Free State Project Forum

Please login or register.

Login with username, password and session length
Pages: 1 [2] 3   Go Down

Author Topic: Re: Recommended Libertarian reading list?  (Read 11179 times)

John Edward Mercier

  • *****
  • Offline Offline
  • Posts: 6534
  • Native
Re: Recommended Libertarian reading list?
« Reply #15 on: June 12, 2010, 08:15:22 am »

All the investment banks were outside the system. LB was at 24 times capital reserves when it failed... FRS is ten.

The tender laws are to restrict the States, and enforce a standard that is easier to tax.

By the way, there was no universal acceptance of gold, silver, etc. as money. That was created by government.


« Last Edit: June 12, 2010, 08:29:42 am by John Edward Mercier »
Logged

10stateswithnh

  • *****
  • Offline Offline
  • Posts: 659
  • Liberty Lover on New Hampshire seacoast
Re: Recommended Libertarian reading list?
« Reply #16 on: June 12, 2010, 02:55:06 pm »

Dave Ramsey also states that gold and silver have not been turned to as money in situations where economies collapse - but rather the actual commodities people need such as food, water, clothing, etc. I think he also says gold and silver were only used by governments (although he is a conservative rather than a libertarian).

Logged
Bryce in Rochester
States I have lived in:
PA, DE, WA, ME, SC, NY, GA, UT, CO, NH as of Sep 2011!

John Edward Mercier

  • *****
  • Offline Offline
  • Posts: 6534
  • Native
Re: Recommended Libertarian reading list?
« Reply #17 on: June 12, 2010, 03:29:53 pm »

The use of precious metal as a standard made far reaching trade easier.
Logged

rossby

  • Director of Development
  • Global Moderator
  • *****
  • Offline Offline
  • Posts: 4801
Re: Recommended Libertarian reading list?
« Reply #18 on: June 12, 2010, 03:49:14 pm »

The tender laws are to restrict the States, and enforce a standard that is easier to tax.

The tender laws are part of a larger scheme in the U.S. Constitution to ensure that certain businessmen would receive payments on loans in "hard currency". It has almost nothing to do with collecting federal taxes (which were quite modest in 1787).
Logged

John Edward Mercier

  • *****
  • Offline Offline
  • Posts: 6534
  • Native
Re: Recommended Libertarian reading list?
« Reply #19 on: June 12, 2010, 07:49:45 pm »

Wouldn't they receive payment in whatever the Congress deemed legal tender?
The taxation was a last minute thought on the scope of complexity of taxation with no standard, and was a broader focus on civilization throughout the ages.


Logged

CurtHowland

  • FSP Participant
  • *****
  • Offline Offline
  • Posts: 533
  • Mover #902. If not for the deer, maybe #901!
    • Anarchy != Chaos
Re: Recommended Libertarian reading list?
« Reply #20 on: June 13, 2010, 02:55:23 pm »

sorry, but there is no requirement to to use fractional reserves.

As I said, it was an interview with a bank owner in Massachusetts who said the regulators specifically told him that if he didn't make more loans (against static deposits), they were going to be "sorry".

Quote
A true Austro-libertarian, would not call for the government to 'bring back the gold standard' but instead to get rid of all legal tender laws.

Couldn't agree more. I have no interest in any government at all, at which time people would return to sound money because that's what people do when left alone. They choose a "gold standard" which means commodities not fiat currency.

Quote
In the 19th century, the government tried fixing the exchange rate between gold and silver, and when the market prices would change, there would be big influxes of the overvalued metal and an exodus of the overvalued metal.  This lead to a lack of silver and therefore small change, which can cripple business

Just another failure caused by government regulation of people's lives.
Logged
"We must, indeed, all hang together or, most assuredly, we shall all hang separately."

Tech blog fun: http://anarchic-order.blogspot.com/

John Edward Mercier

  • *****
  • Offline Offline
  • Posts: 6534
  • Native
Re: Recommended Libertarian reading list?
« Reply #21 on: June 13, 2010, 07:13:51 pm »

Yes... there was a 'push' to make more loans, but the numbers state that it didn't work. Being repaid is a higher priority than earning interest.

Cultures that have little to no government don't tend toward a Gold Standard... gold is an unnecessary commodity for the most part.
And there really is no such thing as Sound Money.
Logged

rossby

  • Director of Development
  • Global Moderator
  • *****
  • Offline Offline
  • Posts: 4801
Re: Recommended Libertarian reading list?
« Reply #22 on: June 13, 2010, 07:25:58 pm »

Wouldn't they receive payment in whatever the Congress deemed legal tender?

Legal tender is just a form of tender that must be accepted. Legal tender laws help create a de facto currency because of the constant tax demand. What Congress said in Article I, Section 10 is that states can't make anything but gold and silver legal tender. The reason was to prevent a sympathetic state legislature from allowing impoverished debtors from paying off their debts by tendering commodities or paper money to their creditors.
Logged

BigJoe

  • ****
  • Offline Offline
  • Posts: 363
Re: Recommended Libertarian reading list?
« Reply #23 on: June 14, 2010, 03:31:28 am »

Cultures that have little to no government don't tend toward a Gold Standard... gold is an unnecessary commodity for the most part.
And there really is no such thing as Sound Money.

cultures in previous centuries had MUCH less government and they DID tend toward a gold standard so I don't know what your talking about.

gold is an unnecessary commodity?  What does that even mean?  Would the human race continue living if all the gold in the world was vaporized? probably, but that is also true of jewelry, art, and many, many, many other things.

what exactly do you mean by 'there is no such thing as sound money'  On a very abstract level I think I would agree with you, but I'm not sure what you meant.
Logged

John Edward Mercier

  • *****
  • Offline Offline
  • Posts: 6534
  • Native
Re: Recommended Libertarian reading list?
« Reply #24 on: June 14, 2010, 09:31:05 am »

Which culture had less government and tended toward a gold standard?

Money is used to provide an elastic medium to relative value. If one was to condsider the USD static, it would simply appear that the prices of everything else where moving relative to it. Sort of like early concepts that the Earth was the center of the universe and everything moved relative to it.

Change the standard to gold, and the same phenomena occurs.
« Last Edit: June 14, 2010, 09:36:20 am by John Edward Mercier »
Logged

WendellBerry

  • Guest
Re: Recommended Libertarian reading list?
« Reply #25 on: June 14, 2010, 09:55:57 am »

The reason we had to move away from gold backing our money is because we take land as collateral against mortgages.

Logged

BigJoe

  • ****
  • Offline Offline
  • Posts: 363
Re: Recommended Libertarian reading list?
« Reply #26 on: June 14, 2010, 10:25:16 am »

Which culture had less government and tended toward a gold standard?

Money is used to provide an elastic medium to relative value. If one was to condsider the USD static, it would simply appear that the prices of everything else where moving relative to it. Sort of like early concepts that the Earth was the center of the universe and everything moved relative to it.

Change the standard to gold, and the same phenomena occurs.


How about England after WWI?  How about from the Jackson to the Lincoln Administration?  How about the gilded age?

If one was to consider the USD static?   What?  it is very much not static, trillions of them can be created in an instant, much more difficult to do with ounces of gold.

money is not neutral in the short run, the winners are the people who get their hands on the new money first (i.e the politically connected), and the losers are the ones who get their hands on it last.

And then of course, when you dramatically increase the amount of loanable funds available, interest rates plummet, and its important for interest rates not to be artificially tampered with because they serve a vital temporal coordination purpose.
Logged

BigJoe

  • ****
  • Offline Offline
  • Posts: 363
Re: Recommended Libertarian reading list?
« Reply #27 on: June 14, 2010, 11:13:33 am »

The Origin Of Money and Its Value
Robert Murphy


The importance of the Austrian school of economics is nowhere better demonstrated than in the area of monetary theory. It is in this realm that the simplifying assumptions of mainstream economic theory wreak the most havoc. In contrast, the commonsensical, "verbal logic" of the Austrians is entirely adequate to understand the nature of money and its valuation by human actors.

Menger on the Origin of Money

The Austrian school has offered the most comprehensive explanation of the historical origin of money. Everyone recognizes the benefits of a universally accepted medium of exchange. But how could such a money come into existence? After all, self-interested individuals would be very reluctant to surrender real goods and services in exchange for intrinsically worthless pieces of paper or even relatively useless metal discs. It's true, once everyone else accepts money in exchange, then any individual is also willing to do so. But how could human beings reach such a position in the first place?

One possible explanation is that a powerful ruler realized, either on his own or through wise counselors, that instituting money would benefit his people. So he then ordered everyone to accept some particular thing as money.

There are several problems with this theory. First, as Menger pointed out, we have no historical record of such an important event, even though money was used in all ancient civilizations. Second, there's the unlikelihood that someone could have invented the idea of money without ever experiencing it. And third, even if we did stipulate that a ruler could have discovered the idea of money while living in a state of barter, it would not be sufficient for him to simply designate the money good. He would also have to specify the precise exchange ratios between the newly defined money and all other goods. Otherwise, the people under his rule could evade his order to use the newfangled "money" by charging ridiculously high prices in terms of that good.

Menger's theory avoids all of these difficulties. According to Menger, money emerged spontaneously through the self-interested actions of individuals. No single person sat back and conceived of a universal medium of exchange, and no government compulsion was necessary to effect the transition from a condition of barter to a money economy.

In order to understand how this could have occurred, Menger pointed out that even in a state of barter, goods would have different degrees of saleableness or saleability. (Closely related terms would be marketability or liquidity.) The more saleable a good, the more easily its owner could exchange it for other goods at an "economic price." For example, someone selling wheat is in a much stronger position than someone selling astronomical instruments. The former commodity is more saleable than the latter.

Notice that Menger is not claiming that the owner of a telescope will be unable to sell it. If the seller sets his asking price (in terms of other goods) low enough, someone will buy it. The point is that the seller of a telescope will only be able to receive its true "economic price" if he devotes a long time to searching for buyers. The seller of wheat, in contrast, would not have to look very hard to find the best deal that he is likely to get for his wares.

Already we have left the world of standard microeconomics. In typical models, we can determine the equilibrium relative prices for various real goods. For example, we might find that one telescope trades against 1,000 units of wheat. But Menger's insight is that this fact does not really mean that someone going to market with a telescope can instantly walk away with 1,000 units of wheat.

Moreover, it is simply not the case that the owner of a telescope is in the same position as the owner of 1,000 units of wheat when each enters the market. Because the telescope is much less saleable, its owner will be at a disadvantage when trying to acquire his desired goods from other sellers.

Because of this, owners of relatively less saleable goods will exchange their products not only for those goods that they directly wish to consume, but also for goods that they do not directly value, so long as the goods received are more saleable than the goods given up. In short, astute traders will begin to engage in indirect exchange. For example, the owner of a telescope who desires fish does not need to wait until he finds a fisherman who wants to look at the stars. Instead, the owner of the telescope can sell it to any person who wants to stargaze, so long as the goods offered for it would be more likely to tempt fishermen than the telescope.

Over time, Menger argued, the most saleable goods were desired by more and more traders because of this advantage. But as more people accepted these goods in exchange, the more saleable they became. Eventually, certain goods outstripped all others in this respect, and became universally accepted in exchange by the sellers of all other goods. At this point, money had emerged on the market.

The Contribution of Mises

Even though Menger had provided a satisfactory account for the origin of money, this process explanation alone was not a true economic theory of money. (After all, to explain the exchange value of cows, economists don't provide a story of the origin of cows.) It took Ludwig von Mises, in his 1912 The Theory of Money and Credit, to provide a coherent explanation of the pricing of money units in terms of standard subjectivist value theory.

In contrast to Mises's approach, which as we shall see was characteristically based on the individual and his subjective valuations, most economists at that time clung to two separate theories. On the one hand, relative prices were explained using the tools of marginal utility analysis. But then, in order to explain the nominal money prices of goods, economists resorted to some version of the quantity theory, relying on aggregate variables and in particular, the equation MV = PQ.

Economists were certainly aware of this awkward position. But many felt that a marginal utility explanation of money demand would simply be a circular argument: We need to explain why money has a certain exchange value on the market. It won't do (so these economists thought) to merely explain this by saying people have a marginal utility for money because of its purchasing power. After all, that's what we're trying to explain in the first place—why can people buy things with money?

Mises eluded this apparent circularity by his regression theorem. In the first place, yes, people trade away real goods for units of money, because they have a higher marginal utility for the money units than for the other commodities given away. It's also true that the economist cannot stop there; he must explain why people have a marginal utility for money. (This is not the case for other goods. The economist explains the exchange value for a Picasso by saying that the buyer derives utility from the painting, and at that point the explanation stops.)

People value units of money because of their expected purchasing power; money will allow people to receive real goods and services in the future, and hence people are willing to give up real goods and services now in order to attain cash balances. Thus the expected future purchasing power of money explains its current purchasing power.

But haven't we just run into the same problem of an alleged circularity? Aren't we merely explaining the purchasing power of money by reference to the purchasing power of money?

No, Mises pointed out, because of the time element. People today expect money to have a certain purchasing power tomorrow, because of their memory of its purchasing power yesterday. We then push the problem back one step. People yesterday anticipated today's purchasing power, because they remembered that money could be exchanged for other goods and services two days ago. And so on.

So far, Mises's explanation still seems dubious; it appears to involve an infinite regress. But this is not the case, because of Menger's explanation of the origin of money. We can trace the purchasing power of money back through time, until we reach the point at which people first emerged from a state of barter. And at that point, the purchasing power of the money commodity can be explained in just the same way that the exchange value of any commodity is explained. People valued gold for its own sake before it became a money, and thus a satisfactory theory of the current market value of gold must trace back its development until the point when gold was not a medium of exchange.*

The two great Austrian theorists Carl Menger and Ludwig von Mises provided explanations for both the historical origin of money and its market price. Their explanations were characteristically Austrian in that they respected the principles of methodological individualism and subjectivism. Their theories represented not only a substantial improvement over their rivals, but to this day form the foundation for the economist who wishes to successfully analyze money.



http://mises.org/daily/1333


What has Government Done to Our Money?

http://mises.org/books/whathasgovernmentdone.pdf
Logged

John Edward Mercier

  • *****
  • Offline Offline
  • Posts: 6534
  • Native
Re: Recommended Libertarian reading list?
« Reply #28 on: June 14, 2010, 12:28:00 pm »

Odd. Your proving my point. Jackson to Lincoln? England after WWI? A time of less government as compared to when?

Static in perception. The gold standard is a eurocentric perception. Even the trade of precious metals is described by Americans in terms of USD valuation. When under your theorem the USD should be described in terms of gold weight/purity.

The wheat and telescope is a fairly good example. Food is survival, a telescope might only be a luxury.

Logged

BigJoe

  • ****
  • Offline Offline
  • Posts: 363
Re: Recommended Libertarian reading list?
« Reply #29 on: June 14, 2010, 01:57:38 pm »

Odd. Your proving my point. Jackson to Lincoln? England after WWI? A time of less government as compared to when?

Static in perception. The gold standard is a eurocentric perception. Even the trade of precious metals is described by Americans in terms of USD valuation. When under your theorem the USD should be described in terms of gold weight/purity.

The wheat and telescope is a fairly good example. Food is survival, a telescope might only be a luxury.



as to compared to now, or pretty much any time in the past couple hundred years when gold was not used as money.


What are you talking about?  Why would that be the case? 


You totally missed the point with the 'food is survival telescope is luxury line'   The point is saleability.  In order for something to emerge as an exchange good, it needs to have very high saleability.

but if you compared gold to wheat in terms of which commodity had better money properties, gold pwns wheat.  Gold is durable, divisible, dense, etc.  And most importantly, marketable. As more and more people trusted that they would easily be able to sell their goods and services in exchange for gold, that they could then turn around and sell for goods and services, this built up a positive network effect of gold as money.  The more people use something as an exchange good, the more valuable that thing becomes as an exchange good.
Logged
Pages: 1 [2] 3   Go Up