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.
George,
You write,
Tell me, since you are so convinced that people generally believe that banks "store" (basic) money: is that what you yourself were inclined to believe? If so, how did you imagine that banks were profiting by doing that?
I do deposit my check in my bank to store my money. I find it more convinient than converting my check into cash and holding it in my room. That I use the bank as a storage unit for my money, however, does not mean that a bank can't lend some of it out, under the condition that when I demand funds in my demand deposit the bank will have to make good of my request. I think that the distinction between 'money warehouse' and 'financial intermediary' dilutes the point.
Every historic bank run is proof that plenty of depositors don't believe that banks are mere warehouses. And any depositor who thinks that they are, despite the fact that banks don't charge storage fees and even pay interest on deposits, is a moron, no more entitled to have the law force reality to conform to his or her idiotic beliefs than a flat earther is entitled to have the planet made into a pancake.
Read the depotor agreement on your bank contract. You have one. It makes the bank's responsibility perfectly clear. People don't read the contract? Well whose fault is that?
No, Jonathan: you deceive yourself by imagining that you are "storing" basic money at your bank. You give every nickel to the banker in exchange for ademandable debt claim. Every nickel, I tell you. You do not "allow" the bank to lend "some" of your (basic) money.
My point is that individual A who wants X from individual B means he might have to acquiesce to individual B's demands. In other words, that I want to store my check as a means of depositing my money and having easy access to it, while not having to carry it on me at all times, means that I will have to barter my demands with those of the individual I'm engaging with. By the way, I agree with the argument that I prefer to store my money in a bank that pays me interest (even if it means that they reserve the right to loan out my money) than one that doesn't, always assuming that my money is safe and that I can withdraw it on demand.
Selgin, people that want to lend their money, lend their money (buy bonds, or pay someone to do it for them, i.e. investment services firms). People that want to keep their money while enjoying transactional services (for a fee), deposit their money.
Without state sponsorship (Fed and FDIC) only morons would agree to "leposit" (a term for the Frankenstein mix between lending and deposit which is FracRB), i.e. expose themselves to a perpetual risk of being trampled over in a bank run (ending up with no chair when the music stops) in return for an interest handout + free transactional services, while the FracR banker takes "risks" with -- and earns profits (interest) on -- capital he doesn't own.
George, since you started posting here, you have kinda won me over, but it certainly wasn't due to your bedside manner. :)
I think the problem with the deposit/IOU stuff comes from loose language. A depositor is not making a loan. There is no IOU when you make a deposit at any other institution, state or private. A deposit receives a receipt. A receipt is not an IOU.
A deposit contract that describes a loan is a loan contract.
lol, did I just read a drunken "deconversion manifesto" rant from George Selgin?
Selgin:This kinda crap isn't scholarship. It's theology. It's what happens when a doctrine becomes a defining dogma. If you are a Catholic theologian, no amount of argument or evidence will cause you to admit the absurdity of the Trinity. Likewise, if you are a Rothbardian monetary theorist, which is to say a monetary theorist who writes almost exclusively for MI outlets, no argument or evidence will cause you to admit that the 100-percent reserve position is rubbish.
No argument or evidence? Since this is coming from a praxelogist, apparently since you've written a paper on it back in your grad years, people I guess should trust your authority on this one.
I don't know about your grad school years, but praxeology is not to be found in your most popular publications.
Selgin: And how 'bout when this gang says things like, "in a free market, bank reserves would be close if not equal to 100% of their liabilities" as if there weren't OODLES of evidence showing that this just ain't so?
And how 'bout when this gang says things like, "in a free market, bank reserves would be close if not equal to 100% of their liabilities" as if there weren't OODLES of evidence showing that this just ain't so?
My emphasis.
What evidence? You make observations, you make your own interpretations, and you declare for all that there is evidence. This is what I'm talking about. No praxeology. No logical deductive arguments. No nothing.. except empirical observations, which you are apparently free to interpret in anyway that suits you.
These nerdy libertarian fights sure do get fiesty.
Dr Selgin, interesting as the free banking debate is, I wanted to ask you another question. What is your view on Austrian price theory in the tradition of (predominantly) Bohm Bawerk, Mises, Wicksteed and Rothbard? It seems to me one of the most compelling but also possibly neglected research areas in the Austrian tradition, at least since the publication of MES.
On the other hand I know Hayek was an enthusiast of Indifference curves, and even said in an interview he gave at UCLA that it was he that got Hicks to look at Pareto and Edgeworth, helping make this approach to price theory mainstream.
"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."
Selgin:Every historic bank run is proof that plenty of depositors don't believe that banks are mere warehouses.
This isn't proof. This isn't proof according to any standard of whatever scientific theory of knowledge you wish to adhere to. Certainly not praxeology, nor the scientific method assuming that was made to be relevant just for the sake of argument.
liberty student:A deposit contract that describes a loan is a loan contract.
This, this, this! This is the point I made on that other thread on free banking.
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."
Selgin:Now, no one can accuse me of being a GMU crony: so if I say that, whatever the faults of that bunch, notwithstanding some relatively low key, residual Lavoie worshipping, the program has no defining dogmas. You can CRITICIZE Hayek at GMU and still keep your union card. You criticize Mises (or Rothbard) at an MI forum and you are likely to find yourself at the bottom of a pile up. Do I blame this on Lew Rockwell? Not in the least: so far as I'm aware, it isn't MI policy. Instead, it is part of the personally cult that Murray unwittingly brought to Austrian economics. I ought to know, because I once belonged to it.
I think you're going off-track here since the OP was about the institutions and their scholars, not the followers/students of those institutions. Although, some time ago there was battling going on this forum between Giles Stratton (a Hayekian) and some defenders of the LvMI. I found it hilarious that Giles used Dan D'Amico as example of the fine products of GMU. Of course, I had to point out to him that D'Amico got his bachelors under Walter Block.
An undergraduate education in economics hardly compares to graduate school.
to DD5: Professor Selgin has written a book offering proof to his claims. No one is keeping you from reading it.
WIlliam,
+1
The atoms tell the atoms so, for I never was or will but atoms forevermore be.
Yours sincerely,
Physiocrat