Conservatives hark back to the gold standard as some sort of golden age when all was well with the world. They still think that prosperity is within the grasp of a society if it anchors its currency to the price of gold. It seems the US Republican party is toying with the idea again – presumably as a pitch to rope in the real conservatives (Ron Paul supporters). They couldn’t be serious though. It would be a disaster if the world attempted to go back to a system that failed when it operated and it would lead to the further immiserisation of the poor if implemented. The salient point is that it didn’t work when it was in operation. It didn’t produce lower price variability and lower inflation rates nor did it prevent bank crises and financial panics. It was abandoned because it was politically unsustainable such was the entrenched unemployment that accompanied it.Bill Mitchell — billy blog
Return to a gold standard – don’t even think about it
Bill Mitchell
“Beware the leader who bangs the drums of [gold-standards] in order to whip the citizenry into a patriotic fervor, for patriotism is indeed a double-edged sword. It both emboldens the blood, just as it narrows the mind. And when the drums of war have reached a fever pitch and the blood boils with hate and the mind has closed, the leader will have no need in seizing the rights of the citizenry. Rather, the citizenry, infused with fear and blinded by patriotism, will offer up all of their rights unto the leader and gladly so. How do I know? For this is what I have done. And I am Caesar.”
ReplyDelete― Julius Caesar
http://www.goodreads.com/author/quotes/97728.Julius_Caesar
The Austrians understand that the Republicans know nothing of their position on gold and laugh at the idea of a Republican “gold commission”.
ReplyDeletehttp://www.economicpolicyjournal.com/2012/08/the-republicans-and-gold-commission.html
Just as Mr. Billyblog knows nothing of the Austrian theoretical and historical analysis about gold. Thanks for the link. I would have never so quickly found Billyblog’s enunciation of his ignorance. Where does the stupidity start and the dishonesty end? Every time I see one of your fraudulent misstatements of Austrian theory and history, it makes me even more optimistic about the future. Do you people really not understand the Austrian/libertarian objection to banks being granted a special privilege of making loans out of thin air, even if the bank notes are ostensively convertible to gold or silver coins which just might not be there because of excessive issuance of notes? Do you really not understand a free market in currency vs. legal tender? 100% gold reserves vs. 40% gold reserves?
I know you won’t ever read it, but again here is Rothbard’s “America’s Great Depression”.
http://mises.org/rothbard/agd/contents.asp
Bob,
ReplyDeleteYour great Austrian thinkers couldn't carry Bill Mitchells guitar strap.
Bill actually relies on real arithmetic, even though imaginary numbers do exist. No circular logic in his arguments.
You remind me of a schizophrenic trying to convince others that the voices in his head are real. I know they are real to you, but…
You may need a device like they used in the movie Inception, so they could tell whether or not they were in reality or dreaming.
Prof. Murray Rothbard's degree from Columbia was in math. Thanks for announcing to the world that you don't know what you are talking about.
ReplyDeleteBob,
ReplyDeletemany can get by in a college math curriculum by memorizing procedure, without really UNDERSTANDING math...
rsp,
Bob,
ReplyDeleteA degree in math doesn't by itself make one an expert on economic systems, or anything. It helps to not be constrained by ideological blinders.
I know, we're all wearing ideological blinders. Even so, some of us are interested in the truth, whatever it may be. We aren't all scared of the unknown.
The world is full of mathemeticians that believe we are running out of money. From my perspective the only thing that matters is what I believe.
If you are willing to come here and make your arguments in a language the rest of us understand, you might make some headway. The stuff you (seem to) parrot sounds like gibberish to me.
Math is a universal language and is understood by people everywhere. I am not willing to learn an entirely new language to understand you. Nothing is that complicated.
Why do we want banks to have all of their deposits back by gold 1-for-1?
ReplyDeleteNo, I do not have the time to read Rothbard's book.
"The world is full of mathemeticians that believe we are running out of money."
ReplyDeleteThis is just fascinating Paul... hard to understand... Leverage has the data on this whereby certain human brain functions can just shut down... higher order functioning (ie like math) can be suppressed..
It would be good to understand what happens chemically in these people's brains when this goes on... or their DNA or something.... there has to be a biological record I would think...
rsp
Matt,
ReplyDeleteIt could be something as simple as them having the wrong abstract model of "money" in their understanding, so they may be right that we are in fact running out of something…
…it just isn't money.
Semantics maybe, but you wouldn't expect a "true" mathemetician to fall prey to this.
Bob, I'm completely confused about your position. Are you recommending a free market in currency or deploring it?
ReplyDeleteAn interesting set of questions:
ReplyDelete1) Has Bob convinced/converted any readers of this site?
2) Does Bob seem to making headway?
3) If the answer is no to both of them, then why does Bob continue to comment here?
Bob, what's the point? You can call us all funny-money pink sociliasts all you want, but to what end? If your goal is to convert some of the readers here into recognizing (believing in?) the superioirty of Austrian economics, I think you need to reconsider your strategy and tactics.
I'm open to what you have to say, but so far it just seems like you're speaking about a non-existent world that you think we should be living in. Meanwhile, MMT and 'modern money' followers are interested in the world that we are living in.
Yes, everyone here knows that the current system isn't perfect. Yes, there are costs associated with a sovereign currency. etc. So what?
What MMT seems to be trying to do is look at the system we have, describe it, and figure out how best we can use the system we've got toward goals like full employment and prices stability. Do you see no value in this?
Is it the Austrian way or the highway?
JK,
ReplyDeleteIt looks like Bob thinks that if we took the time to learn about "economic calculation" we would suddenly "see the light".... Bob repeatedly stresses this "economic calculation" thing....
rsp,
Re: economic calculation
ReplyDeleteAs if I have pointed out so many times before, John Carney pointed out the obvious about MMT:
Furthermore, I do think there's a problem with MMT that cannot be confined to confusion.
The problem is as follows: MMTer are so focused on sectoral balances and the interaction between the private domestic sector and the public sector that they often downplay the intra-sector dynamics.
Finally, MMTers do not seem to fully appreciate the problems of ignorance and calculation that inform Austrian economics. They seem to recoil at even thinking about them because of the implications for the limits of political action.
http://mikenormaneconomics.blogspot.com/2012/03/john-carney-comments-on-jkhs-post-on.html?showComment=1332343882664#c370523094954810558
I find each example of your "recoiling" quite fascinating.
"often downplay the intra-sector dynamics"
ReplyDeleteIntra-sector dynamics in what way?
The Intra-sector dynamics within the non-government domestic sector or between the government, domestic and external sectors?
Paul,
ReplyDeleteI think this is code for "crowding out" ie if the govt takes provision from a sector of the economy it would deprive the non-govt sector of the output it (govt) took out of the said sector... this is INTRA sector..
rsp
@ JK,
ReplyDeleteI give Bob points for persistence and EXTRA points for not being a troll (unlike other persistent posters here who have agenda's but routinely lack in tack AND substance).
Anyhow, a month or so you had asked at the end of a very LONG post if I was interested in writing anything. I've got couple 400 word or less write-ups I'm working on. If your interested in reviewing... arhill1989 AT gmail.com
Re: intra-sector dynamics.
ReplyDeleteaka "economics".
You know, people making and buying and selling and trading goods and services. As Mises explained 100 years ago, the "state theory of money" is acatallactic. The "theory", such as it is, is free of human beings and their actions.
http://www.econlib.org/library/Mises/msTApp.html
Oh not that old thing again. There was a brief fracas about the somewhat crazy charge that MMT didn't understand that households lend to firms, etc. etc. S = I + (S-I) and all that. Carney was one of the cheerleaders for a while but it blew over, because there was nothing much to it.
ReplyDeleteNone of these debates have anything to do with deep or complex economics. It's ultimately about moral values and basic understandings of human nature. Most MMTers think there are important kinds of economic activity that the private sector will never accomplish adequately on its own, and so there is an important role for public enterprise along with private enterprise. Most Austrians hate government and think governments and groups of people with more than two people in them are too stupid to do anything right or calculate the outcomes of large products effectively, and so we must rely at all times on the magic of the price mechanism and free exchange.
MMTers also tend to think we should live in a society based on mutual responsibility, equal dignity, and the brotherly sharing of work and reward. Others think we should live in a social Darwinistic struggle for success and survival, where the weak or less intelligent are punished for their inferiority and culled from the herd, while the great and awesome are rewarded with great gifts from the many.
"Re: intra-sector dynamics."
ReplyDeleteOK, wanted to make sure because they imply two completely different dynamics.
Like I've said many times, MMT is pure math. Math isn't ignorant of anything, but math isn't smart either.
One thing we know about intra-sector dynamics is that in the course of normal capitalistic activity, funds are re-distributed from one sector of the domestic non-government to another.
This is true because of profits, which are peeled away from wages.
If over a fiscal year in the aggregate companies make a net profit, funds available for spending by wage-earners and the consumers they fund declines.
If over a fiscal year in the aggregate companies make anet loss the reverse is true.
I'm going to go out on a limb and say that in general funds flow in one direction, away from the wage-earner and as such funds available for spending decline at a steady rate.
In reality this couldn't go on for very long because the economy would collapse. In order to do otherwise velocity would have to increase inversely with the decline in money supply to maintain GDP.
This can't happen, so the only alternatives are to print more money or tax excess saving, spending it back into the economy targeted at wage-earners, the unemployed, poor people, etc.
Giving tax cuts to rich people does nothing to change the dynamic.
If John Carney thinks we don't understand this he is grossly under-estimating the MMT community.
But then so does pretty much everyone.
Bob R. Re: intra-sector dynamics. aka "economics".
ReplyDeleteThis is the error that neoclassical economics, the Keynesian synthesis, New Keyensianism, New Classicalism, and Austrian economics makes.
They do not get that economics involves complexity and that macro is emergent. So they think of proper macro as scaled up micro or else irrelevant. The result is fallacies of composition and the like.
It's reached the point where Bob doesn't even understand the links he's pasting in.
ReplyDeleteBob: The theory cannot possibly be free from human beings and their actions. Insofar as Mises had a point worth considering, it is that while a state theory can on its own account for money as a means of circulation and a unit of account, it cannot characterize its specific purchasing power.
That is not the same thing as saying it is "free of human beings and their actions." In order for that to be true, by your understanding of "human action," it would have to mean that state money arose as an entirely reflexive and unconscious process, with no agency at any part of the process. That's an interesting thesis but you're going to have to turn reality inside-out to argue it.
I do look forward to your attempt.
Matt:
ReplyDeleteI think this is code for "crowding out"
If Bob is thinking this way we just need to set the assumptions as a balanced budget and no foreign trade.
Then we can look at intra-sector dynamics with no "crowding out" possible.
funds still flow away from wage-earners if companies as a whole make a net profit.
Same problems emerge.
bob,
ReplyDelete"state theory of money"
It is NOT a theory.
Read Tom's excerpt from Aristotle post below; Aristotle is simply telling posterity WHAT THEY DID... THERE IS NO 'THEORY' INVOLVED.
If you have other recommended arrangements for how the government does this, you guys should form a Party and run on it...
rsp,
Bob Says:
ReplyDelete"They seem to recoil at even thinking about them because of the implications for the limits of political action."
No political action needed?
He sounds like the English Libertarians of the 1840s who Bill Black just thoroughly debunked. So much for libertarians being "non-violent". FDR pursued political action and it worked. Empirical evidence is better than a failed ideology.
"Why is Paul Ryan, an Irish Catholic, praising the dogmas that drove the Great Hunger?"
http://neweconomicperspectives.org/2012/08/why-is-paul-ryan-an-irish-catholic-praising-the-dogmas-that-drove-the-great-hunger.html
Tom Hickey has probably said it best so far.
ReplyDeleteAs for catallaxy - MMT is catallaxy aggregated - it does not discount human interaction. There are times we will want to disaggregate too.
Whether we use catallaxy or economics - we are talking about the same thing.
And Dan is right when he says it all boils down to libertarian vs. collectivism morality. Both moral theories are valid and each have complementary values but this is not the place to discuss them.
Nob Robbish strikes again with his endless stream of Robbish nonsense.
ReplyDelete