Fiat Money: How It Ruins Incentives For Individuals & Companies

• Fiat money ruins individual incentives by creating a lack of savings vehicles and availability of debt.
• Companies are artificial and don’t have the same level of relationships as families, yet they are much more popular in a fiat economy.
• Government/corporate safety nets provide individuals with insurance, pensions, etc., freeing them from relying on their families for security.

The Impact of Fiat Money on Individual Incentives

Fiat money has had far reaching impacts on individual incentives due to its lack of savings vehicles and availability of debt. This creates an incentive structure that encourages consumption over saving, leading to people relying more heavily on government/corporate safety nets than their own family or kin for security.

Lack of Savings Vehicles

Individuals in a fiat economy are unable to save value as there are no savings vehicles available to them. This forces them to work hard just to maintain the value they have accrued, rather than being able to store it away for future use. The lack of available savings options means that individuals will often opt for short-term gains such as consuming goods or services instead of investing in longer-term strategies such as building wealth through stocks or property.

Availability of Debt

The availability of debt also contributes to this shift towards consumption rather than saving. Individuals can borrow against their future earnings which gives them access to funds that they would otherwise not be able to access without waiting until they earn the money themselves. This encourages people to bring forward consumption by borrowing funds that could otherwise be used for investments or other more responsible uses.

Increased Dependency on Companies

The result is an increase in reliance on companies rather than family members for security and well-being. Government/corporate safety nets that provide items such as health insurance, unemployment insurance, social security and life insurance all make it easier for individuals to rely less on their immediate family members and more on these corporate entities when times get tough or when periods of crisis occur.


In conclusion, fiat money has drastically changed the way individuals interact with each other and view their own security by providing government/corporate safety nets which replace traditional familial roles with monetary compensation and benefits packages provided by companies instead. The lack of savings vehicles coupled with the availability of debt create an environment where consumption is encouraged over saving which leads to increased dependence upon companies rather than one’s kin or family members