Hello to all,
I am looking for a thorough critique of the Mitchell school of Chartalism from an Austrian perspective (this is different from the Mosler school discussed before). A few general beliefs of Mitchell listed here, divergences are at the bottom.
Warm Regards,
Matt
Related to deficit equals surplus thingy:
http://mises.org/daily/5260
Hello Wheylous,
I happened to read that link yesterday and related threads, no objections on my part. I am more inclined to what the general consensus of the Austrian school is toward the latter parts. Are you aware of any recent works on the theory of inflation, something much more recent than Mises but just as/more informative?
Sorry, but I'm an ignorant little libertarian. I have yet to read any actual Austrian work besides a whole bunch of articles. I hope someone here can help you. It may also be useful to directly contact prominent Austrians like Robert Murphy.
"Solution to unemployment is a job guarantee."
The problem with job guarantees from government (I presume this is what you mean by this) is that they must inherantly redistribute resources in order to make that guarantee, so other people become poorer in exchange for this "job". While government could "guarantee", or even force upon everyone a job, and it would technically solve unemployment, it would cause more problems, as people would become poor. The best solution to unemployment is to abolish unions and laws that affect employment, allowing people to freely negotiate work.
"Quantitative easing is unstimulative because banks don't need reserves before they can lend. They worry about their reserve positions after much lending, and if they are short of cash they can borrow from the interbank market. Lonas create deposits which generate reserves, banks aren't lending because they think they aren't credit worthy etc."
Its technically true that a fractional reserve bank does not need reserves in order to lend, they just need people to deposit money. The problem is that fractional reserve banking is inherently fraud and unstable; if too many depositors ask for their money, the bank is unfinished. The reason banks are unwilling to lend is because they are afraid of this default. I know they argue against quantitative easing, but austrian economists are opposed to it because the central bank essentially creates money out of thin air by writing people checks, where it becomes virtual money at a local bank when someone cashes it in.
"The inflation in the Weimar republic was caused by the loss of the Ruhr's natural resources, and Zimbabwae's by land reforms and negligent trade management."
Losing natural resources does cause an increase in some prices, ceterus perebus, but it can't explain hyperinflation.
Schools are labour camps.
0. Asking for the latest cutting edge modern Austrian stuff is like asking for the latest in theoretical physics to prove things don't fall up when dropped.
1. General overview of this whole shebang:
Notice that nothing is said about actually making stuff. One would think the author is describing a game of Monopoly, where there are only little plastic houses and paper deeds, and nobody eats or drinks or does anything real. Is that his vision of the world? Does he think the problem an economy has to tackle is primarily how play around with the Monopoly money? Just find the right rules of the game for handling the Monopoly money and everything will take care of itself, he seems to be saying. Does anyone think such a scheme deserves serious consideration?
Does he think that moving Monopoly money around influences the world of goods and services, or not? If not, of what relevance is it? If yes, why does he not tell us about its influence in detail? After all, that is what we want to know about, how to have more stuff for everyone to enjoy.
2. "Solution to unemployment is a job guarantee." Same thing again here. Just shuffle the Monopoly money around a certain way and everything will be fine. Is the problem jobs? Is any job just fine? As Peter Schiff often says, in the Soviet Union everyone had a guaranteed job, and yet they still could only gape in disbelief at Western living standards. They had a different problem, [and it is the basic question facing every economy]: how come nothing is being made here? Why are the shelves in the stores either empty or full of useless garbage?
3. "The inflation in the Weimar republic etc. etc." But if the money supply was held constant in those countries, it would be mathematically impossible to have hyperinflation. There just isn't enough money to go around for prices to shoot up like that.
4. Bottom line, Mises' maxim still holds, that anyone who thinks we solve everyones problems by fiddling with the money is a "monetary crank" [=polite way of saying nutjob].
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It's easy to refute an argument if you first misrepresent it. William Keizer
eliotn and Smiling Dave,
Thank you.
yw