Comments on: Why we shouldn’t gather around the gold standard http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/ University College London Libertarian Society - The Free Society Fri, 30 Jul 2010 22:13:29 +0000 http://wordpress.org/?v=2.2 By: DOUGLAS http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-18877 DOUGLAS Tue, 20 Jul 2010 22:47:15 +0000 http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-18877 <strong>< blockquote >< a href="http://medicamentspot.com/">MedicamentSpot.com. Canadian Health&Care.Special Internet Prices.Best quality drugs.No prescription online pharmacy. Online Pharmacy. Order drugs online< /a >...</strong> Buy:Prednisolone.Zovirax.100% Pure Okinawan Coral Calcium.Mega Hoodia.Retin-A.Nexium.Lumigan.Prevacid.Human Growth Hormone.Petcam (Metacam) Oral Suspension.Valtrex.Actos.Zyban.Arimidex.Synthroid.Accutane.... < blockquote >< a href=”http://medicamentspot.com/”>MedicamentSpot.com. Canadian Health&Care.Special Internet Prices.Best quality drugs.No prescription online pharmacy. Online Pharmacy. Order drugs online< /a >…

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]]> By: Ian B http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-854 Ian B Wed, 30 Jan 2008 14:46:20 +0000 http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-854 Okay, as someone untrained in economics, here's a question. Why not simply tie the currency printing presses to GDP? If we can accurately, or reasonably accurately, measure growth in GDP, can we not simply increase the money supply by the same quantity? Suppose GDP is measured and has increased by 3% over the past year (of course we could be finer grained about this, measuring it per month if we like) then we simply increase the money supply by 3%. If GDP falls for a while, we can either stop printing money until it catches back up with our known money supply again (a temporary inflationary period?) or we can withdraw money from the supply via the banks (is this practicable?). Is real world measurement of GDP realistic enough to do this? IOW, liquidity is pegged strictly to some proportion of GDP. What's the problem with doing this? Okay, as someone untrained in economics, here’s a question. Why not simply tie the currency printing presses to GDP? If we can accurately, or reasonably accurately, measure growth in GDP, can we not simply increase the money supply by the same quantity? Suppose GDP is measured and has increased by 3% over the past year (of course we could be finer grained about this, measuring it per month if we like) then we simply increase the money supply by 3%. If GDP falls for a while, we can either stop printing money until it catches back up with our known money supply again (a temporary inflationary period?) or we can withdraw money from the supply via the banks (is this practicable?).

Is real world measurement of GDP realistic enough to do this?

IOW, liquidity is pegged strictly to some proportion of GDP. What’s the problem with doing this?

]]> By: draq http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-846 draq Mon, 28 Jan 2008 18:30:53 +0000 http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-846 Concerning the circulation of Latin Amercian silver in the Far East in the 19th, in case China is also included: The "currency" in which taxes were levied was silver, whereas the common "currency" used by the population was bronze. Through the colonialist wars (e.g. opium wars) and the resulting indemnities to be paid in silver to the colonial powers, the exchange rate of bronze to silver changed dramatically, finally rendering the peasants unable to pay taxes. Conclusion: Government's inability to regulate the currency results in a miserable state. Do you regard Euro as bad since it eliminates the plurarity existed before? Why do I not see a link to Cato Unbound on the blogroll? Concerning the circulation of Latin Amercian silver in the Far East in the 19th, in case China is also included:
The “currency” in which taxes were levied was silver, whereas the common “currency” used by the population was bronze. Through the colonialist wars (e.g. opium wars) and the resulting indemnities to be paid in silver to the colonial powers, the exchange rate of bronze to silver changed dramatically, finally rendering the peasants unable to pay taxes. Conclusion: Government’s inability to regulate the currency results in a miserable state.

Do you regard Euro as bad since it eliminates the plurarity existed before?

Why do I not see a link to Cato Unbound on the blogroll?

]]> By: Patrick http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-827 Patrick Tue, 22 Jan 2008 14:43:30 +0000 http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-827 > Oli wrote: > ...the most active topic of discussion at the Libertarian Party’s forum is in the same vein. However, I’ve avoided the discussion for reason of disagreement... Your input at the forum would be valued -- we can only learn through listening to each other. > As Friedman argued, the Great Depression, by and large, occurred because the money supply grew more slowly than the rate of economic growth during the 1920s: due to the gold standard. Friedman's view is not universally shared. For example, see http://www.mises.org/rothbard/agd/contents.asp#contents > The truly libertarian solution would be to scrap the legal tender, remove any obligation on individuals interacting with the government (mostly paying taxes, etc) in sterling, and let them trade in whatever currency they see fit Yes, but. The big but is that of public acceptance of any new form of currency. Given the choice between a well known existing currency -- sterling, presumably backed by the state -- and a new currency, many people would stick with what they know, warts and all. You could argue that this would change over time. However, time is not something that anyone proposing major structural monetary reform would enjoy -- governments change, and slowly acting reforms can be neutered or reversed. I believe that this is one of the main reasons for Paul advocating the position that he does. He wants change, permanent change. It's worth noting that Paul's position is not 'the' Austrian approach. As you might expect from any broad school, there are several takes on possible approaches to the problems that you have written about. A good overview of the differing solutions that have been proposed can be found in this article by Herbener: http://www.mises.org/journals/qjae/pdf/qjae5_4_1.pdf > Oli wrote:
> …the most active topic of discussion at the Libertarian Party’s forum is in the same vein. However, I’ve avoided the discussion for reason of disagreement…

Your input at the forum would be valued — we can only learn through listening to each other.

> As Friedman argued, the Great Depression, by and large, occurred because the money supply grew more slowly than the rate of economic growth during the 1920s: due to the gold standard.

Friedman’s view is not universally shared. For example, see http://www.mises.org/rothbard/agd/contents.asp#contents

> The truly libertarian solution would be to scrap the legal tender, remove any obligation on individuals interacting with the government (mostly paying taxes, etc) in sterling, and let them trade in whatever currency they see fit

Yes, but. The big but is that of public acceptance of any new form of currency. Given the choice between a well known existing currency — sterling, presumably backed by the state — and a new currency, many people would stick with what they know, warts and all. You could argue that this would change over time. However, time is not something that anyone proposing major structural monetary reform would enjoy — governments change, and slowly acting reforms can be neutered or reversed.

I believe that this is one of the main reasons for Paul advocating the position that he does. He wants change, permanent change.

It’s worth noting that Paul’s position is not ‘the’ Austrian approach. As you might expect from any broad school, there are several takes on possible approaches to the problems that you have written about. A good overview of the differing solutions that have been proposed can be found in this article by Herbener: http://www.mises.org/journals/qjae/pdf/qjae5_4_1.pdf

]]> By: Tristan Mills http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-825 Tristan Mills Tue, 22 Jan 2008 13:55:13 +0000 http://blog.ucllibertarians.com/2008/01/22/more-on-the-gold-standard/#comment-825 The main reason for Mises's metallism was to prevent the government messing around with the money supply as they did under the gold exchange standard and they do under fiat systems. I wonder what he'd think in today's world of electronic commerce. Metallism won't work today as far as I can see, and government monopoly will enable government to mess with money whatever. So, even from that view, free banking seems to be the best solution. From what I've seen, Ron Paul may be a gold bug, but his policy proposals are more subtle and involve allowing competing currencies and dropping the taxes and restrictions on gold which make it impossible to have a gold standard even with free banking. The main reason for Mises’s metallism was to prevent the government messing around with the money supply as they did under the gold exchange standard and they do under fiat systems.

I wonder what he’d think in today’s world of electronic commerce. Metallism won’t work today as far as I can see, and government monopoly will enable government to mess with money whatever.

So, even from that view, free banking seems to be the best solution.

From what I’ve seen, Ron Paul may be a gold bug, but his policy proposals are more subtle and involve allowing competing currencies and dropping the taxes and restrictions on gold which make it impossible to have a gold standard even with free banking.

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