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.
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.
I know, but this is what I mean by attempting to redefine your way out impossible situations. The end result is always that there are more tittles to property then actual physical property. Property can be transferred between people but it cannot be increased somehow magically by an increase in the number of tittles, and it is an undisputable empirical fact that the number of tittles (or bank notes) in exchange is greater then physical property.
But there is another clever way I think to demonstrate the futility of this attempt to redefine the deposit according to Selgin and White. I'm short in time right now. I'd like to elaborate on this later.
z1235: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.
You do not remain in "full control" over what has been deposited. The bank is the full owner, because the deposit is a loan. It is possible the bank will miuse the funds it has been lent and be unable to pay the depositor back on demand. In other words, the bank may default on its obligations to its "depositors" -- that is the risk of being a creditor.
You no more own the money you deposit in a bank than you own the goods purchased by issuer of a bond you hold.
>> As Selgin has painstakingly explained, this relationship has been acknowledged in law for hundreds of years and is explicitly detailed in banking >>contracts;
There's truth in here, Carr vs Carr established this in English Law in 1811 (legal positivism?)
and 200 years later the British Public have no idea:
source : http://www.cobdencentre.org/?dl_id=67
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
Modus Tollens: In other words, the bank may default on its obligations to its "depositors" -- that is the risk of being a creditor. You no more own the money you deposit in a bank than you own the goods purchased by issuer of a bond you hold.
In other words, the bank may default on its obligations to its "depositors" -- that is the risk of being a creditor.
You are aware that banks have both creditors (buyers/holders of their bonds) and depositors (customers), correct? Now you are suggesting that their customers (depositors) are nothing but creditors, as well? As I explained, and as Nir's pie chart shows, FracRB only works with either brainwashed or coerced masses (or both). It is logically unsustainable (i.e. immediately collapses) whenever all owners act as the owners of their property.
nirgrahamUK,
The conventional meaning of words changes. Sometimes this can be misleading and detrimental; sometimes this can be elucidating and beneficial; most of the time this is just an arbitrary reassigment of symbols. Whatever the case, trying to fight these changes, especially when they occurred hundreds of years ago, is normally a futile endeavor. For most purporses, a bank deposit is a bank's debt to its customer. In some contexts it may be prudent to affix qualifications to the word deposit for clarity, such as "FR deposit," "warehouse deposit," or whatever else. But since Selgin is not writing exclusively for people seeped in the Austrian economics community, such qualifications will normally just create confusion and need continual explanation.
>>But since Selgin is not writing exclusively for people seeped in the Austrian economics community, such qualifications will normally just create >>confusion and need continual explanation.
On the contrary, I find Selgins audience is an elite group , he disregards 90% of the British Public as 'morons'
z1235:You are aware that banks have both creditors (buyers/holders of their bonds) and depositors (customers), correct?
z1235:Now you are suggesting that their customers (depositors) are nothing but creditors, as well?
nirgrahamUK: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..
Yes, that's another "good" brainwashing argument: People don't actually need their money (property). They only need the stuff they can buy with it. Preposterous.
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.
Yes, now that we have you by the balls let's see how we can "help you out". If we can find a way where both (1) you could buy the stuff you need and (2) we still have your property invested in our name, then everyone's happier for it, right?
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.
Yes, while language and brainwashing (science!) has been bamboozling masses into believing otherwise, for centuries and still going strong. Your pie-chart was eye-opening!
The chart you provide is interesting but irrelevant. Given present banking institutions (e.g. fiat money, central banks, deposit insurance, etc.) what do people care who owns the base money they deposit in a bank? So long as their debit cards are accepted they have no reason to care. But even in the relatively regulated banking systems of pre-1850 United States, banks would post details about their balance sheets on the window to reassure depositors of the banks solvency. People know these things when they have an incentive to know.
Moreover, the British public may not be so moronic. So far as the British public are concerned, the IOUs in their bank account are money. They don't care about the ins and outs of banking, or the relationship between inside and outside monies. The fact is they do own the IOUs in their bank account, and as far as they are concerned that is money, because they routinely use it as a medium of exchange. A more enlightening question would be whether people understand that, without deposit insurance, there is a risk associated with holding money in a bank account. But even that wouldn't be particularly relevent to this debate, since we are so far from either a fractional reserve or 100% reserve free banking ideal.
Modus Tollens: Of course, what relevence do you suppose that has? They are just two different kinds of debts to the bank. A depositor must be repaid on demand, whereas a bond holder is repaid on a prearranged schedule. The extra risk associated with debts that must be repaid on demand is why banks hold fractional reserves. What is your point?
Of course, what relevence do you suppose that has? They are just two different kinds of debts to the bank. A depositor must be repaid on demand, whereas a bond holder is repaid on a prearranged schedule. The extra risk associated with debts that must be repaid on demand is why banks hold fractional reserves. What is your point?
Why not simply use debt (both in language and action) just like everybody else? What could be the motive behind (successfully) brainwashing one's largest body of creditors into believing that they're not creditors (non-collateralized, no less!!) but merely "depositors"? Take a wild guess.
By golly I think he's got it!
Oh, no worries, I've had it for a long while. It's the Ponzi-playing sheep that I'm concerned about and the professors that "scientifically" prove to them that "it works" as long as no one panics (i.e. exercises their property rights).
z1235:Why not simply use debt (both in language and action) just like everybody else? What could be the motive behind (successfully) brainwashing one's largest body of creditors into believing that they're not creditors but "depositors"? Take a wild guess.
z1235:Oh, no worries, I've had it for a long while. It's the Ponzi-playing sheep that I'm concerned about and the professors that "scientifically" prove to them that "it works" as long as no one panics (i.e. exercises their property rights).
Modus Tollens: Whether the bank fails has nothing to do with people exercising their rights, but with how the bank is run and what precautions it takes against various risks.
Whether the bank fails has nothing to do with people exercising their rights, but with how the bank is run and what precautions it takes against various risks.
When a bank "fails", it's not the banker that fails. When a butcher shop fails, it's the butcher that fails. Language is everything. Playing strictly by the Orwellian playbook, every word in the English language assumes a completely different meaning when entering the mysterious realm of FracR banking.
z1235,
The thing is, if banks truly succeeded in fooling depositors into believing they were offering warehousing services, then what possible motive could its depositors have to run on the bank? The premise of a bank run is that depositors know the bank may run out of money to repay them. But if depositors believe, rightly or wrongly, that the bank has all the money securely held in its vault, then there is no incentive to run in the first place. Selgin tried to make this point earlier: it is difficult to reconcile the existence of bank runs with the hypothesis that people are completely unaware of the risks of holding bank accounts.
Modus, thats no argument.
If a warehouse is seen to be disreputable people will go and demand to see their stock.
What are you talking about? That is a customary way of talking about these matters, proponent of 100% reserve banking or not. And you actually quote my next comment, "but with how the bank is run and what precautions it takes against various risks." Who do you think runs the bank but the bankers? Seriously, how old are you? And it wasn't even a response to anything I wrote.