Because they are not subordinates of the legislature or the executive.
Central banks can’t be independent, because goverments control their monopoly.
Remind me who appoints the governor of the Fed? Or the bank of England?
Tell me what would happen if the CB did anything radically opposed to the executive?
Better to have competing currencies.
Gold…wear it.
Who appoints the federal judiciary. Which is also independent.
What exactly?
I think there’s been some confusion with regards to the definition of “currency”. What I meant is that I do not believe there will be seperate, different currencies provided by different firms, rather, that there will be numerous firms whose business is coinage and warehousing but there will be a single commodity picked by the market that will serve as money. The latter of these two proposals is both confirmed by history and praxeology, whereas the former stands in contradiction to both. I cited Hayek as wrongly favouring the former because of his arguments in one of his essays that appears in Individualism and Economic Order, I forget the name but it is, to my knowledge, the only essay on currency in the book. Hayek claims that firms will issue notes based on a collection of goods, however, this seems absurd since there would exist one of those goods that would be more saleable than the rest and would thus be better suited to serve as money (and would hence, most likely emerge as one).
its not something that can be settled theoretically its so very contingent on the facts of the world and human action. but in history there have been ‘free markets in money’ (if not for other products etc) and bi-metalism has worked in these. im thinking gold and silver. etc. so its not beyond belief that modern commodity free market money would have several competing commodities that vie for the title of superior money. obviously the larger the number of competing commodity moneys there are in use, increases costs and reduces the ‘special benefit of money’ yet as an opposing force, a market that has adopted one predominant money is not inevitably locked into that money, and may abandon that money for a rival money if over time the rival money begins to seem superior. and this is because the ‘historically widely traded as money’ attribute of a candidate for money, isnt the only quality of moneyness.
Of course it can, as follows:
- A good emerges as a medium of exchange once entrepreneurs realise that it is highly saleable,
- That good which is most saleable will be best suited to emerge as a money,
- A “bundle” of goods which contains numerous goods will have one good which is more saleable than the rest,
- That good will better suited to the function of money than the bundle combined.
- That good, on its own, will be adopted by entrepreneurs searching for the most saleable good to function as a medium of exchange,
- That good will outcompete the “bundle”.
Moreover, with competing currencies as advocated by Hayek, certain trade will be contingent upon a double coincidence of wants with regards to the competing currencies and therefore the division of labour will not be as widespread as it possible could, moreover, prices cannot be determined entirely rational without a single currency to be used in cost accounting.
When have I said I do not advocate free markets in money? I’ve just said the free market will choose one single good, not a bundle. Also, in history there has been countries that have attempted to do away with prices and private ownership of capital goods. This does not mean that socialism is viable or economic, so I don’t get your point.
No, it’s not, but it would be beyond belief for one to say that one will not outcompete the rest as gold has historically done.
it depends on how you are using outcompete?
does that mean it will be the only money, or just that it will have a relatively larger share of the ‘is money pie’ then any other rival money?
i.e. is it a question of being the only thing anyone will admit to being money. i.e. A natural monopoly arising on the free market. or using a looser definition of outcompete that gold would be the ‘dominant money’ that has lesser rivals nipping at its heels… , incentivising it to stay the relatively ‘better’ money…,
I agree with only the latter and not the former.
I don’t understand the second of the options, but it’s nonsensical to refer to the former as a monopoly and it is the former that will prevail.
i.e. in your freemarket world, would a shopkeeper who posts prices in gold, tell someone that offers him silver, what the hell this isnt money, go away, or will he say, ‘i dont usually take silver but if you pay a markup, i’ll do the trade’
And I’m supposed to know, how exactly?
you answer assumes that gold is the only money. so the shopkeeper would reject calling the silver offered money and would call it a barter good.
I agree.
I’ve never said anything of the sort, I can’t tell you what the shopkeeper will do, that’s beyond praxeology. I can make a fairly well established claim, using praxeology, that one commodity will outcompete the rest.
Try reading what I wrote again.
give me some context to understand outcompete. its meaningless jargon otherwise. i have demonstrated two possible interpretions and their entailments. if there are other interpretations , one of which you are using, it would be kind of you to share it.
i concede this particular point. it was used more as metaphor. i wished to describe a situation that would look to a 3rd party as though a monopoly situation, even though due to lack of coercion it would not be a political monopoly. i hope this didnt throw you off understanding me.
It’s hardly meaningless jargon, rather it’s an essential part of any market economy. It simply means that all/ the vast majority of people will set their prices with regard to this particular commodity as opposed to another, and most people will hold stocks of this particular currency as opposed to notes giving them access to some mysterious “bundle” as advocated by Hayek.
i was just saying that i can easily agree with the vast majority. and i find the idea that it could be all quite incredible
vast majority does allow for substantial minority, and i would be fine to describe the system as multiple commodity money economy, even if in everyday talk i adopted the conventions of the day and chose to ignore the competing currencies and focus on the dominant money; i.e. when making a simple argument that doesnt require the redundant complexity.
I hope we dont differ on this. I understand if what I have written seems pernickity in light of this. Its only we came down this thread because it seemed like there was a more fundamental disagreemetn going on. but perhaps there really isnt.
That’s beyond the scope of praxeology. It is impossible to tell if everybody will adopt the currency or if only a very sizable majority will, the fact of the matter is however, there will be a tendency towards universal agreement on the currency, and those who refuse to adopt the currency will have to pay an economic price for not doing so.