gold in your bank's vault, the temptation is irresistible, judging by the historical record, to then start secretly issuing more notes than you have gold, but still telling everybody that your notes are all 100% backed by gold, so they will continue to be accepted at the same value. Of course this never works for too long either, and since it's easier to print paper notes than to mint debased coins, inflation with debased paper money tends to happen faster and be more of a problem than inflation with debased coins.

So the difference between a private issuer of money and the government issuing money is not that the latter will debase money but the former won't. The difference is that if one private issuer's money gets debased, but there are multiple different private issuers, such as banks, people can simply stop using the money from the bank that debases it. So in a private, competitive situation, there is actually an incentive to not debase your money, which can counteract the incentive I described above towards debasement. In short, there is a limit to how bad things can get if private money issuance is allowed.

But if the government debases the money, while it's also enforcing a monopoly on money issuance (and also, most likely, requiring things like taxes to be paid in the money it issues), there is no other money people can choose, so an entire economy can be ruined.

The problem is, a big part of the value in the economy never gets to be an explicitly "issued" money, and that was so even many centuries ago. So your belief in the magic of the "hard" issued money appears to me to be just a wishful thinking, even without the historical support since the earliest times. Different forms of debts are older than any precisely defined issued money, and all the forms of debts are what actually drove the economies.

Most famously, the period of democracy in Athens started only after Solon abolished the accumulated debts, which speaks a lot about the dynamic of their economy during all the times before that point was reached.

It appears to me that sooner or later the current world will have to accept that we need a Solon-like act to end the period we're in.

For an appropriate definition of "value", yes, I'll agree with this.

However, I don't see how it conflicts with anything I said.

> Different forms of debts are older than any precisely defined issued money, and all the forms of debts are what actually drove the economies.

Debt certainly plays a role in how economies develop. However, again, I don't see how that conflicts with anything I said.

> the period of democracy in Athens started only after Solon abolished the accumulated debts

First, I don't think historians are in agreement about exactly what Solon did and whether it amounted to abolishing all accumulated debts.

Second, while many historians credit Solon with laying the foundations for Athenian democracy, it did not actually start until well after Solon's death, after a considerable period of autocratic rule following the seizure of power by Peisistratos. So even if we grant that Solon abolished all accumulated debts, I don't see any clear connection between that and democracy.

> sooner or later the current world will have to accept that we need a Solon-like act to end the period we're in

Meaning, abolish the accumulated debts? That's basically what the US government is doing to its debt by continuing to print money; since all of the US government's debt, and pretty much all of US private sector debt, is denominated in dollars, printing more dollars dilutes the impact of all that debt on the debtors. It's not clear to me that this is a good thing. Of course, it's also not clear to me that continuing to accumulate debt is a good thing. But while the current financial and economic system certainly has plenty of issues, I don't see how "abolish all accumulated debts" is a good way to fix them.

Ultra liberal economics lead to accumulation of wealth by few super riches. This happens to be one of the reason the Roman Empire fell because all this money could not be spent on keeping the army in working conditions. Super riches of the time hoarded the necessary gold for themselves.

But don’t put that on Keynes’ tab. It’s twistedly wrong.

Yes, it is. Keynes said at one point that the government printing dollar bills and burying them for people to dig up would be a valid form of economic stimulus.

> This extreme monetarism you describe is... Friedman’s!!!

Milton Friedman did not advocate anything like the arbitrary manipulation of the money supply by the government that is practiced by the Federal Reserve. (He was in fact a consistent opponent of the Federal Reserve; he thought it should be abolished.) He advocated tying the growth rate of the money supply to the growth rate in real productivity, with no discretionary element at all.

> Ultra liberal economics lead to accumulation of wealth by few super riches

No, the government printing money and giving it to a few favored parties, which is exactly what the Federal Reserve does and always has done (the favored parties have almost always been financial institutions, no surprise given the background of most Fed members), leads to accumulation of wealth by a few super riches.

> This happens to be one of the reason the Roman Empire fell because all this money could not be spent on keeping the army in working conditions.

I don't know where you're getting your history from, but it's wrong. The reason the empire had trouble paying for a competent army was that it had debased the coinage so much that people were refusing to take Roman coins as payment. It even got so bad that the Roman government itself, knowing that its coins were worthless, stopped accepting them in payment of taxes and insisted on payment in kind instead.

The emperor Constantine managed to get hold of a large supply of gold bullion and used it to mint new gold coins, which were accepted in payment of taxes. That helped for a while as the empire could use these to pay the army and the civil servants; but many people could not afford to buy the new gold coins and therefore could not pay their taxes, so the improvement didn't last too long.

It also didn't help that the size of the army and civil service kept increasing, for no tangible reason, which just increased the tax burden.

This does not make it the center piece. The center piece of Keynesian economics is that state intervention is necessary to moderate the booms and busts in economic activity.

> Milton Friedman did not advocate anything like the arbitrary manipulation of the money supply by the government that is practiced by the Federal Reserve.

Sorry, but clamping the growth of money supply with a k-rule, irrespective of the market cycle, is the arbitrariest manipulation I can think of.

> No, the government printing money and giving it to a few favored parties (.../...)

We can agree there that governments giving money to the already super wealthy is a bad think. But why does it do that? Because same super wealthy have become so wealthy they can influence government.

Which brings me to your case on Rome. The reason why Roman emperors debased their coins was because they had emptied their coffers on other things yet /needed/ to keep the army strong for what was essentially a looting regime to survive. At the end of the day, Emperors are not governments, they are another form of super-rich protecting their short-term positions at the expense of longer term stability.

Ah, our old friend No True Scotsman. Sorry, not buying it.

Not just "state intervention", but state intervention of a particular kind, namely, manipulation of the money supply. Keynes' basic theory was that in a depression like the Great Depression, the problem was that there wasn't enough money in circulation, because people would not simply let both prices and wages fall in order to establish a new equilibrium between supply and demand. So, he said, the solution is to simply print more money.

> clamping the growth of money supply with a k-rule, irrespective of the market cycle, is the arbitrariest manipulation I can think of

I personally don't favor Friedman's solution either; I don't think the government should be manipulating the money supply at all. But to call determining the money supply by a known objective rule "more arbitrary" than determining it by the whim of regulators does not strike me as a sound use of language.

> We can agree there that governments giving money to the already super wealthy is a bad think. But why does it do that? Because same super wealthy have become so wealthy they can influence government.

No, you have it backwards. The super wealthy influencing government comes before the government giving money to the super wealthy, not after.

In the case of the Federal Reserve, it came into being because the super wealthy got tired of the government coming to them for loans to bail it out every time there was a financial panic. Why did the government come to the super wealthy for loans? Because the super wealthy had already gotten favors from the government through influence--for example, monopoly privileges over transcontinental railroad routes in order to outlaw free market competition. So naturally the government would come to the super wealthy expecting a quid pro quo.

Once this had happened a few times, the super wealthy figured out a better (from their perspective) solution: create a system of central banks that would allow them to transfer wealth to themselves directly, stealthily, by manipulating the money supply, instead of having to openly go to the government for favors. And sell this system to the public as a means of "preventing" future financial panics. The Panic of 1907 presented a perfect opportunity to put this system in place, and by 1913, the Federal Reserve system was law.

> The reason why Roman emperors debased their coins was because they had emptied their coffers on other things yet /needed/ to keep the army strong for what was essentially a looting regime to survive.

Governments always spend more money than they have, on white elephant schemes that do not benefit society. So of course governments are always looking for ways to avoid having to face the consequences.

But that is a very different claim from the claim you originally made, and I rebutted, that the Roman empire fell because the ultra rich were hoarding all the wealth. In fact the Roman emperors appropriated the wealth of the ultra rich pretty much the same way they appropriated the wealth of everybody else. The reason for the shortage of real wealth in the later Roman empire was not that it was being hoarded; it was that it was being squandered and destroyed by ruinous public policy.