What Does ChatGPT Know About Money?
Given the contentious topic of money and its influence on the world, I decided to see what ChatGPT “knows” about it. I was surprised by the breadth of its responses, as well as its information on free market positions, especially those of the Austrian school.
Though my prompts (queries) were exactly as I present them here, ChatGPT was so expansive I had to edit its results due to article length restrictions. For emphasis and to mark subject headings ChatGPT frequently used bold-face text. I italicized portions of its replies, which are indented, to stress points I thought were especially important, and I added links in a few cases to augment ChatGPT’s response.
Let’s begin.
Smith: Is it true that money arose from barter as a response to the problem of a double-coincidence of wants? And is it also true that the commodity eventually chosen to serve as a medium of exchange was determined by market participants? And further, is it true that in all of human history no paper money was ever freely chosen as money, and that paper money was always imposed on the market?
After explaining what is meant by the double-coincidence of wants, ChatGPT went on to say:
ChatGPT:
Economists like Carl Menger, a key figure in the Austrian School, argued that money emerged spontaneously from the marketplace, not through government decree. . .
Over time, market participants naturally gravitated toward using certain commodities that had desirable qualities—those that were widely valued, durable, divisible, portable, and had a stable supply. These commodities were easily traded because people generally accepted them as being valuable. . . .
Importantly, no central authority had to mandate that these commodities be used as money. People recognized the benefits of using certain commodities, and through repeated use in trade, these commodities became widely accepted as money.
No Paper Money Was Ever Freely Chosen as Money.
Initially, paper money began as a substitute for commodity money, like gold or silver. . . .
Importantly, people accepted these paper notes voluntarily because they were confident they could redeem them for a tangible commodity, making these notes convenient substitutes for carrying physical gold or silver. . . .
Historically, when governments detached paper money from any redeemable commodity, it was usually under duress . . .
Smith: How did money go from market control to government control?
ChatGPT:
The shift evolved over centuries, largely driven by governments’ desire to centralize power, finance wars, and stabilize or control the economy.
Minting Coins: Governments took control of minting coins from precious metals. In doing so, they could stamp their own symbols, which ensured a standard weight and purity of coins. . . The market still valued these coins based on the amount of metal they contained . . .
Over time, governments would reduce the amount of precious metal in coins (e.g., mixing in cheaper metals like copper) while keeping the face value the same. This allowed governmen
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.