• Bretton Woods Agreement of 1944 established a new monetary world order.
• This agreement allowed countries to have legitimacy of gold and the stealth taxation of central bank fiat money.
• The incentives in the world are a result of this agreement and have led to isolation, dissatisfaction with work and authoritarianism.
The Bretton Woods Agreement
The Bretton Woods Agreement was signed in 1944 by government bureaucrats from all over the world and established what they called «a new monetary world order.» The aim of the conference was to fix the problems from World War I (WWI), where reparation payments and loopholes around the then re-established gold standard wreaked havoc on economies, eventually leading to World War II (WWII).
Prior to WWI, gold was convertible directly at banks. Currency was backed by gold and convertibility kept it scarce. Most currencies were gold-backed and for those currencies, foreign exchange was easy and didn’t fluctuate because gold was the standard. The advent of central banking changed this as some central banks had more power than others due to their ability to print money.
Incentives Created by Fiat Money
The incentives created by fiat money have led to isolation, dissatisfaction with work, and authoritarianism at both individual, corporate, national levels; as well as globally. Countries want legitimacy in terms of gold but also want the ability to tax through fiat currency which leads to an unstable environment that rewards short-term gains instead of long-term stability. As a result, individuals are incentivized not only for selfish gain but also for riskier behavior without any regard for potential consequences on society or future generations. Corporations are incentivized toward maximizing profits at any cost while nations are incentivized toward policies that will bring them immediate gains rather than sustainable development over time.
Fiat Money’s Impact On Our Lives
Fiat money has had an enormous impact on our lives since its inception with negative consequences that outweigh any potential benefits it may provide. It has enabled governments around the world to exert control over their citizens through hidden taxes disguised as inflationary policies or quantitative easing measures while giving individuals little incentive beyond their own personal gain rather than collective growth or societal advancement. This system is inherently unstable which leads nations into cycles of booms followed by busts and creates financial instability worldwide that can be difficult or impossible to recover from once it has been set into motion.
Ultimately, we must recognize how our current system is flawed if we want any chance at creating a better one for ourselves in the future. We must understand how incentives created by fiat money can be manipulated for personal gain without consideration for anyone else’s well being or sustainability when left unchecked; something we must strive towards preventing if we ever hope to create a more equitable economic system in which everyone can benefit equally regardless of nationality or socio-economic status.