Hehe. Good summary =]
Your first comment on the subject:
What you retreated to:
The former concerns the regression theorem the latter is an empirical observation. It’s not even a theorem, let alone the regression theorem as formulated by Ludwig von Mises.
Look, I wouldn’t be bringing this up if you weren’t so wont to challenge the credentials of others regarding their “Austrianism”. You see when you call people “liars” who “literally make shit up” and then seek to “expose” them whilst “obliterating” their argument it gives the impression that you don’t care much for scientific discourse at any level. Rather, you have your own set of views, of quasi-religious nature, that you seek to confirm. You ignore any arguments advanced against your faith and dismiss those who disagree with you as nobodys who “don’t know anything”.
Perhaps before you call people “liars” you should look at two posts quoted above by me and remember that “people who live in glass houses shouldn’t throw stones”. As LS would most likely love to point out right now, I’ve not been exemplary when it comes to my behaviour of these fora, nonetheless, it’s quite clear that at least I have some intention of coming to understanding with those with whom I have disagreements whereas you seem to have your dogma and wish to stick with it.
your post here is half eristic and half advice on conduct, you arent advancing any evidence towards supporting any of the contested beliefs which are the points of debate here.
@ Giles
The concept Esuric was talking about was commodity money, as far as I can tell. And yes, anybody who knows the basics and is honest enough, as opposed to being an academic pseudo-economist, knows what the origin of money is, and what commodity money is.
That’s certainly not something Mises discovered, so when you say that Esuric claimed that Mises is mentioned in all macroeconomic books you are either misunderstanding him, or maybe lying. I wouldn’t be surprised if it’s the latter.
Does anybody have links to these papers where Austrian economists defend fractional reserve banking?
Esuric said:
Subsequently backpeddling to:
So, yeah, apparently I’m the liar.
Lol, OK, I see how this is supposed to work. I make numerous points in favour of FRB that are ignored (as does Avram), at which point other participants are being told not to lie and not to “literally make shit up”. At which point you give advice to Esuric concerning his conduct, advice more or less in the direction of “keep going!”. At which I give advice in the direction of “perhaps you should keep more of an open mind” and I’m told to stop ignoring the points brought up by others.
How objective!
Jonathan, I’m compiling a short reading list covering both sides of the debate right now. I’ll be posting it later tonight hopefully.
Well, Giles mentioned a couple of names once, but I can’t recall them. Oh, yes, black, white, or something.
Yes you are. The concept in question was the nature of money, not an explicit mention of Mises. Yet you put Mises and macroeconomics books in the same sentence and said that no macroeconomics book mentions him. Which wasn’t really the point.
Talk about dishonesty.
How those quotes (pertaining to me) respond I haven’t a clue. You just repeat an ignorant fallacy as if it was a rebuke, liquid assets are assets, I don’t care how much you wish it only gold. Not one quote actually shows me saying gold isn’t market money, why my claims that the gold standard is un-libertarian and inefficient (which it is) show anything I don’t know, (how it exposes me as a statist I’d still like to know). My explanations (to NirgrahamUK) are even up there (perhaps that was a mistake) oddly my mentioning of the Currency School isn’t. While there still really hasn’t been any actual response to my claims and questions. (also where did I chop up TMC?)
Yes, I’ve been exposed, I believe liquid assets are real and think that a full-reserve gold standard is inefficient.
I know I said I wouldn’t respond anymore, but this time I have to. But this is the last time, seriously!
_**
**_
I can think of a couple off hand.
Sechrest:
Selgin:
http://www.independent.org/publications/tir/article.asp?issueID=21&articleID=244
http://www.fmnn.com/Analysis/241/6794/banking.asp?nid=6794&wid=241&pv=1
White:
Yes, government has, IN FACT, put in place gold standards, do you deny this?
That not the same as saying that gold ISN’T market money.
Now, let’s provide his actual post:
Now, I’ve bolded the important parts. He’s talking about the regression theorem and later notes that a certain concept is noted in every macroeconomic textbook.
He lated said:
Mises wasn’t mentioned (admittedly, he never said this in the first place) according to him, but now it’s narrowed down to one textbook (Greg Mankiw’s wonderful book) and he is still insisting that the concept (the regression theorem) is mentioned.
His next post:
He’s now referring to a different textbook but there is still an allusion to the regression theorem (not the explicit mention he talked about earlier).
Finally:
Now, we’re no longer talking about any concepts or theories but an empirical observation, namely that gold has been chosen by free societies in recorded history.
Notice, quotations are absent from all of this (when he was originally meant to provide them in favour of his claim that all intermediate textbooks explain the regression theorem).
Somehow, I’m the intellectual dishonest, morally bankrupt liar.
it may have been a mistake to appeal to the mainstream
sample Mankiw textbook quote:
Many people think that inflation makes them poorer because it raises the cost of what they buy. This view is a fallacy, however, because inflation also raises nominal incomes.
This is besides the point. The quote Giles provides shows that I was being completely honest; the first part deals with the regression theorem, something Angurse is obviously unaware of, and the second part talks about the progression of money throughout time (the ‘concept’ I was talking about). Mankiw is an idiot, but he understands that fiat money cannot come into existence on its own (again, something angruse doesn’t understand), and mentions it in his textbook. I pointed out A) Anguse is unfamiliar with the regression theorem, and B) used empirical evidence to support my claim; this isn’t lying.
“We value dollars because at one time they represented gold (1/20 an ounce of gold), which was chosen by the market as money because of its qualities (doesn’t spoil, easily exchanged, used for ‘industrial purposes’). This concept is so well known that it’s included in almost every standard intermediate macroeconomic textbook.”
I never said Mankiw mentions Mises, nor does he even cite the regression theorem, as Giles claimed. But Mankiw understands that fiat money must come from commodity money, or money chosen by the market. Again, the concept I’m talking about in the final part of that passage is not the regression theorem, it’s just history; this is the 'inconsistency" Giles believes he’s seeing.
The only thing I got wrong was the name of the Textbook, sorry.
You are either misreading Esuric or playing dumb.
He’s not saying that Mises regression theorem is explicitly included in every econ book and credited to Mises. He’s saying that the concept is included in standard books on the subject.
But maybe your contention is that ordinary books on macroeconomics don’t really explain the origin and nature of money ? Well, if that’s true it only shows what sort of joke ‘academic’ economics is.
The important thing is, though, the points about money’s nature and origin remain.
Prices can be expressed as a ratio. If the price of a hamburger is $5, then the price of $5 is a hamburger.
When the price of money rises so does its purchasing power – to most economists this is called “deflation.”
The price of money rises when 1) its supply decreases relative to other goods, and 2) its demand increases relative to other goods.
In the first case, the rising price of money reflects gains from productivity, but in the second case it reflects a change in peoples’ preferences. This second case is important : when the price of money rises because of an increase in demand, it is exchanged for other goods less frequently (i.e. its “velocity” declines). For banks this is a signal to increase their supply of money, because if a bank’s daily debt repayments decline, then it can afford to go into more debt without increasing its risk exposure.
In this way, an increase in saving is translated into an increase in lending, and vice versa. The “price level” is stabilised while relative prices can adjust, and the discoordination effects of both inflation and deflation can be nipped in the bud.
for angurse
http://mises.org/journals/rae/pdf/RAE7_2_3.pdf
This basically explains why gold is free market money. the gold standard is libertarian etc.
…
extract from intro:
The question to be addressed in this paper is rather how is a fiat
money possible? More specifically, can fiat money arise as the natural
outcome of the interactions between self-interested individuals; or, is
it possible to introduce it without violating either principles ofjustice
or economic efficiency?
It will be argued that the answer to the latter question must be
negative, and that no fiat money can ever arise “innocently” or
“immaculately.” The arguments advancing this thesis will be largely
constructive and systematic. However, given the fact that the thesis
has frequently been disputed, along the way various prominent
counterarguments will be criticized. Specifically, the arguments of
the monetarists, especially Irving Fisher and Milton Friedman, and
of some Austrian “free bankers,” especially Lawrence White and
George Selgin, in ethical andlor economic support of either a total or
a fractional fiat money will be refuted.