What's up with the religious analogies? As far as I'm concerned this is science if unfortunately of the dismal variety (lots of interacting variables). I'm an atheist, yes... but I don't see how that has any bearing on the dialogue. Just ends up being a whole lot of flowery language.
I think you have to be very careful with your titles and language. You don't want them to come off like the general news media, as just inflammatory, oversimplified and ambiguous to who you are attacking. Mises, Rothbard & Hayek represent Austrian theology (U talk about praxeology, so arent completely ignorant)..Yet if u had made a distinction in the video, you would have saved me a lot of time. U admit that u didn't realize their contribution to boom theory.. so maybe I have educated a little.
Part 4 : There is no reason you can't be mindful of all economic schools mentioned... they all have some valid points. You may happen to have arguments with ignorant people that have some Austrian views. To call Austrians Racist, or say say that Austrians = Goldbugs.... means you owe an apology to the Austrian theories which you clearly haven't read. Similarly misunderstood... Keynes is not Socialism, and Marx never denied the productive power of the free market, just had a problem with distri.
My problem is not with the volumous Austrian school of thought which is largely a mystery to laymen and atheist alike, it is with the outspoken, sel-described and assumed Austrians that engage me on a frequent basis in comments and replies to the video. These people are real and they are frustrating and there is no way to get past their dogmatic and religious adherence to the doctine of GOLD, GOLD GOLD.
To suggest that I have an argument with Mises or Hayek is a misstatement.
Part 3: The real value of the Austrian school, and the reason it's back in vogue, is that where as Keynes and the Monetarists (Friedman) prescribe methods of dealing with the Bust, it's the Austrians alone that say the problem was with the Boom! Again see Econstories.tv . Their explanation of the Great Dep, was not like others, interest rate rises (Friedman) in 1929 or fiscal (Keynes). Instead it was the ROARING 20s and crazy inc in prices. So they propose policies to slow this down. Makes sense
One of the first comments you posted that I mostly agree with. I agree with the part about booms leading to busts, but I don't think I have ever had a self-described or assumed Austrian even go in that direction with discussion. It must be one of the sectarian doctrines reserved for the divine?
I promise to watch Econostories.tv soon. Thanks for sticking with this thread of comments and please forgive my sarcastic sense of humor.
Part 2: It's a myth that Austrians reject mathematical models. See this very insightful post tinyurl-dot-com-slash-2923vcr (READ IT!) . Austrians don't believe you can assign an ordinal number to utility to compare preference. So they rejected the neo-classical utility curve and favour a cardinal approach (believe in an ordered list of preferences only). I think that for the individual they are correct, but for groups the neo-classicals add value.
That was difficult! It was like asking an atheist to read the liturgical sermon of a Methodist explaining the problems with Presbyterians.
Still, some expressions were used that I was unfamiliar with and I will recognize them later as subjects more apprpriate to mysticism and theology than to common sense.
Part2: It's a myth that Austrians reject mathematical models. See this piece which is very insightful tinyurl-dot-com-salsh-2923vcr . The reason people say this is that Austrians don't believe people function by constructing a utility curve (preference). That a person can't assign numbers to preference, but CAN GIVE you an ordered list of preference. I actually believe this true for the individual. When looking at groups of people I think the Neoclassical utility curve makes sense.
Part 1: You are shooting the messenger who happens to be both an Austrian and a Goldbug. That's really unfair to the founders like Hayek and Mises. It is pretty pathetic to judge a system by people who don't know the system. Like you said later Austrian economists often suggest regulating THE MONEY SUPPLY based on gold reserves. Hayek suggested targeting NOMINAL GDP for the money supply (See Econstories.tv) That's not the same thing as rejecting fiat, but are weary of the effect of politics.
I can't say that I ever had an online exchange with Hayek or Mises, they don't seem to posting at YouTube these days (grin).
I can't bring myself to get into a religious debate about economics. I understand that Hayek and Mises are prophets of the church but I think it is more important to engage with living people and what they are saying.
GOLD! GOLD! GOLD!
I suppose I should try and read something from Hayek one day, I did read some Mises when I was younger.
I will check out Econostories.tv ... looks interesting. It is worth noting that I don't consider myself pro-Keynes or anti-Hayek or anything like that. I'm frustrated by pretty much all the economist-type people.
I remember learning about Keynes in college and really getting frustrated by how some of the really bright observations he made about human behavior were being used by government to get us to spend saving and borrow money.
HAhahah... You are spot on Zthustra... I admittedly started studying the subject of economics using the Austrians work (since it was FREE online) but became dismayed by the VERBAL DIARRHEA and lack of math/graphs to explain anything. And I have had the same crazy debates with them as well. If you really want to test them, ask them to explain the difference between their theories and Neo-Classical economics, and prepare for the same insanity. BTW are you done with the PMR series? Where's part 11?
Talk about absent-minded! I thought I had finished the PMR series; there are at least three more videos to be made.
I need to make another Austrian frustration video. It appears that silver and gold do NOT have intrinsic value, what they have are intrinsic properties; the value of gold and silver is subjective, something to do with usefullness.
I just want to know why modern people might value soft, shiny, non-corrosive metal more than paper; is it personally usefull?
@zthustra That's good news... your work and analysis on the PMR series is most cogent. I would also recommend you read Jane D'Arista's paper "The Evolving International Monetary System" which seems to echo some of the criticisms of the PMR paper (with some possible solutions going forward).
In regards to the Austrians: YES... make another frustration vid... Their lack of understanding of ELASTICITY in supply and demand curves shoots their critique of "minimum wage laws" in the foot.
I'm not sure I could answer that question, and believe me when I say I have tried to put myself in one of the several well-known camps of economic thought.
Have you read "A Program for Monetary Reform" (July 1939)? How would you describe the economist that agreed with that proposal? Irving Fisher was called as a neo-classical and he seems to be the grandfather of the program. Several of the authors were Chicago School. A lot of emphasis is placed on "managed currency".
Here's one thing that always confused me about the gold and silver standards. Gold is just a shiny, purdy metal. Same with silver. Any extrinsic value is purely superficial. This is the same case with fiat money as well. I hear so many say "Paper money on its own is worthless, it's just paper!" That always makes me wonder "And gold isn't?" I'm aware that gold has extrinsic value, but I'm not convinced it should when it has little to no practical application. Again, it's just shiny metal.
I'm still learning stuff and I just now got some insight to why gold and silver emerged as money.
I've been asking gold bugs what "intrinsic" value the gold and silver have to them. For example, if it was wheat, you would eat it, and if it was wool, you would wear it, but if it is gold, what do you do with it? Gold is a raw material for things that would be useful AFTER manufacture but gold itself isn't that useful to us.
I need to make a video on "why" metals became money.
@zthustra I agree that gold and silver as 'money' is nonsensical. It seems that the desire for gold and silver comes from 'ancient history'. Zecharia Sitchin, based on this studies, notes that it was the gods that demanded gold and silver. Humans were required to find and produce it. This 'activity' became a habit of humans for so long that the original reasons have been lost. I am invested in Au and Ag as a commodity.
@zthustra I may be misunderstanding your point I thought that austrian theory of the good is that all goods(& money is a good)have no intrinsic(belonging to a things essence or naturally to it)value. Things only have value if people treat them like they can satisfy a need/want. Gold played a big part of Austrian esteem because of the way the self regulating gold standard restricted government spending, created a world market & prevented inflation(which is the cause of macroeconomic instability)
I just visited the Ludwig von Mises Institute web site and searched intrinsic value money, an aweful lot of pages came up with discussion about the intrinsic value of gold as money. Choose the words any way you want, the argument of most Austians is that silver and gold lend their commodity value to the medium of exchange, in other words, they give money intrinsic value.
I don't view money as a commodity. Commodities are for barter.
@zthustra 1. I see what you mean, I do not deny that a consistently high market value is factor that will help a goods adoption as currency. What seems to be the problem for me is the word intrinsic. While your search brought up lots of articles the only article that had the word in the article text & not the comments was used in lines like this ''Intrinsic theories of value have nothing to do with economics'' That is the kind of angle I was coming from.
@zthustra 2. I am sure that people use the word in a specialised financial way that I am unaware of. My point was that intrinsic value in the sense of being of a things essence or basic nature, goes against the basic austrian idea that value only exists between a human mind & thing. The thing having no essential value without a human need. Also I said money is a good. Which is somthing that can be brought into connection with need satisfaction. Demand for a medium of exchange is a need too.
Is it your point that value is always a subjective assignment by a human and there for always extrinsic to that which is valued?
If so, what are the qualities of gold that give it value to humans? Are those qualities intrinsic to the gold, even if value is an extrinsic and subjective assignment of the human?
If you ask a subjective-value theorist, "What makes gold valuable to humans?", the answer will be something along the lines of "I dunno. I guess it's shiny, and it's purdy, and everybody else seems to like it.".
The relevant question for orthodox Austro-libs is, "What are the qualities of gold that would make it a good commodity-money right now?".
The Gold-standard is a pragmatic political prescription. It's not a tenet of Austrian Theory, and it's by no means an "ideal".
@zthustra Thats right, most material goods like gold will be desired for mostly intrisic properties, they I think can be desired for non intrinsic properties but that would be very much the exception rather then the rule.
Would it be true that the intrinsic properties of the precious metal, like gold, lend themselves to the coin. The gold coin is a commodity, because it is coined, the qualities of the coin such as weight and purity of gold are assumed to be uniform. The coin is then fit to traded for other goods and services, the subjective value of the coin being based upon its established intrinsic properties and weighed against the subjective value of the other good or service with it qualities?
Would it also be true that the subjective value of the coin can be altered by the quantity of coins available? the quantity of gold available to coin? the quantity of godds and services available? Would the value of the coin be constantly moving against these variables making the trading of such coins for other goods and services little more than barter using a convenient commodity?
In regards to your first question, the answer is "yes", but I'm puzzled by the last 3 words at the end of the question.
The answer to your second question hinges upon what you mean by "quantity of coins available".
By definition, everything on the market is "available" — for a price.
As for your barter question, I think you are talking about "value" in an aggregate sense. The answer is "yes", but you've made a leap from the micro to macro. In macro, value connotes price relations.
I think your anser was more honest than most. This is a trick question of course.
What are the properties of gold or silver that make it valuable to you personally? What use do you have for soft, shiney, metal?
Oh, the last line had some typos ... in trade, the suggestion is that the qualities of soft, shiney metal would be compared to the qualities of the god or service desired and a fair quanty of metal would be traded for the good or service.
Yes, all the coins being brought to market for exchange with goods and services are the quantity. That quantity could go up if a bunch of precious metal was dug up and coined or go down if people started hording their coin.
Austrians tell me that managing the quantity of money, if it is a preceious metal, isn't an issue, it only seems to be an issue if it something like paper.
What are the properties of gold or silver that make it valuable to me personally? I dunno. I guess it's purdy and shiny.
What use do I have for soft, shiney, metal? Not much, directly.
Money facilitates Indirect Exchange. The value we place on money is imputed from the value we place on goods that can be acquired by means of monetary exchange. The degree to which we value money for its directly-serviceable properties is the degree to which we don't value it as money.
The Commodity-Money vs Fiat-Money debate needs to be put in context.
1) Are we working under the assumption of Monopoly Money, or do we assume Competing Currencies? (yes, these terms are loaded. It'd be just as easy to say "Managed Money" vs "Chaos Currency")
2) What are the ends desired in the policies we advocate?
Whenever I have this debate with people of Fisher/Chicago Tradition, it ultimately boils down to Price-Deflation Theory — the causes and the consequences.
I understand "fiat money" and what gives it value; I also am in favor of competing currencies. I am very critical of the monopolization of money either by government directly or by government endowing a monopoly on a big private banking system.
If government-issued currency did the job, I don't imagine that competing currencies would serve more than niche groups; if government mis-managed money, competing currencies would rise.
(cont) I wish I could just stop there, but more needs to be said.
If competing currencies did well, then there would be less need for government-issued money and I should think that the monetary authority would reduce the money supply as part of its management strategy. Just like if the private sector does a great job at anything there is no need for government to do it.
This idea needs a video but I'm not feeling it in me at the moment.
When the state prescribes the qualities of the coin and stamps the coin with a value is that an established value by fiat? When the state demands that payment to the state for fees, fines, licenses, tarriffs and taxes be made in state-mandated coin, does that give the coin fiat value? When the state increases or decreases the demand for the coin and/or regulates the quantity of the coin in circulation does that alter the value of the coin by fiat?
If the state routinely assigns a value to the coin by fiat that is greater than the value of the metal that is used to make the coin, has the gold become a convenient medium upon which the token value of obligations has been stamped? Is gold, not just a more durable medium in such an environment than paper? Is the quantity of tokens in circulation established by the state against the demand for tokens established by the state + demand for other exchanges now the basis for value?
At this point, how important are the intrinsic qualities of gold that originally made it subjectively valuable as convenient barter relative to the state established values stamped on the coin, or the state established quantity of coin or the state established demand for coin? Has a socio-economic evolution occured? What is the next step in that evolution? Forward? Or, backward?
I am just curious, but how does that comment have anything to do with the video? I know that Austrians would oppose printing money to pay of government debt, as would I. So, what are you saying?
IC ... I laughed because the Austians will be the first to insist that math models as empiracle evidence aren't useful because human behavior is too complex ... you know, praxology.
But the prinicple reason they want gold is to prevent inflation due to prinint too much money, which is an issue involving math models and empiracle evidence.
I happen to agree that precaustions are needed to prevent excessive expansion of the money supply but I don't think gold does that.
Gold bugs will be first to tell you that any time you need more money you just change the qty of gold backing a monetary unit. Well, they got the math worked out for that, but why not just skip the gold altogether and focus on the qty of monetary units in circulation. A kind of Occam's Razor kind of solution.
Another silly solution is just keep making coins smaller. Isn't that a reverse of those money instruments where they are like 100,000 Lira? Only 1/100,000th oz gold? Silly!
And the Gold which is currently being mined now. Nuclear fusion is more likely than asteroid recovery, as we people have actually created gold by bombarding lead with subatomic particles. And Gold has been extracted from seawater.
Austrians are only good at predicting boom and bust cycles. Which is why I am not a Keynesianist. But they really need to get off the gold standard. It just is possible any more.
Thank you for hitting the nail on the head. I talk to so many silver and gold bugs and they're totally like that. Even got banned from Davinci's channel for pointing out the exact same thing.
Of course a 1troy-oz silver coin stamped 1dollar by the government has a fiat value of 1 dollar. Even dollars bills have some level of "intrinsic value," although it's a tiny fraction of the dollar itself. If the dollar were to become worthless by fiat, they may still have a market value for collecting purposes, kindling, and you could even sew them into shirts or blankets, whatever people decide to do with them.
Of course, governments normally take something that is worth a certain amount of "intrinsic value" and stamp it for a higher value. They don't do this with silver coins now, but that's why silver coins don't circulate, and because of this the government sells their stamped silver above silver price, rather then selling them at the fiat price. Obviously, they need to make money on their minting, not lose it.
I find other Austrians just have a poor understanding of the word emprical.
And when I say "other Austrians," I mean people who identify themselves as Austrians, as people are generally pretty quick to adopt any ideology, or system of ideas, at appears to agree with them in any way they deem important at that time. Especially on youtube, haha.
This guy doesn't seem to have anything to say.
SteveTierney1 8 months ago 2
What's up with the religious analogies? As far as I'm concerned this is science if unfortunately of the dismal variety (lots of interacting variables). I'm an atheist, yes... but I don't see how that has any bearing on the dialogue. Just ends up being a whole lot of flowery language.
dmg46664 1 year ago
I think you have to be very careful with your titles and language. You don't want them to come off like the general news media, as just inflammatory, oversimplified and ambiguous to who you are attacking. Mises, Rothbard & Hayek represent Austrian theology (U talk about praxeology, so arent completely ignorant)..Yet if u had made a distinction in the video, you would have saved me a lot of time. U admit that u didn't realize their contribution to boom theory.. so maybe I have educated a little.
dmg46664 1 year ago
Part 4 : There is no reason you can't be mindful of all economic schools mentioned... they all have some valid points. You may happen to have arguments with ignorant people that have some Austrian views. To call Austrians Racist, or say say that Austrians = Goldbugs.... means you owe an apology to the Austrian theories which you clearly haven't read. Similarly misunderstood... Keynes is not Socialism, and Marx never denied the productive power of the free market, just had a problem with distri.
dmg46664 1 year ago
@dmg46664
My problem is not with the volumous Austrian school of thought which is largely a mystery to laymen and atheist alike, it is with the outspoken, sel-described and assumed Austrians that engage me on a frequent basis in comments and replies to the video. These people are real and they are frustrating and there is no way to get past their dogmatic and religious adherence to the doctine of GOLD, GOLD GOLD.
To suggest that I have an argument with Mises or Hayek is a misstatement.
zthustra 1 year ago
Part 3: The real value of the Austrian school, and the reason it's back in vogue, is that where as Keynes and the Monetarists (Friedman) prescribe methods of dealing with the Bust, it's the Austrians alone that say the problem was with the Boom! Again see Econstories.tv . Their explanation of the Great Dep, was not like others, interest rate rises (Friedman) in 1929 or fiscal (Keynes). Instead it was the ROARING 20s and crazy inc in prices. So they propose policies to slow this down. Makes sense
dmg46664 1 year ago
@dmg46664
One of the first comments you posted that I mostly agree with. I agree with the part about booms leading to busts, but I don't think I have ever had a self-described or assumed Austrian even go in that direction with discussion. It must be one of the sectarian doctrines reserved for the divine?
I promise to watch Econostories.tv soon. Thanks for sticking with this thread of comments and please forgive my sarcastic sense of humor.
We have to talk more about the boom issue.
zthustra 1 year ago
Part 2: It's a myth that Austrians reject mathematical models. See this very insightful post tinyurl-dot-com-slash-2923vcr (READ IT!) . Austrians don't believe you can assign an ordinal number to utility to compare preference. So they rejected the neo-classical utility curve and favour a cardinal approach (believe in an ordered list of preferences only). I think that for the individual they are correct, but for groups the neo-classicals add value.
dmg46664 1 year ago
@dmg46664 I meant ordinal rather than cardinal
dmg46664 1 year ago
@dmg46664
That was difficult! It was like asking an atheist to read the liturgical sermon of a Methodist explaining the problems with Presbyterians.
Still, some expressions were used that I was unfamiliar with and I will recognize them later as subjects more apprpriate to mysticism and theology than to common sense.
My favorite economist was Will Rogers!
zthustra 1 year ago
This has been flagged as spam show
Part2: It's a myth that Austrians reject mathematical models. See this piece which is very insightful tinyurl-dot-com-salsh-2923vcr . The reason people say this is that Austrians don't believe people function by constructing a utility curve (preference). That a person can't assign numbers to preference, but CAN GIVE you an ordered list of preference. I actually believe this true for the individual. When looking at groups of people I think the Neoclassical utility curve makes sense.
dmg46664 1 year ago
Part 1: You are shooting the messenger who happens to be both an Austrian and a Goldbug. That's really unfair to the founders like Hayek and Mises. It is pretty pathetic to judge a system by people who don't know the system. Like you said later Austrian economists often suggest regulating THE MONEY SUPPLY based on gold reserves. Hayek suggested targeting NOMINAL GDP for the money supply (See Econstories.tv) That's not the same thing as rejecting fiat, but are weary of the effect of politics.
dmg46664 1 year ago
@dmg46664
I can't say that I ever had an online exchange with Hayek or Mises, they don't seem to posting at YouTube these days (grin).
I can't bring myself to get into a religious debate about economics. I understand that Hayek and Mises are prophets of the church but I think it is more important to engage with living people and what they are saying.
GOLD! GOLD! GOLD!
I suppose I should try and read something from Hayek one day, I did read some Mises when I was younger.
zthustra 1 year ago
@dmg46664
I will check out Econostories.tv ... looks interesting. It is worth noting that I don't consider myself pro-Keynes or anti-Hayek or anything like that. I'm frustrated by pretty much all the economist-type people.
I remember learning about Keynes in college and really getting frustrated by how some of the really bright observations he made about human behavior were being used by government to get us to spend saving and borrow money.
Thanks for the link!
zthustra 1 year ago
HAhahah... You are spot on Zthustra... I admittedly started studying the subject of economics using the Austrians work (since it was FREE online) but became dismayed by the VERBAL DIARRHEA and lack of math/graphs to explain anything. And I have had the same crazy debates with them as well. If you really want to test them, ask them to explain the difference between their theories and Neo-Classical economics, and prepare for the same insanity. BTW are you done with the PMR series? Where's part 11?
heckler73 1 year ago
@heckler73
Talk about absent-minded! I thought I had finished the PMR series; there are at least three more videos to be made.
I need to make another Austrian frustration video. It appears that silver and gold do NOT have intrinsic value, what they have are intrinsic properties; the value of gold and silver is subjective, something to do with usefullness.
I just want to know why modern people might value soft, shiny, non-corrosive metal more than paper; is it personally usefull?
zthustra 1 year ago
@zthustra That's good news... your work and analysis on the PMR series is most cogent. I would also recommend you read Jane D'Arista's paper "The Evolving International Monetary System" which seems to echo some of the criticisms of the PMR paper (with some possible solutions going forward).
In regards to the Austrians: YES... make another frustration vid... Their lack of understanding of ELASTICITY in supply and demand curves shoots their critique of "minimum wage laws" in the foot.
heckler73 1 year ago
What is your school of thought?
gunsandbullhorns 1 year ago
@gunsandbullhorns
I'm not sure I could answer that question, and believe me when I say I have tried to put myself in one of the several well-known camps of economic thought.
Have you read "A Program for Monetary Reform" (July 1939)? How would you describe the economist that agreed with that proposal? Irving Fisher was called as a neo-classical and he seems to be the grandfather of the program. Several of the authors were Chicago School. A lot of emphasis is placed on "managed currency".
zthustra 1 year ago
@zthustra
Hmmm... I don't know where I'd place that. I'll re-read it and see if I can answer that question.
gunsandbullhorns 1 year ago
Here's one thing that always confused me about the gold and silver standards. Gold is just a shiny, purdy metal. Same with silver. Any extrinsic value is purely superficial. This is the same case with fiat money as well. I hear so many say "Paper money on its own is worthless, it's just paper!" That always makes me wonder "And gold isn't?" I'm aware that gold has extrinsic value, but I'm not convinced it should when it has little to no practical application. Again, it's just shiny metal.
SeruQuik 1 year ago
@SeruQuik
I'm still learning stuff and I just now got some insight to why gold and silver emerged as money.
I've been asking gold bugs what "intrinsic" value the gold and silver have to them. For example, if it was wheat, you would eat it, and if it was wool, you would wear it, but if it is gold, what do you do with it? Gold is a raw material for things that would be useful AFTER manufacture but gold itself isn't that useful to us.
I need to make a video on "why" metals became money.
zthustra 1 year ago
@zthustra I agree that gold and silver as 'money' is nonsensical. It seems that the desire for gold and silver comes from 'ancient history'. Zecharia Sitchin, based on this studies, notes that it was the gods that demanded gold and silver. Humans were required to find and produce it. This 'activity' became a habit of humans for so long that the original reasons have been lost. I am invested in Au and Ag as a commodity.
rlrlhyatt 1 year ago
@zthustra I may be misunderstanding your point I thought that austrian theory of the good is that all goods(& money is a good)have no intrinsic(belonging to a things essence or naturally to it)value. Things only have value if people treat them like they can satisfy a need/want. Gold played a big part of Austrian esteem because of the way the self regulating gold standard restricted government spending, created a world market & prevented inflation(which is the cause of macroeconomic instability)
Malthus0 1 year ago
@Malthus0
I just visited the Ludwig von Mises Institute web site and searched intrinsic value money, an aweful lot of pages came up with discussion about the intrinsic value of gold as money. Choose the words any way you want, the argument of most Austians is that silver and gold lend their commodity value to the medium of exchange, in other words, they give money intrinsic value.
I don't view money as a commodity. Commodities are for barter.
zthustra 1 year ago
@zthustra 1. I see what you mean, I do not deny that a consistently high market value is factor that will help a goods adoption as currency. What seems to be the problem for me is the word intrinsic. While your search brought up lots of articles the only article that had the word in the article text & not the comments was used in lines like this ''Intrinsic theories of value have nothing to do with economics'' That is the kind of angle I was coming from.
Malthus0 1 year ago
@zthustra 2. I am sure that people use the word in a specialised financial way that I am unaware of. My point was that intrinsic value in the sense of being of a things essence or basic nature, goes against the basic austrian idea that value only exists between a human mind & thing. The thing having no essential value without a human need. Also I said money is a good. Which is somthing that can be brought into connection with need satisfaction. Demand for a medium of exchange is a need too.
Malthus0 1 year ago
@Malthus0
Is it your point that value is always a subjective assignment by a human and there for always extrinsic to that which is valued?
If so, what are the qualities of gold that give it value to humans? Are those qualities intrinsic to the gold, even if value is an extrinsic and subjective assignment of the human?
zthustra 1 year ago
@zthustra
If you ask a subjective-value theorist, "What makes gold valuable to humans?", the answer will be something along the lines of "I dunno. I guess it's shiny, and it's purdy, and everybody else seems to like it.".
The relevant question for orthodox Austro-libs is, "What are the qualities of gold that would make it a good commodity-money right now?".
The Gold-standard is a pragmatic political prescription. It's not a tenet of Austrian Theory, and it's by no means an "ideal".
gunsandbullhorns 1 year ago
@zthustra Thats right, most material goods like gold will be desired for mostly intrisic properties, they I think can be desired for non intrinsic properties but that would be very much the exception rather then the rule.
Malthus0 1 year ago
@Malthus0
Would it be true that the intrinsic properties of the precious metal, like gold, lend themselves to the coin. The gold coin is a commodity, because it is coined, the qualities of the coin such as weight and purity of gold are assumed to be uniform. The coin is then fit to traded for other goods and services, the subjective value of the coin being based upon its established intrinsic properties and weighed against the subjective value of the other good or service with it qualities?
zthustra 1 year ago
@Malthus0
Would it also be true that the subjective value of the coin can be altered by the quantity of coins available? the quantity of gold available to coin? the quantity of godds and services available? Would the value of the coin be constantly moving against these variables making the trading of such coins for other goods and services little more than barter using a convenient commodity?
zthustra 1 year ago
@zthustra I can't honestly answer those questions without oversteping what I comfortably know.
Malthus0 1 year ago
@zthustra
In regards to your first question, the answer is "yes", but I'm puzzled by the last 3 words at the end of the question.
The answer to your second question hinges upon what you mean by "quantity of coins available".
By definition, everything on the market is "available" — for a price.
As for your barter question, I think you are talking about "value" in an aggregate sense. The answer is "yes", but you've made a leap from the micro to macro. In macro, value connotes price relations.
gunsandbullhorns 1 year ago
@zthustra
(continued...)
Wait... disregard my affirmative answer to your first question. I'm not sure what you're asking anymore.
The content of the gold coin governs the Nominal Value of the money. Nominal Value is not Subj-Value. Does that answer your first question?
Are you familiar with the Law of Marginal Utility?
gunsandbullhorns 1 year ago
@gunsandbullhorns
I think your anser was more honest than most. This is a trick question of course.
What are the properties of gold or silver that make it valuable to you personally? What use do you have for soft, shiney, metal?
Oh, the last line had some typos ... in trade, the suggestion is that the qualities of soft, shiney metal would be compared to the qualities of the god or service desired and a fair quanty of metal would be traded for the good or service.
zthustra 1 year ago
@gunsandbullhorns
Re: quantity of coin
Yes, all the coins being brought to market for exchange with goods and services are the quantity. That quantity could go up if a bunch of precious metal was dug up and coined or go down if people started hording their coin.
Austrians tell me that managing the quantity of money, if it is a preceious metal, isn't an issue, it only seems to be an issue if it something like paper.
zthustra 1 year ago
@zthustra
What are the properties of gold or silver that make it valuable to me personally? I dunno. I guess it's purdy and shiny.
What use do I have for soft, shiney, metal? Not much, directly.
Money facilitates Indirect Exchange. The value we place on money is imputed from the value we place on goods that can be acquired by means of monetary exchange. The degree to which we value money for its directly-serviceable properties is the degree to which we don't value it as money.
gunsandbullhorns 1 year ago
@zthustra
(continued...)
The Commodity-Money vs Fiat-Money debate needs to be put in context.
1) Are we working under the assumption of Monopoly Money, or do we assume Competing Currencies? (yes, these terms are loaded. It'd be just as easy to say "Managed Money" vs "Chaos Currency")
2) What are the ends desired in the policies we advocate?
Whenever I have this debate with people of Fisher/Chicago Tradition, it ultimately boils down to Price-Deflation Theory — the causes and the consequences.
gunsandbullhorns 1 year ago
@gunsandbullhorns
I really love both of those replies!
I understand "fiat money" and what gives it value; I also am in favor of competing currencies. I am very critical of the monopolization of money either by government directly or by government endowing a monopoly on a big private banking system.
If government-issued currency did the job, I don't imagine that competing currencies would serve more than niche groups; if government mis-managed money, competing currencies would rise.
zthustra 1 year ago
@gunsandbullhorns
(cont) I wish I could just stop there, but more needs to be said.
If competing currencies did well, then there would be less need for government-issued money and I should think that the monetary authority would reduce the money supply as part of its management strategy. Just like if the private sector does a great job at anything there is no need for government to do it.
This idea needs a video but I'm not feeling it in me at the moment.
zthustra 1 year ago
@Malthus0
When the state prescribes the qualities of the coin and stamps the coin with a value is that an established value by fiat? When the state demands that payment to the state for fees, fines, licenses, tarriffs and taxes be made in state-mandated coin, does that give the coin fiat value? When the state increases or decreases the demand for the coin and/or regulates the quantity of the coin in circulation does that alter the value of the coin by fiat?
zthustra 1 year ago
@Malthus0
If the state routinely assigns a value to the coin by fiat that is greater than the value of the metal that is used to make the coin, has the gold become a convenient medium upon which the token value of obligations has been stamped? Is gold, not just a more durable medium in such an environment than paper? Is the quantity of tokens in circulation established by the state against the demand for tokens established by the state + demand for other exchanges now the basis for value?
zthustra 1 year ago
@Malthus0
At this point, how important are the intrinsic qualities of gold that originally made it subjectively valuable as convenient barter relative to the state established values stamped on the coin, or the state established quantity of coin or the state established demand for coin? Has a socio-economic evolution occured? What is the next step in that evolution? Forward? Or, backward?
zthustra 1 year ago
of course increasing the money supply devalues the currency
i aint no economist but
it's obvious that we can't just print $13 trillion and pay off our debt.
acrophobe 1 year ago
@acrophobe
I am just curious, but how does that comment have anything to do with the video? I know that Austrians would oppose printing money to pay of government debt, as would I. So, what are you saying?
zthustra 1 year ago
@zthustra
you laughed off the idea that printing more "fiat" money devalues money. that was the first example that came to mind that demonstrates that it does.
acrophobe 1 year ago
@acrophobe
IC ... I laughed because the Austians will be the first to insist that math models as empiracle evidence aren't useful because human behavior is too complex ... you know, praxology.
But the prinicple reason they want gold is to prevent inflation due to prinint too much money, which is an issue involving math models and empiracle evidence.
I happen to agree that precaustions are needed to prevent excessive expansion of the money supply but I don't think gold does that.
zthustra 1 year ago
Gold bugs will be first to tell you that any time you need more money you just change the qty of gold backing a monetary unit. Well, they got the math worked out for that, but why not just skip the gold altogether and focus on the qty of monetary units in circulation. A kind of Occam's Razor kind of solution.
Another silly solution is just keep making coins smaller. Isn't that a reverse of those money instruments where they are like 100,000 Lira? Only 1/100,000th oz gold? Silly!
zthustra 1 year ago
@zthustra i might buy 1/100,000th of an ounce of gold. it would give me a small, consoling, pitiful sense of accomplishment.
acrophobe 1 year ago
@zthustra
There's enough dissolved gold in the oceans to make everyone a billionaire in nominal terms.
It's not currently economically feasible, but will be before you get to 1/100,000's units.
WorBlux 1 year ago
@WorBlux
Yes, and let's not forget all the precious and strategic metals on asteroids! All just waiting there for the grabbing.
zthustra 1 year ago
@zthustra
And the Gold which is currently being mined now. Nuclear fusion is more likely than asteroid recovery, as we people have actually created gold by bombarding lead with subatomic particles. And Gold has been extracted from seawater.
WorBlux 1 year ago
Austrians are only good at predicting boom and bust cycles. Which is why I am not a Keynesianist. But they really need to get off the gold standard. It just is possible any more.
TheAtheistPaladin 1 year ago
Haha you seem very amused with this zthustra, nice to see! XD
VolcanicPenguin 1 year ago
Thank you for hitting the nail on the head. I talk to so many silver and gold bugs and they're totally like that. Even got banned from Davinci's channel for pointing out the exact same thing.
a012345 1 year ago
Strawmans, strawmans everwhere.
Of course a 1troy-oz silver coin stamped 1dollar by the government has a fiat value of 1 dollar. Even dollars bills have some level of "intrinsic value," although it's a tiny fraction of the dollar itself. If the dollar were to become worthless by fiat, they may still have a market value for collecting purposes, kindling, and you could even sew them into shirts or blankets, whatever people decide to do with them.
MotionFur 1 year ago
@MotionFur
Of course, governments normally take something that is worth a certain amount of "intrinsic value" and stamp it for a higher value. They don't do this with silver coins now, but that's why silver coins don't circulate, and because of this the government sells their stamped silver above silver price, rather then selling them at the fiat price. Obviously, they need to make money on their minting, not lose it.
I find other Austrians just have a poor understanding of the word emprical.
MotionFur 1 year ago
@MotionFur
And when I say "other Austrians," I mean people who identify themselves as Austrians, as people are generally pretty quick to adopt any ideology, or system of ideas, at appears to agree with them in any way they deem important at that time. Especially on youtube, haha.
MotionFur 1 year ago