To put it bluntly, what are the major differences between the two and whats the deal between the feuding?
I'll admit, as far as I know I have not read any explicit "Masonomics" books, but my understanding of the difference is that George Mason tends to stress Hayek more along with more "mainstream" (hopefully I'm not angering anyone with that) monetary theories and methdological approaches. They also seem to cite Mises as supporting their views (FRB etc) while downplaying Rothbard. Mises Institute is more Rothbard (who they say is more in tune with Mises) and the "traditional" Austrian approach. Am I missing any other significant distinguishes?
So whats the drama between them all? Judging by various posts on the internet they appear to have different academic ideas and some of their arguments can get a little personal at times.
Finally, what happened to Gene Callahan? I remember reading his book along time ago and loved it, and now I hear he isn't an Austrian anymore (although he frequents over at Coordination Problem and generally bashes Rothbard). Then I read on a post here he got mad over his book deal with the MI, but I don't know if this is trash talking or not.
And for a bonus question, if you had to pick a "side", which do you prefer? Honest.
For me, Mises Institute.
Ah, very nice, that "money (property)." Why, you almost slipped that right past me, you clever fellow!
And yet, I conceed it: I admit that bank money is "property": the holder owns an IOU, just as someone who buys a bond owns...a bond! What he emphatically doesn't own is the base money surrendered to the bank in exchange for the IOUs. That base money became the bank's property, until the bank in turn lent it.
And as for whether I know a "better" survey than the Cobden Centre's: well, every anti FRB type on this thread appears to "know" what banks are up to--or else what is it that all are so vehemently condemning? Do all think themselves so much brighter than average bank customers? If not, that's my survey. Or will someone on this list admit to being one of the knuckleheads who thnks a bank is just warehouse?
And as for, the suggestion that a bad survey is better than none is ...shades of "if you can't measure, measure anyway"!
*sigh*
Selgin, what do you think your 'survey by this thread' proves?, that there is no problem with heavily regulated bank systems under regimes of fiat money and legal tender laws where the banks engage in fractional reserve banking, that may as well just be full reserve banking since when banks go under tax payers get the bill anyhow? that we all know the government intervenes in the market for financial services and yet we still all participate in the distorted market that therefore there are no problems and nothing to criticise?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
Dr Selgin, can you indicate why you think credit expansion by banks under free banking would not lead to business cycles of the kind predicted by the ABCT?
As an admitted amateur(especially at macroeconomics, I had a humbling experience w.r.t that recently...), I can hazard a guess as to one way this problem could be offset in a free market. This would be through the operation of a secondary discount market in fiduciary media. Speculators on these markets would look to make gains based on their better knowledge and impression of different banks' activities and balance sheets, making profits on the differentials between anticipated future discounts or reserve ratios at redemption and the discount at which these "IOUs" are purchased. Operations on these secondary markets would then effect the behaviour of consumers, retailers who accept these fiduciary media as well as the banks that issue them, all of whom would either emulate these prices for their transactions or adjust activities in accord with them.
The system would not be perfect, owing to a lack of omniscience, uncertainty and human error, but nothing associated with the free market and human action is. Speculators on the market would make money proportional to their ability to perceive the relative recklessness and soundness of the banks concerned. On the other hand the banks would be rewarded for their ability to also perceive better investments, even if these are financed at a "leverage" due to a lower than 100% reserve ratio, while their recklessness would be punished too. Meanwhile the pyramided credit expansion by which the business cycle is accentuated would be offset to a large extent if not almost eliminated via the operation of an efficient discount market in fiduciary media(the banks themselves would probably be major participators in such markets too). Their operation would also help smooth out the fluctuations in money supply as a result of bank runs that has otherwise occured via FRB systems in the past. Indeed more efficient banks may effectively be able to expand credit at the expense of less efficient ones, making the market in a sense "cannibalistic" too.
The discount market would moreover be aided in its functional capacity due to the abolition of legal tender laws and deposit insurance, making speculators and buyers of bank media no longer effectively compelled to purchase them at par. Hence as a result, such a market would help regulate free bank activities in much the same way that stock and bond markets currently help regulate and govern the flow of capital to public stock companies. Meanwhile it would also help offset lot of the economic (not ethical) side-effects of FRB that the 100% reserve school has been concerned with. What do you think, am I just being ignorant/smoking something really good?
"When the King is far the people are happy." Chinese proverb
For Alexander Zinoviev and the free market there is a shared delight:
"Where there are problems there is life."
abskebabs,
I think the FracRB "deposit" (more like, bond) free market would look much like you described it. The moment a bank customer wakes up one morning and sees his "deposit" account (i.e. bond, IOU) trading at $.70 on the dollar in the open market he will perceive it as the junk bond that it actually is. As I said in my first post in this thread, people who want to lend their money, lend their money. The ones that want to maintain access to it (i.e. enjoy the liquidity benefits offered by it) deposit it.
Esuric:Can we ignore conspiracy theories for a moment and focus on economics?
Mass delusion is not a conspiracy theory. It is a fact. I'm guessing both you and I participate in numerous delusional fantasies each day.
Esuric:Do you deny that there's a demand for money? Do you understand that money is an economic good?
Could you give me an example of a good which is not economic?
Esuric:Do you understand that money, under normal circumstances, is solely demanded because of its ability to facilitate exchange, i.e., its liquidity?
I'm not sure this statement is consistent with praxeology.
Selgin:Do all think themselves so much brighter than average bank customers?
I would like to mention that I believe I am much brighter than the average bank customer. :)
i'm guessing you know more than average about all sorts, like marginal utility and the law of how it diminishes, the mutual gains from trade, the impossibility of rational economic calculation in a socialist commonwealth, the regression theorem for money... I could go on.
Esuric: Do you deny that there's a demand for money? Do you understand that money is an economic good?
Do you deny that there's a demand for money? Do you understand that money is an economic good?
You mean an economic good like burgers or sheep? Do you understand that economic goods (property) can not be willed into existence simply because someone "demands" them?
Do you understand that money, under normal circumstances, is solely demanded because of its ability to facilitate exchange, i.e., its liquidity?
Yes. A good (property) is demanded because someone needs (values) it it for something. So?
Are you saying that my desire to hold bank money over money proper, and earn interest rather than pay storage fees, somehow makes me an idiot? Who are you to critique my subjective preferences?
I can critique whatever I want. You earn interest on loans (bonds -- junk or others). You pay service fees on deposits (or they're free if you agree to look at pop-up ads). Just making you aware that there is a difference. You pays your money and you takes your chances.
Selgin:[...]This isn't surprising, after all: the Cobden Center is under the influence of 100-percenters, who wanted to claim that banbk customers din't know they were making loans to banks.
Oh Yewah, now there's a conspiracy amongst the 100-percenters.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
Not what he said or implied, Daniel.
I know, but that's been his attitude with regards to the "100-percenters."
What’s the point of this question? I merely asked z if he believes in the demand for money.
It is simply an economic fact that money is demanded because of its ability to facilitate exchange. This shouldn’t be controversial at all. Chapter 8 in Mises’ Theory of Money and Credit provides a full explanation.
You mean an economic good like burgers or sheep?
Did I say that media of exchange are identical to all other economic goods? There are clear differences between them, but it is an economic good nonetheless, and there is a demand for it.
Do you understand that economic goods (property) can not be willed into existence simply because someone "demands" them?
Not only is this entirely immaterial but it is also blatantly incorrect. It doesn’t matter to me whether money is produced in a factory, or found in a cave, or simply created by banking practices (a bookkeeping entry). Again, I value it because of its ability to facilitate exchange and eliminate certain efficiencies associated with barter.
You put money demand in quotes before, so it seemed as though you dismiss the concept of money demand and therefore monetary equilibrium altogether.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Selgin:I admit that bank money is "property": the holder owns an IOU, just as someone who buys a bond owns...a bond!
Yet this particular IOU matures instantly at face value the moment its holder shows up and demands it. It's rather fascinating that all it took was essentially two things to be redefined in order to overcome the praxeological impossibility of having two individuals being the exclusive owners of the same thing at the same time.
1. The claim ticket or warehouse receipt is redefined as an IOU
2. The depositor is redefined as creditor.
Yet evertying else remains the same. We still have a fixed amount of pysical property and a greater amount of claims (call them IOUs) issued, each representing a claim to the full amount orignially deposited. Nothing has changed except terms are redefined by you, yet the process in principle remains the same.
Answer my question. Am I a "brainwashed moron" because I (a) choose to earn interest rather than pay storage fees, and (b) voluntarily exchange my base money for bank money (which is quite convenient)?