I doubt that’s true in any meaningful sense. You could say the same thing for food: if you make it more scarce at some point you will probably observe an increase in price of existing food. And yet you could have eaten the food instead of destroyed it.

I believe the parent here is making a distinction between "capital" and "money"; "money" being a claim against real physical "capital".

When a pile of "capital" is destroyed (i.e. a bushel of wheat spoils, or a factory burns to the ground, or the lyrics to Bohemian Rhapsody are somehow lost forever) then this is a loss to society in general and to the owner of that "capital" in particular. If a pile of "money" is destroyed (i.e. Pablo Escobar burns $2MM in currency, private key to crypto wallet is lost) there is no corresponding loss of real physical "capital". There is simply a reduction in aggregate outstanding claims against the unchanged real physical "capital". So the unaffected holders of the other claims see their purchasing power increase, i.e. they no longer have to outbid the person whose "money" was destroyed, they have now "cut out" the loser from claims against "capital".

> When a pile of "capital" is destroyed (i.e. a bushel of wheat spoils, or a factory burns to the ground, or the lyrics to Bohemian Rhapsody are somehow lost forever)…

Well, at least one of these examples is actually capital (the factory). Of the remainder, one is just plain property, not a capital good, and the other is information. Capital is property which serves as a means of production. Sometimes the term is used loosely to include highly marketable goods (money) which can stand in for the means of production (e.g. "raising capital"), or even more loosely as in "human capital" (referring to the capacity for labor as a means of production), but it does not include commodities consumed in the production process, such as the wheat; nor information, which is non-rivalrous and thus not property, much less capital.

With that said, you're basically correct about the difference between currency other forms of property—goods with utility beyond their use in trade. For the most part there is no advantage to society in having a larger or smaller amount of currency (in aggregate). For economic calculation it's best if the supply just remains constant; any variation will temporarily affect the allocation of other resources, but eventually the value of the currency will adjust so that the total purchasing power of the currency equals all the goods available for purchase. It can cause problems if the supply changes too rapidly, making prices unstable, or if so much currency is lost that it starts to impact divisibility. For example, if bitcoins grew in value to the point where one satoshi was worth a month of labor we would need to modify the protocol to add more significant digits, or introduce a parallel system for day-to-day transactions, much like silver vs. gold.

This is why I added "assuming it’s reasonably liquid" to my initial comment. If one's wealth is reasonably liquid, then I don't think it makes much sense to make a distinction between whether it's "capital" or "money." For the vast majority of people, I think this is a reasonable assumption. If you could liquidate the deceased person's estate and exchange it for consumables or capital and donate those to a good cause, is that really worse for society than the nebulous idea of increasing the value of everyone's money by destroying the deceased person's money? I guess I'm having trouble seeing the distinction between "destroying existing capital is bad" and "destroying money that could have been exchanged for capital or used to create capital is good."

> If you could liquidate the deceased person's estate and exchange it for consumables or capital and donate those to a good cause, is that really worse for society than the nebulous idea of increasing the value of everyone's money by destroying the deceased person's money?

That would depend on who gets to decide what counts as "a good cause". I can think of worse ways the purchasing power could be employed than distributing it widely among other users of the currency. Even assuming the best of intentions, you're still directing resources rather arbitrarily away from other goals in favor of the selected cause, which is not necessarily a net benefit to society.

In general it makes sense to follow the wishes of the deceased, if they are known—it serves no good purpose to distinguish between gifts made just before death vs. ones made at the time of death via a will, and doing so penalizes those who die unexpectedly before making their bequests. Beyond that, I see no reason why relatives of the deceased should have an automatic claim in the absence of a will—but their claim is stronger at least than any the state might make, so given the choice I'd rather see the property go to the heirs than the state. Personally, though, in the absence of a will I would just consider the property abandoned and available for anyone to freely use and thus claim for themselves via homesteading. In some cases that process may have already begun—for example, if the owner of a house dies without leaving a will then anyone else who was already living there (presumably the deceased's family) would have priority to assume ownership once the deceased's claim was abandoned. Their prior investment in the home didn't matter as long as it had an owner, but with that owner gone it should count in their favor for the homesteading process.

> That would depend on who gets to decide what counts as "a good cause". I can think of worse ways the purchasing power could be employed than distributing it widely among other users of the currency.

Yes, but the dependency on what counts as a good cause also applies to distributing wealth indiscriminately among all holders of a currency.

It applies to some extent no matter what you do, but with this approach the purchasing power is spread so widely that no one will even notice the difference. Also, destroying the currency or otherwise making it permanently inaccessible when the owner dies is for all practical purposes indistinguishable from the owner living and simply never spending it, so nothing really changes.

Yes, but again you could say the exact same thing about any capital or food the person had when they died, especially if they weren't extremely wealthy. But I thought we had agreed that destroying capital and food is not good. I'm just failing to understand the distinction between destroying a deceased person's capital, and destroying their money.

> I'm just failing to understand the distinction between destroying a deceased person's capital, and destroying their money.

"Capital" is the wrong word here. It doesn't include non-productive, consumable goods such as food, but it can include money as a stand-in for means of production. It doesn't make sense to contrast "capital" with "money" when what you really mean is "all goods which are not money".

In any case, the difference is utility. The value of money is (almost) entirely derived from its use in trade; it's not consumed and it doesn't directly serve as a means of production. If a factory burns down or food spoils then society is poorer for it, but if the amount of money in existence decreases then nothing of value is lost, provided it affects everyone holding currency equally. (In the case of someone dying the only one not affected equally is the deceased, who isn't around to object to the loss and thus doesn't count.) We still have all the consumable goods and means of production which we had before, and the purchasing power of the remaining currency will adjust to compensate for the change in the money supply.