I was wandering throughout the blogosphere and came across a blog post from J.F. Catalán where he comments on a point raised by Daniel Kuehn about inflation being theft (in commenting on an article from the Atlantic). Daniel's pertinent comment first:
"Banks and bondholders get cheated, because their loans are repaid with inflated coin. Similarly, people with fixed savings, such as retirees, get punished for their thrift. President Grover Cleveland, a warrior against inflation (in his day, brought about by cheap silver), rightly likened a debasement of the currency to theft." This is an irresponsible set of sentences. Nobody has property rights associated with a stable value of money. [Emphasis mine] Everyone makes transactions with the understanding that the value of money changes - CERTAINLY banks and bondholders do. This is absolutely, unequivocally not "theft".
And Catalán's concurrence:
Exactly. Inflation ought to be judged based on its consequences. ... Austrians know that stabilizing the value of money is impossible. Targeting a price level does not accomplish a stable exchange value of money. The value of money is always in terms of other economic goods, and the value of money will constantly be changing: this is a function of changing preferences, expectations, and plans/actions. As long our economy is a money one characterized by the pricing process, then the value of money will always be shifting. If government-induced inflation is theft, then it is theft when someone affects prices in such a way that it reduces your purchasing power with regards to the relevant good. The moral argument against inflation is a bad one. Stick with the consequentialist one.
Am I misunderstanding the exchange here, or did I just completely waste my time reading Inflation Is Theft?
If he actually believes "A producer could just produce money pyramiding on top of nothing, just like the dollar", I doubt he's even heard of the regression theorem. I think you may be playing too big here, Clay Clay.
Clayton,
Well, when you say that a freely accepted inflating currency would be impossible, you than disagree with both Hayek and Murphy?
Now, truly if one assumes that inflation is inherently impossible without legal tender laws, than inflation as a phenomenon would logically follow form legal tender, and in saying that legal tender laws constitute aggression, one could then say that inflation to, as a direct consequence, also constituted aggression.
Anyway, I strongly disagree with that initial assumption.
John James: ThatOldGuy:Wealth is the sum of economic goods in one's possession;Please explain how one calculates this sum.
ThatOldGuy:Wealth is the sum of economic goods in one's possession;
The sentence explains itself. Menger provides this in his Principles of Economics (109; no emphasis added):
Earlier (p. 76) we called “the entire sum of goods at a person’s command” his property. The entire sum of economic goods at an economizing individual’s command we will, on the other hand, call his wealth. The non-economic goods at an economizing individual’s command are not objects of his economy, and hence must not be regarded as parts of his wealth. We saw that economic goods are goods whose available quantities are smaller than the requirements for them. Wealth can therefore also be defined as the entire sum of goods at an economizing individual’s command, the quantities of which are smaller than the requirements for them.
Earlier (p. 76) we called “the entire sum of goods at a person’s command” his property. The entire sum of economic goods at an
economizing individual’s command we will, on the other hand, call his wealth. The non-economic goods at an economizing
individual’s command are not objects of his economy, and hence must not be regarded as parts of his wealth. We saw that economic
goods are goods whose available quantities are smaller than the requirements for them. Wealth can therefore also be defined as the entire sum of goods at an economizing individual’s command, the quantities of which are smaller than the requirements for them.
John James:however, in the context of inflation, in which this discussion is framed, wealth is implicitly defined as the value of the sum of one's money.False.
however, in the context of inflation, in which this discussion is framed, wealth is implicitly defined as the value of the sum of one's money.
Would you elaborate- How do you define wealth in the context of 'increasing one's wealth at another's expense'?
If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH
@Dave: Murphy argues that Hayek's proposal is consistent with the Regression Theorem. It's still crank, in my opinion.
Clayton -
Clayton: @Dave: Murphy argues that Hayek's proposal is consistent with the Regression Theorem. It's still crank, in my opinion. Clayton -
Is this a reply to me?
@Merlin: Oops, yes. Don't know why I put Dave. My brain doesn't seem to work anymore nowadays.
ThatOldGuy: The sentence explains itself. Menger provides this in his Principles of Economics (109; no emphasis added): Earlier (p. 76) we called “the entire sum of goods at a person’s command” his property. The entire sum of economic goods at an economizing individual’s command we will, on the other hand, call his wealth. The non-economic goods at an economizing individual’s command are not objects of his economy, and hence must not be regarded as parts of his wealth. We saw that economic goods are goods whose available quantities are smaller than the requirements for them. Wealth can therefore also be defined as the entire sum of goods at an economizing individual’s command, the quantities of which are smaller than the requirements for them.
Is that supposed to be some kind of appeal to authority? I didn't ask you to explain what the sentence meant, and it therefore doesn't matter if it "explains itself". I asked you to explain how the sum is calculated. If you can't do it, just say so.
What's wrong with your definition?
John James:Is that supposed to be some kind of appeal to authority? I didn't ask you to explain what the sentence meant, and it therefore doesn't matter if it "explains itself". I asked you to explain how the sum is calculated.
I stated earlier that, 'however, in the context of inflation, in which this discussion is framed, wealth is implicitly defined as the value of the sum of one's money.' To which you replied 'False.' Would you please elaborate on why you assert this to be so? You either endorse my definition of wealth as stated or you don't endorse it, in favor of some other definition, and your comment 'What's wrong with your definition?' leaves this discussion very ambiguous to me.
Specifically, theft is the agressive seizure of property. You must argue, either, that: in inflating, theft occurs because the value of the unit of currency is diminished and one has property rights to the value of his goods, or; in inflating, one's property is aggressively seized. The reason I made the claim, regarding implicit definitions, is that you haven't made an argument advocating either of the above choices, insofar as I can tell.
ThatOldGuy: What do you mean "calculated" and why is it relevent? One's wealth consists of the sum [all; the total] of one's economic goods; every economic good one owns constitutes a part of one's wealth. I quoted Menger as I thought he could elaborate on what I meant; I thought that my original sentence sufficiently elaborated on what wealth means.
What do you mean "calculated" and why is it relevent? One's wealth consists of the sum [all; the total] of one's economic goods; every economic good one owns constitutes a part of one's wealth. I quoted Menger as I thought he could elaborate on what I meant; I thought that my original sentence sufficiently elaborated on what wealth means.
If I understand you correctly, I would agree with this statement.
ThatOldGuy: I stated earlier that, 'however, in the context of inflation, in which this discussion is framed, wealth is implicitly defined as the value of the sum of one's money.' To which you replied 'False.'
I stated earlier that, 'however, in the context of inflation, in which this discussion is framed, wealth is implicitly defined as the value of the sum of one's money.' To which you replied 'False.'
I agree with JJ here, though I don't know if it's for the same reasons. I don't see why, when discussing inflation, we should define wealth as the sum of one's money instead of the original definition you supplied (which I agree with) which is the sum of what one owns. I would think that we can separate one's monetary wealth from tangible when discussing inflation.
ThatOldGuy: Specifically, theft is the agressive seizure of property. You must argue, either, that: in inflating, theft occurs because the value of the unit of currency is diminished and one has property rights to the value of his goods, or; in inflating, one's property is aggressively seized. The reason I made the claim, regarding implicit definitions, is that you haven't made an argument advocating either of the above choices, insofar as I can tell.
I don't quite agree with the idea that theft is necessarily agressive. I think that it is possible to steal something from someone without resorting to violence (such as stealing when no one is home).
gotlucky: I don't see why, when discussing inflation, we should define wealth as the sum of one's money instead of the original definition you supplied (which I agree with) which is the sum of what one owns.
To be clear, I'm still advocating for my definition. I inferred, correctly or incorrectly is the question I posed to him in that post, from John James' statement "If anyone would like to explain how 'increasing one's wealth at another's expense' is not stealing, I'd be interested to hear it," that he is implying that wealth includes the value of the sum of one's economic goods- if not, he's arguing that, in inflating, the inflating agency (in this case, the state) is aggressively seizing the property of others; that is, unless there is some other option, for which has not yet contended.
gotlucky:I don't quite agree with the idea that theft is necessarily agressive. I think that it is possible to steal something from someone without resorting to violence (such as stealing when no one is home).
Aggression here denotes an action that violates the legitimate (legitimate defined below in parentheses) property rights of others; it may take the form of violence (me running up to you in the street and punching you in the face would violate the property rights you have to your body, assuming you had never before aggressed against me or my property), but violence (in the sense of physical confrontation, if this is what you mean) is not necessary for an action to be aggressive by itself. For instance, you mug me, steal my watch (again, assuming that it is legitimately my property), and run off with it on Monday; on Tuesday, I see you, restrain you, and take back my watch. In scenario, you aggressed against me by violating my property rights to my person, by mugging me, and the property rights I had to my watch by stealing it. My taking back the watch does not constitute an aggressive act, and is consistent with the Non-Aggression Principle, because it was taken in defense of my property and the violence I used to take my watch back (restraining you) on Tuesday was less than the violence you used, initially on Monday, against me (physically beating me). For instance, if you weren't home and I broke into your house to steal your televsion, this would be a violation of your property rights to your house and your television, assuming you acquired them legitimately (i.e. through homesteading them, producing them, or acquiring them through voluntary exchange), and would constitute an act of aggression; namely, theft. Such an action may not be aggressive in the sense that I pried the television from your hands or fought you for the television and took it in your incapacitation, but it is aggressive with respect to the definition as it applies to the Non-Aggression Principle and property rights.
When you FORCE people to use a currency.. it is (legal tender laws).
The thread seems to be operating under this presumption. I don't agree with the assertion. Perhaps if someone would be so kind as to point out the law(s) that:
1. Require payment of all goods and services in dollars.
2. Require parties to use government run courts to settle disputes.
The truth of the matter is that government only requires payment to government denominated in dollars. People are free to use whatver currencies they wish but choose to almost exclusively use dollars for the convenience of paying government.
Maybe the problem is not so much government as what can be found in the mirror...
Oh boy, the Fed apologists are really crawling out of the woodwork. I guess this topic really sorts the sheep from the goats.
The thread seems to be operating under this presumption. I don't agree with the assertion. Perhaps if someone would be so kind as to point out the law(s) that: 1. Require payment of all goods and services in dollars. 2. Require parties to use government run courts to settle disputes. The truth of the matter is that government only requires payment to government denominated in dollars. People are free to use whatver currencies they wish but choose to almost exclusively use dollars for the convenience of paying government.
No, it's not just a matter of convenience... Federal Reserve Notes are the only duty-free medium of exchange. If I buy your car for $5,000, that $5,000 is income for you but the car is not income for me and does not have to be reported as income for tax purposes. But if I buy your car for 5 gold pieces, the transaction is a barter transaction and both parties must report the items in the exchange as income to the IRS at the "fair market value." Suddenly, the car becomes taxed.
In addition, the inflationary appreciation of any non-dollar commodity is treated as "income" by the IRS and will be taxed. If I buy an ounce of gold when it was $250 each and later spend that ounce of gold when it's worth $1,500, I technically owe taxes on $1,250 of "income."
No, the problem really is the government.
ThatOldGuy:What do you mean "calculated" and why is it relevent?
I mean "calculated":
adjective
You said "sum, total, all". I want to know how such a thing is calculated. This is relevant because your answer is important in making you realize the full logical implications of what you're arguing.
So if you please, how is this sum calculated?
I stated earlier that, 'however, in the context of inflation, in which this discussion is framed, wealth is implicitly defined as the value of the sum of one's money.' To which you replied 'False.' Would you please elaborate on why you assert this to be so?
Would you please elaborate on why you assert this to be so?
Because in the context of inflation, wealth is not implicitly defined as the value of the sum of one's money. But even still, that's irrelevant, as you already stated in the very same instance that "Wealth is the sum of economic goods in one's possession"...unless of course you'd like to argue that money is not an economic good.
You either endorse my definition of wealth as stated or you don't endorse it, in favor of some other definition, and your comment 'What's wrong with your definition?' leaves this discussion very ambiguous to me.
I'm sorry you feel that way.
I say again. You are the one who claimed:
"Hoppe is very clear in stating that no one has a right to the value of his goods as value is placed on goods by individuals and their subjective valuations of these goods; ultimately, claiming a right to the value of something is tantamount to claiming a right to the minds of others. If that's true, then inflation can't be theft as the value of a currency is only lowered as a result of market transactions and theft is defined as the aggressive seizure of another's property."
My response was quote from the same man you speak of saying:
...the state's position regarding money and banking is obvious: its objectives are served best by a pure fiat money monopolistically controlled by the state. For only then are all barriers to counterfeiting removed (short of an entire breakdown of the monetary system through hyperinflation) and the state can increase its own income and wealth at another's expense practically without cost and without having to fear bankruptcy.
This is why, for you to be logically consistent, it is imperative for you to demonstrate how "increasing one's own wealth at another's expense" is not stealing. By definition, one would assume it is. I asked for an explanation of how it's not on the very first page. Merlin even said he was "Glad to oblige", yet he nor anyone else has done so, and we are already on the 4th page of this thread.
This statement is inaccurate. Since I only need one citation to discredit the assertion.... Time Dollars.
In your example you are using the intellectual property of USA, Inc. as a unit of account or measurement (ie $, dollars). Under the Constitution, USA, Inc. has power of seigniorage over the dollar. If I trade you one apple for one orange who incurs a tax liablity and why? Furthermore, under what law am I obligated to disclose this hypothetical trade to anyone?
No, the problem really is not government. Government is simply a reflection of the people. (I reserve the right to bash government whenever it suits me for the purposes of educating people using the sales pitch how evil government is and why the state must be abolished).
P.S. I will answer my own question since I do not believe you will have an answer. The answer to the former question is whichever party voluntarily discloses the trade to government and claims a loss to receive a tax benefit. It is at this precise moment the other party incurs an alleged liability. Enforcement, or lack of, is a separate matter. Let me further illustrate the point with an everyday example. How does the IRS know you received income? Your employer testified you received income stating they witnessed you receiving $x.xx of income when they filed the W-2.
Next question... (advanced course)
How do you receive income from an employer not denominated in $x.xx?
P.S.S.
Would this mean I can escalate the sarcasm in my replies to maximum?
USA, Inc.
Government is simply a reflection of the people.
Yeah, just like slavery is a reflection of the slaves. Pussies deserved to be enslaved.
And don't forget: