The Awesome Science of Chinonomics

"Work hard and you will get the reward". That is a tenet any good parent would like to teach their children. The idea rests on the basic principle (assumed to be true) that whatever reward you get will not be snatched from you by someone else. The principle in question: Property Rights . Property rights are a keystone of human civilization. When we discovered farming, the primitive farmer had to make sure whatever he was growing was not going to be stolen by any passing nomad tribe that "didn't get the memo" that a farmer was growing something for his own consumption or benefit and that it could not just be taken. Imagine how difficult it was to go from communal to private property. Enforcement of property rights became one of the primal functions of proto-States and other central authority entities created in the beginnings of civilization. The difficulty of enforcement of property rights even shapes human culture. The "culture of honor" displayed i...

If you found a penny on the ground, would you pick it up? Most people would not. In fact many believe they should be discontinued . They argue that pennies are not commonly accepted, that they are worth more for their metal content than for their monetary (fiat) value, that they are impractical to carry around, and that they are an inefficient store of value (breaking 2 out of 3 qualities money must have: medium of exchange, store of value and unit of account). In sum, the penny is a vestigial remnant of an era long gone that has no purpose anymore - much like the appendix or the wisdom teeth in the human body. Does this mean that pennies are really worthless? Fiat money is a very funny thing. It is worth something because we are told so by decree and because we expect (or believe) that someone else will also expect (or believe) it will be worth something when they take it from us in exchange for a good or a service. Enter the key word: "expectations". We hear often abou...