Module 4 Essay: An Op-Ed on "Francisco's Money Speech" in Atlas Shrugged, Chapter 2: The Price is Right in The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives, and Chapter 2: The Meaning of Stable Money in The Money Confusion: How Illiteracy about Currencies and Inflation sets the stage for Crypto Revolution.
Alexis Del Angel
School of Business, Oklahoma State University – Stillwater
EEE 2083: Entrepreneurship & Society
Professor Steve Trost
3.6.2023
Module 4 Essay: An Op-Ed on "Francisco's Money Speech" in Atlas Shrugged, Chapter 2: The Price is Right in The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives, and Chapter 2: The Meaning of Stable Money in The Money Confusion: How Illiteracy about Currencies and Inflation sets the stage for Crypto Revolution.
The following are my summaries of the three readings assigned to us. Those are Francisco’s Money Speech, The Price is Right, The Meaning of Stable Money. I will be tackling them in that order. In the end, I will close out with my opinions and conclusion.
On: "Francisco's Money Speech" in Atlas Shrugged by Ayn Rand
Francisco goes over the pros and cons of money, whether or not it is the root of all evil, and what money is fundamentally. He opens by asking us what money's core or root is.
"So you think that money is the root of all evil?" said Francisco d’Anconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them" (Rand, 2020).
Here, Francisco is setting the stage for what he will go on to speak about. He is getting us to question the value of money from a different perspective. He goes on to establish a baseline definition: money is simply a tool of exchange. A medium of exchange helps the market flourish. He claims money is a
"claim upon the energy of the men who produce" (Rand, 2020).
Money is something that does not have an inherent value outside of the humans who help produce the goods that drive the use of money. He explains that to trade and deal with money is something for men of good will. That is a tool for mankind to use to progress, purchase, deal with, and turn productiveness into a quantifiable value. Francisco states that if you are a bad person, money cannot change that. As money is something that cannot make you good, if one attempts to replace our "badness" with material possessions, we do not become better; we simply become replacers.
Later on, he hits on some passionate thoughts. Saying that those who look at money as the root of all evil are exactly the issue with how money is handled Afterwards, he praises Americans as being the nation that
"created the phrase ‘to make money"" (Rand, 2020).
This is because he believes that Americans were the first to understand how wealth is created. Anyone who sees it contrary is simply avoiding a necessary choice.
On: Chapter 2: The Price Is Right by P.L. Bylund in The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives
The Price is Right has P.L. Bylund explaining what the market value is and how it is decided. He opens with questions about pricing: what, how, and why of it?
"The answer is that there is no such thing as a "right" price. We could also say, which is equally accurate, that all prices are right" (Bylund, 2016, p. 27).
Answering that there is no correct price in an objective sense. What he is saying is that because value can be intrinsically variable from person to person, you could never have a correct price, or, inversely, all prices are technically correct. He goes on to establish this point further with the following:
"For instance, if Adam offers Adele a can of Coke in exchange for an apple, then we know two things about the valuation of these goods: we know that Adam values the apple more highly than the Coke, and, assuming Adele accepts the terms, that Adele values the Coke more highly than the apple. In this case, they’re both willing to go through with the exchange since both expect to be better off—subjectively speaking, that is by their own ranking of preferences—with what the other party offers. But it is wrong to conclude from this that the apple "is worth" a can of Coke. It is for Adam, since he’s willing to give up a Coke for the apple. But it isn’t for Adele, who rather makes the opposite exchange" (Bylund, 2016, p. 28).
Here, Bylund explains the value of something and how trading establishes it. This does not give us a complete look at value or worth. All we can identify from these types of exchanges is that
"they’re willing to give value up to a certain point in order to get the other—and more treasured—value" (Bylund, 2016, p.p. 28-29).
As this develops, more goods will emerge as more universally valuable than others; these will become standards. Money helps make that value definition less vague by creating a quantifiable universal value for goods. Societally speaking, this allows anyone the opportunity to purchase a good (or "trade" in a new way). Whether or not they actually can in practice is another question.
He goes on to explain that money does not change the nature of the exchanges that happen. The logic stays the same: Adam values apples more than Adele does, and Adele trades for her set value. This helps establish the right price; as more people buy from Adele, the clearer it becomes what the price should be. When other apple sellers come along, they will add to this market value by undercutting or overpricing Adele, which can create a shift in the "right" price.
On: Chapter 2: The Meaning of Stable Money in The Money Confusion: How Illiteracy about Currencies and Inflation sets the stage for the Crypto Revolution by J. Tamny
In The Meaning of Stable Money, Tamny explains the importance of a dependable standard being attached to money and how having or not having that may affect how we trade and interact with the market and economy. Tamny begins with an example of a dependable standard replacing the currency for a time. After World War II, Germany had been left in indescribable devastation. He then mentions that the majority of economists believe that
"the maiming, killing, and wealth destruction that was World War II lifted the U.S. economy out of the Great Depression" (Tamny, 2022, pp. 30-31).
Tamny argues the opposite, that the
"truth is that people, yet again, are the economy, and war exterminates them" (Tamny, 2022, p. 31).
What Tamny is saying is that it was the vacuum left behind by World War II that helped lift the U.S. The U.S. economy thrived because of a lack of competition. Germany post-war quickly found its currency without a foothold within its economy. This quickly forced the people in Germany to create a new standard, a dependable standard; as with the fall of Germany, so did the reichsmark. They found it in cigarettes. While its exchange rate was not all that stable, it was one of the more dependable certainties available. As markets do, currencies will naturally assert themselves in the chaos. Emerging as a unit of referee for most exchanges. The U.S. standard of definition was gold for a long time, as it had emerged as the least fluctuating item. This is because in order
"for money to be most useful, it needs to be quiet, or "low-entropy"." (Tamny, 2022, p. 35).
This is important for an economy because the more stable the value, the less deterred people will be from trade, savings, and investments. The U.S.’s removal of the gold standard (a general standard in this case) could draw some criticism. As a result, the price is now planned by monetary authorities as opposed to gold’s price stability defining the dollar. Since the separation trade has skyrocketed to a point, that shows us there was some loss in its status as a reliable measure of value. As now money is a floating concept instead of a stable one, contracts and trade are now hedged on the unreliability of money. When money’s value is typically based on stability, one can quickly see how this situation could spiral out of control.
Conclusion
Francisco’s speech had heavy conviction. I do not agree with Francisco's idea that money is for the good willed. It is funny to read that when the world is full of corrupt money-making schemes. Plenty of people and companies have made money hand over fist by actively screwing the little guy in a completely fair way. He goes on to touch on this, but it all comes off as very shortsighted and general shilling for capitalism. Ayn Rand typically writes characters as vehicles for ideologies, so maybe that has something to do with it.
Bylund‘s Chapter 2 really goes at length with details, explanations, and examples of what he is defining. He mentions the idea of market forces pushing a market price onto us over time. How money creates an easy way to take advantage of those forces I agree with him that money does not change the nature of an exchange. While that was obvious, it was something I had not actually realized or thought about.
Tamny gave me insight into a monetary standard and its importance for a currency. It was nice to read something so contemporary. I agree that there is a sense of instability since the removal of the gold standard. Although I do not think we should necessarily go back, what if we find more gold years from now or use a different, rarer, and more stable material? Having a standard seems important, but the choice of the standard also seems equally important.
These were great readings; I learned a lot and plan on taking this knowledge with me.
References
Rand, A. (2020, April 13). "Francisco's money speech" by Ayn Rand. Capitalism Magazine. Retrieved February 24, 2023, from https://www.capitalismmagazine.com/2002/08/franciscos-money-speech/Links to an external site.
Bylund, P. L. (2016). Chapter 2: The Price Is Right. In The Seen, the Unseen, and the Unrealized: How Regulations affect our everyday lives (pp. 15–26). essay, Lexington Books.
Tamny, J. (2022). Chapter 2: The Meaning of Stable Money. In The money confusion: How illiteracy about currencies and inflation sets the stage for the Crypto Revolution (pp. 29–41). essay, All Seasons Press.