Better Money

By -
I saw John Nash present his ideas on commodity-basket money (money that can be exchanged for a defined basket of commodities, e.g., an ounce of gold, barrel of oil, pound of tin, and a cord of wood) at the Southern Economic Association meetings a few years ago, a talk in which he credited Hayek as a forerunner. One person, during the Q&A, said that commodity had been "tested" and failed -- during the era of the gold standard, he claimed, the economy exhibited larger boom-and-bust cycles than it has with fiat money since.

Now, I don't want to claim that gold is an "objective" "measure" of value -- money doesn't measure anything, and all value is subjective -- but it just struck me that the change in question is as if a person, troubled by the fluctuations in his weight, decided that the solution was to get a scale that varied in the opposite direction of his bulk! When a recession hits, the government pumps fiat money into the economy, and then proclaims that recessions, as "measured" by the amount of that fiat money that changes hands, are milder than when they had been measured in terms of a money whose value the government could not arbitrarily alter. Now isn't that something to write home about?

Comments

  1. Anonymous12:13 PM

    How did Nash answer the question?

    ReplyDelete
  2. gcallah8:14 AM

    I don't remember. I do remember that I thought his presentation style was awful -- until I read his life story some months later, and realized that it was a major accomplishment that he stayed on topic.

    ReplyDelete

Post a Comment

Popular posts from this blog

Libertarians, My Libertarians!

By -
Cruel to be kind means that I love you . Because, while I think you are mistaken, your hearts are in the right place -- yes, even you, Silas --  unlike some people . This Breitbart fellow (discussed in the link above), by all appearances, deliberately doctored a video of Shirley Sherrod to make her remarks appear virulently racist, when they had, in fact, the opposite import. I heard that at a recent Austrian conference, some folks were talking about "Callahan's conservative turn." While that description is not entirely inaccurate, I must say that a lot of these people who today call themselves conservative give me the heebie-jeebies.
Read more

"Pre-Galilean" Foolishness

By -
 I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose...
Read more