See 04:15 . This has unfolded recently with the Liberty dollar experiment in NC by the freedom fighter, Bernard van Notthaus. The Fed gov is trying to put him away for 22yrs just for making an independent currency that was backed by Gold and Silver reserves.
Hayek, Mises, and Rothbard were Austrian economists. Friedman was a monetarist. History, especially the last 10 years, has proven that the Austrians were correct in regards to monetary policy, and economics in general.
@OldRightPaleocon Well put. Btw, your name, "oldrightpaleocon" is the shit! Someone needs to do a study on the psychology behind the Paleo-Austrian-Liberty combo versus the Vegan-Keynesian-Fascist combo. Its fascinating. RP 2012!
wow never thought of money being a monopoly controlled by government. but i mantain that governments should have control on how much money circulates on the economy. otherwise the consequences would be unpredictable to say the least.
@diogotomediogo The Austrian take on industrial fluctuations is that they are caused by inflation leading to the missallocation of resources. Monetary policy will always lean in favour of inflation due to the fear of overshooting & causing deflation. So from the Austrian point of view crisis is inevitable with gov control of money.As for unpredictability that point could be extended to any other product on the market.Stabilty arises from the bottom up not from central control.
@Malthus0 I would also like to add that people are inherently unpredictable. Because of that their are praxeological and epistemological problems to central planning. There is no way to forcast the decisions of 309 million people accurately. Ludwig Von Mises wrote very extensively about that.
I don't understand what Hayek is saying about Milton Friedmans monetary policy. The gold standard seems like a better alternative than our fiat system. It might not be the ideal form of monetary policy, but it does help to reduce inflation.
@dubified89 I don't recall him saying that, but I don't doubt it either. I think it's indexing the money supply to real GDP. That way inflation won't increase or decrease very much.
I've watched this a few times now and am blown away each time by the prescient genius of this man. In the age of global communications - where undreamed of computing power rests literally in the hands of the common man - there is a way for Hayek's vision of competing currencies to become reality.
Well I think competing currencies would be a lot more complex than most people think. For example, if something needs to be imported, how would we determine the value of the product compared to the certain currency? Unless Hayek is just talking about competing with already established currencies (Dollars, Pounds, etc.) which seems logical, but let's say someone wants to use those pounds instead of dollars, how would they come about in obtaining it? You can't just get money for nothing.
As far as I know, Friedman believed in central control of monetary policy. He believed that inflation was necessary in times of distress, and that it would have alleviated the ills of the Great Depression. It would be hard to have any effect if people switched currencies from American dollars to cowrie shells or something else. Much later in his life however, Friedman became disheartened with the effects of intervention, by the Fed, on the market and called for its abolishment.
@ninjashade411 I find free banking very interesting. I think at the least there ought to be a hard currency backed by a commodity that responsible savers can divert their money into to avoid the whims of an inflationary fiat.
@ninjashade411 Check out the history of Canadian banking! Our major banking houses such as RBC and TD had competing currencies before central banking took over.
...Speaking of Leatherman [previous comment], consider that Victorinox (sole supplier to the swiss army) previously dominated the market to the point that multi-tools were colloquially termed Swiss Army knives even when made by off-brand manufacturers. Enter Tim Leatherman and the game changed. That's how money can work too.
I like the idea of competing currencies theoretically, but in practice it seems like people would eventually settle on one strong currency for the sake of convenience.
@captcool420 That is what would happen most likely. However the point of competition is not necessarily having loads of competitors a la the perfect competition model. As Hayek points out competition is a discovery procedure & we don't know the optimum No. of competitors before the fact. As long as there are no barriers to entry the dominant firm will be constrained by real & even only potential competitors & be replaced if they take their eye of the ball. Someone will always fill their shoes.
@captcool420 true, however if that currency should ever become compromised it would be better to have an alternative ( a legal alternative of course ) as opposed to a monopoly which is what you get with the dollar and the ever approaching collapse that comes with it.
If there is anything in the field of public policy and economics more riveting than an argument between intellectuals in the Libertarian field would someone please inform me?
My Keynes Hayek: The Clash That Defined Modern Economics is published in October by W.W.Norton. See website: sites.google.com/site/wapshottkeyneshayek/
One thing that bothers me is that a fair number of monetarists and especially Austrians speak as though expansion of the money supply is the sole determinant of price inflation. There is also this idea among some Austrians that expanding the money supply is always bad, even though not expanding it would lead to deflation if output increases.
@tifforo1 Maybe they let on this appearance but i do not know of any of them that would phrase it in such absolute terms. They seem to fully grasp the psychological influences, business influences that can actually inflate the monetary perception. Personally, i wouldn't mind the deflation as it just means economic soberization, but some people would be hurt by it and governments do not much care for that .
This is the first Youtube video about economics I have seen that actually has a majority of intelligent comments in it. Maybe it's because it doesn't have the psychotic rivalry between libertarians and those on the economic left but rather highlights differences among libertarian economists.
How would having competing "monies" within a single country like the United States work without the "monies" having intrinsic value? If the competing "monies" had intrinsic value, would they differ from regular goods? That would seem to be a more sophisticated--but still inefficient--form of bartering. Also, what happens when one firm effectively "wins" and becomes the preferred distributor? That would amount to the initial issue but with the added problem that the issuer(s) is unelected...
@MrMustard12345 What you say points to the inherent complexity of a free market and hence the insanity of coercion-based regulatory policies.
By the way, did anyone elect Tim Leatherman, manufacturer of multi-tools? Or Sam Walton? or... the list is long.
No. These individuals built teams around themselves to offer consistent value to the aggregated needs or desires of mind-boggling numbers of people. Currencies can work exactly like this.
@Malthus0 Thank you for uploading this. I probably just don't know where to look, but I've been searching for Austrian criticisms of monetarism or visa versa. I have been listening to an audio series called Knowledge Products on economics from audible.com. The series cover many schools of economics which I can't find in economic intro texts (undergraduate student here.) I've found criticisms of Austrian economics by Keynesians, and criticisms of Keyensian from Austrian and monetarism.
@spamdude1 He doesnt believe in fiat money, he doesnt believe in a central bank system that can print money at will. Milton Friedman had no problem with the Federal Reserve system but Hayek is saying he doesnt agree, Hayek wants people to make their own private currencies or foriegn currencies.
He is saying that one of the greatest misfortunes is if people ever cease to beleive in the quantity theory of money except if you take it literally. I.E. The quantity of money is significant to price levels in the economy. THIS IS VERY SIGNIFICANT ( think about having a central bank with monopoly power of printing money and the cause and effect). However, the statistical equation of M*V=P*Q is basically impossible to calculate statistically as money is a wide variety of things.
@deficithawker I'd encourage you to get a copy of Gabriel Kolko's book "The Triumph of Conservatism". Though he is a neo-Marxist himself, he shows the futility of government attempts at regulation, since government is in the end controlled by the same special interest it supposedly seeks to regulate. Big business uses regulation and government force to protect itself from competition. In a perfect world we wouldn't have this corruption, but it is hazardous to pretend it doesn't exist.
OK, so, hayek is saying that.. Keynes believes he knows the amount of money that should be injected to get the economy rolling again in the effect of monetary and fiscal policy by creating demand that automatically creates its due supply, thus creating economic growth, BUT hayek says it's impossible to know the price behaviors of an economy therefore you cannot calculate how much money to inject?
Competing monies. Exactly! Why should there be monopoly on money? People created money spontaneously, out of barter system, still many things could be used as money, as long as they were easy to liquidate. People should be "free to choose" money as well.
The very first time I heard Hayek I had no idea what he was saying. I don't even have to watch the video to be able to comprehend his English/German accent.
@AUSM92 True, I think one of the causes is that the Ludwig von Mises institute was headed by Lew Rockwell, who is a anarcho-capitalist, Friedman was very clear that he was not an Anarchist and that government served a very important (though very limited) role. I appreciate the arguments for both, but I think Friedman (on that issue) was just a little more realistic. After all, very few semi-modern "stateless" societies have existed, and none for very long.
@kevrawn In his 1962 book "Capitalism and Freedom", Friedman explains how, before the Fed (excluding the Civil war and a while afterward) the monetary system was better and more stable in retrospect, though he also explains that it was not a "pure" gold standard in the US or pretty much any other country. (Pure in the sense of exchange, not in the quality of the metal) I can't pretend to explain how exactly it worked, but it is described...I think in chapter 3??? of that book.
I would also add that currently there seems to be some bad blood between the Chicago and Austrian schools, but as we can see with Friedman and Hayek, the disagreements were relatively minor. Murray Rothbard once accused even Friedman of being a statist, but I think Rothbard forgot one of his own dictums; that you should side with those whom you agree on the most issues, not reject them for the few issues on which you disagree.
This is extremely interesting. I love Friedman, but I admit that I do not fully understand his monetary policy (or any monetary policy, they all seem quite convoluted) and I have always liked the idea of competition in everything else, so why not money? I also find it interesting how there seems to be an economic uncertainty principle; that is to say all quantities and values cannot ever be fully known at any given time.
@kevrawn Well I'm an Austrian so that is a good thing. Slowly but surely America will know Austrian economics. And you will see the government leaned on to start moving in that direction. It will hold Republicans accountable and will most certainly be the death of the Democrat party.
@luisisilvab Captions can be turned on by the 'cc' button bellow the video to the left of the little speech mark button for annotations. In the same bar as the play button & video time.
@Malthus0 But until now I haven't found any criticisms of Austrians from monetarists or from monetarists of Austrians. I'm attempting to determine my own perspective. Having read Hayek's "The Road to Serfdom" I found myself agreeing with him about the trend toward collectivism. When I read "Free to Choose" I agreed with this as well. But from a philosophical and economic perspective (I admit I'm weak in both,) I can't determine which is the better position.
Austrian economics is about the unknown. It admits that there are shadows that economic factors are hidden. Unlike classical economics. The one thing about Austrian that is universal is that it doesn't assume that economies can be managed by planning, but rather by letting the market run itself. Now, for those of you out there who are scared of that? Look at what the Keynesian model has given us? Where are we? Still scared of Austrian economic theory? I think not. Be scared of Government!
@naadde Very much agreed with that assessment. Libertarians better be careful. They are finally making real headway now. They need all of the allies they can get. And Miltons contributions over the course of his life was very beneficial to the Libertarian cause. He is not the Libertarians enemy. He is a strong and brilliant contributor. I personally have been very inspired by Dr. Friedman. And I am 100% Austrian.
@richardcadbury ... find out who owns those channels, one of the 5 corporations (was over 90 pre Clinton), then you will know why shows like this aren't on any of them.
Friedman speaks with a forked tongue. Replacing the Fed with a computer does NOT abolish it. It only automates it. Of course, it has to use Freidman's program. So, invariably, Friedman just replaces the Fed with himself.
Hayek's theories are really information theory. Macroeconomics generalizes the free market & Hayek thinks the free market NEVER operates on generalities. So excluding bits in the process of grouping them as bytes may be more efficient but not necessarily better information. All Hayek is saying is that macroeconomics is garbage because quality depends on the ENTIRE quantity of information & if you put garbage in, you get garbage out. He simply prefers ALL individual molehills to one mountain.
Doesn't the idea of competing currencies run contrary to the efficient operation of markets? Would the price signals that the markets operate on be confused, or at least slowed by the number of different competing currencies in circulation?
"Doesn't the idea of competing currencies run contrary to the efficient operation of markets?"
No. JFK used competing currency, i.e. silver certificates, issued by the Treasury because the gold standard prevented the Fed from expanding the money supply. It did ABSOLUTELY nothing to hamper the market. On the contrary, by breaking the Fed's monopoly on paper currency, it proved that Hamiltonian bi-metalism works to both stimulate growth & stabilize the value of currency.
Silver backed american dollars and Gold backed american dollars are not competing currencies. They're both still American dollars. Stores accepted them at equal value.
Hayek specifically says that there should be different institutions offering different currencies. This implies a differing value for the different currencies, not simply being backed by different things. I would be surprised if people cared if their $1 bill said exchangeable for silver or gold.
"Silver backed american dollars and Gold backed american dollars are not competing currencies...Stores accepted them at equal value."
Only stores that could not redeem currencies for the commodities with which they were valued, treated them as equal values. The only "stores" that could redeem the notes, i.e. the Fed or the Treasury, did NOT treat them at equal value (a silver certificate didn't get you the same quantity of gold). Equal treatment does NOT bestow equal value.
Ummm. Yes actually it does. If i Have to go to either the treasury department or the federal reserve to get a different value for that currency, and those are the only places where those currencies are given different values, then for the vast majority of people there is no difference.
"Hayek specifically says that there should be different institutions offering different currencies."
Show me where Hayek says the American Federal Reserve & Treasury Dept. are the same institution? Being from the same country doesn't make them the same institution. So, unless you can prove the Treasury is a government sanctioned monopoly of PRIVATE banks, they are not the same institution & their currencies, as I've explained, did in FACT have different values.
They're both run by the US government... Definitely not different institutions. The fed is subject to congressional over site, it is not an independent organization. In effect both Silver and gold certificates were backed by the United states of America. Your grasping at very small distinction between the 2. For the majority of people ( IE THE MARKET) there was no difference.
"This implies a differing value for the different currencies, not simply being backed by different things. I would be surprised if people cared if their $1 bill said exchangeable for silver or gold. "
Well, I suppose you're right in one sense because if you bought a Big Mac, fries & a coke with four gold, one dollar coins, the cashier would probably say, "...one more dollar, please". But only YOU would be happy with that deal for your "happy" meal.
Well since gold in the US no longer accepted in that way, I'm not sure what you're getting at here. Friedman is advocating 2 DIFFERENT currencies, with differing values the Lira and the Pound for example. So if you had different institutions ( 2 different banks for example) issuing 2 different currencies, backed by their assets there would be a different value assigned to them. 1 unit of currency from bank A would not equal 1 unit of currency from bank B.
@Okbran - The problem here is that Friedman advocates FIAT currencies which by their creation are not backked by 'assets' but by reputation. So whether or not there were two or twenty competing fiat currencies, Friedman's method fails for the same reason all fiat currencies have and do fail: the moral hazard of the printing press and government's ability to secretly inflate the currency/currencies for their own purposes, exacting a hidden tax on the people and devaluing their money.
"Friedmans egalitarianism is revealed in the Friedman-Stigler pamphlet attacking rent controls."For those, like us, who would like even more equality than there is at present it is surely better to attack directly the existing inequalities in income and wealth at their source" than to restrict the purchases of particular commodities, like housing.The most disastrous influence of Milton Friedman has been his egalitarianism:a guaranteed annual income"
"One of Friedmans most disastrous deeds was the important role he proudly played, during World War II in the Treasury Department, in foisting upon the suffering American public the system of the withholding tax. Before World War II, when income tax rates were far lower than now, there was no withholding system; everyone paid his annual bill in one lump sum, on March 15."
"An infinitely superior view of competition is found in the totally neglected school of "Austrian economics" which scorns the "perfect competition" model and prefers the real world of free-market competition.3So while Friedmans practical view of competition and monopoly is not too bad, the weakness of his underlying theory could permit at any time a return to the frenetic trust-busting of the Chicagoans of the 1930s."
While "It remains in the Chicagoite desire to lay the tax structures greatest stress on the income tax, undoubtedly the most totalitarian of all taxes. Chicagoites prefer the income tax because, in their economic theory, they follow the disastrous tradition of orthodox Anglo-American economics in sharply separating the "microeconomic" from the "macroeconomic" spheres."
a drastic policy of trust-busting of all business firms and unions down to small blacksmith-shop size, in order to arrive at "perfect" competition and what Simons conceived to be the "free market";
a vast scheme of compulsory egalitarianism, equalizing incomes through the income-tax structure; and
a proto-Keynesian policy of expansionary fiscal and monetary programs"
"The members of the original, or first-generation, Chicago School were considered "leftish" in their day, as indeed they were by any sort of genuine free-market criterion. And while Friedman has modified some of their approaches, he remains a Chicago man of the thirties."
"Mention "free-market economics" to a member of the lay public and chances are that if he has heard the term at all, he identifies it completely with the name Milton Friedman. For several years, Professor Friedman has won continuing honors from the press and the profession alike, and a school of Friedmanites and "monetarists" has arisen in seeming challenge to the Keynesian orthodoxy." ."
@kevrawnOf course there is allways "supicous" activities goin around all over youtube.You don´t even have a ordinary account.You sure appear here in different names.cjanne i don´t know,but i know of course that zylvana.A legend i think
among leftist economists.I don´t bother,Attac him if you want,but if you clever enough to read his presentation site your se he have 500 influental friends from all over the world and from UN and MIT an you name it.I would not reccomend to get at him for sure
@kevrawnI am curious about you to.I have many times,debated zsylvana and he is a swede.He has no good explaition on failures on monetarist theory,what i have seen.i challlenged him on those topics many times,but he just tell me he has debunked Freidman many times.He use to answer me in that way.I don´t mind.I don´t know him but i think he is corny professor in my view,And grammar?I could learn you a lot of boer language if you want to,My english is not perfect,but better then swedish professors
@Malthus0 Economics is a Positivist science.A body of accepted generalisations about economic phenomena that can be used to predict the consequences of changes in circumstances.Progress in expanding this body of generalisations,strengthening our confidence in their validity, and improving the accuracy of the predictions.There is the diffrence between Neo-Classical theory produced by such as Friedman,Lucas, and others and Austrians like Hayek that not used the scientific method.
@Malthus0 Despite the appearance of considerable controversy,this is true equally of existing static monetary theory,which is designed to explain the structural or secular level of absolute prices,aggregate output,and other variables for the economy as a whole,and which has had a form of the quantity theory of money as its basic core in all of its major variants from David Hume to the Cambridge School to Irving Fisher.A Central Bank & fiat money is crucial in a economy as Friedman explained
@Malthus0 Existing relative price theory,which is designed to explain the allocation of resources among alternative ends and the division of the product among the co-operating resources and which reached almost its present form in Marshall's Principles of Economics,seems to me both extremely fruitful and deserving of much confidence for the kind of economic system that characterises Western nations.Milton Friedman,know how to use Neo-classical tool but Hayek failed to use it in high degree
So would Hayek eventually admit that there is imperfect information? Friedman and Robert Lucas developed the imperfect information model based on relative prices. Isn't it true that man is not omniscient, and thereby it eventually means not a perfect market at all times and periods? Who agrees?
If I understand you correctly then, I think you are mistaken. Austrians like Hayek do not assume perfect information in the first place. So there would be no point of modifying Austrian theory in the same way as the neoclassical perfect competition model needed to be modified. Israel Kirzner's paper ‘How Markets Work’ explains how the Austrian position differs & came to differ from the neo-classical.
@Malthus0 Hey Malthus how are you? I tried searching for that Israel Kirzner article but couldnt find it. What i did find was "Market Theory and the Price System". Would this be the same thing?
@NicosMind That is more of a textbook on price theory. I understand why you could not find it, The stuff saved over at the IEA does not come up on search engines well.
@NicosMind: If Malthus hasn't already sent you the link, Google "iea uk" and then click on the link for "IEA publications." Then in the "Google Custom Search" box, search for "kirzner how markets work" (remove the quotes). The first result will be the "splash page" for the book (you can order a hard copy or "download full publication" from here); the second result will be a direct link to the pdf of the book/ebook.
@NicosMind If Malthus hasn't already sent you the link, Google "iea uk" and then click on the link for "IEA publications." Then in the "Google Custom Search" box, search for "kirzner how markets work" (remove the quotes). The first result will be the "splash page" for the book (you can order a hard copy or "download full publication" from here); the second result will be a direct link to the pdf of the book/ebook.
A “product” is defined as a collection of units that are perfect substitutes to purchasers so the elasticity of demand for the output of one firm with respect to the price of another firm in the same industry is infinite for some price and some outputs. A firm is monopolistic if the demand curve for its output is not infinitely elastic at some price for all outputs.If it is a monopolist,the firm is the industry
Trustbusting is needed to maintain a freemarket as Friedman understood
I explain it to you.In analysing the world as it is,the great Alfred Marshall constructed a hypothesis that,for many problems,firms could be grouped into “industries” such that the similarities among the firms in each group were more important than the differences among them.These are problems in which the important element is that a group of firms is affected alike by some stimulus — a common change in the demand for their products,say,or in the supply of factors.
@Malthus0 The abstract model corresponding to this hypothesis contains two “ideal” types of firms: atomistically competitive firms, grouped into industries, and monopolistic firms. A firm is competitive if the demand curve for its output is infinitely elastic with respect to its own price for some price and all outputs, given the prices charged by all other firms; it belongs to an “industry” defined as a group of firms producing a single “product.”
@Malthus0 I think this sums up why so many economists have a problem with Austrian economics. They cant comprehend that someone who would call themselves an economist would also admit to not having perfect knowledge.
@Shotosboring1stpick Actually, its Stiglitz that did most of the pioneering work on asymetries of information. Lucas and Friedman, especially Lucas, often worked on the absurd assumption that people have perfect information and act on it rationally all the time.
i hope you see the fundamental difference between the way people used to debate back then and how people debate npw.hayek is attacking keynes's principles and policies not keynes himself.today people attack the person behind the principle rather than the prinicple itself.perfect example the bitch niomi klien on the shock doctrine.whatta bitch.if she thinks friedmans views are wrong.why attack friedman himself? thats like enstein attacking newton because his theory on gravity was wrong
@mintoo2cool You are so right. Especially in the case of Niomi Klien (who has no economic training...just an opinion)(there...I did it too...attacking Klien herself). But it is important to distinguish between intellectuals like Friedman who have actually spent their lives in a rigorous pursuit of truth and people like Klien who are simply trying to be "giant killers".
@axe863 The irony of that statement is that Friedman actually advocated for the abolishment of the Federal Reserve, and he argued that Monetarism would be the best monetary policy given the fact that we do have a central bank in the U.S. So it would appear that Friedman actually tended to agreed with Hayek on monetary policy but for some reason or another wasn't courageous enough to consistently go to bat against the Fed.
@publicanimal Monetarists & Austrians argue completely different reasons for recessions. Monetarists argue that money supply contraction turned a recession into a depression. Austrian believe the great depression was caused by prolonged artificially low interest rates which caused a massive amount of mal-investment. Friedman believed that money growth stability correlated with GDP stability and not some partial systematic irrationality for otherwise hyper-rational individuals
@BurnBeforeEating Yes, but it was years ago and I've since lost it or maybe I lent it to someone and never got it back. My point is that though he was on record advocating Monetarist policies, these were the policies he thought would be best GIVEN that the Fed exists. He would have preferred the abolition of the Fed.
Why do you say this about malinvestment? TThe issue is not rationality but the effects of deluding price signals from inflation/suppressed interest rates, the former deluding the actual state of production in each sector according to demand by perverting relative prices thus leading to business in production of prices which must clear without the cognition thereof of leveragers backing them etc, the latter leading to intertemporal malinvestment for which savings are too low to allow completion.
Friedman didn't agree with Hayek on monetary policy though, MF believed that insufficient spending would arise from generally falling prices thus inflation is necessary for growing economies with increased marginal prodcution IN THE MONETARIST view. Austrians view this as childish gibberish that might as well have been said before economics developed into a rigorous school of thought. The supply of money is never too low, inflation makes overextended production structures which need more saving.
@Nintendomanwill What I'm pointing out and you're failing to acknowledge for whatever reason is that Friedman eventually abandoned his monetarist views. What I would view as one of his failings is that he was against the existence of the Fed but never offered a viable alternative. Friedman was a brilliant economist whose work in statistical analysis is unrivaled. The Austrians have much to teach us but their rejection of empirics is very limiting. Friedman was THE genius of positive economics.
I hope you're joking! Friedman is in a completely lower intellectual league to Hayek, was a terrible economist on monetary issues (hence advocated inflation) and taught in the pitiable tradition of Fisher style quantitativists advocating 'price stability' to remove supposed frictional effects of generally falling prices if money supply is stable (as if financial services couldn't direct employment towards lower time preference/higher savings, you know that's why we have massive loan markets!)
@Nintendomanwill It's worth pointing out as well the Ron Paul owns millions of dollars worth of shares in the world's leading gold mining operations, so he can effectively be considered a special interest when it comes to a return to the gold standard. By doing this he's undermined some of his credibility if you ask me.
Ron Paul cannot possibly lose credibility. He's obviously (deadly) serious. Now to call Friedman a genius is perverse. There are very few geniuses in economics since it's a very badly defined and laughably sloppy branch of human knowledge. Only the Austrian masters and the (early) Classicals compare to real geniuses since economics is very poorly developed. As for gold, you can have gold certificates of 0.00000000001G or whatever so the scarce supply is no problem-but is in fact its main quality
@Nintendomanwill How does Ron Paul's personal financial stake in gold and silver not affect his credibility regarding going back to commodity money? It's not enough to change my opinion of the inherent advantages of specie, but it is enough to call his integrity into doubt. The more demand for gold and silver increase, the more Ron Paul profits. The conflict of interest is obvious.
So what, everyone has savings in gold. Come now, Ron Paul is just not the sort of guy whose promotion of sound money is excessive due to personal interests. He's absolutely anti-Fed and anti-Fiat money from ideological and theoretical perspectives obviously intertwined with the venal reasons ie inflation came about through theft of market money and enables secret taxation and bailouts of an insolvent banking cartel organised by the Fed
Why you want to spend your time debating this is beyond me.
@Nintendomanwill Ron Paul has massive investment in gold mining operations, not just "savings in gold". Thus he is involved in the gold industry, thus has a vested interest in increasing the demand for gold (by forecasting a dollar crisis, advocating gold standard, etc.). I'm not debating the inherent quality of gold as a store of value, thus being a good commodity to back currency. But claiming there is a dollar crisis around the corner is kind of like saying "The world is ending tomorrow!"
Maybe as things are now there is no impending and absolute drop of the dollar by most people but what do you think will happen with further QE? You don't seem to realise the existential necessity of bailouts for Fiat money bankers. This is the main flaw in the arguments of Axe on these youtube fora. When money supplies increase intersectoral prices are distorted to that extent from what the market would have set them as therefore bankers themselves can't appreciate proprly which sectrs to go for
@publicanimal Gold as currency has been discussed by countless books, and articles so has fiat currency. You seem to not know about all of these studies, from generations past,including Adam Smiths Wealth of Nations, Volume I chapter 4 where he lays out the gold and silver standards, and how the value of the French currency was underminded by similar govt interventionism. It's not a Paul CABAL. The Chinese Tang dynasty 600-1000 BC also had fiat currency and there society collapsed.
@publicanimal There is a dollar crisis, and the world will not come to an end, fiat currency is coming to an end. The debt is too high, too wide spread and politicians on the present course do not have the will to, or the right tools to stop the collapse.
wow. So your saying, that Ron Paul would be better off by not practicing what he preaches? He should just not invest in gold, to prove that he really believes in sound money/gold as money? That is a weak argument. Theirs easier ways to sell out.......Not to mention that he always knew their would most likely not ever be a return to a gold standard in his life time...
@19TEC85 I'm as big of a Ron Paul fan as anybody so don't get me wrong. But I think he has put himself in a position where his advocacy for a return to the gold standard combined with his involvement in the gold mining industry represents a potential conflict of interest. As a politician he needs to be careful about that. That's all I'm saying, it doesn't diminish my love for the man, which is great. I've been waiting for a politician like him to come to prominence my whole life.
@publicanimal But if they returned to gold standard he could still buy only as much as now with an ounce of gold. Besides he's a men and he has to protect his family.
@GompCelticPL If there was a return to the gold standard the value of gold would skyrocket, since gold is way more scarce than fiat currency. So your statement is not correct.
@publicanimal The value of gold never changes, the dollar is getting weaker not gold stronger. One ounce of gold had as much purchasing power in 1913 as it has now.
@GompCelticPL The statement that the value of gold never changes is an fallacy. As a commodity, its value is determined according to its supply and demand, as it is for any other commodity. There is nothing magical about gold that allows it to stand outside the laws of supply and demand. Does it has one of the most stable values of any commodity? Yes. Does its value never change? No!
A return to the gold standard would mean a vast increase in demand, thus the value would skyrocket.
It is not only the supply and demand of the gold that is being measured. It is also (perhaps primarily) the supply and demand of whatever currency thay you are valuing the gold in. To me, gold is like a magic mirror that gives you the true value of the value of the currency that it is being valued in. Or the true value of a stock exchange, or whatever.
@Frumibandersnatch Agreed. I was just trying to negate the misguided idea that gold's value is stable and unchanging, because that's a patently false notion.
@publicanimal re:negate the misguided idea that gold's value is stable and unchanging, because that's a patently false notion.
Well sort of, a one Oz coin in the mid 19th century was worth about $20 and would buy a nice new suit. A one Oz coin today is worth about $1200 and would buy a comparable new suit. What has changed but the value of the dollar that we are evaluating the gold in? In real terms the actual value of the gold has changed little compared to the value of the dollar.
@Frumibandersnatch Are suits really comparable today as to suits in the mid 19th century? Are suits still equally valued? Is your statistic not just pulled out of thin air? It's a kinetic world. You are making the same tired argument that gold has an unchanging "intrinsic" value, which is patently absurd and patently false.
@publicanimal And you could get a loin cloth just by picking throught garbage but I wouldn't wear it to a job interview. In any case that goodwill suit would cost about 30 grains of gold.
@publicanimal Agreed. Just to cover the known amount of dollars in circulation gold would have to be valued upwards many fold and that assumes everyone from outside the united states will give up their gold freely for this American currency experiment.
excatly the reason why keynesian economics rule the world.
After World War 2 nobody wnated to listen to an AUGUST FRIEDRICH VON HAYEK. Sounded waaaayyy to german and also his massiv accent.
He says: Friedmans Monetarism and his austrain economics oppose only by the question of money. First if there should be different moneys at one time . like in europe 2002 where you could buy in Euro and in the old national money. Second Hayek questions Friedman methods on the quantati of money.
@MrBWB amen to that brother. im really trying to learn more about hayek who from what i understand was a genius on the theory of true free market and can never understand a dam word hes saying
Competing money is probably not a good idea. having a single market based money is a far better idea, which is why commodity money is better than any sort of note, regardless of who issues it.
@christo930 Who controls such commodity, how do you control it? Commodity based money is not a sustainable idea - gold standard in the beginning of 20s century demonstrated it rather conclusively.
"I'm absolutely convinced that no government is capable of - politically or intellectually - or providing exactly the amount of money which is needed for smooth economic development. And I should be all in favor - in fact I'm convinced that we will never have decent money again before we take from government the monopoly of issuing money"
See 04:15 . This has unfolded recently with the Liberty dollar experiment in NC by the freedom fighter, Bernard van Notthaus. The Fed gov is trying to put him away for 22yrs just for making an independent currency that was backed by Gold and Silver reserves.
aem945532 2 days ago
Hayek is a pathological fatalist. He's essentially a lunatic.
DavidByrne85 4 days ago
I dont understand his english :s and i know his words are gold
FrederikLambert 5 days ago
@FrederikLambert There are subtitles you know. Read the annotation at the begining of the video.
Malthus0 5 days ago
@Malthus0 awesome, this will help out a lot. I like the Milton Friedman vids, so i would love Hayeks views
FrederikLambert 5 days ago
Hayek, Mises, and Rothbard were Austrian economists. Friedman was a monetarist. History, especially the last 10 years, has proven that the Austrians were correct in regards to monetary policy, and economics in general.
OldRightPaleocon 2 weeks ago
@OldRightPaleocon Well put. Btw, your name, "oldrightpaleocon" is the shit! Someone needs to do a study on the psychology behind the Paleo-Austrian-Liberty combo versus the Vegan-Keynesian-Fascist combo. Its fascinating. RP 2012!
aem945532 2 days ago
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For anyone interested in Austrian economics, I have comedic video series that I am starting which is on my channel. Ron Paul 2012
CommonSenseLako 1 month ago in playlist More videos from Malthus0
wow never thought of money being a monopoly controlled by government. but i mantain that governments should have control on how much money circulates on the economy. otherwise the consequences would be unpredictable to say the least.
diogotomediogo 1 month ago
@diogotomediogo You haven't thought about a lot of things bro. Keep learning.
dubified89 1 month ago
@diogotomediogo The Austrian take on industrial fluctuations is that they are caused by inflation leading to the missallocation of resources. Monetary policy will always lean in favour of inflation due to the fear of overshooting & causing deflation. So from the Austrian point of view crisis is inevitable with gov control of money.As for unpredictability that point could be extended to any other product on the market.Stabilty arises from the bottom up not from central control.
Malthus0 1 month ago
@Malthus0 I would also like to add that people are inherently unpredictable. Because of that their are praxeological and epistemological problems to central planning. There is no way to forcast the decisions of 309 million people accurately. Ludwig Von Mises wrote very extensively about that.
cooljj82 1 week ago
I don't understand what Hayek is saying about Milton Friedmans monetary policy. The gold standard seems like a better alternative than our fiat system. It might not be the ideal form of monetary policy, but it does help to reduce inflation.
groam6666 3 months ago
@groam6666 Friedman's policy was for the government to expand the money supply by a certain percentage annually.
dubified89 1 month ago
@dubified89 I don't recall him saying that, but I don't doubt it either. I think it's indexing the money supply to real GDP. That way inflation won't increase or decrease very much.
groam6666 1 month ago
I've watched this a few times now and am blown away each time by the prescient genius of this man. In the age of global communications - where undreamed of computing power rests literally in the hands of the common man - there is a way for Hayek's vision of competing currencies to become reality.
AntiFed1791 3 months ago
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At 4:26, its so true and the only hope is Dr Ron Paul. He asked this very question in a senate hearing at tinyurl dot com slash rpcurrency
One's gotta admit his courage of treason in the Empire of lies
unholysaint666 3 months ago
Hayek sure knew how to look comfortable in a chair!
Goodatconnect4 4 months ago 2
Well I think competing currencies would be a lot more complex than most people think. For example, if something needs to be imported, how would we determine the value of the product compared to the certain currency? Unless Hayek is just talking about competing with already established currencies (Dollars, Pounds, etc.) which seems logical, but let's say someone wants to use those pounds instead of dollars, how would they come about in obtaining it? You can't just get money for nothing.
SirBoonga 4 months ago
I thought Milton was in favor of competing currencies.. Was he not?
rpfpoa 4 months ago
As far as I know, Friedman believed in central control of monetary policy. He believed that inflation was necessary in times of distress, and that it would have alleviated the ills of the Great Depression. It would be hard to have any effect if people switched currencies from American dollars to cowrie shells or something else. Much later in his life however, Friedman became disheartened with the effects of intervention, by the Fed, on the market and called for its abolishment.
Goodatconnect4 4 months ago
@ninjashade411 I find free banking very interesting. I think at the least there ought to be a hard currency backed by a commodity that responsible savers can divert their money into to avoid the whims of an inflationary fiat.
zentonil 5 months ago
@ninjashade411 Check out the history of Canadian banking! Our major banking houses such as RBC and TD had competing currencies before central banking took over.
zentonil 5 months ago
Hayek would likely love the concept of Bit Coin
dt3891 5 months ago
@dt3891 that's interesting.
guilledmartin 4 months ago
While I can't say I agree with Hayek on a good number of issues, I've always enjoyed reading him.
earthshine2Y 5 months ago
...Speaking of Leatherman [previous comment], consider that Victorinox (sole supplier to the swiss army) previously dominated the market to the point that multi-tools were colloquially termed Swiss Army knives even when made by off-brand manufacturers. Enter Tim Leatherman and the game changed. That's how money can work too.
GarcaPerdida 6 months ago
I like the idea of competing currencies theoretically, but in practice it seems like people would eventually settle on one strong currency for the sake of convenience.
captcool420 7 months ago
@captcool420 That is what would happen most likely. However the point of competition is not necessarily having loads of competitors a la the perfect competition model. As Hayek points out competition is a discovery procedure & we don't know the optimum No. of competitors before the fact. As long as there are no barriers to entry the dominant firm will be constrained by real & even only potential competitors & be replaced if they take their eye of the ball. Someone will always fill their shoes.
Malthus0 7 months ago
@Malthus0 Yea it makes sense theoretically. I don't think there is much of an argument against that.
captcool420 7 months ago
@captcool420 true, however if that currency should ever become compromised it would be better to have an alternative ( a legal alternative of course ) as opposed to a monopoly which is what you get with the dollar and the ever approaching collapse that comes with it.
fauxmocracy 4 months ago
I like how he does his napolean pose at the end.
K20ej88 7 months ago
If there is anything in the field of public policy and economics more riveting than an argument between intellectuals in the Libertarian field would someone please inform me?
adulby 7 months ago
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My Keynes Hayek: The Clash That Defined Modern Economics is published in October by W.W.Norton. See website: sites.google.com/site/wapshottkeyneshayek/
Nicholas Wapshott
nhwapshott 7 months ago
One thing that bothers me is that a fair number of monetarists and especially Austrians speak as though expansion of the money supply is the sole determinant of price inflation. There is also this idea among some Austrians that expanding the money supply is always bad, even though not expanding it would lead to deflation if output increases.
tifforo1 7 months ago
@tifforo1 Maybe they let on this appearance but i do not know of any of them that would phrase it in such absolute terms. They seem to fully grasp the psychological influences, business influences that can actually inflate the monetary perception. Personally, i wouldn't mind the deflation as it just means economic soberization, but some people would be hurt by it and governments do not much care for that .
ExquisiteDoom 6 months ago
This is the first Youtube video about economics I have seen that actually has a majority of intelligent comments in it. Maybe it's because it doesn't have the psychotic rivalry between libertarians and those on the economic left but rather highlights differences among libertarian economists.
tifforo1 7 months ago
How would having competing "monies" within a single country like the United States work without the "monies" having intrinsic value? If the competing "monies" had intrinsic value, would they differ from regular goods? That would seem to be a more sophisticated--but still inefficient--form of bartering. Also, what happens when one firm effectively "wins" and becomes the preferred distributor? That would amount to the initial issue but with the added problem that the issuer(s) is unelected...
MrMustard12345 8 months ago
@MrMustard12345 What you say points to the inherent complexity of a free market and hence the insanity of coercion-based regulatory policies.
By the way, did anyone elect Tim Leatherman, manufacturer of multi-tools? Or Sam Walton? or... the list is long.
No. These individuals built teams around themselves to offer consistent value to the aggregated needs or desires of mind-boggling numbers of people. Currencies can work exactly like this.
GarcaPerdida 6 months ago
Competing currencies rock!!
DONOVANDANNA 8 months ago
Hayek is teh sex.
darklordsma 9 months ago
@Malthus0 Thank you for uploading this. I probably just don't know where to look, but I've been searching for Austrian criticisms of monetarism or visa versa. I have been listening to an audio series called Knowledge Products on economics from audible.com. The series cover many schools of economics which I can't find in economic intro texts (undergraduate student here.) I've found criticisms of Austrian economics by Keynesians, and criticisms of Keyensian from Austrian and monetarism.
buffysummersfanboy 9 months ago
What does Hayek mean exactly around 1:35, regarding the quantity theory?
spamdude1 9 months ago
@spamdude1 He doesnt believe in fiat money, he doesnt believe in a central bank system that can print money at will. Milton Friedman had no problem with the Federal Reserve system but Hayek is saying he doesnt agree, Hayek wants people to make their own private currencies or foriegn currencies.
TomJackson986 9 months ago
@spamdude1
He is saying that one of the greatest misfortunes is if people ever cease to beleive in the quantity theory of money except if you take it literally. I.E. The quantity of money is significant to price levels in the economy. THIS IS VERY SIGNIFICANT ( think about having a central bank with monopoly power of printing money and the cause and effect). However, the statistical equation of M*V=P*Q is basically impossible to calculate statistically as money is a wide variety of things.
bpolley0 9 months ago
@spamdude1 Atleast that is what I took out of it. I have a double major in Econ and Finance and took Monetary policy so I hope that helped :)
bpolley0 9 months ago
@deficithawker I'd encourage you to get a copy of Gabriel Kolko's book "The Triumph of Conservatism". Though he is a neo-Marxist himself, he shows the futility of government attempts at regulation, since government is in the end controlled by the same special interest it supposedly seeks to regulate. Big business uses regulation and government force to protect itself from competition. In a perfect world we wouldn't have this corruption, but it is hazardous to pretend it doesn't exist.
pdxpumped 10 months ago
OK, so, hayek is saying that.. Keynes believes he knows the amount of money that should be injected to get the economy rolling again in the effect of monetary and fiscal policy by creating demand that automatically creates its due supply, thus creating economic growth, BUT hayek says it's impossible to know the price behaviors of an economy therefore you cannot calculate how much money to inject?
JpassTheTime 10 months ago
Competing monies. Exactly! Why should there be monopoly on money? People created money spontaneously, out of barter system, still many things could be used as money, as long as they were easy to liquidate. People should be "free to choose" money as well.
KarasekUS 10 months ago
The very first time I heard Hayek I had no idea what he was saying. I don't even have to watch the video to be able to comprehend his English/German accent.
goodatbasebal 10 months ago
@AUSM92 True, I think one of the causes is that the Ludwig von Mises institute was headed by Lew Rockwell, who is a anarcho-capitalist, Friedman was very clear that he was not an Anarchist and that government served a very important (though very limited) role. I appreciate the arguments for both, but I think Friedman (on that issue) was just a little more realistic. After all, very few semi-modern "stateless" societies have existed, and none for very long.
kev3d 1 year ago
@kevrawn In his 1962 book "Capitalism and Freedom", Friedman explains how, before the Fed (excluding the Civil war and a while afterward) the monetary system was better and more stable in retrospect, though he also explains that it was not a "pure" gold standard in the US or pretty much any other country. (Pure in the sense of exchange, not in the quality of the metal) I can't pretend to explain how exactly it worked, but it is described...I think in chapter 3??? of that book.
kev3d 1 year ago
I would also add that currently there seems to be some bad blood between the Chicago and Austrian schools, but as we can see with Friedman and Hayek, the disagreements were relatively minor. Murray Rothbard once accused even Friedman of being a statist, but I think Rothbard forgot one of his own dictums; that you should side with those whom you agree on the most issues, not reject them for the few issues on which you disagree.
kev3d 1 year ago
This is extremely interesting. I love Friedman, but I admit that I do not fully understand his monetary policy (or any monetary policy, they all seem quite convoluted) and I have always liked the idea of competition in everything else, so why not money? I also find it interesting how there seems to be an economic uncertainty principle; that is to say all quantities and values cannot ever be fully known at any given time.
kev3d 1 year ago
@kevrawn Well I'm an Austrian so that is a good thing. Slowly but surely America will know Austrian economics. And you will see the government leaned on to start moving in that direction. It will hold Republicans accountable and will most certainly be the death of the Democrat party.
SuperGuitarman69 1 year ago
@kevrawn You sure are able to use praxeology in a sentence correctly I will say that
SuperGuitarman69 1 year ago
I cant understand what Hayek is saying.
shaqdaddy11 1 year ago
@shaqdaddy11 Captions are now available
Malthus0 1 year ago 10
Comment removed
shaqdaddy11 1 year ago
@Malthus0 ah got um thanks.
shaqdaddy11 1 year ago
@Malthus0 how can i see them?
luisisilvab 1 year ago
@luisisilvab Captions can be turned on by the 'cc' button bellow the video to the left of the little speech mark button for annotations. In the same bar as the play button & video time.
Malthus0 1 year ago
@Malthus0 awesome! thanks!
luisisilvab 1 year ago
@Malthus0 But until now I haven't found any criticisms of Austrians from monetarists or from monetarists of Austrians. I'm attempting to determine my own perspective. Having read Hayek's "The Road to Serfdom" I found myself agreeing with him about the trend toward collectivism. When I read "Free to Choose" I agreed with this as well. But from a philosophical and economic perspective (I admit I'm weak in both,) I can't determine which is the better position.
buffysummersfanboy 9 months ago
@Malthus0 Thanks for the captions
dubified89 1 month ago
@shaqdaddy11 He said Spartaaaaaaaaaaaaaaaa
tjohn1986 6 months ago
Austrian economics is about the unknown. It admits that there are shadows that economic factors are hidden. Unlike classical economics. The one thing about Austrian that is universal is that it doesn't assume that economies can be managed by planning, but rather by letting the market run itself. Now, for those of you out there who are scared of that? Look at what the Keynesian model has given us? Where are we? Still scared of Austrian economic theory? I think not. Be scared of Government!
SuperGuitarman69 1 year ago
I am a Libertarian that likes Austrian economics more than Keynesian.
I still like Milton Friedman a lot and I see him as a really great libertarian combined with Hayek and Ludwig Von Mises
naadde 1 year ago
@naadde Very much agreed with that assessment. Libertarians better be careful. They are finally making real headway now. They need all of the allies they can get. And Miltons contributions over the course of his life was very beneficial to the Libertarian cause. He is not the Libertarians enemy. He is a strong and brilliant contributor. I personally have been very inspired by Dr. Friedman. And I am 100% Austrian.
SuperGuitarman69 1 year ago
I can't believe we have hundreds more channels now than when this was made, and we don't have shows like this anymore on even one of them.
richardcadbury 1 year ago 9
@richardcadbury ... find out who owns those channels, one of the 5 corporations (was over 90 pre Clinton), then you will know why shows like this aren't on any of them.
wildflower420 1 year ago
@wildflower420 On the bright side though, we've got YouTube etc.
Plus everything Hayek ever said or wrote is available free on demand from the Mises Institute's site.
So overall there's been a huge improvement. :)
richardcadbury 1 year ago
Friedman speaks with a forked tongue. Replacing the Fed with a computer does NOT abolish it. It only automates it. Of course, it has to use Freidman's program. So, invariably, Friedman just replaces the Fed with himself.
bondurango 1 year ago
Hayek's theories are really information theory. Macroeconomics generalizes the free market & Hayek thinks the free market NEVER operates on generalities. So excluding bits in the process of grouping them as bytes may be more efficient but not necessarily better information. All Hayek is saying is that macroeconomics is garbage because quality depends on the ENTIRE quantity of information & if you put garbage in, you get garbage out. He simply prefers ALL individual molehills to one mountain.
bondurango 1 year ago
Doesn't the idea of competing currencies run contrary to the efficient operation of markets? Would the price signals that the markets operate on be confused, or at least slowed by the number of different competing currencies in circulation?
Okbran 1 year ago
@Okbran
"Doesn't the idea of competing currencies run contrary to the efficient operation of markets?"
No. JFK used competing currency, i.e. silver certificates, issued by the Treasury because the gold standard prevented the Fed from expanding the money supply. It did ABSOLUTELY nothing to hamper the market. On the contrary, by breaking the Fed's monopoly on paper currency, it proved that Hamiltonian bi-metalism works to both stimulate growth & stabilize the value of currency.
bondurango 1 year ago
@bondurango
Silver backed american dollars and Gold backed american dollars are not competing currencies. They're both still American dollars. Stores accepted them at equal value.
Hayek specifically says that there should be different institutions offering different currencies. This implies a differing value for the different currencies, not simply being backed by different things. I would be surprised if people cared if their $1 bill said exchangeable for silver or gold.
Okbran 1 year ago
@Okbran
"Silver backed american dollars and Gold backed american dollars are not competing currencies...Stores accepted them at equal value."
Only stores that could not redeem currencies for the commodities with which they were valued, treated them as equal values. The only "stores" that could redeem the notes, i.e. the Fed or the Treasury, did NOT treat them at equal value (a silver certificate didn't get you the same quantity of gold). Equal treatment does NOT bestow equal value.
bondurango 1 year ago
@bondurango
Ummm. Yes actually it does. If i Have to go to either the treasury department or the federal reserve to get a different value for that currency, and those are the only places where those currencies are given different values, then for the vast majority of people there is no difference.
Okbran 1 year ago
@Okbran
"Hayek specifically says that there should be different institutions offering different currencies."
Show me where Hayek says the American Federal Reserve & Treasury Dept. are the same institution? Being from the same country doesn't make them the same institution. So, unless you can prove the Treasury is a government sanctioned monopoly of PRIVATE banks, they are not the same institution & their currencies, as I've explained, did in FACT have different values.
bondurango 1 year ago
@bondurango
They're both run by the US government... Definitely not different institutions. The fed is subject to congressional over site, it is not an independent organization. In effect both Silver and gold certificates were backed by the United states of America. Your grasping at very small distinction between the 2. For the majority of people ( IE THE MARKET) there was no difference.
Okbran 1 year ago
@Okbran
"This implies a differing value for the different currencies, not simply being backed by different things. I would be surprised if people cared if their $1 bill said exchangeable for silver or gold. "
Well, I suppose you're right in one sense because if you bought a Big Mac, fries & a coke with four gold, one dollar coins, the cashier would probably say, "...one more dollar, please". But only YOU would be happy with that deal for your "happy" meal.
bondurango 1 year ago
@bondurango
Well since gold in the US no longer accepted in that way, I'm not sure what you're getting at here. Friedman is advocating 2 DIFFERENT currencies, with differing values the Lira and the Pound for example. So if you had different institutions ( 2 different banks for example) issuing 2 different currencies, backed by their assets there would be a different value assigned to them. 1 unit of currency from bank A would not equal 1 unit of currency from bank B.
Okbran 1 year ago
@Okbran - The problem here is that Friedman advocates FIAT currencies which by their creation are not backked by 'assets' but by reputation. So whether or not there were two or twenty competing fiat currencies, Friedman's method fails for the same reason all fiat currencies have and do fail: the moral hazard of the printing press and government's ability to secretly inflate the currency/currencies for their own purposes, exacting a hidden tax on the people and devaluing their money.
veradinx 1 year ago
"Friedmans egalitarianism is revealed in the Friedman-Stigler pamphlet attacking rent controls."For those, like us, who would like even more equality than there is at present it is surely better to attack directly the existing inequalities in income and wealth at their source" than to restrict the purchases of particular commodities, like housing.The most disastrous influence of Milton Friedman has been his egalitarianism:a guaranteed annual income"
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
"One of Friedmans most disastrous deeds was the important role he proudly played, during World War II in the Treasury Department, in foisting upon the suffering American public the system of the withholding tax. Before World War II, when income tax rates were far lower than now, there was no withholding system; everyone paid his annual bill in one lump sum, on March 15."
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
"An infinitely superior view of competition is found in the totally neglected school of "Austrian economics" which scorns the "perfect competition" model and prefers the real world of free-market competition.3So while Friedmans practical view of competition and monopoly is not too bad, the weakness of his underlying theory could permit at any time a return to the frenetic trust-busting of the Chicagoans of the 1930s."
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
While "It remains in the Chicagoite desire to lay the tax structures greatest stress on the income tax, undoubtedly the most totalitarian of all taxes. Chicagoites prefer the income tax because, in their economic theory, they follow the disastrous tradition of orthodox Anglo-American economics in sharply separating the "microeconomic" from the "macroeconomic" spheres."
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
"The Chicago School consisted of three ideas:
a drastic policy of trust-busting of all business firms and unions down to small blacksmith-shop size, in order to arrive at "perfect" competition and what Simons conceived to be the "free market";
a vast scheme of compulsory egalitarianism, equalizing incomes through the income-tax structure; and
a proto-Keynesian policy of expansionary fiscal and monetary programs"
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
"The members of the original, or first-generation, Chicago School were considered "leftish" in their day, as indeed they were by any sort of genuine free-market criterion. And while Friedman has modified some of their approaches, he remains a Chicago man of the thirties."
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
"Mention "free-market economics" to a member of the lay public and chances are that if he has heard the term at all, he identifies it completely with the name Milton Friedman. For several years, Professor Friedman has won continuing honors from the press and the profession alike, and a school of Friedmanites and "monetarists" has arisen in seeming challenge to the Keynesian orthodoxy." ."
MILTON FRIEDMAN-UNRAVELLED
by Murray Rothbard
franz9z 1 year ago
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@kevrawnOf course there is allways "supicous" activities goin around all over youtube.You don´t even have a ordinary account.You sure appear here in different names.cjanne i don´t know,but i know of course that zylvana.A legend i think
among leftist economists.I don´t bother,Attac him if you want,but if you clever enough to read his presentation site your se he have 500 influental friends from all over the world and from UN and MIT an you name it.I would not reccomend to get at him for sure
treddas851 1 year ago
@treddas851
"but, if you clever enough to read his (zsylvana) presentation site)
Hello sir, do you know what zsylvana's presentation site is? I've asked him awhile ago but received no reply. :(
It's not on his youtube channel page or anything and when I type "Janos Swedish economist" and "zsylvana" etc. I can't find anything.
johnbenimblef 9 months ago
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@kevrawnI am curious about you to.I have many times,debated zsylvana and he is a swede.He has no good explaition on failures on monetarist theory,what i have seen.i challlenged him on those topics many times,but he just tell me he has debunked Freidman many times.He use to answer me in that way.I don´t mind.I don´t know him but i think he is corny professor in my view,And grammar?I could learn you a lot of boer language if you want to,My english is not perfect,but better then swedish professors
treddas851 1 year ago
The idea of private currency competing in the market is such a great idea. The way the US dollar is being treated today is atrocious.
csgators 1 year ago
The one thing that bothers me is that you named yourself after Malthus, a statist if ever there was one.
WanderingSeer 1 year ago
@WanderingSeer Don't read anything into it.
Malthus0 1 year ago
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@Malthus0 Economics is a Positivist science.A body of accepted generalisations about economic phenomena that can be used to predict the consequences of changes in circumstances.Progress in expanding this body of generalisations,strengthening our confidence in their validity, and improving the accuracy of the predictions.There is the diffrence between Neo-Classical theory produced by such as Friedman,Lucas, and others and Austrians like Hayek that not used the scientific method.
treddas851 1 year ago
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@Malthus0 Despite the appearance of considerable controversy,this is true equally of existing static monetary theory,which is designed to explain the structural or secular level of absolute prices,aggregate output,and other variables for the economy as a whole,and which has had a form of the quantity theory of money as its basic core in all of its major variants from David Hume to the Cambridge School to Irving Fisher.A Central Bank & fiat money is crucial in a economy as Friedman explained
treddas851 1 year ago
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treddas851 1 year ago
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@Malthus0 Existing relative price theory,which is designed to explain the allocation of resources among alternative ends and the division of the product among the co-operating resources and which reached almost its present form in Marshall's Principles of Economics,seems to me both extremely fruitful and deserving of much confidence for the kind of economic system that characterises Western nations.Milton Friedman,know how to use Neo-classical tool but Hayek failed to use it in high degree
treddas851 1 year ago
@Malthus0 Please, Please add subtitles to this most fascinating talk. I watch it over
and over and over and I can never completely understand what Hayek is saying.
Please! Help!!
grifflesnaffle 1 year ago
Ron Paul 2012 for President
RunLiberty 1 year ago
So would Hayek eventually admit that there is imperfect information? Friedman and Robert Lucas developed the imperfect information model based on relative prices. Isn't it true that man is not omniscient, and thereby it eventually means not a perfect market at all times and periods? Who agrees?
Shotosboring1stpick 1 year ago
@Shotosboring1stpick
If I understand you correctly then, I think you are mistaken. Austrians like Hayek do not assume perfect information in the first place. So there would be no point of modifying Austrian theory in the same way as the neoclassical perfect competition model needed to be modified. Israel Kirzner's paper ‘How Markets Work’ explains how the Austrian position differs & came to differ from the neo-classical.
Malthus0 1 year ago 3
@Malthus0 fun fact, Israel Kirzner was (and probably still is) the Rabbi of a synagogue in the neighborhood i grew up in.
chupacabrajackson 1 year ago
@Malthus0 Hey Malthus how are you? I tried searching for that Israel Kirzner article but couldnt find it. What i did find was "Market Theory and the Price System". Would this be the same thing?
NicosMind 1 year ago
@NicosMind That is more of a textbook on price theory. I understand why you could not find it, The stuff saved over at the IEA does not come up on search engines well.
I will send you a PA with the URL
Malthus0 1 year ago
@Malthus0 Cheers Mathus, ill get right on that :)
NicosMind 1 year ago
@NicosMind: If Malthus hasn't already sent you the link, Google "iea uk" and then click on the link for "IEA publications." Then in the "Google Custom Search" box, search for "kirzner how markets work" (remove the quotes). The first result will be the "splash page" for the book (you can order a hard copy or "download full publication" from here); the second result will be a direct link to the pdf of the book/ebook.
numberoneclutchfan 1 year ago
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@NicosMind If Malthus hasn't already sent you the link, Google "iea uk" and then click on the link for "IEA publications." Then in the "Google Custom Search" box, search for "kirzner how markets work" (remove the quotes). The first result will be the "splash page" for the book (you can order a hard copy or "download full publication" from here); the second result will be a direct link to the pdf of the book/ebook.
numberoneclutchfan 1 year ago
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@Malthus0
A “product” is defined as a collection of units that are perfect substitutes to purchasers so the elasticity of demand for the output of one firm with respect to the price of another firm in the same industry is infinite for some price and some outputs. A firm is monopolistic if the demand curve for its output is not infinitely elastic at some price for all outputs.If it is a monopolist,the firm is the industry
Trustbusting is needed to maintain a freemarket as Friedman understood
treddas851 1 year ago
@Malthus0 Couldn't you post it in here? I'm also interested in that. Thanks!
JacoboPolavieja 1 year ago
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@Malthus0
I explain it to you.In analysing the world as it is,the great Alfred Marshall constructed a hypothesis that,for many problems,firms could be grouped into “industries” such that the similarities among the firms in each group were more important than the differences among them.These are problems in which the important element is that a group of firms is affected alike by some stimulus — a common change in the demand for their products,say,or in the supply of factors.
treddas851 1 year ago
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@Malthus0 The abstract model corresponding to this hypothesis contains two “ideal” types of firms: atomistically competitive firms, grouped into industries, and monopolistic firms. A firm is competitive if the demand curve for its output is infinitely elastic with respect to its own price for some price and all outputs, given the prices charged by all other firms; it belongs to an “industry” defined as a group of firms producing a single “product.”
treddas851 1 year ago
@Malthus0 I think this sums up why so many economists have a problem with Austrian economics. They cant comprehend that someone who would call themselves an economist would also admit to not having perfect knowledge.
jimberkt 1 year ago
@Shotosboring1stpick Actually, its Stiglitz that did most of the pioneering work on asymetries of information. Lucas and Friedman, especially Lucas, often worked on the absurd assumption that people have perfect information and act on it rationally all the time.
hoodoo961 1 year ago
Huh????
mellamoalex72 1 year ago
can this video PLEASE get subtitled? I'm dying to understand Hayek but I can't :/
tslee14 1 year ago
i hope you see the fundamental difference between the way people used to debate back then and how people debate npw.hayek is attacking keynes's principles and policies not keynes himself.today people attack the person behind the principle rather than the prinicple itself.perfect example the bitch niomi klien on the shock doctrine.whatta bitch.if she thinks friedmans views are wrong.why attack friedman himself? thats like enstein attacking newton because his theory on gravity was wrong
mintoo2cool 1 year ago 35
@mintoo2cool You are so right. Especially in the case of Niomi Klien (who has no economic training...just an opinion)(there...I did it too...attacking Klien herself). But it is important to distinguish between intellectuals like Friedman who have actually spent their lives in a rigorous pursuit of truth and people like Klien who are simply trying to be "giant killers".
jscottupton 1 year ago
@mintoo2cool hehe, and by mentioning Klein you just went to her level...
effectsofasymmetries 1 year ago
@mintoo2cool real talk. agreed.
mmamolina 1 year ago 29
These people predicted Great Depression ....
CHINA is one example of Heyek's style economy
Production + Savings = Power
aviomaster 1 year ago
Friedman>Hayek
axe863 1 year ago
@axe863 The irony of that statement is that Friedman actually advocated for the abolishment of the Federal Reserve, and he argued that Monetarism would be the best monetary policy given the fact that we do have a central bank in the U.S. So it would appear that Friedman actually tended to agreed with Hayek on monetary policy but for some reason or another wasn't courageous enough to consistently go to bat against the Fed.
publicanimal 1 year ago
@publicanimal Monetarists & Austrians argue completely different reasons for recessions. Monetarists argue that money supply contraction turned a recession into a depression. Austrian believe the great depression was caused by prolonged artificially low interest rates which caused a massive amount of mal-investment. Friedman believed that money growth stability correlated with GDP stability and not some partial systematic irrationality for otherwise hyper-rational individuals
axe863 1 year ago
@axe863 Right, but Friedman can't really be considered a Monetarist if he actually wanted to abolish the Fed.
publicanimal 1 year ago
@publicanimal No he didn't. He thought the Fed should exist, but it should always have interest rates set between 3 and 5%.
BurnBeforeEating 1 year ago
@BurnBeforeEating WRONG. DEAD WRONG. He was OPPOSED to the existence of the Federal Reserve. Too bad he's not alive to set you straight.
publicanimal 1 year ago
@publicanimal Have you read "Capitalism and Freedom"?
BurnBeforeEating 1 year ago
@BurnBeforeEating Yes, but it was years ago and I've since lost it or maybe I lent it to someone and never got it back. My point is that though he was on record advocating Monetarist policies, these were the policies he thought would be best GIVEN that the Fed exists. He would have preferred the abolition of the Fed.
publicanimal 1 year ago
@publicanimal Ah, I see.
BurnBeforeEating 1 year ago
@BurnBeforeEating Here is an interview with Friedman backing up my claim:
hubpages.com/hub/Milton_Friedman_on_the_Central_Federal_Reserve_Bank
publicanimal 1 year ago
Why do you say this about malinvestment? TThe issue is not rationality but the effects of deluding price signals from inflation/suppressed interest rates, the former deluding the actual state of production in each sector according to demand by perverting relative prices thus leading to business in production of prices which must clear without the cognition thereof of leveragers backing them etc, the latter leading to intertemporal malinvestment for which savings are too low to allow completion.
Nintendomanwill 1 year ago
Friedman didn't agree with Hayek on monetary policy though, MF believed that insufficient spending would arise from generally falling prices thus inflation is necessary for growing economies with increased marginal prodcution IN THE MONETARIST view. Austrians view this as childish gibberish that might as well have been said before economics developed into a rigorous school of thought. The supply of money is never too low, inflation makes overextended production structures which need more saving.
Nintendomanwill 1 year ago
@Nintendomanwill What I'm pointing out and you're failing to acknowledge for whatever reason is that Friedman eventually abandoned his monetarist views. What I would view as one of his failings is that he was against the existence of the Fed but never offered a viable alternative. Friedman was a brilliant economist whose work in statistical analysis is unrivaled. The Austrians have much to teach us but their rejection of empirics is very limiting. Friedman was THE genius of positive economics.
publicanimal 1 year ago
I hope you're joking! Friedman is in a completely lower intellectual league to Hayek, was a terrible economist on monetary issues (hence advocated inflation) and taught in the pitiable tradition of Fisher style quantitativists advocating 'price stability' to remove supposed frictional effects of generally falling prices if money supply is stable (as if financial services couldn't direct employment towards lower time preference/higher savings, you know that's why we have massive loan markets!)
Nintendomanwill 1 year ago
@Nintendomanwill It's worth pointing out as well the Ron Paul owns millions of dollars worth of shares in the world's leading gold mining operations, so he can effectively be considered a special interest when it comes to a return to the gold standard. By doing this he's undermined some of his credibility if you ask me.
publicanimal 1 year ago
Ron Paul cannot possibly lose credibility. He's obviously (deadly) serious. Now to call Friedman a genius is perverse. There are very few geniuses in economics since it's a very badly defined and laughably sloppy branch of human knowledge. Only the Austrian masters and the (early) Classicals compare to real geniuses since economics is very poorly developed. As for gold, you can have gold certificates of 0.00000000001G or whatever so the scarce supply is no problem-but is in fact its main quality
Nintendomanwill 1 year ago
@Nintendomanwill How does Ron Paul's personal financial stake in gold and silver not affect his credibility regarding going back to commodity money? It's not enough to change my opinion of the inherent advantages of specie, but it is enough to call his integrity into doubt. The more demand for gold and silver increase, the more Ron Paul profits. The conflict of interest is obvious.
publicanimal 1 year ago
So what, everyone has savings in gold. Come now, Ron Paul is just not the sort of guy whose promotion of sound money is excessive due to personal interests. He's absolutely anti-Fed and anti-Fiat money from ideological and theoretical perspectives obviously intertwined with the venal reasons ie inflation came about through theft of market money and enables secret taxation and bailouts of an insolvent banking cartel organised by the Fed
Why you want to spend your time debating this is beyond me.
Nintendomanwill 1 year ago
@Nintendomanwill Ron Paul has massive investment in gold mining operations, not just "savings in gold". Thus he is involved in the gold industry, thus has a vested interest in increasing the demand for gold (by forecasting a dollar crisis, advocating gold standard, etc.). I'm not debating the inherent quality of gold as a store of value, thus being a good commodity to back currency. But claiming there is a dollar crisis around the corner is kind of like saying "The world is ending tomorrow!"
publicanimal 1 year ago
Maybe as things are now there is no impending and absolute drop of the dollar by most people but what do you think will happen with further QE? You don't seem to realise the existential necessity of bailouts for Fiat money bankers. This is the main flaw in the arguments of Axe on these youtube fora. When money supplies increase intersectoral prices are distorted to that extent from what the market would have set them as therefore bankers themselves can't appreciate proprly which sectrs to go for
Nintendomanwill 1 year ago
@publicanimal Gold as currency has been discussed by countless books, and articles so has fiat currency. You seem to not know about all of these studies, from generations past,including Adam Smiths Wealth of Nations, Volume I chapter 4 where he lays out the gold and silver standards, and how the value of the French currency was underminded by similar govt interventionism. It's not a Paul CABAL. The Chinese Tang dynasty 600-1000 BC also had fiat currency and there society collapsed.
dons123111 1 year ago
@publicanimal There is a dollar crisis, and the world will not come to an end, fiat currency is coming to an end. The debt is too high, too wide spread and politicians on the present course do not have the will to, or the right tools to stop the collapse.
dons123111 1 year ago
@publicanimal
wow. So your saying, that Ron Paul would be better off by not practicing what he preaches? He should just not invest in gold, to prove that he really believes in sound money/gold as money? That is a weak argument. Theirs easier ways to sell out.......Not to mention that he always knew their would most likely not ever be a return to a gold standard in his life time...
19TEC85 1 year ago
@19TEC85 I'm as big of a Ron Paul fan as anybody so don't get me wrong. But I think he has put himself in a position where his advocacy for a return to the gold standard combined with his involvement in the gold mining industry represents a potential conflict of interest. As a politician he needs to be careful about that. That's all I'm saying, it doesn't diminish my love for the man, which is great. I've been waiting for a politician like him to come to prominence my whole life.
publicanimal 1 year ago
@publicanimal But if they returned to gold standard he could still buy only as much as now with an ounce of gold. Besides he's a men and he has to protect his family.
GompCelticPL 1 year ago
@GompCelticPL If there was a return to the gold standard the value of gold would skyrocket, since gold is way more scarce than fiat currency. So your statement is not correct.
publicanimal 1 year ago
@publicanimal The value of gold never changes, the dollar is getting weaker not gold stronger. One ounce of gold had as much purchasing power in 1913 as it has now.
GompCelticPL 1 year ago
@GompCelticPL The statement that the value of gold never changes is an fallacy. As a commodity, its value is determined according to its supply and demand, as it is for any other commodity. There is nothing magical about gold that allows it to stand outside the laws of supply and demand. Does it has one of the most stable values of any commodity? Yes. Does its value never change? No!
A return to the gold standard would mean a vast increase in demand, thus the value would skyrocket.
publicanimal 1 year ago
@publicanimal re: the value of gold...
It is not only the supply and demand of the gold that is being measured. It is also (perhaps primarily) the supply and demand of whatever currency thay you are valuing the gold in. To me, gold is like a magic mirror that gives you the true value of the value of the currency that it is being valued in. Or the true value of a stock exchange, or whatever.
Frumibandersnatch 1 year ago
@Frumibandersnatch Agreed. I was just trying to negate the misguided idea that gold's value is stable and unchanging, because that's a patently false notion.
publicanimal 1 year ago
@publicanimal re:negate the misguided idea that gold's value is stable and unchanging, because that's a patently false notion.
Well sort of, a one Oz coin in the mid 19th century was worth about $20 and would buy a nice new suit. A one Oz coin today is worth about $1200 and would buy a comparable new suit. What has changed but the value of the dollar that we are evaluating the gold in? In real terms the actual value of the gold has changed little compared to the value of the dollar.
Frumibandersnatch 1 year ago
@Frumibandersnatch Are suits really comparable today as to suits in the mid 19th century? Are suits still equally valued? Is your statistic not just pulled out of thin air? It's a kinetic world. You are making the same tired argument that gold has an unchanging "intrinsic" value, which is patently absurd and patently false.
publicanimal 1 year ago
@publicanimal I can tell you that you wont get a very good suit for twenty bucks.
Frumibandersnatch 1 year ago
@Frumibandersnatch ...unless you shop @ Goodwill
publicanimal 1 year ago
@publicanimal And you could get a loin cloth just by picking throught garbage but I wouldn't wear it to a job interview. In any case that goodwill suit would cost about 30 grains of gold.
Frumibandersnatch 1 year ago
@publicanimal Agreed. Just to cover the known amount of dollars in circulation gold would have to be valued upwards many fold and that assumes everyone from outside the united states will give up their gold freely for this American currency experiment.
CmdrTobs 1 year ago
i need subtitles...
MrBWB 1 year ago
@MrBWB Damn: me too! :-(
jedieco23 1 year ago
@MrBWB I guess being German helps me understand him completely?
blummedia 1 year ago
@MrBWB
excatly the reason why keynesian economics rule the world.
After World War 2 nobody wnated to listen to an AUGUST FRIEDRICH VON HAYEK. Sounded waaaayyy to german and also his massiv accent.
He says: Friedmans Monetarism and his austrain economics oppose only by the question of money. First if there should be different moneys at one time . like in europe 2002 where you could buy in Euro and in the old national money. Second Hayek questions Friedman methods on the quantati of money.
Windchilly 1 year ago
@MrBWB amen to that brother. im really trying to learn more about hayek who from what i understand was a genius on the theory of true free market and can never understand a dam word hes saying
jc0753 1 year ago
Competing money is probably not a good idea. having a single market based money is a far better idea, which is why commodity money is better than any sort of note, regardless of who issues it.
christo930 1 year ago
@christo930 Who controls such commodity, how do you control it? Commodity based money is not a sustainable idea - gold standard in the beginning of 20s century demonstrated it rather conclusively.
cheburashka1326 1 year ago
@cheburashka1326 Who says it has to be controlled? Let the market control it. Look at what federal reserve control of the currency has done.
christo930 1 year ago
"I'm absolutely convinced that no government is capable of - politically or intellectually - or providing exactly the amount of money which is needed for smooth economic development. And I should be all in favor - in fact I'm convinced that we will never have decent money again before we take from government the monopoly of issuing money"
klaptongroovemaster 1 year ago