Fiat Money: The Great Incentive Killer

• Fiat money encourages individuals to consume rather than save, as there are fewer savings vehicles and the availability of debt.
• Companies have become a prevalent way for individuals to be organized in a fiat economy due to the incentives of fiat money.
• Governments under fiat money provide insurance, social security and other safety nets that replace human relationships.

Fiat Money Ruins Individual Incentives

The lack of savings vehicles and the availability of debt create a potent mix of terrible incentives at the individual level. Without proper saving vehicles, individuals must work hard to keep any value they have, while debt allows them to bring forward consumption. This leads to more people consuming and less productive people who save.

Companies Replacing Human Relationships

Whereas before we used to depend on our families or tribes for security, companies have now become an artificial way for individuals to be organized in a fiat economy due to the incentives it provides. Health insurance, unemployment insurance, social security, pensions and life insurance are all government/company safety nets that protect people from disaster in this economy. These safety nets make it so that people no longer need their family for help when facing difficult times; instead they can turn towards government assistance such as unemployment benefits or life insurance payouts.

Government Incentives Win Popular Support

The prevalence of these government/company safety nets is due to governments using them as a way to win popular support under fiat money systems. People appreciate these safety nets provided by their government because it gives them protection without having them rely on their families alone.

Money Is A Poor Substitute For Human Relationships

While these safety nets may be beneficial in some ways, they also come with costs; namely that they replace human relationships with money or insurance which is not nearly as effective or fulfilling as being surrounded by family members or friends during difficult times. Social security payments cannot replace emotional support from loved ones when needed most and yet this is what many people are forced into depending upon due to economic pressures brought about by fiat money systems.


In conclusion, it is clear that fiat money has changed how individuals interact with each other by providing various forms of government assistance instead of relying solely on kin relationships for security and support during tough times. While these measures may help protect some from disaster, they often come at the cost of replacing human relationships with monetary substitutes which can never truly replicate genuine affection between loved ones.