Tuesday, July 3, 2012

Duncan Weldon — Back to the gold standard? It makes no economic sense

'Gold bugs' argue that currencies should be backed by precious metal. But the gold standard cost jobs and hindered recovery.
Read it at The Guardian (UK)
Back to the gold standard? It makes no economic sense
by Duncan Weldon
(h/t Mark Thomas via Twitter)

OK, stand by for the onslaught.

54 comments:

Bob Roddis said...

Let's criticize the "libertarian right" without having a clue about even the basics of Austrian School theory (a familiar theme because it is ALWAYS the case among anti-Austrians).

In Daniel Kuehn's marvelous paper, he thinks he is disproving Austrian School analysis of the 1920 depression. Instead, he unintentionally proves that it was the Fed's funding of WWI that caused the artificial boom. The first big post-Fed recession was the result of the government’s First World Slaughterfest boom followed by the post-slaughterfest bust. There's nothing in his article about a “free market” having a “structural” problem causing unemployment. Kuehn writes:

2. The austerity depression of 1920–21

During World War I federal expenditures ballooned and although the new income tax was able to partially finance the war effort, most of the financing was done through federal borrowing and by the highly accommodating monetary policy of the Federal Reserve. The role of the Federal Reserve at this time was expressed unambiguously by the New York Federal Reserve Bank Governor Benjamin Strong, who told a Congressional committee in 1921 that ‘I feel that I, or the bank at least, was their [the Treasury’s] agent and servant in those matters’ and further added that the wartime inflation caused by the low interest rates maintained by the bank were ‘inevitable, unescapable, and necessary’ for prosecuting the war (Strong, 1930).

However, after the war ended the deficit spending of the Wilson administration and the expansionary policy of the Federal Reserve were sharply curtailed to bring a halt to the inflation. By November 1919 the Wilson administration balanced the federal budget, slashing monthly expenditures by almost 75% in a matter of months.4 The New York Federal Reserve Bank raised the discount rate by 244 basis points over the course of eight months, with other Reserve System banks following suit. Shortly after these austerity measures were taken, the 1920–21 depression was under way. Postwar industrial production in the USA peaked in January 1920 as the economy moved into a major depression, with production levels dropping by 32.5% by March 1921.5 This loss in output is second only to the Great Depression in American economic history (Romer, 1999), although its duration was considerably shorter. Declines in output were matched by precipitous drops in employment and the price level. The proximate cause of the 1920–21 depression was a deliberate fiscal and monetary retrenchment following World War I.


http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1591030

Britain went off the gold standard in WWI. This allowed governments to fund slaughterfests without actually having to tax resources from the public in real time as such taxation might arouse the rabble against the slaughterfest. It was Churchill's foolish attempt to reestablish a gold standard at the pre-war par in the 1920s that contributed to the Great Depression along with fractional reserve banking which artificially bid up prices to unsustainable levels.

The unfounded assertion that these problems were caused by "the gold standard" and/or "the free market" and/or laissez faire is academic fraud.

Bob Roddis said...

Let's also not forget that "Lord Keynes" insists that the "Golden Age of Capitalism" occurred between 1945 and 1971 during a period of a type of "gold exchange standard".

bbjaylive said...

This article is nothing new. It doesn't even mention that mass deflation makes your mortgage unbearable. BTW, it's stupid and lazy to attribute the gold buggery to the 'libertarian right'. I hardly think orgs like CATO and Reason want to go back to a gold standard. I attribute all this gold buggery to one Dr Ron Paul, currently the most prominent AUSTRO-libertarian. The realistic libertarians are monetarists.

Matt Franko said...

"First World Slaughterfest boom"

Hard to refute Bob's point here, often seems like we can only get the economy really humming around the times that we mostly are all trying to kill each other...

rsp

Bob Roddis said...

I attribute all this gold buggery to one Dr Ron Paul, currently the most prominent AUSTRO-libertarian. The realistic libertarians are monetarists.

As if you have a clue about Austrian School concepts.

Commenter Major Freedom takes apart monetarist Scott Sumner here:

http://www.themoneyillusion.com/?p=15116

http://www.themoneyillusion.com/?p=15157

Roger Garrison shows that Friedman was a type of Keynesian:

http://mises.org/daily/4067

Matt Franko said...

I'm starting to interpret Bob's point as that we humans should just give up and surrender/turn it all over to the authorities behind the metals in column 11 of the Periodic Table as the only alternative looks like open warfare/chaos which is the only occasions during which we seem to be able to deliver robust economic results... sad.

rsp

Tom Hickey said...

Matt: "Hard to refute Bob's point here, often seems like we can only get the economy really humming around the times that we mostly are all trying to kill each other..."

Right. Because at other times austerianism prevails. When a war needs to won, there are no financial limits and deficits swell.

Tom Hickey said...

Matt, the gold standard as been a source of war due to mercantilism. In true mercantilism, the surplus is saved in precious metals, and precious metals were traditionally used to pay armies.

Matt Franko said...

True Tom I also see that in history, but remember in more recent history we seem to actually be using state currency to provision the govt for war... Civil War (greenbacks), WW2 (off gold standard 1933), Vietnam (Nixon leaves gold std in toto), Cold War, Gulf War 1 & 2, GWOT, etc...

We seem to use state currency these days to go to war... seems to "be working just fine" toward those purposes...

rsp,

Bob Roddis said...

The American revolutionaries were funded with funny money. That's why it's prohibited in the constitution.

The War of 1812 began a period of notes expansion leading to the panic of 1819.

http://mises.org/rothbard/panic1819.pdf

The Civil War was funded with funny money. Etc.....

Hard money does not CAUSE war.

Bob Roddis said...

Thomas Jefferson’s thoroughgoing opposition to paper money was heartily concurred in by his old enemy and current friend, Massachusetts elder statesman John Adams. Adams, writing to his old Jeffersonian opponent, John Taylor of Caroline, denounced banks roundly and placed the blame for the depression on their shoulders. Paper money beyond the value of specie he considered to be “theft” and bound to depreciate as in the case of debased coins.62 He cited a similar abysmal failure of paper money in Massachusetts in 1775, which was quickly and efficiently replaced in circulation by silver.

62 John Adams to John Taylor, March 12, 1819, in John Adams, Works (Boston: Little, Brown & Co., 1856), X, 375.

Rothbard pages 138-139

Matt Franko said...

bob,

I think those forms of "paper money" were "bank money", not state currency.

rsp

jeg3 said...

"Let's also not forget that "Lord Keynes" insists that the "Golden Age of Capitalism" occurred between 1945 and 1971 during a period of a type of "gold exchange standard"."

If this is true then WWI & WWII occurred under a type of gold standard (before 1945). Lets also not forget that greenbacks came about during the war, and at the start of the war was also a type of gold standard.

Tom Hickey said...

Matt: "We seem to use state currency these days to go to war... seems to "be working just fine" toward those purposes...
"

Yes, but on a GS, a country needs gold to fund itself. Under a GS, empires run on gold.

Bob Roddis said...

If this is true then WWI & WWII occurred under a type of gold standard (before 1945). Lets also not forget that greenbacks came about during the war, and at the start of the war was also a type of gold standard.

I'm as sick of saying it as you are of reading it. But you guys haven't a clue about the Austrian School. The problem under these historic regimes was the issuance of paper money in excess of specie. This allowed and caused prices to be bid up to artificial levels only to later tumble in the inevitable bust.

I thought I just cited Thomas Jefferson and John Adams on this point. It's not that complicated to understand so there is no excuse to not understand the argument.

Anonymous said...

Paper money beyond the value of specie he considered to be “theft” and bound to depreciate as in the case of debased coins.

This is a classic case of early modern confusion between the problem of credit and the question of what money is made of.

It doesn't matter what money and credit instruments are made of. If people are permitted to issue IOUs of any kind, legally redeemable on demand in the form of some other more fundamental payment instrument; and if they are permitted to issue these IOUs in such a way that the total face value of the IOUs might outstrip the face value of the fundamental payment instruments; and if they start using these IOUs to make payments and transact ordinary business; then there is always the potential that in a time of heightened concern or stress, people might stop accepting the IOUs and begin to demand redemption of their IOUs in terms of their promised quantity of the most fundamental payment unit, causing a fear a payments crisis or liquidity crisis.

The issue is the IOUs, not whether the most fundamental unit is paper, metal, or electrons on digital media.

Bob Roddis said...

The issue is the IOUs, not whether the most fundamental unit is paper, metal, or electrons on digital media.

No. The issue is people being misled or unclear about EXACTLY what constitutes repayment. The 100% specie rule solves that problem to the extent it can be solved in this galaxy and universe.

By the way, this is the week to "celebrate" the Battle of the Somme, thanks to central banking and funny money.

This senseless slaughter began on July 1, 1916, and ended on November 18, 1916--after the Allies suffered 623,907 casualties and the Germans 465,000. This one battle should have been enough to convince all men in every nation to never, ever follow their governments into war again. What a tragic waste of life.

Interesting that Hitler (the real one) was wounded in this battle, but obviously not bad enough to not be able to convince men to fight for him later.

"Somme. The whole history of the world cannot contain a more ghastly word." -- A German officer

http://www.lewrockwell.com/blog/lewrw/archives/114968.html

miller B said...

Hard money does not CAUSE war.

so Spain slaughtered South Americans for paper funny money? .

What about the vikings did they plunder for paper?

Just curious when do you consider the birth of funny money and what financed the wars before this period.

Also why was the post WW2 boom phoney? It did in fact raise the standard of living for millions of Americans. In fact the New deal- post ww2 phoney boom created the highest percentage of middle class in any period of history . Poor middle class Americans living that phoney lie of middle classhood. somebody should tell them their cars, houses, education isn't real unless it was bought with something shiny.

Septeus7 said...

"The American revolutionaries were funded with funny money. That's why it's prohibited in the constitution."

Wrong! No where does the Constitution prohibit Federal Credit. In it requires Federal borrowing on credit and also makes Free Trade illegal.

The Constitution is the most anti-libertarian document ever conceived.

Here's James Madison on Federal Fiat Notes: "The Debates in the Federal Convention of 1787, ed. Madison, James (1787-08-16). Retrieved 2007-02-24. The full text of Madison's footnote is as follows: "This vote in the affirmative by Virga. was occasioned by the acquiescence of Mr. Madison who became satisfied that striking out the words would not disable the Govt. from the use of public notes as far as they could be safe & proper; & would only cut off the pretext for a paper currency, and particularly for making the bills a tender either for public or private debts."

The prohibition in the Constitution is to the state not to the Federal government. The importance of Bills on Credit is clearly found in Hamilton's Report on National Credit and if you knew any history at all Bob rather that Neo Confederate racist crap from the Fascist funded and founded Mises Institute you would know that the Constitution was Hamilton's and Franklin's project.

Quote: "Let's also not forget that "Lord Keynes" insists that the "Golden Age of Capitalism" occurred between 1945 and 1971 during a period of a type of "gold exchange standard"."

OMG! A Balance of Payments system with gold convertibility is not a gold standard. So Bob thinks a fixed exchanged rate regime is free market. You are an utter joke.

Bob, why don't you go to Naked Capitalism and have a debate with either Hugh or F. Beard and you see how far you get with real libertarians and anarchists. Or how about these radical Austrians who disagree with the gold standard here: http://fauxcapitalist.com/2012/05/01/austrian-school-economist-george-a-selgin-pointed-out-a-flaw-in-von-mises-case-for-a-gold-standard/ and http://fauxcapitalist.com/2012/06/24/exposing-faux-capitalism-with-jason-erb-episode-1/

Any among some of the purest Austrian Libertarianism the gold bugs are considered cranks.

Anyone who know the history of the gold standard and "libertarian" reactionary "business right" knows the deep support of Fascism in the libertarian movement from the get go. ...see "Old Nazis, the New Right, and the Republican Party: Domestic fascist networks and their effect on U.S. cold war politics" And "Under Cover — My Four Years in the Nazi Underworld in America" and "The Nazis Go Underground"

I have about a dozens of books document that link the far right libertarians, Neonazis, and Christian Identity. Bob Roddis is a dupe of the the most truly evil elements in American society.

David said...

The American revolutionaries were funded with funny money. That's why it's prohibited in the constitution.

My reading of American history is that state money wins wars, but the bankers always win the "peace."

Bob Roddis said...

Septeus7:

What insight. Libertarians who insist upon a meticulous enforcement of the non-aggression principle are in league with National SOCIALISTS?

Even "Lord Keynes" knows Hitler was a Keynesian.

http://socialdemocracy21stcentury.blogspot.com/2011/09/fiscal-stimulus-in-germany-19331936.html

Pete said...

Tom Hickey:

Matt, the gold standard as been a source of war due to mercantilism. In true mercantilism, the surplus is saved in precious metals, and precious metals were traditionally used to pay armies.

miller B:

so Spain slaughtered South Americans for paper funny money?

Tom and miller, that is some major cognitive dissonance. As expected, you have history completely upside down.

Tom, it's not the gold standard that is to blame, it's state aggression.

The war of 1812 was financed by fiat money. The Civil War was financed by fiat money. WW1 and WW2 were financed by fiat money.

Gold CURBS war, because it makes it necessary for states to finance their wars by taxation (and/or borrowing now and taxing later) only, which is much more difficult for them to do.

With fiat money, the restraint of the people's consent is seriously undermined, because they cannot defend their purchasing power the way they can defend their money balances. States can tax the people by depreciating their money, and that makes financing war far easier.

War is encouraged and exacerbated with fiat money. States that print money can avoid the "problem" of having to convince a public that its war is justified enough for them to pay more taxes. With paper money, states can finance war in a more covert fashion, that confuses most of the rabble who have been taught since childhood to blame rising prices on greedy businessmen.

Pete said...

Septeus7:

"Let's also not forget that "Lord Keynes" insists that the "Golden Age of Capitalism" occurred between 1945 and 1971 during a period of a type of "gold exchange standard"."

OMG! A Balance of Payments system with gold convertibility is not a gold standard. So Bob thinks a fixed exchanged rate regime is free market. You are an utter joke.

In your blind dogmatic rage, you quite naturally completely overlooked the words you read. I see the words "a type of gold exchange standard."

And in your blathering response, you spew out "You think that was a gold standard?"

Obviously not, since the words were "a TYPE of gold EXCHANGE standard." That's not "the gold standard."

Any among some of the purest Austrian Libertarianism the gold bugs are considered cranks.

Considered as cranks by...actual monetary cranks.

Fiat bugs are considered as cranks by free market economists.

Anyone who know the history of the gold standard and "libertarian" reactionary "business right" knows the deep support of Fascism in the libertarian movement from the get go. ...see "Old Nazis, the New Right, and the Republican Party: Domestic fascist networks and their effect on U.S. cold war politics" And "Under Cover — My Four Years in the Nazi Underworld in America" and "The Nazis Go Underground"

You know we've won when our opponents accuse libertarians of being...wait for it....in league with fascists.

It's over. They have nothing.

I have about a dozens of books document that link the far right libertarians, Neonazis, and Christian Identity. Bob Roddis is a dupe of the the most truly evil elements in American society.

YOU are the dupe, because you have duped into believing that violations of property rights is to your and everyone else's interests. No, it's to the interests of fascists, communists, and other "screw you I want yours" demagogues.

y said...

Bob you have to differentiate between wars of aggression and wars of self defence.

Wars are always terrible but sometimes they are inevitable. The allies had no real choice but to defeat the nazis. Even if they had reached a truce on the battlefield, the nazis would have still carried on slaughtering millions of people in camps behind the front lines.

The monetary system is irrelevant to whether a government can or can't go to war. If a government wants or needs to go to war then that is what it will d, and it will use whatever means it has at its disposal to achieve its aims. It won't let a monetary system, whatever form it might take, stand in its way. It's not going to stop fighting just because it runs out of gold, for example.

You won't stop wars by bringing back a gold standard monetary system.

y said...

*what it will do

Bob Roddis said...

One of my hobbies is collecting insightful quotes from Keynesians, inflationists and “progressives”. I’ve got Septeus7 in first place on my list for 2012 for this little ditty:

You slavertarians are the problem. You are the police state. You are violence and the war of all against all. You are the hellfire club and every form of Bentham's cycle of debauchery. You are all that the because of your love of argurion is the root of all evil.

http://tinyurl.com/cr4rzkz

And he’s serious too. Happy 4th of July.

y said...

Von Mises:

It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error."

Von Hayek:

"As long term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. [...] Personally I prefer a liberal dictator to democratic government lacking liberalism. My personal impression – and this is valid for South America – is that in Chile, for example, we will witness a transition from a dictatorial government* to a liberal government."

*Fascist dictator Augusto Pinochet.

jeg3 said...

Wars have existed throughout human history, and the use of a gold standard will not change human nature.
http://www.historyworld.net/wrldhis/PlainTextHistories.asp?historyid=aa29

When talking about macroeconomics, what works best for all citizens is what matters. You have to be practical & pragmatic which the austrians don't seem to get. Your right the nazis did get it:

http://www.henryckliu.com/page105.html
"In four short years, Hitler's Germany was able to turn a Germany ravaged by defeat in war and left in a state national malaise by the liberal policies of the Weimar Republic, with a bankrupt economy weighted down by heavy foreign war debt and the total unavailability of new foreign capital, into the strongest economy and military power in Europe. How did Germany do it? The centerpiece was Germany's Work Creation Program of 1933-36, which preceded its rearmament program. Neo-liberal economists everywhere seven decades later have yet to acknowledge that employment is all that counts and living wages are the key to national prosperity. Any economic policy that does not lead to full employment is self-deceivingly counterproductive, and any policy that permits international wage arbitrage is treasonous. German economic policies between 1930 and 1932 were brutally deflationary, which showed total indifference to high unemployment, and in 1933 Hitler was elected chancellor out of the socio-economic chaos."

The nazis just prove what macroeconomic policies work, but you don't have to follow their psycopathic inhumane leadership policies for macroeconomic policies to benefit all people.

Bob Roddis said...

Economist John Maynard Keynes was a prominent supporter of Eugenics, serving as Director of the British Eugenics Society, and writing that eugenics is "the most important, significant and, I would add, genuine branch of sociology which exists".

http://en.wikipedia.org/wiki/Eugenics

Keynes’ position on eugenics goes straight to the heart of his economic theory.

However, your Mises’ quote is taken completely out of context. Mises was clearly (and merely) pointing out that (in his opinion in 1927) the pre-Hitler form of fascism (Mussolini) had halted the spread of Stalinist mass murdering Communism in Italy in the 1920s (Mussolini was indeed quite popular with hip leftists until he joined up with Hitler in the late 1930s). But Mises also makes clear that fascism is a brutal and ignorant movement because fascists cannot even argue or engage in debate (just like socialists) and that fascism will lead to a civilization-ending war:

“Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles. But when the fresh impression of the crimes of the Bolsheviks has paled, the socialist program will once again exercise its power of attraction on the masses. For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted really to combat socialism, it would have to oppose it with ideas. There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism. ****

So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one's own nation can secure its place in the community of nations by force alone.

It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.”
Pages 50-51

http://mises.org/books/liberalism.pdf

Bob Roddis said...

The nazis just prove what macroeconomic policies work

No. The Nazis proved (again) that deficits and fiat funny money dilution can crank up an artificial boom in the short run that is doomed to failure. As the reality of the failure set in, Hitler felt compelled to invade other countries if only to get the Germans' minds off of his failure.

Further, the essence of Keynesianism is the destruction of private property and individual autonomy. Keynesianism opens the door to the intrusive state.

And it wasn't a coincidence that Keynesian USA and Keynesian Germany went to war with each other soon after each engaged in their "stimulus" programs.

Tom Hickey said...

"You won't stop wars by bringing back a gold standard monetary system."

Whenever governments face constraints in war time they act to remove those constraints. IF there is a gold standard, it is quickly removed to enable military expansion. The notion that a return to the gold standard would prevent war is naive.

Moreover, in the present context, suppose the world would go to a GS tomorrow. Does anyone really believe that the US govt would transfer its gold holdings to China in payment of existing obligations, cut back its military and end its de facto empire? What would happen in the EMU?

Matt Franko said...

From the article: "In the programme, Robert Skidelsky argued that supporters of the gold standard have an almost atavistic belief in its powers, rooted in the age-old worship of sun gods."

It looks to me that they are not into "sun-gods" but rather are surrendering to some sort of authority that is behind the actual metals themselves, looks like Cu, Ag, and Au so far... what ever is behind these elements is effectively often getting the human to go underground and collect these materials and reform them into more concentrated forms, after they have been "scattered" throughout the lower regions of the earth (perhaps during the earth's disruption mentioned in Genesis 1)....

Apostle Paul described the Ag form of this behavior as "philargurion" or "fondness for silver" to Timothy, and identified it as "A root of all the evils"... even if one cannot completely see what is going on with this stuff spiritually, even from a secular perspective it is still irrational behaviour in any case and against even the evolutionary theories (limits return on coordination) as Roger here has been pointing out.

rsp,

y said...

"The nazis just prove what macroeconomic policies work"

You've got that all wrong. The nazi economy was totally distorted. Nothing of benefit to be seen there. Just a ruthless machine geared to war.

Tom Hickey said...

Very insightful, Matt. In ancient times the sages gave certain advice that we now regard as superstitious about the capacity of certain gross substances in relation to the subtle world, metals are one and gems are another. Their various subtle properties and effects are described in ancient texts.

Moreover, these materials are not subject to the ravages of time like other gross objects. Thus they were considered closer to the eternal then the ephemeral.

As a result there is a deep psychic attached to these objects now, metals, gems, and some other things like herbs, which have healing power.

BTW, I have heard contemporaries with subtle perception confirm this. So maybe there is more going no than meets the eye?

Bob Roddis said...

Whenever governments face constraints in war time they act to remove those constraints

Which is why some people devote their lives to constraining government and other people devote their lives to removing all constraints on government.

Differing world views, as someone once said.

Tom Hickey said...

y: "You've got that all wrong. The nazi economy was totally distorted. Nothing of benefit to be seen there. Just a ruthless machine geared to war."

Yes, but why was Hitler so popular after Weimar? He got the country going again and wealthy enough to build a war machine that had never been seen before.

Hitler did this two ways. First, through populism, and secondly through fascism, that is, corporate statism, with the Krupp coming along.

In the 20th century the company was headed by Gustav Krupp von Bohlen und Halbach (1870–1950), who assumed the surname of Krupp when he married the Krupp heiress, Bertha Krupp. After Adolf Hitler came to power in Germany in 1933, the Krupp works became the center for German rearmament. In 1943, by a special order from Hitler, the company reverted to a sole-proprietorship, with Gustav and Bertha's eldest son Alfried Krupp von Bohlen und Halbach (1907–67) as proprietor. After Germany's defeat, Gustav was senile and incapable of standing trial, and the Nuremberg Military Tribunal convicted Alfried as a war criminal in the Krupp Trial for "plunder" and for his company's use of slave labor. It sentenced him to 12 years in prison and ordered him to sell 75% of his holdings. In 1951, as the Cold War developed and no buyer came forward, the authorities released him, and in 1953 he resumed control of the firm.

Wikipedia - Krupp

Matt Franko said...

"So maybe there is more going no than meets the eye?"

Yes at least I myself can see this Tom... it often looks like (to me anyway) that when we look at something with our flesh eyes and it seems "irrational", there is probably something going on there "that is more than meets the eye"..

rsp,

y said...

"Which is why some people devote their lives to constraining government and other people devote their lives to removing all constraints on government."

MMT doesn't seek to remove all constraints on government.

It shows how the monetary system works, and which policies governments could pursue to attain full employment and price stability.

y said...

"the essence of Keynesianism is the destruction of private property"

No, the essence of Keynesian economics is understanding how economies work and then formulating policies to eliminate problems such as unemployment and poverty.

"an individual autonomy"

People's standard of living greatly increased during the post-war "keynesian" period. Incomes rose in real terms, levels of education rose, lifespans increased, health improved, people had more free time and more freedom in their career choices and lives in general. Keynesian policies actually helped to increase individual autonomy.

"And it wasn't a coincidence that Keynesian USA and Keynesian Germany went to war with each other soon after each engaged in their "stimulus" programs."

They went to war with each other because the nazis tried to take over the whole of europe.

Time to stop making dumb comments Bob.

I'llHaveADouble said...

Further, the essence of Keynesianism is the destruction of private property and individual autonomy. Keynesianism opens the door to the intrusive state.

Obviously, the Puritan and Calvinist surveillance governments were time travelers. I'll inform the press.

I'llHaveADouble said...

Which is why some people devote their lives to constraining government and other people devote their lives to removing all constraints on government.

Differing world views, as someone once said.


What you've done is invent an Evil Other you call "government". Saner men and women recognize that political, economic and sociological organization is a bit more complicated than an abstract notion called "power" and what portion of this "power" is controlled by a monolithic state.

You've created a fiction and think you've gained insight. You've taken a side in this fiction and think you roll with the righteous. It's bogus from top to bottom.

Bob Roddis said...

Saner men and women recognize that political, economic and sociological organization is a bit more complicated than an abstract notion called "power" and what portion of this "power" is controlled by a monolithic state.

100% wrong. One is either allowed to initiate force against innocent people or they are precluded from doing so. It's quite a bright line that your statist views require you to constantly smudge in order to obfuscate the obvious.

More playing Whac-a-Mole with definitions, which is an essential feature of "progressives".

Tom Hickey said...

What you've done is invent an Evil Other you call "government". Saner men and women recognize that political, economic and sociological organization is a bit more complicated than an abstract notion called "power" and what portion of this "power" is controlled by a monolithic state.

You've created a fiction and think you've gained insight. You've taken a side in this fiction and think you roll with the righteous. It's bogus from top to bottom.

Interesting how some deny a "collective" and say therefore that society doesn't exist, and at the same time they make their enemy "the state." Why is this not a contradiction?

I'llHaveADouble said...

Interesting how some deny a "collective" and say therefore that society doesn't exist, and at the same time they make their enemy "the state." Why is this not a contradiction?

I'm tempted to say, "Because cocaine's a hell of a drug." Or maybe there's just something in the water.

Kind of like people going to mass rallies to wave identical yellow snake flags and engage in uniform chants about the importance of individualism.

I'llHaveADouble said...

100% wrong. One is either allowed to initiate force against innocent people or they are precluded from doing so. It's quite a bright line that your statist views require you to constantly smudge in order to obfuscate the obvious.

And yet everyone must obviously deal with the state of affairs left to them by the decisions everyone who ever lived before them made. To deny people the right to, say, pass any amount of money, property and thus power on to chosen recipients would be a God forsaken abuse of the abstract concept of "power", right? Who cares if the outcome is rigged so long as it fits your personal view of what's right and wrong - so long as mysterious "power" isn't exercised by the frightening monolithic state...that people agreed to create just as much as their actions created those divisions of wealth.

Kind of fun how "power" manages to confuse things like taxing people, regulating products so they don't kill people, and actually killing people. It's a fantastic piece of casuistry.

My apologies if any of this comes off as unkind, but I suspect the philosophy you endorse endangers western civilization.

Bob Roddis said...

[T]he philosophy you endorse endangers western civilization.

The philosophy I endorse IS western civilization. aka English Common Law without the exceptions that usually allow the elites to abuse and pollute the common people.

jeg3 said...

"The philosophy I endorse IS western civilization. aka English Common Law"

Welcome to American Independence Day where the english were kicked out. We now live under a U.S. Constitution,
http://www.archives.gov/exhibits/charters/constitution_transcript.html
which says by the way"

Preamble
"We the People of the United States, in Order to form a more perfect Union,...promote the general Welfare..."

Section 8
"The Congress shall have Power To...and provide for the common Defence and general Welfare of the United States..."

Providing for the general welfare includes environmental, labor, child protection, etc. laws.

Libertarians do not understand American values
http://crookedtimber.org/2012/07/01/let-it-bleed-libertarianism-and-the-workplace/

http://crookedtimber.org/2012/07/04/coercion-vs-freedom-bhl-vs-brg-happy-4th-of-july/

y said...

Bob, taxation is not "initiation of force". It is a fee charged by the legislative authority within a jurisdiction, to be paid by those that are eligible. The law states that taxes owed must be paid. If someone decides to break the law then the law will be enforced, as with all laws.

I'llHaveADouble said...

The philosophy I endorse IS western civilization. aka English Common Law without the exceptions that usually allow the elites to abuse and pollute the common people.

Greeks, Romans, the Church, the Renaissance...

Common law disagrees with your assertions of its purpose and descendants. Flipping through Blackstone doesn't reveal too much about this "power" you speak of.

Perhaps the provenance of your economic and social dystopia is somewhat different. It's a bit more Rand than Locke, and Rand was like Nietzsche with a closed head injury.

Bob Roddis said...

Interesting how some deny a "collective" and say therefore that society doesn't exist, and at the same time they make their enemy "the state." Why is this not a contradiction?

I never said a “collective” could not exist. Because 10%, 45%, 65% or whatever percentage of the population can voluntarily agree to do whatever they want to collectively. The reason you have elections is to force a non-existent consensus upon the entire population based upon who got 50.0001% of the vote (of perhaps 20% of the eligible voters) using SWAT teams and the threat of prison to enforce your non-existent consensus.

There’s nothing to stop a majority of the population from voluntarily sharing their resources to provide aid to the poor or diluted funny money for that matter. Or whatever they want. The allegation that elections provide any type of true consensus is completely bogus.

I really cannot understand how anyone can fail to see the difference between compulsion based upon the threat of violence and voluntary behavior. That’s basically all there is to the libertarian principle of non-aggression. I guess that’s a bright line you guys must continuously smudge.

Bob Roddis said...

Libertarians do not understand American values

You are so right. We are appalled by Keynesian New Dealers firebombing every last city in Japan and then slaughtering hundreds of thousands more in the last two cities still standing with atomic bombs. The only people in the history of the galaxy to use atomic bombs on other human beings were Keynesian New Dealers. It’s not a coincidence.

http://tinyurl.com/7234s6c

Tom Hickey said...

Bob R:"I never said a “collective” could not exist. Because 10%, 45%, 65% or whatever percentage of the population can voluntarily agree to do whatever they want to collectively. The reason you have elections is to force a non-existent consensusupon the entire population based upon who got 50.0001% of the vote (of perhaps 20% of the eligible voters) using SWAT teams and the threat of prison to enforce your non-existent consensus. 

There’s nothing to stop a majority of the population from voluntarily sharing their resources to provide aid to the poor or diluted funny money for that matter. Or whatever they want. The allegation that elections provide any type of true consensus is completely bogus. 

I really cannot understand how anyone can fail to see the difference between compulsion based upon the threat of violence and voluntary behavior. That’s basically all there is to the libertarian principle of non-aggression. I guess that’s a bright line you guys must continuously smudge.

Well, finally something on which I can agree, as can virtually all libertarians whether of the right or the left, and I suspect that a lot of political scientists would also point out the contradictions in US "liberal democracy, when the US Constitution was crafted as a highly illiberal document and a great deal of that illiberality remains in place institutionally.

See the Wm. Hogeland piece I to which I posted a link today.

The answer of libertarians of the left is a move toward direct democracy, which technology now makes possible, and toward institutions based more on consensus, with filters against co-optation and capture.

In the final analysis, a large organization like a complex modern nation can only function smoothly based on tolerance, compromise, and cooperation. this means eradicating every vestige of institutionally established privilege, whether by birth, institutional power, or wealth.

y said...

"I really cannot understand how anyone can fail to see the difference between compulsion based upon the threat of violence and voluntary behavior."

What you don't seem to understand is that you live within a jurisdiction whose laws are created by a legislative authority.

The laws are not created by Bob Roddis alone, according only to Bob Roddis' personal beliefs.

This legislative authority charges a fee, called a tax, to those who live and work within its jusrisdiction.

Is that really so difficult for you to understand?

You, Bob Roddis, want to change the law to make it illegal for the legislative authority to charge a fee to those that live and work within its jurisdiction. You believe that the charging of a fee by the legislative authority to those that live and work in its jurisdiction is unjust. That is your belief.

How are you going to achieve that Bob? How are you going to make the legislative authority act in accordance with your personal beliefs, and your personal beliefs alone, Bob?


"a dictatorship may be a necessary system for a transitional period"

(Von Hayek)

jeg3 said...

"You are so right. We are appalled by Keynesian New Dealers firebombing every last city in Japan..."

Nice try no cigar, you always change the subject when your called out. Address the issue brought up - are libertarians for or against environmental laws, labor laws, child protection laws, etc.?

You say libertarians are non-aggressive, what about with regard to property rights? or employers ability to cause harm indirectly (threats and coercion)? What about the pseudo-free trade agreements? How do libertarians enforce laws?

The biggest problem the U.S. has with regards to a citizens rights is the bad decisions by the Supreme Court which is suppose to be the third branch (checks and balances - not upholding the bill of rights, putting checks on law enforcement, etc.) and not being a neoliberal yes-person.

Libertarians appear to be a tool for billionaire malefactors and not problem solvers. How is the Koch takeover of CATO going? That is why they don't get elected, but their neoliberal cousins do.

Eventually this country needs constitutional amendments because citizen and individual rights are important, and to also be co-opted by treaty insults American citizens.
http://www.alternet.org/news/156059/trans-pacific_partnership%3A_under_cover_of_darkness%2C_a_corporate_coup_is_underway_/