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.
TY Z.
Selgin:I've mentioned historical episodes,
Economic history. Not theory.
Those episodes can and do have other interpretations.
Selgin:given figures
More historical empirical data that cannot be used for constructing a scientific theory. How can I possibly elaborate on this without sounding like I'm giving your a lesson on epistemology?
Selgin:and referred to relevant sources concerning a number of substantive points.
There are numerous praxeological objections, which in my opinion, you and others have never been able to respond to in any satisfactory manner. Now, it is possible that all these objections are vain, and that logic is on your side after all. But that's precisely the point, this issue can only be resolved (or not) in this domain. No hisotrical data can overcome logical fallacies. It's just that it is usually your side, that at some point during the debate, begins to resort to ad hoc claims usually involving history and emprical observations, e.g.,, 'the fact is that free banking has flourished here and there, etc......' and other such assertions.
I hope I may enter this debate only insofar as to clarify something which I suspect is causing the greatest loss of productivity, by causing talking past each other.
Proof has well-defined sense, since Leibniz sent around his letters on this subject:
That is necessarily true which is the contrary of any contradictory statement.
There are things, however, which are not necessary, merely possible. They are called "contingent," or "empirical." Like stories that are internally consistent but contradict each other when taken together. Why? Analysis required to prove them true or false by contradiction is analysis where infinite combinatorial terms must be checked for contradication. We cannot do infinite combinatorial analysis if we can't find some "shortcut" were we can construct series for which something about (n+1)th case can be proved.
Whereupon we rely on experience (experimentum). Which provides no causality or proof in mathematical sense, since we never actually show contrary of contradiction. At least, however, we provide determining equations of motion (set of functions such that full or partial derivative in any one variable is equal to a given function of initial states of all observed variables). There we have unproven assumption that future is like past in structure (also that these deterministic but not causal equations hold only if system is capable of local approximation, which may be proven depending on physical system that is modelled).
Can all parties please supply their one-sentence definition of proof to each other?
Selgin: AJ, your post baffles me. I don't claim that definitions and semantics are irrelevant; and my statement clearly shows that I favor a particular understanding of the meaning of a bank "deposit." Generally, I think peoiple ougfht to use words to mean what everyone uses them to mean, and not what they believe they ought to mean.
AJ, your post baffles me. I don't claim that definitions and semantics are irrelevant; and my statement clearly shows that I favor a particular understanding of the meaning of a bank "deposit." Generally, I think peoiple ougfht to use words to mean what everyone uses them to mean, and not what they believe they ought to mean.
Yeager argues that the 100-percenter definitions are chosen to make their side look right ("persuasive definitions"). Hence the fear seems to be that if you use their definitions to make your case, it will sound wrong-ish even if it is right.
That may well be a valid concern. Yet if it is truly impossible to make a convincing case using the 100-percenters' definitions, and they refuse to accept arguments couched in any other definitions, then it seems the only way to move forward is to address the definitional issues directly and refuse to make any more points until that is taken care of. Yeager did address these issues, but if his efforts are not to be wasted surely the next step is to wait, not to continue, at least until the 100%-ers make some concessions on the definitions front.
Why anarchy fails
z1235: AJ:So anyone who is for full-reserve banking has all their money in a fee-based safekeeping service, not a bank? I have my money in a bank, and I'm not worried about bank runs. Am I being needlessly risky? No, because if the need arises, taxpayers would be forced to make you whole at the point of a gun.
AJ:So anyone who is for full-reserve banking has all their money in a fee-based safekeeping service, not a bank? I have my money in a bank, and I'm not worried about bank runs. Am I being needlessly risky?
No, because if the need arises, taxpayers would be forced to make you whole at the point of a gun.
It seems you are arguing that FRB only exists because of state enforcement. That might be true, but I am having trouble pinning down just what your main point is. Specifically, I can think of at least three positions you (and/or 100-percenters) might be taking:
1) FRB would not exist in the absence of a state; only fee-based money warehouses would exist.
2) FRB might exist in the absense of a state, but if so it would only be because many people have foolish ideas about banking (due to brainwashing, etc.). In other words, stateless free banking would only survive if people fail to see what is in their best interests.
3) FRB should not exist (moral claim).
Is it one of these, more than one, or something else?
EDIT: Your subsequent post clarifies this somewhat:
z1235:I, for one, am not suggesting prohibition of any voluntary exchanges. I see the FracR vs FullR debate as merely one about predicting (and affecting) the level of risk education in the market (masses). The economic (financial) parasites are benefiting from this prevalent economic ignorance in the same way that political parasites are benefiting from the prevalent ignorance about the necessity of government. It is only natural that they join forces as is the case everywhere today.
From this it seems your position is basically (2) above. So we can distill the debate down to the question of, simply, Is banking with an FRB in a stateless society worth the risk for the average person, or for anyone? And if not, how likely is it that those people would accurately assess that risk?
"2) FRB might exist in the absense of a state, but if so it would only be because many people have foolish ideas about banking (due to brainwashing, etc.). In other words, stateless free banking would only survive if people fail to see what is in their best interests."
That sounds awfully open to parternalistic prodding.
If the intellectual world were populated entirely by people like AJ, everything would go so much more smoothly.
AJ:It seems you are arguing that FRB only exists because of state enforcement.
I was only responding to your particular question about whether you should worry about your money in the bank now. I explain my argument with more subtlety below.
This, but not sustainably so as one can't fool everyone all the time. To the extent that FracRB is not shoved down people's throats by the prince, it is "sold" to the masses by intelligent professors writing thick books about it. Until it isn't.
That's the purpose of these debates (and sites like LvMI): education and enlightenment.
Logically, even to a 7yr old, FracRB (just like any "honest" Ponzi scheme) is unsustainable as conflicting property claims must get resolved at some point in the future. Btw, FracRB is the only industry in which the resolution of property claims is synonimous with a collapse or a "run on the bank". It is also the only industry where a business's collapse translates into a whipe-out of the customers and usually not the owners. The brainwashing through mere language ("money", "bank", "deposit", "collapse", "run" all have special meanings when applied to FracRB) is really astounding.
Empirically, FracRB supporters wave off the risks inherent in their scheme by stipulating that "some point in the future" is usually too far away for an average person to worry -- and the more people don't worry, the further in the future that point gets pushed. So the "magic" of FracRB seems to work best when most customers are not worried about the point of property reckoning (which is logically inevitable). IIRC Keynes said: "In the long run we're all dead." In the meantime FracR bankers accumulate returns risking other people's capital while throwing them a bone of token interest and free checking.
That's why it is crucially important to have professors convincing the masses: "Don't worry, be happy. All is good. Scientific research shows that things have been good in 18 century Scotland (with 2% reserves no less!), and in many, many other instances -- until it inevitably wasn't good but that's all because of unpredictable human nature and human spirits and such (i.e people demanding their property for no good reason. The panicky bastards.) So we had to go in business with the prince and invent a central bank." Since we're playing empirics, I propose that the unsustainability of FracRB in a free market is hinted (if not proven) by the only two outcomes of every such scheme: (1)collapse or (2)collusion with the Prince.
FracRB supporters claim they don't need the Prince to sustain their scheme. Both logic and empirics overwhelmingly show that they do.
I think Z suggests an interesting twist. How much of the previous [sic] success of FRB was due to information asymmetry which no longer exists in our commercial society? Isn't the bank run itself a result of increased information (accurate or inaccurate) about the situation of an institution?
AJ:2) FRB might exist in the absense of a state, but if so it would only be because many people have foolish ideas about banking (due to brainwashing, etc.). In other words, stateless free banking would only survive if people fail to see what is in their best interests.
Are you suggesting that ignorance can overcome reality: two individuals cannot be the exclusive owner of the same thing at the same time. It's a praxeological truth that cannot simply be contracted away no matter how stupid people are. Z said it well. This conflict would resolve itself sooner or later. I presume rather quickly absent State intervention.
DD5, we need other attacks since Selgin and Whte deny that when you deposit with a bank you have any title to what you deposited.
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
AJ:Yeager did address these issues, but if his efforts are not to be wasted surely the next step is to wait, not to continue, at least until the 100%-ers make some concessions on the definitions front.
You cannot define your way out of logical contradictions. If two people cannot be the exclusive owner of the same thing, definition that attempt to circumvent this apparently little inconvenient truth are useless and will usually be self contradictory.
nirgrahamUK: DD5, we need other attacks since Selgin and Whte deny that when you deposit with a bank you have any title to what you deposited.
So you don't own X (as in not having a title to it) but you remain in full control over it (as in having access to it and the right to do whatever you want with it at will)? That's like saying you don't own X until you decide that you do (i.e. until you act as X's owner). What kind of (non)-ownership are we talking about here? The word is mightier than the sword, indeed.
Putting on Selgin and White shoes, I suppose I would say that you don't remain in full control over it. But what do you want exactly? to pass of your IOU to someone else, ok, thats you exchanging your iou for somones good or service.. Or you want to draw on the funds explicitly? come over and we'll see if we can help you out depending on how well kept our reserves are.
Lets face it, this form of 'banking' is really a low-yield lottery. it is explicitly designed as such. You pay in to have a stake in the lottery, and everyday you play you risk walking away with nothing.
nigrahamUK,
Precisely, the bank is not offering warehousing services; it is offering the services of a financial intermediary. Whatever you "deposit" in a bank immediately becomes the full property of the bank. What you own is an IOU issued by the bank which obligates them to repay money on your demand (perhaps with interest and subject to other conditions). The relationship is analogous to a call loan: the "depositor" is the creditor and the bank is the debtor. As Selgin has painstakingly explained, this relationship has been acknowledged in law for hundreds of years and is explicitly detailed in banking contracts; among economists, bankers, and courts, the term "deposit" is conventionally used to describe this kind of transaction.
You might not like this, but it shouldn't be difficult to understand.