The Chicago School of Economics

Congratulations to Pace University, for winning the 2014 Fed Challenge.  The Bentley team (which was superb, as usual) represented the New England region in the competition.  After they returned I was told that the University of Chicago team presented a proposal that involved NGDP targeting.

As a Chicago alum, I’m happy to hear that the economics program is still do a good job of teaching its students.  I was also told that at one point the Chicago team mentioned NGDP futures targeting as an option.  That actually made me a bit sad, as I was never taught that cool idea when I attended the UC in the late 1970s. That’s not fair!

Then I remembered why; NGDP futures targeting had not yet been invented when I attend to UC. So there would be no way for me to have learned about the sort of monetary policies that make sense in a world of efficient markets.  At least I was fortunate to study at a university that had people like Lucas and Fama, and hence I learned the tools necessary to create those sorts of proposals. And that’s all you can ask for.

PS.  I was told that Evan Soltas was on the Princeton team, which came in second. Nice job.

PPS.  I have a post on the ECB over at Econlog.


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83 Responses to “The Chicago School of Economics”

  1. Gravatar of Bob Murphy Bob Murphy
    4. December 2014 at 09:32

    That must be very bittersweet, Scott. Sorta like J.K. Rowling is the one person on Earth who could never anticipate the next Harry Potter book.

  2. Gravatar of ssumner ssumner
    4. December 2014 at 09:40

    Bob, Yeah, it’s really difficult, but I’ll just have to keep a stiff upper lip and tough it out. Maybe my next life will be better.

  3. Gravatar of Major.Freedom Major.Freedom
    4. December 2014 at 09:58

    I still haven’t heard any argument for why I am supposed to cheer and congratulate the winner of a competition of how a property rights violating government created banking cartel can most efficiently exploit innocent people. Or, how to prolong the life of central banks for another finite period of time before it is realized that the new rule has, like all previous rules, failed.

    I feel like I am watching a funhouse full of demented do-gooders, who all have blood on their keyboards and PC monitors.

    An unstated truth about all of this is that whoever “wins”, will be most intellectually responsible for the continued exploitation that cannot and will not last in a world where truth is valued over ignorance.

    I feel sorry for these misguided souls who have been convinced that success is based on involvement and intellectual affinity to state power. Sad state of the academic economics establishment for sure.

  4. Gravatar of Bob Murphy Bob Murphy
    4. December 2014 at 14:14

    I’m guessing Thanksgiving at Major.Freedom’s house is pretty intense.

  5. Gravatar of Don Geddis Don Geddis
    4. December 2014 at 15:00

    Off topic, but Mr. Murphy here has a very intriguing post on the (short, deep) 1920 recession. (HT: David Henderson on EconLog.)

    These points in particular: “Far from easing, the Fed engaged in literally unprecedented tightening, with discount rates rising to all-time highs … and with the monetary base collapsing some 15 percent year/year” and “Prices fell more rapidly in one year than at any 12-month span during the Great Depression.” and “Far from being “rigid downward,” nominal wages fell 20 percent in a single year“.

    As stated, that data certainly does not seem to match the MM macro narrative. It would be interesting to hear the Market Monetarist analysis of 1920.

  6. Gravatar of Brian Donohue Brian Donohue
    4. December 2014 at 15:05

    Love UChicago!

  7. Gravatar of Don Geddis Don Geddis
    4. December 2014 at 15:06

    Ah! Kuehn’s paper (HT: “A”) seems like a good start to my own question.

  8. Gravatar of W. Peden W. Peden
    4. December 2014 at 15:35

    Don Geddis,

    The first thing to look at is always NGDP. Given how much more market orientated the US economy was in the 1920s, and looking at annual NGDP rates in the early 1920s, I don’t see anything that goes against a MM narrative.

  9. Gravatar of W. Peden W. Peden
    4. December 2014 at 15:36

    But the early 1920s is a good example of how flexible wages are in a flexible labour market. I think that’s the lesson to take away from that recession.

  10. Gravatar of W. Peden W. Peden
    4. December 2014 at 15:37

    (The second ‘flexible’ meaning liberalised.)

  11. Gravatar of benjamin cole benjamin cole
    4. December 2014 at 16:26

    Kudos Bentley and U Chicago.
    Don Geddis: it might be you could solve a recession by bashing wages, but probably also prices and profits.

    But why? Why not pursue growth?

  12. Gravatar of Don Geddis Don Geddis
    4. December 2014 at 19:13

    @benjamin cole: “Why not pursue growth?

    Are you confusing nominal and real? Of course we want real growth. But there would be nothing wrong with “bashing” nominal wages / prices / profits, if (!) it led to real growth. Absolute nominal levels don’t matter at all.

  13. Gravatar of ssumner ssumner
    4. December 2014 at 19:17

    Everyone, Tomorrow I’ll do a post on 1921 over at Econlog.

  14. Gravatar of Negation of Ideology Negation of Ideology
    5. December 2014 at 03:14

    Don –

    “Absolute nominal levels don’t matter at all.”

    I don’t think that’s true, because contracts, including debt contracts, are written in nominal terms. Imagine an extreme case where NGDP dropped by 99%. Are you saying that wouldn’t matter at all? Wouldn’t virtually all property be redistributed from debtors to creditors?

    It’s much easier to simply have a stable dollar in terms of GDP than it is to renegotiate every single contract in the country.

  15. Gravatar of Major.Freedom Major.Freedom
    5. December 2014 at 04:51

    Bob, we don’t celebrate Thanksgiving because it is a celebration invented on the graves of murdered Indians.

    We have small celebrations each day we’re alive, together, and peaceful towards each other.

    I’m guessing if you and Sumner had dinner together, and what he talks about he put into practice, and what you say you put into practice, we’d see him point a gun at you. It is the only way to target paper denominated income in your household, right?

  16. Gravatar of Major.Freedom Major.Freedom
    5. December 2014 at 04:56

    Or rather, because I know there will be quibbling over the semantics of what I said, I will instead say that Sumner pointing a gun at you is the only way for him to put into practise your household being made to have a mandatory “share” or “slice” of paper currency NGDP.

    I won’t tell you who to respect and who not to respect, but I have my own criteria. Disagreeing with what a person wants of me, where peaceful opting out results in guns being pointed at me, kind of spoils the whole possibility of friendship and respect don’t you think?

  17. Gravatar of Philippe Philippe
    5. December 2014 at 06:20

    you should seek professional psychological help, mf.

  18. Gravatar of Edward Edward
    5. December 2014 at 07:41

    VIOLENCE VIOLENCE VIOLENCE!!!!!!!
    Philippe is right,MF. Does everything have to be a ridiculous Manichean struggle with you? And not over something WORTHWHILE, (regarding an abuse if state power in America) like police brutality against minorities, the drug war, but central effing BANKING?!!!!

  19. Gravatar of Major.Freedom Major.Freedom
    5. December 2014 at 09:41

    Philippe and Edward,

    Super secret for you: Central banks are a huge facilitator of growths in state power. It is much easier for the state to grow when it can print its own money, instead of relying solely on taxation and borrowing.

    Why do you think every state wants and enforces a central bank? For your benefit? For Joe Sixpack? Please. That is the myth we’re told to encourage obedience, for people not to revolt when they realize the truth. And the appeasers calling themselves Monetarists and Keynesians are really just the enablers of said power. Their academic lives are only worth what values the central bankers and the rest of the state put on them. It is what the enablers chose to do with their intellectual lives.

    I don’t expect you to understand the connection between state monopoly over money, and state oppression, but that is because you’re too busy trying to attack those of us who are right, instead of fighting for the truth with us. You’re afraid. You have been afraid your whole life.

    Exactly like you view recessions, you are only focusing on treating the symptoms, rather than getting to the root causes. The root causes are too discomforting.

    The root cause is of course philosophy, and it is your philosophy you feel is under threat when I critique central bank existence.

    Police brutality? You support the existence of the police no matter how bad it gets, so if anyone is apathetic towards that violence, it is you rather than me. Stop attacking me, because I am not your enemy. You are choosing to be my enemy because you don’t even gave the courtesy to merely verbally support me acting peacefully towards my fellow men but “disobeying” a violent institution that does not protect us, but harms us to maintain their power. You want me to respect you as well, but why should I? Because you put your pants on one leg at a time like me? Because you go to the washroom? Because you can speak? If I wanted only those things I’d watch my dog.

    You talk about police brutality as if there is such a thing as police that are not paid to initiate brutality against anyone who dares stand up for their individual liberty and the liberty of others. It us because of people like you that I now live in a country where the police are flat out murdering unarmed people on the street and the murderers get paid holidays as punishment. You technocratic appeasing court strategist wannabes have only to look in the mirror at the destruction you’ve helped unleash.

    I hope your short term interests were worth it. That is what many of your forefathers thought as well. Now you’re living in it.

  20. Gravatar of Philippe Philippe
    5. December 2014 at 14:56

    States can always print their own money. See early American colonies for example. Issuing money can be thought of as a form of borrowing.

    You’re not opposed to violence per se. You’re just opposed to what you consider to be unjustified violence, like everyone else. It’s sad that you feel the need to pretend otherwise.

    Name one thing that the Fed does which is violent.

  21. Gravatar of Ben B Ben B
    5. December 2014 at 17:14

    Phillipe,

    The issue isn’t printing money, per se; it’s having a monopolist of money printing which by definition engages in violence or threats of violence against property owners who wish to print their own money.

    Although, it’s hard to imagine how “money printing” would have ever arisen in the first place if it wasn’t for previous aggressions against legitimate property owners, such as legal tender laws, confiscation of gold, and especially the fraudulent legal concept of fractional reserve-banking, which allowed banks to issue property titles (to gold) representing property that didnt actually exist. I mean, imagine if I sold you the title to a car which didn’t exist; wouldn’t that be fraud? This is exactly what occurred when FRNs were money substitutes for gold, as opposed to their current status as money. FRNs were only able to become money because of previous acts of legalized fraud.

  22. Gravatar of Ben B Ben B
    5. December 2014 at 19:30

    Phillipe,

    Name one thing that Hitler did that was violent.

    Name one thing that an organized crime boss does that is violent.

    Name one thing that a battle general does that is violent.

    Technically, none of these individuals initiates violence, right?

    Perhaps the Fed doesn’t give direct orders to initiate violence, but the fact remains that someone initiates violence on behalf of the Fed. If the banking industry wants to give itself a central authority in a free market, so be it, but until then, the central bank as we know it is supported by violence (aggression).

    It seems that you ultimately believe that because the Fed/government/whatever doesn’t actively initiate violence against others, then this means that aggression/property rights violations are not taking place. Imagine a world where slave masters have so efficiently employed violence that no slave dares to assert his natural rights, in this case slave masters are no longer “initiating violence”, right? I mean, they aren’t actively whipping slaves, right?

  23. Gravatar of Daniel Daniel
    6. December 2014 at 02:55

    Oh look, another Austro-moron.

    How’s about this, idiots – I am aware of how you define “violence” – and I reject it for being too simplistic (that is to say, stupid).

    So go lecture some other chumps, I ain’t buying.

  24. Gravatar of Ben B Ben B
    6. December 2014 at 04:49

    Daniel,

    I reject your rejection for being too simplistic.

  25. Gravatar of Daniel Daniel
    6. December 2014 at 05:11

    I don’t care what stupid people think.

    How do I know you’re stupid ? You buy into pseudo-science (also known as “austrian economics”).

    Now go away, the grown-ups are talking.

  26. Gravatar of Ben B Ben B
    6. December 2014 at 05:27

    Daniel,

    What does my age have to do with my arguments? A better response would have been, “Now go away, people with better theoretical understanding are talking.” Of course, this would still be an unsound, yet valid argument as opposed to your original unsound and invalid argument.

    Do my arguments instantly become that much better at the moment I turn 18 years old? Is 18 years of age your definition of an adult?

  27. Gravatar of Philippe Philippe
    6. December 2014 at 05:44

    “it’s having a monopolist of money printing which by definition engages in violence or threats of violence against property owners who wish to print their own money”

    The Fed doesn’t engage in violence or threats of violence. There are laws which restrict the printing of money, but the Fed doesn’t create, judge or enforce laws. And issuing private money is actually legal so long as it complies with certain regulations.

    “it’s hard to imagine how “money printing” would have ever arisen in the first place”

    Have you never heard of an IOU? If I issue you an IOU on a piece of paper, or any similar sort of promise on a piece of paper, which then circulates in exchange, you have a form of money.

    “the fraudulent legal concept of fractional reserve-banking, which allowed banks to issue property titles (to gold) representing property that didnt actually exist.”

    Bank deposits, or a bank notes, are not property titles for property that doesn’t exist. They are bank liabilities, or bank debts. Issuing liabilities is not fraudulent.

    Banks do offer safe deposit box services too, but in that case the property you leave in the box remains your property and does not leave the box.

    You should read some more about banking, as you obviously know nothing about it at all.

    “the central bank as we know it is supported by violence (aggression).”

    Firstly, violence and aggression are not the same thing.

    Secondly, all laws are backed up by the threat of enforcement, or the use of force, which might potentially include violence. That includes the sorts of laws that you like. So you support violence, and your ideal social/economic system is supported by violence.

  28. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 13:35

    Philippe:

    A demand from person or party G that they back by threats of initiations of violence, that over time empirically does not actually contain physical violence due to either obedience of the victim, or the victim getting away with not obeying and not getting caught, does not suddenly make G’s actions morally justified.

    If a man threatens someone else at knife or gun point, and demand they turn over their wallet, or perform some action that the victim would not otherwise do, that threat does not suddenly become morally justified if the victim obeys because they’d rather avoid getting physically harmed.

  29. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 13:40

    Philippe:

    “States can always print their own money. See early American colonies for example. Issuing money can be thought of as a form of borrowing.”

    Not when demand for payment for said notes, backed by initiations of force, is imposed.

    “You’re not opposed to violence per se. You’re just opposed to what you consider to be unjustified violence, like everyone else. It’s sad that you feel the need to pretend otherwise.”

    I never claimed I am against defensive force. It is sad that you feel the need to repeatedly set up that straw man.

  30. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 13:42

    Daniel,

    You are just repeating what you have been told growing up.

    I feel sorry for you, and whoever abused you should feel ashamed at themselves.

  31. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 13:58

    Philippe:

    “The Fed doesn’t engage in violence or threats of violence. There are laws which restrict the printing of money, but the Fed doesn’t create, judge or enforce laws. And issuing private money is actually legal so long as it complies with certain regulations.”

    That “as long as it complies” is not just statesmen defending themselves from initiations of force. That is statesmen initiating threats of force against non-violent activity such as people producing and using their own money.

    “Have you never heard of an IOU? If I issue you an IOU on a piece of paper, or any similar sort of promise on a piece of paper, which then circulates in exchange, you have a form of money.”

    An IOU for what exactly? The state’s paper, if you call it an IOU, would logically entail the owner of said paper to be owed something. But with fiat, there isn’t anything of value. There is only threats of force if you don’t obey the aggressive laws of the monopoly.

    “Firstly, violence and aggression are not the same thing.”

    “Secondly, all laws are backed up by the threat of enforcement, or the use of force, which might potentially include violence. That includes the sorts of laws that you like. So you support violence, and your ideal social/economic system is supported by violence.”

    Not all possible laws are backed by initiations of force. You are conflating aggressive force and defensive force, and pretending that because I advocate for a victim of aggressive force to be legally allowed to use defensive force, that this somehow means that I support the same aggressive force backed laws that you advocate for.

    There is a huge difference between a rape or theft victim use of force against their attacker, and the attacker’s use of force.

    Just because someone is not a pacifist, it doesn’t make them a supporter of aggressive force based laws.

    If I enforced a law of protecting my person and property from aggressive violence, then the only time I would ever use violence, would be if someone else is initiating violence against me. I would not use violence to force you to use a money of my choice. That would be aggressive violence because I am using force against you not to stop you from using force against me, but to stop you from using your own money.

    And that is exactly what the state does. It used force not just to protect itself, but to stop others from doing what is in their best interests that is not violent activity against anyone else.

    For some reason, you feel the need to want force to be used not just to defend against initiations of it, but to also compel and coerce people away from doing perfectly peaceful activity such as producing and using their own money. You want them to be severely hampered in this by demanding that they pay mandatory percentages of their income, regardless of what form that income takes, to the state in the form of the state’s currency. Why? Why are you for uses of force that are aggressive? Why are you for uses of force that go against defensive uses of force? Do you not want individuals to be able to protect their persons and property from ANY and ALL aggressive force?

  32. Gravatar of Philippe Philippe
    6. December 2014 at 15:55

    “That is statesmen initiating threats of force against non-violent activity such as people producing and using their own money.”

    You don’t have a problem with initiating threats of force against non-violent activity, so why is your comment relevant?

    “But with fiat, there isn’t anything of value”

    You can use it to pay your debts. Or you can use it to buy goods, assets, or anything else.

    “You are conflating aggressive force and defensive force”

    Let’s say person A claims to own a certain area of land. Person A invents a rule that no-one can use, create or issue any form of money not issued by person A, whilst they are on that area of land. If people don’t follow this rule, person A will enforce the rule and may use physical force against them. You have no problem with person A initiating threats of force in this way against people engaging in non-violent activity.

  33. Gravatar of Philippe Philippe
    6. December 2014 at 15:57

    Why do you think it is ok to compel and coerce people away from doing perfectly peaceful activity such as producing and using their own money?

  34. Gravatar of Negation of Ideology Negation of Ideology
    6. December 2014 at 16:01

    Ben B –

    “The issue isn’t printing money, per se; it’s having a monopolist of money printing which by definition engages in violence or threats of violence against property owners who wish to print their own money.”

    There is no monopolist of money printing. People are free to use gold, silver, tobacco, Euros, Yen, Walmart gift certificates, Apple stock, or whatever they like for money.

    You may be confused with the government’s monopoly on issuing its own securities. Just like Walmart has a monopoly on issuing Walmart gift certificates and Apple has a monopoly issuing Apple stock, the US Government has a monopoly on issuing US Dollars. Counterfeiting any of those is illegal. Backed by force, “pointing a gun”, as the Austrian School likes to say. Of course all property rights are also backed by force. But the government is not “pointing guns”, even figuratively, at Walmart or Apple for issuing securities.

    Now, if you’re talking about the taxing power of governments, the issue of currency is besides the point. The tax is the coercion, not the form of payment. Either the government has the right to force people to pay taxes or it doesn’t.

    Imagine a robber demands payment from you, and then says “For your convenience, I accept gold, dollars or whatever payment you want.” Would you be happy? The issue is not the form of payment, it is that the robber has no right to demand anything from you. If the government has the right to demand payment from you(taxes), it also has the right to set the form of payment. And if it prefers its own securities (saving taxpayers billions in interest), then that’s a matter of prudence.

  35. Gravatar of Ben B Ben B
    6. December 2014 at 17:55

    Negation of Ideology:

    Do you really believe the US government would allow someone else’s “securities” to become a rival money? Again, the US government had to confiscate gold through threats of violence in order to increase the value of its “securities” so that it could become a monopolist in money. When the US government allows the banking industry to create more property titles (bank notes redeemable in specie on demand) than there is property (gold, silver, whatever), and then when bank runs eventually occur after the the economy crashes from an unsustainable boom caused by credit expansion unbacked by real savings, and the US government allows banks to suspend specie payments on demand during these bank runs, then don’t you think that’s going to hurt the value of the US government’s “securities” as well as it’s reputation as an issuer of money? The US government at one point decided to confiscate gold while also making its notes irredeemable in gold through threats of violence; is this not an act of monopolization?

    Do you really think that simply because the US government made it legal for people to own gold again forty years later that this somehow makes the US government no longer a monopoly? Give me a break…let’s say you owned a very prestigious business within a particular industry, and then I went on to confiscate all of your capital resources, but I didn’t legally make it impossible for you to enter the market, and you said to me, “C’mon man! How can I compete with you now!? You’re a monopolist!”, and I replied, “Hey man, nobody’s stopping you from starting your own business!” Yeah, I guess that’s not “technically” a monopolist, huh?

    Furthermore, as I alluded to above in my first paragraph, the US government isn’t going to waste its time and resources every time some new domestic money tries to enter the market. Only when other monies begin to gain some serious headway into the market will you start to see the US government initiate threats of violence against the issuers of these potential rival monies.

  36. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 18:33

    Philippe:

    You did not answer my questions.

    For some reason, you feel the need to want force to be used not just to defend against initiations of it, but to also compel and coerce people away from doing perfectly peaceful activity such as producing and using their own money. You want them to be severely hampered in this by demanding that they pay mandatory percentages of their income, regardless of what form that income takes, to the state in the form of the state’s currency. Why? Why are you for uses of force that are aggressive? Why are you for uses of force that go against defensive uses of force? Do you not want individuals to be able to protect their persons and property from ANY and ALL aggressive force?

    “That is statesmen initiating threats of force against non-violent activity such as people producing and using their own money.”

    “You don’t have a problem with initiating threats of force against non-violent activity, so why is your comment relevant?”

    Trespassing is not a peaceful activity.

    “But with fiat, there isn’t anything of value”

    “You can use it to pay your debts. Or you can use it to buy goods, assets, or anything else.”

    That is not the IOU backing dollars. If you own a dollar, nobody is obligated to redeem that dollar for anything. You said paper money is an IOU. What is owed to a person who owns a dollar?

    Just because dollars are generally accepted, it does not mean that a dollar is an IOU. An IOU is a specific contract.

    “You are conflating aggressive force and defensive force”

    “Let’s say person A claims to own a certain area of land. Person A invents a rule that no-one can use, create or issue any form of money not issued by person A, whilst they are on that area of land.”

    The state does not own the land. They did not homestead it. They did not trade for it. The laws they enforce on people who live on their own land, including legal tender laws, are not legitimate.

    If a warlord conquers an area of land and takes control of it away from the legitimate owners, and demands that anyone who forever more lives on that land must give up their first born to the warlord, would the mere fact that the warlord “claims” to own that land, make the law morally just?

    “You have no problem with person A initiating threats of force in this way against people engaging in non-violent activity.”

    Trespassing is not non-violent activity.

    “Why do you think it is ok to compel and coerce people away from doing perfectly peaceful activity such as producing and using their own money?”

    I don’t think it is OK to compel people away from doing perfectly peaceful activity such as producing and using their own money, provided of course the property they use up in the production of said money is their own property, or the property of others who have given their expressed consent to giving or selling their property to those who are using that property to produce their own money. If that consent is not there, then it is theft.

    Why do YOU think it is OK to compel people away from doing perfectly peaceful activity such as producing and using their own money?

    You have not answered any of my questions. You never do. And I know why. You won’t answer all of my questions in your next reply either.

  37. Gravatar of Philippe Philippe
    6. December 2014 at 18:41

    “the US government had to confiscate gold in order to increase the value of its “securities” so that it could become a monopolist in money”

    Actually part of the point of the compulsory gold purchase order was to reduce the value of government currency.

    The US government already had a monopoly on US dollars. What were the other forms of money that you were thinking of?

    Bank notes are not property titles. There is no point in you repeating things which are factually false. It just makes you look very silly and ignorant.

    Why do you think it’s ok to initiate threats of violence against people, Ben B?

  38. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 18:53

    Philippe:

    Why do you think it’s OK to initiate threats and uses of violence against people?

  39. Gravatar of Ben B Ben B
    6. December 2014 at 19:10

    Phillipe,

    The US government had to confiscate gold in order to increase the value of its “securities” *relative to gold* so that it could become a monopolist in money *production*. It’s itrelevant to the relative value of US dollars if the absolute value of the US dollar falls wen an individual is threatened with 10 years of prison time or $10,000 for using an alternate money. What matters is whether or not to use gold or US dollars as money. Let’s see, I can either use US dollars or gold….hmmm.

    The US government had a monopoly in money substitures and not money. Do you really not know what money I had in mind? Here’s a hint; it starts with a g.

    Bank notes are property titles when they claim to be redeemable for property on demand. Just because a property title represents a fungible good doesn’t mean that it’s no longer property.

    How do I look silly and ignorant? You can’t see me nor do you experience my thoughts and emotions. What you really mean is that if you were me, then you would feel silly and ignorant. But you’re not me, and I’m not you, so I don’t understand the relevance of this statement.

  40. Gravatar of Ben B Ben B
    6. December 2014 at 19:24

    Phillipe,

    I think I see the problem. You think that people demanded FRNs in and of themselves, but that’s not correct. Originally, the demand for FRNs came from the fact that people believed they were a perfect substitute for gold, as stated on the FRNs themselves which read: “redeemable in gold on demand”.

  41. Gravatar of Philippe Philippe
    6. December 2014 at 19:41

    “If you own a dollar, nobody is obligated to redeem that dollar for anything”

    The government promises to redeem it by accepting it in payment. A landlord might issue an IOU which he promised to accept in payment of rent.

    “The state does not own the land.”

    Doesn’t matter if it does or doesn’t. Laws define what ownership is, what property rights are, who owns what, etc.

    If you say “I am the owner of this piece of land because I homesteaded it. This means I have absolute dominion over this piece of land in perpetuity”, what you are doing is making a law, or a rule. You then use force to enforce that rule against anyone who disagrees with it or doesn’t obey it.

    The act of ‘homesteading’ in itself doesn’t make you the ‘owner’ of a piece of land. It is simply a justification you use for your rule-making.

    In actual fact there is no reason why ‘homesteading’ should entitle someone to have complete dominion over an area of land, in the present or in perpetuity. It is simply an assertion.

    “would the mere fact that the warlord “claims” to own that land, make the law morally just?”

    No, obviously.

    “Trespassing is not non-violent activity”

    In my example person A threatens to use force against people engaging in the non-violent activity of issuing and using money. You think it is ok for person A to do this if he ‘owns’ the land (x).

    So you think it is ok for a person to initiate threats of force against people engaging in non-violent activity, because of x .

    The problem is that you are too pathologically dishonest to admit even simple, obvious things.

  42. Gravatar of Philippe Philippe
    6. December 2014 at 19:49

    Ben B,

    bank notes are not property titles. They are bank debts. If a bank promises to redeem a debt ‘on demand’ that does not make the debt a property title. What you are saying is factually wrong.

    This is why you come across as very ignorant, because everything you are saying is factually wrong.

  43. Gravatar of Ben B Ben B
    6. December 2014 at 19:52

    Phillipe,

    If you believe that laws define what ownership is…end of story…then doesn’t that imply that you would have supported laws that defined ownership of other humans as legitimate?

  44. Gravatar of Ben B Ben B
    6. December 2014 at 20:02

    Phillipe,

    I think I see the problem. You think that juristic laws override physical laws of nature. No, issuing bank notes redeemable on demand for a specific quantiry of a commodity does not actually create additional physical units of that commodity. You can call these notes whatever you want, but claiming that you have 10,000 gold ounces (via bank notes) when you only have 1,000 actual gold ounces is an act of fraud.

  45. Gravatar of Philippe Philippe
    6. December 2014 at 20:23

    “The US government had to confiscate gold in order to increase the value of its “securities” *relative to gold*”

    No, the US government reduced the value of its currency relative to gold. They devalued the dollar.

    “What matters is whether or not to use gold or US dollars as money”

    The only form of money that generally circulated in the US at that time was dollars. Gold was a physical asset which the dollar was tied to by government decree. Some government-issued (dollar) coins were made of gold.

    You should read up on the history of the gold standard as you clearly know nothing about that either.

    Also, read up on the history of countries other than the US. The particular monetary history of the US is not the only history of money, you know.

  46. Gravatar of Philippe Philippe
    6. December 2014 at 20:34

    “doesn’t that imply that you would have supported laws that defined ownership of other humans as legitimate?”

    No. I didn’t say that laws are necessarily ‘legitimate’ or just.

    issuing bank notes redeemable on demand for a specific quantiry of a “commodity does not actually create additional physical units of that commodity”

    I didn’t say that it does.

    “claiming that you have 10,000 gold ounces (via bank notes) when you only have 1,000 actual gold ounces is an act of fraud”

    There is nothing fraudulent about issuing debts. If a bank failed to keep a promise to pay a debt ‘on demand’, that would be a type of default. Defaulting on a debt is not fraud.

    Read up on banking.

  47. Gravatar of Ben B Ben B
    6. December 2014 at 20:39

    Phillipe,

    The U.S. government had to confiscate gold in order to increase the demand for US dollars relative to gold demanded by individuals. Hence, to strengthen its demand as a money against gold.

    Your ignorance is showing. You need to read Mises’ Theory of Money and Credit to get a better understanding of the difference between money substitutes and money.

    Rather than telling me that I should read up on “the histories”, don’t you think you should recommend actual works that would better help my understanding? It’s odd that you wouldn’t; it gives the impression that you actually don’t know what you are talking about. I mean, isn’t it in your best interest and “society’s best interest” to guide me towards the “truth”?

  48. Gravatar of Ben B Ben B
    6. December 2014 at 20:42

    Phillipe,

    Issuing bank notes ON DEMAND means that you are claiming that you have possession of a certain quantiry of physical goods. You’re confusing bank notes with time deposits (debts).

  49. Gravatar of Ben B Ben B
    6. December 2014 at 20:49

    Phillipe,

    It’s impossible for an issuer of bank notes redeemable on demand to know exactly when that note will be redeemed; thus, if he says that he will have it on demand then he needs to have it in his possession at all times.

    Now, if the bailee doesn’t want to sue the bailer (the bank note issuer) for not having his deposit on demand, then fine, but a third party (the state) doesn’t have the right to intervene on behalf of the bailer if the bailee does want to sue.

  50. Gravatar of Philippe Philippe
    6. December 2014 at 20:56

    “to strengthen its demand as a money”

    to devalue a currency, to reduce its value, is the opposite of strengthening the demand for the currency.

  51. Gravatar of Ben B Ben B
    6. December 2014 at 21:04

    Phillipe, follow closely:

    Ben B: “Phillipe, people don’t own other people.”

    Phillipe: “It doesn’t matter If they do or they don’t. Laws define what ownership is, what property rights are, who owns what, etc.”

    Ben B: “So it doesn’t “matter” that people own other people? All that matters is what the state says?”

    You nees to clarify what you mean by “matter”.

  52. Gravatar of Ben B Ben B
    6. December 2014 at 21:11

    Phillips,

    See my point above about the difference between absolute value and relative value between competing monies.

    Sure, the U.S. government may have devalued its currency in relation to foreign currencies, but remember we are taking about the US government establishing a domestic monopoly on money, which means that the demand for US dollars may be decreasing relative to foreign currencies, but not in relation to demand for gold as a domestic money.

  53. Gravatar of Philippe Philippe
    6. December 2014 at 21:15

    “Issuing bank notes ON DEMAND means that you are claiming that you have possession of a certain quantiry of physical goods”

    No, it means you are promising to pay a debt on demand.

    “thus, if he says that he will have it on demand then he needs to have it in his possession at all times”

    No, he just needs to be able to pay debts as required, which might require being able to liquidate assets quickly or borrow quickly.

    A bank deposit or a bank note is not a bailment, it’s a type of debt. Again, what you are saying is factually incorrect.

  54. Gravatar of Philippe Philippe
    6. December 2014 at 21:27

    The money at the time was the dollar. Gold was not a different, alternative type of money to the dollar. Gold was a physical asset tied to the dollar by decree. It was a part of the dollar monetary system, not a separate form of money.

  55. Gravatar of Ben B Ben B
    6. December 2014 at 21:34

    Gold was not “tied to the dollar” randomly as a physical asset; the US dollar piggy backed on gold. Which came first as a money? Gold or US dollars?

    Come on Phillipe, and you’re claiming that I need to study history.

  56. Gravatar of Ben B Ben B
    6. December 2014 at 21:46

    You are confusing mutuum contracts with irregular depostium contracts. Mutuum contracts are not redeemable on demand and involve a time element. Irregular contracts (fungible goods such as money) are redeemable on demand and have been considered a bailment based on traditional legal principles. Again, you need to study up on your history. I recommend Jesus Huerta de Soto’s Money, Bank Credit, and Economic Cycles.

  57. Gravatar of Major.Freedom Major.Freedom
    6. December 2014 at 21:47

    Philippe:

    “The government promises to redeem it by accepting it in payment.”

    That is not redeeming anything of value in return. Simply accepting an IOU does not mean that.

    Redeeming something means to accept something AND give something back in return.

    “A landlord might issue an IOU which he promised to accept in payment of rent.”

    The government does not own the land.

    If a landlord ISSUED an IOU, then that would entail the landlord promising to GIVE the holder of an IOU something of value.

    “The state does not own the land.”

    “Doesn’t matter if it does or doesn’t.”

    Yes, it does matter. If I start enforcing laws on your land, without your consent, that is morally different from me enforcing laws on my own land, or you enforcing laws on your land.

    You are just pretending it doesn’t matter because you are afraid of where this line of logical thinking will take you.

    “Laws define what ownership is, what property rights are, who owns what, etc.”

    Not all laws are equally morally just. Not all laws are only laws defending against aggression. Some laws are themselves aggression.

    “If you say “I am the owner of this piece of land because I homesteaded it. This means I have absolute dominion over this piece of land in perpetuity”, what you are doing is making a law, or a rule. You then use force to enforce that rule against anyone who disagrees with it or doesn’t obey it.”

    To disagree with and then act on a disagreement with a law based solely on defense of person and property from aggression, would itself be an aggression. I am not introducing force against you by protecting my person and my material means of life. I am stopping you from introducing it.

    “The act of ‘homesteading’ in itself doesn’t make you the ‘owner’ of a piece of land. It is simply a justification you use for your rule-making.”

    Your feeling of hunger in itself does not make YOU the “owner” of just any piece of land. That is simply a justification for your aggression against other people’s property.

    “In actual fact there is no reason why ‘homesteading’ should entitle someone to have complete dominion over an area of land, in the present or in perpetuity. It is simply an assertion.”

    Of course there is a reason. The reason is to eliminate conflict. If two people want to use a piece of land, for different uses, but neither knows any intellectual basis for who should use the land, then conflict is unavoidable.

    But if the two parties know of an intellectual based reason why one plan should be implemented, then they need not engage in conflict.

    Those who would use a piece of land regardless of any laws, are not law abiding people and there is no reason to even have a debate with them about which plan among many should be implemented for a piece of land. They have proved themselves thugs who do not believe in any laws.

    In actual fact there is a very good reason why the homesteader rather than a subsequent visitor should have their plans implemented on the land. The reason can be understood Socratically. Suppose subsequent visitors and not the homesteader should have their plan implemented for the land. Why the subsequent visitor and not the homesteader? You have not provided any reason why it should be the subsequent visitors, nor which among the subsequent visitors if there is more than one.

    The fact is that your position is based purely on assertion, and at some level you recognize this, but rather than ask whether there should be something more than just someone’s assertion, you instead suggest that all land laws amust be assertions. That way, your bare assertion will appear as equal among all other ideas, even if other ideas are rationally superior.

    “would the mere fact that the warlord “claims” to own that land, make the law morally just?”

    “No, obviously.”

    Why not?

    “Trespassing is not non-violent activity”

    “In my example person A threatens to use force against people engaging in the non-violent activity of issuing and using money.”

    “You think it is ok for person A to do this if he ‘owns’ the land (x).”

    In your house, you should be able to enforce such a law. But you should not enforce that law in MY house, without my consent.

    I am not against the abstract law of someone enforcing a particular means of exchange. If you want to use toilet paper, go right ahead, I will not try to stop you and I will not call for violence against you. I just ask that you don’t seek to have that law enforced in my life, on my land, nor on the lands of anyone else, without their consent.

    State monopolies in money are not morally unjust because of the physical makeup of the currency. It is because the law us being enforced by some people who have no right to enforce it on other people’s lands. The state enforcing a law of currency over the country is enforcing laws in other people’s places of residence and of business. The reason why a mafia gang enforcing a monopoly in a currency on other people’s lands is wrong, is the same exact reason why it is wrong for a state to do it.

    “So you think it is ok for a person to initiate threats of force against people engaging in non-violent activity, because of x .”

    No, if a person enters your home, then them not abiding by your house rules is a violent activity against you.

    Violence occurs not when certain physical acts take place, but when certain physical acts take place the actors of which do not have the consent of the owners of the material means they are using.

    If you invited someone into your house or business, and then all of a sudden, without your consent, they take your piles of printer paper in your study, and start to “non-violently” draw pictures of dead Presidents on them, and he called them “dollars”, then that would be an act of aggression against your property. You would have the right, but not the obligation, to seek recompense for that aggression, and you would have the right, but not the obligation, to ask him to leave. Why? Not because the state says you can do that, but because it is your house.

    “The problem is that you are too pathologically dishonest to admit even simple, obvious things.”

    No, you are just too scared to admit that you support laws that are themselves initiations of violence.

  58. Gravatar of Daniel Daniel
    7. December 2014 at 03:45

    Wow, it’s a moron-fest in here. We need Dan W and Mike Sax to spice things up.

  59. Gravatar of Philippe Philippe
    7. December 2014 at 05:16

    “Irregular contracts (fungible goods such as money) are redeemable on demand and have been considered a bailment based on traditional legal principles.”

    No, according to the law demand deposits and bank notes are not bailments, they are a type of debt. What you are saying is factually incorrect.

    Safe deposit boxes are bailments, not demand deposits or bank notes. Bank notes have never legally been any sort of bailment.

  60. Gravatar of Philippe Philippe
    7. December 2014 at 07:46

    “If a landlord ISSUED an IOU, then that would entail the landlord promising to GIVE the holder of an IOU something of value”

    Accepting it in payment of rent is giving the bearer something of value.

    “If I start enforcing laws on your land, without your consent, that is morally different from me enforcing laws on my own land, or you enforcing laws on your land.”

    Wow you’re stupid. The act of defining something as ‘your land’ is an act of rule-making or law-making. Laws or rules define ‘ownership’.

    It’s illogical to say that the law-maker has to ‘own’ the land on which the law applies, as defining land as being ‘owned’ is itself a form of law or rule making.

    Besides, you say yourself that individual ‘land owners’ should be subject to law which they do not create or decide themselves, so you completely contradict yourself. For example: should you be allowed to murder someone on your land just because you feel like it?

    “The reason is to eliminate conflict….if the two parties know of an intellectual based reason why one plan should be implemented, then they need not engage in conflict.”

    A theory only serves to eliminate conflict if everyone agrees with it. But people don’t all agree, especially not on how to organize and distribute the resources of the world. So your theory does nothing to eliminate conflict at all. This should immediately be obvious from the fact that practically no one agrees with your daft theories.

    “Why the subsequent visitor and not the homesteader?”

    Why the ‘homesteader’ and not anyone else?

    “Why not?”

    Because claiming ownership does not in itself make whatever you do just.

    “I am not against the abstract law of someone enforcing a particular means of exchange”

    So you’re not against initiating threats of force against people engaged in non-violent activity.

    “if a person enters your home, then them not abiding by your house rules is a violent activity against you”

    Using/issuing money is a violent activity now? Ha ha. It suddenly changed from being non-violent activity to violent activity. Hilarious.

    Say I make a rule that you are not allowed to squint your eyes whilst on my land. Does that make squinting your eyes a violent activity against me? Please say yes, that will be very funny.

  61. Gravatar of Philippe Philippe
    7. December 2014 at 08:37

    Ben B,

    a good discussion of the status of banknotes and demand deposits here by ‘Austrian free banker’ Lawrence White:

    http://www.independent.org/pdf/tir/tir_07_3_white.pdf

  62. Gravatar of Negation of Ideology Negation of Ideology
    7. December 2014 at 09:20

    Ben B –

    ” Again, the US government had to confiscate gold through threats of violence in order to increase the value of its “securities” so that it could become a monopolist in money. ”

    I disagree that the government “had to” do anything. FDR made a choice that I disagree with. He should have simply just ended socialized gold (commonly called the gold standard) and let the free market determine the price of gold like anything else. Then the government should have auctioned off all its gold and silver over a reasonable period of 5-10 years. The government should own no stocks of gold or silver. You later say:

    “Gold was not “tied to the dollar” randomly as a physical asset; the US dollar piggy backed on gold.”

    False. The dollar was originally based on silver, then it was bimetalism, with the exchange rate between silver and gold defined (and changed from time to time) by the government (price controls), then the unbacked greenback from 1861 – 1873, then gold only after silver was dropped by the “Crime of 73”.

    Silver and gold were made money by government fiat, not by the free market. The government is no more a monopolist of money today than it was during the gold standard period or any other time.

  63. Gravatar of Philippe Philippe
    7. December 2014 at 09:37

    well put.

  64. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 10:35

    Philippe:

    “Irregular contracts (fungible goods such as money) are redeemable on demand and have been considered a bailment based on traditional legal principles.”

    “No, according to the law demand deposits and bank notes are not bailments, they are a type of debt. What you are saying is factually incorrect.”

    You did not read the statement accurately. He said that they have been considered a bailment based on traditional legal principles. That is factually correct.

    “If a landlord ISSUED an IOU, then that would entail the landlord promising to GIVE the holder of an IOU something of value”

    “Accepting it in payment of rent is giving the bearer something of value.”

    No, accepting it in payment of rent is not giving anything of value either. Giving something of value would be the landlord giving the tenant the right to live in the apartment.

    Going back to dollars, that you called an IOU, the government does not give back anything of value should you give the dollars. No, them merely accepting it is not giving you anything of value back either.

    “If I start enforcing laws on your land, without your consent, that is morally different from me enforcing laws on my own land, or you enforcing laws on your land.”

    “Wow you’re stupid. The act of defining something as ‘your land’ is an act of rule-making or law-making. Laws or rules define ‘ownership’.”

    Once again, if I start enforcing laws on your land without your consent, that is morally different from me enforcing laws on my land. Yes, who owns what is also a law, but that does not mean I cannot say what I said above. You being owner of your own land is a law of homesteading and free trade. Me then trying to enforce laws on your land without your consent, including threatening you eith force in order to attempt to coerce you into considering yourself owner over that land which you do want to be owner over, would also be a example of me enforcing laws on your land. You have a right to dispossess yourself of it, and not even regard yourself as owner of it. But that doesn’t mean you then have a right to then force me NOT to be owner over what I homesteaded. For then you would be trying to enforce an aggressive law against me. I did not aggress against anyone by homesteading a piece of land. It was a peaceful activity. And given that more than one plan for the land might come into the fore, as referred to before, we again have to ask which law would minimize conflict and make the most logical sense? The homesteader or subsequent visitors?

    “It’s illogical to say that the law-maker has to ‘own’ the land on which the law applies, as defining land as being ‘owned’ is itself a form of law or rule making.”

    I never said anything about “the lawmaker” being a person. Right law is made by reason, not a proper name of a person.

    “Besides, you say yourself that individual ‘land owners’ should be subject to law which they do not create or decide themselves, so you completely contradict yourself.”

    It is no contradiction at all because the ground of ancap law is not what Mr. Jones opines or Mrs. Smith feels. The ground is reason, which is inter-subjective and not the arbitrary creations of anyone. Just because I happen to agree with it, it doesn’t suddenly make it Major.Freedom’s law.

    “For example: should you be allowed to murder someone on your land just because you feel like it?”

    A person’s physical body is ALSO their property. As I explained to you many times before, with bodies and material property being scarce, the most logical punishment for any law violation should be “eye for an eye.” That means if you violate the property rights of another, the worst punishment you ought to receive, is the damage you yourself inflicted on the victim’s health and well-being, however minor or great it is.

    So for example, trespassing on the land of someone else, and that’s it, likely does not justify bring murdered, because the damage you caused is likely not the death of the owner. But there is a possibility of it. Imagine you trespassed, and you stepped foot on and killed a rare plant that the owner was growing to save his life from a rare disease. You destroying that plant is the cause for his death. You could have done it on purpose or by mistake. On purpose would have been murder, by mistake would have been “manslaughter”. I think it is logical not to kill people for engaging in manslaughter, but there are good reasons to kill people who purposefully murder others. I try to use common sense.

    “The reason is to eliminate conflict….if the two parties know of an intellectual based reason why one plan should be implemented, then they need not engage in conflict.”

    “A theory only serves to eliminate conflict if everyone agrees with it.”

    No that is not true. More than just agreement is necessary. Imagine a law that everyone agrees with but is based on flawed premises. It is possible for conflict to arise even if everyone agrees with the law, because the law itself is contradictory and contains conflict in its structure.

    The above is actually what describes most governmental laws. State laws are written with contradictory premises.

    “But people don’t all agree, especially not on how to organize and distribute the resources of the world. So your theory does nothing to eliminate conflict at all. This should immediately be obvious from the fact that practically no one agrees with your daft theories.”

    It is precisely because anarcho-capitalist laws are not generally recognized that you have seen such incredible conflict, murder and mayhem all around the world. My theory is empirically confirmed.

    State laws are full of contradictions that even with agreements, conflict is assured. Agreeing TO ENGAGE in conflict does not remove conflict.

    Agreement is not sufficient. It is necessary. You need more than merely agreement. You need an intellectual component. You need reason, logic and evidence. You lack the latter. You only want agreement because state law is based on conflict, and the only way to reconcile conflict with obedience is “agreement” and that is it.

    “Why the subsequent visitor and not the homesteader?”

    “Why the ‘homesteader’ and not anyone else?”

    I don’t understand your question. Who among “anyone else” are you referring to? Why that person?

    “Why not?”

    “Because claiming ownership does not in itself make whatever you do just.”

    What does make what I do just?

    “I am not against the abstract law of someone enforcing a particular means of exchange”

    “So you’re not against initiating threats of force against people engaged in non-violent activity.”

    Trespassing is not a non-violent activity.

    “if a person enters your home, then them not abiding by your house rules is a violent activity against you”

    “Using/issuing money is a violent activity now? Ha ha.”

    If a person enters your home, and starts using your property without your consent, including “producing and issuing money” is a violent activity yes. They are destroying what belongs to you.

    YOU are the one against people producing and issuing their own money, using their own property, because you want violent threats to be placed on them. I am not against you doing that using your own property.

    What kind of hilariously transparent absurdity are you trying to do here? Are you really not understanding the difference between “You shall not use up my paper in my house without my consent, or else you must leave my house”, and “You shall not use up your own paper in your own house without my consent, or else you must leave your house”?

    The government does not own the land, so if they demand that other people shall not use their own property to produce, issue, and use their own money, then that law is itself conflict.

    You did not mention who owns the property, the means of which the money is produced. So issuing money using the property of whom?

    “It suddenly changed from being non-violent activity to violent activity. Hilarious.”

    You mean you cannot understand that it is non-violent to hit yourself in the face, or eat your own food, but it is violent to do those exact same actions against someone else’s face and their food?

    Once again, it is not the mere act of issuing paper currency that is violent. What is violent is the coercive usage of other people’s property to make it happen. Without property rights being violated by the state, there can be no state monopoly over money. In a context of private property rights, money will arise on the market, and the means used up to produce said money will also be non-violent, even if the money some people choose is the same toilet paper the state issues now.

    The violence is not the physical make up, or the isolated act of printing money. If you want to use your own property to print money in your basement, and you can convince anyone else to accept it in exchange for their goods or their labor, then go right ahead. That would be non-violent because there is consent of the owners.

    “Say I make a rule that you are not allowed to squint your eyes whilst on my land. Does that make squinting your eyes a violent activity against me? Please say yes, that will be very funny.”

    It would be a property violation. But you are ignoring the important thing here. You setting your own laws on your own land does not mean that everyone will be jumping head over feet to ask that you grant them entry so that they can follow your house rule of no squinting.

    If you had a house rule of no swearing, but then a rowdy guest of yours started to swear, and you then asked them to leave, that would be justified according to ancap ethics. We do not have to waste time quibbling over the semantic issue of whether or not the word “violence” is apropos in this particular instance. It does not matter as much as whether or not you give your consent to such behavior. There is a spectrum of behaviors in the non-consensual range of activity, going from murder, all the way to your example of not squinting in someone’s home without their consent. I do not want to engage in an endless debate which word to use, because that is a semantic debate for the linguistic professors to have. I have enough with consensual versus non-consensual, my property versus your property, voluntary versus involuntary transfer of property, etc. I will leave it to you to decide whether you want to consider my squinting in your home as “violent” or something else as I chuckle at it as I’m being asked to leave.

  65. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 10:45

    Negation of Ideology:

    “I disagree that the government “had to” do anything. FDR made a choice that I disagree with. He should have simply just ended socialized gold (commonly called the gold standard) and let the free market determine the price of gold like anything else.”

    No, you do not really believe “like everything else.” You do not believe that FDR should have gotten the government out of money altogether, and “let the free market decide” the price of the means from which a commodity or commodities become used as medium of exchange. You want the government to have a monopoly over the means of producing the population’s currency, and thus there cannot be a price system for the means of producing money. There is no exchanging of the right to hold and act on the monopoly over the currency. Without exchanges, there can be no prices.

    What you want for money is what the Soviet Communists wanted for consumer goods. You want the government to control the means, which eliminates freedom of competition and exchange of those means, and thus eliminates prices of those means, but you are gracious enough to leave exchanges and prices for the rabble as they use the final outputs.

    “Then the government should have auctioned off all its gold and silver over a reasonable period of 5-10 years. The government should own no stocks of gold or silver.”

    If you believe they should own the unique right to issue currency, then why shouldn’t they own gold and silver, or anything else for that matter? What exactly are the principles you have used to come to the conclusion that the government should own the means to issue currency, but not own precious metals? Seems arbitrary when you just assert it.

  66. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 10:57

    Negation of Ideology:

    “Silver and gold were made money by government fiat, not by the free market.”

    False. Gold and silver were used as money in the market prior to governments making them mandatory as payment. The only reason governments started accepting gold and silver was because they were already valued prior by the people the governments wished to dominate.

    It is absurd to believe that governments were the first institution to accept gold and silver as payment. It contradicts both the historical record, and logic.

    “The government is no more a monopolist of money today than it was during the gold standard period or any other time.”

    False. With gold and silver, the government had to compete with private gold and silver miners. They were also constrained to what occurred “naturally” in the ground.

    With fiat paper, there is no competition. The government is also practically unconstrained.

  67. Gravatar of Daniel Daniel
    7. December 2014 at 11:19

    Oh look, it’s Major_Moron attempting to re-write history.

    Newsflash, imbecile – when your theory is based upon a falsehood (Menger’s fantasies about the origin of money), is it automatically false.

    Not that I’d expect a total retard like you to comprehend such a basic fact.

  68. Gravatar of Philippe Philippe
    7. December 2014 at 11:19

    “they have been considered a bailment based on traditional legal principles”

    That is factually incorrect. ‘irregular deposits’ have not been considered bailments. An irregular deposit is a type of deposit in which the bank promises to return a sum equal to the amount deposited, not the specific thing deposited. An ‘irregular deposit’ is a variant of the mutuum contract. Bailments have in contrast been referred to in the past as ‘regular deposits’.

  69. Gravatar of Philippe Philippe
    7. December 2014 at 11:36

    “It would be a property violation”

    So does that make squinting your eyes a violent activity against me or not?

    You usually love to throw around the word violence, to describe anything you disagree with as being ‘violence’… and now all of a sudden you’re reticent about using the word. Funny that.

    If squinting your eyes is not a violent activity, then you’re ok with initiating threats of force against people engaged in non-violent activity.

  70. Gravatar of Philippe Philippe
    7. December 2014 at 11:52

    “I have enough with consensual versus non-consensual”

    Private property is not based on consent. Your ideology is actually based on a system of non-consensual, non-voluntary rules, but you’re too dishonest to admit that.

  71. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 14:25

    Philippe:

    “‘irregular deposits’ have not been considered bailments. An irregular deposit is a type of deposit in which the bank promises to return a sum equal to the amount deposited, not the specific thing deposited. An ‘irregular deposit’ is a variant of the mutuum contract. Bailments have in contrast been referred to in the past as ‘regular deposits’.”

    That is factually incorrect. Irregular deposits of money wihdrawable on demand have been considered bailments. A bailment is a deposit whereby the ownership is not transferred from the depositor to the party accepting the deposit. The party accepting the deposit was during certain periods in the past in certain locations around the world not entitled to use the deposit.

    “It would be a property violation”

    “So does that make squinting your eyes a violent activity against me or not?”

    If you do not consent to such activity in your home, then you have the right to demand that the person leave. If we define “violence” as non-consensual activity against another’s person or property, then yes, even squinting would be “violent.” There would of course be different degrees of violence, depending on the harm the property violation incurred on the owner. It is possible for the owner to be made psychologically distraught over such faces. It depends on the owner’s circumstances. For me, I would not consider squinting to be something undesired in my house, but other equally as non-physically aggressive activities such as swearing might be. I understand other individuals better than you do, which is why I don’t pass negative judgment on someone who did not want to hear or look at certain things in their home. I know that someone not wanting to see someone else squint in their house, is, even if I myself don’t fully understand the psychological reasons, nevertheless know it is within their right as homeowner to not have to look at what they don’t want to look at in other people’s faces. I would put squinting in the same category as yelling swear words in front of young children, if we talk strictly in terms of what the homeowner has a right to decide on. It is possible for someone to be made more psychologically distraught over others squinting in that person’s home, than they would listening to someone yell swear words in front of their kids. It is not for me to pass judgment, because my only judgment is whether I want to accept someone’s invitation into their homes, given that there is a rule of no squinting. Depending on what my goals are, I may or may not accept the invitation given those rules. The point is that the homeowner has the right to ask me to leave FOR ANY REASON, including eye squinting. That point overrules any semantic quibbling over whether or not squinting consitutes violence. But like I said above, if we define violence as any property rights violation, then even squinting would be included in possible acts of violence.

    “You usually love to throw around the word violence, to describe anything you disagree with as being ‘violence’… and now all of a sudden you’re reticent about using the word. Funny that.”

    False. I do not define violence as “anything I disagree with.” You again fail to include considerations of property, and consent. Violence is anything the individual disagrees with when it comes to the actions of others against the individual’s own person and property.

    You don’t like me throwing around the word “violence” to describe the things you agree with, but others do not agree with, where what you are agreeing with are actions against the consent of the individual when it comes to their own persons and property. You want such actions to be considered by the victims as non-violent. Peaceful. You agree with actions against individuals that they themselves do not agree with, and they are not supposed to consider it violence.

    If you agree with some people, with badges, initiating threats of violence against others, without badges, to get them to not do peaceful acts with their own property that you would disagree with it, to you that means the actions are not violent. Simply because you agree with that activity. You agree that such peaceful, non-violent activity should not take place. You agree that such activity should be coercively stopped. Simply because you disagree with it.

    For me on the other hand, even if you used your property in a peaceful way that I, if I were insane like you, would want to have stopped by threats of violence, I know it is your right to do whatever you want provided you do not aggress against others.

    That is why you are insane whereas I am sane. It is why I have more compassion than you. I do not want to stop activity that does not violate people’s property rights. You do. You want threats of guns to be pointed at people so as to stop them from engaging in non-violent activity of producing and using their own money out of choices made with their own property.

    You know that without threats of violence against others, that they will quite willingly develop a non-violent, peaceful, conaensual, non-state monopoly currency. Since you disagree with a free market in money, you believe it is OK for some people with guns, and badges, to stop anyone who would otherwise outcompete, economically, the state’s monopoly.

    “I have enough with consensual versus non-consensual”

    “Private property is not based on consent.”

    I never said private property is based on consent. I understand there are people like you who want to live in a world with a group of people paid to violate non-aggression, so that you can selfishly gain more in the short run than you otherwise could if the only way you can gain anything is through production and/or voluntary exchange. I get it that you lack the self-esteem to feel unafraid at the prospect of having to be individually responsible for not only the choices the state’s laws “allow” you to make, but also choices of self-protection. You have defined state violence against you as protection of you, so that you can sleep at night.

    Private property is based on non-aggression. No aggression is created when an individual homesteads a piece of untouched land. No aggression is created when that homesteader sells his land to another. This is private property coming into existence whether you “agree” with it or not.

    Aggression comes into existence when someone who neither homesteaded the land, nor traded for it, nor acquired the permission of the owner, uses that land for any purpose, including merely stepping foot on it. For that is the introduction of non-consensual activity regarding the land. Prior to that, there was no aggression.

    Whether you consent to nonaggression is up to you to decide.

    Your ideology is actually based on a system of non-consensual, non-voluntary rules, but you’re too dishonest to admit that.

  72. Gravatar of Philippe Philippe
    7. December 2014 at 15:06

    “If we define “violence” as non-consensual activity against another’s person or property, then yes, even squinting would be “violent.””

    Squinting your eyes is a violent activity? HA HA AHA HA AHA AH AHA HA AH HA

    You’re such a moron!

    What about pointing my finger at the sky? Is that a violent activity? What about wiggling my toes?

    What an delusional idiot you are.

  73. Gravatar of Philippe Philippe
    7. December 2014 at 15:10

    “A bailment is a deposit whereby the ownership is not transferred from the depositor to the party accepting the deposit”

    An ‘irregular deposit’ is not a promise to return the exact same money that was deposited, only to repay an equivalent sum of money. So the depositor does not keep ownership of the particular money he deposited – he doesn’t get the same money back.

    You’re a moron.

  74. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 18:14

    Philippe:

    “Squinting your eyes is a violent activity?”

    If we define a violent activity as non-consensual activity regarding an individual’s property, then yes, by definition a non-consensual activity regarding an individual’s property would be violence.

    “What about pointing my finger at the sky? Is that a violent activity? What about wiggling my toes?”

    If a landowner does not want such behavior to take place on his land, but you do so against his wishes, then yes, by the definition above that would be violent activity by definition.

    You seem to not be able to grasp semantics. Just because you are used to defining violence in a particular way, it doesn’t mean every person is obligated to agree with you.

    Your resort to name calling means I win. Again. You have no argument.

    “An ‘irregular deposit’ is not a promise to return the exact same money that was deposited, only to repay an equivalent sum of money. So the depositor does not keep ownership of the particular money he deposited – he doesn’t get the same money back.”

    You don’t understand what a bailment deposit is. A bailment deposit is a deposit whereby the acceptor of the deposit is not to use that which is deposited. The original argument that you didn’t understand but claimed is wrong anyway, was that a demand deposit used to be considered a bailment. That is factually correct.

  75. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 18:18

    Philippe:

    Since you failed to respond to everything else is my last post, I will assume that you are unable to refute it, secretly agree with it but don’t want to admit it, and too afraid to respond to it.

    I thought you would eventually present a serious challenge to the arguments I am making. I have been patient and waiting for it. But you have failed to even attempt to answer any of my questions to you. The closest you ever come to it is quoting my question, and then asking the same question back to me.

    You’re a total chickens#!t

  76. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 18:44

    Even the act of just standing completely still in someone’s house can be an act of violence, if they do not want you in their home.

    The key is the lack of consent regarding the act, not the nature of the act itself. You will never be able to logically create a list of acts that are violent and not violent based solely on the act itself. This is because one and the same act can be either consensual or non-consensual from the perspective of an individual’s preferences, and it is the lack of consent that makes an act unjustified.

    I find it hilarious that you actually believe you have found a “gotcha” with the eye squinting, as if the act abstracted from consent is sufficient to telling us anything about its ethical validity.

  77. Gravatar of Philippe Philippe
    7. December 2014 at 19:02

    MF says that wiggling your toes is a violent act against someone else. Classic moron.

  78. Gravatar of Major.Freedom Major.Freedom
    7. December 2014 at 19:48

    Philippe:

    “MF says that wiggling your toes is a violent act against someone else.”

    Even standing perfectly still can be an act of violence.

    The act itself is not what determines whether not it is violent. It is the lack of consent from the property owner.

    Wiggle your toes all you want in the homes or places of business owned by people who have no problems with you doing it. It would NOT be violent in those circumstances.

    You are mischaracterising my argument.

  79. Gravatar of Philippe Philippe
    8. December 2014 at 01:42

    Ha ha!

  80. Gravatar of Major.Freedom Major.Freedom
    8. December 2014 at 04:20

    Suppose you “just” wiggled your toes…in the home of someone who considers you an invader.

    But you’re just wiggling your toes!

    Clearly the homeowner is crazy to say you are acting aggressively. Toe wiggling is just toe wiggling. What is his problem, right?

  81. Gravatar of mpowell mpowell
    8. December 2014 at 13:19

    Normally I just scroll down past the Austrians and the people arguing with them. But sometimes it just takes over everything. People don’t engage with them! At least not so much. It ruins the comments.

  82. Gravatar of Major.Freedom Major.Freedom
    8. December 2014 at 17:34

    mpowell,

    I think the same way about your comments and those who engage with you. They ruin the blog.

    Or, you know, that might just be like, an opinion. Or something.

  83. Gravatar of Ben B Ben B
    10. December 2014 at 18:08

    Negation of Ideology,

    Of course FDR didn’t have to confiscate gold; I’m not denying free will. But in so far as FDR wanted to establish a monopoly in money production, then he “had to” confiscate gold.

    You say that the US government decided to make gold and silver monies. So why did the U.S. Government decide to back the U.S. Dollar in gold and silver? Not just because it looked pretty, right? It’s because they wanted to establish some sort of demand for their notes, and the best way (if not the only way) to do this was to tie it to an already established money.

    If FDR had done what you have suggested, and created a free market in money production, the U.S. Dollar would not have outcompeted commodity or privately issued currencies, especially given the inflationary nature of the state.

    Philippe,

    A statment is not “well put” simply because it agrees with your worldview.

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