17 Feb 2014

George Selgin Makes a Great Jon Lovitz

Austrian School 42 Comments

There was a funny Saturday Night Live sketch (unfortunately I don’t think they allow YouTube to host clips, since there’s barely anything from SNL on it) with Jon Lovitz playing “Frenchie,” who says really outrageous things and then acts stunned when people react. “Oh I’m sorry!” he exclaims. “Didn’t mean to offend anyone. Everything good? Good. I’m Frenchie!”

I was reminded of this sketch when reading the continuing battles of George Selgin vs. Joe Salerno on the issue of methodology in economics. In response to Joe and me, George opens by saying: “It seems that, even when I’m not trying to do so, I manage to raise the hackles of some of the 100-percent crowd.”

In the interest of avoiding future, unintentional fights, let me clarify exactly what George innocently wrote that raised the hackles of the hypersensitive 100% reservists. And to be clear, I’m not grabbing something buried in his original post; this is how he opened up the discussion:

At the close of my last post here, I referred to myself as a “non-Austrian,” causing one of our regular commentators to wonder why. “Because,” I answered, “belonging means conforming.”

That admittedly cryptic reply (I was anxious to get back to the book I was reading) led to speculation to the effect that I was inclined to identify “Austrian” economics with the economics of Murray Rothbard, and particularly with his and his devotees’ opposition to fractional reserve banking.

But although it’s true that I have a low opinion of the ideas and arguments put forward by the 100-percent crowd, and that I’d rather swallow a dozen toads than have anyone confuse my thinking with theirs, I don’t believe they’ve yet succeeded, despite trying their damnedest, in hijacking the “Austrian” brand name. There are, thank goodness, still plenty of non-Rothbardian “Austrians,” including my fellow blogger and former colleague and mentor Larry White.

There are no ellipses in the above; that’s exactly how George opened his remarks on this topic. Can anyone see why Rothbardians who advocate 100% reserve banking might have perceived an attack, and responded defensively?

Everything good, good. I’m Georgie!

42 Responses to “George Selgin Makes a Great Jon Lovitz”

  1. Major_Freedom says:

    Sometimes people believe they are engaging in self-defense, but nevertheless appear to be engaging in an unsolicited attack, thus provoking a defense, which appears as an attack.

  2. Daniel Kuehn says:

    He really really doesn’t want to be confused with people who have ideas he considers to be wrong and poorly representative of an intellectual tradition?

    Oh perish the thought!

    If that gets to you, don’t read any comments from Bob Roddis or Major Freedom on your blog, Bob. We’d need smelling salts to revive you and I don’t think they sell that at the drugstore anymore.

    • Matt M (Dude Where's My Freedom) says:

      BRB – Searching for a 1,000 word Jeffrey Tucker article about the virtues of smelling salts and how evil government has stolen them from us.

    • Major_Freedom says:

      Ironically, because I get under your skin DK, I am continuing the tradition of Austrianism quite well.

      • Daniel Kuehn says:

        It’s mostly just inanities from you MF, but the point is how it compares to Selgin.

        • Ken B says:

          There we have anities.

        • Major_Freedom says:

          Inanities or not, the point is that the tradition is alive and well. According to Keynesians, Austrians have been eliciting “inanities” since the 1930s.

          It just means you’d prefer to have your flawed beliefs go unchallenged, that’s all.

          • Daniel Kuehn says:

            Hmmm… I don’t think it’s a tenet of Keynesianism that Austrians have been spouting inanities since the 30s. I certainly don’t think that.

  3. Ken B says:

    “Everything good, good. I’m Georgie!”

    As I recall though Lovitz said things pretty much everyone would agree are offensive. That’s how the joke works; it’s not that Frenchie said something reasonable an anodyne that a hysteric over reacted to. It’s like Tobias Bluth saying inappropriate things unaware. http://www.youtube.com/watch?v=UrIpPqcln6Y

    But GS saying “I have a low opinion of the ideas and arguments put forward by the 100-percent crowd, and … I’d rather swallow a dozen toads than have anyone confuse my thinking with theirs” is just him colorfully expressing disagreement with a view that most people disagree with. There’s no analogy here. No reader not already committed to Rothbardism will read Selgin and think “Wow, what a ding dong and he doesn’t see it.”

  4. Transformer says:

    “Can anyone see why Rothbardians who advocate 100% reserve banking might have perceived an attack, and responded defensively”

    How could he do this after you guys have been so respectful to him over the years ! I guess it must have been a nasty shock to discover that Selgin secretly opposed 100% reserve banking all along.

  5. TravisV says:

    Repeating my question: what are the prevailing theories for why the gold standard failed in the 1930′s? The view of Sumner, Glasner, Irwin is (1) WWI really skewed the equilibrium, which eventually led to (2) excessive gold hoarding by the French central bank, then by the U.S. central bank, etc. etc.

    Are there competing Austrian theories floating out there? What does Bob Murphy believe? Peter Schiff? Larry White?

    After skimming George Selgin, I sense that Bob Murphy and Sumner actually agree on why the gold standard failed (World War I screwed it up)………

    • Tel says:

      Can you clarify what you mean by the gold standard “failing” ?

      Do you mean that the Bank of England was unable to defend their unrealistic valuation of the pound?

    • TravisV says:

      I’m not 100% sure but I think Jim Caton is saying here that World War I is not truly the reason why the Gold Standard ultimately failed during the 1930’s……….


      “I my paper, “Monometallism as the Winner’s Curse” I argue that the instability of the gold standard was a feature, not a bug, of the system. With the international adoption of the gold standard in the 1870s, non-gold metallic substitutes were essentially outlawed as base money. This decreased the elasticity of demand and made price instability more likely, especially as central banks centralized gold reserves. Note that by the middle of WWI over 75% of the world’s monetary gold was held by central banks. By 1929 the proportion reached 90%. Decisions by primary holders of gold, like the Federal Reserve, the Bank of France, and the Bank of England, that changed reserve levels substantially impacted the price level.

      The same problem would hold for any other commodity that was adopted as the sole standard for base money.”

    • Major_Freedom says:


      The gold standard is a choice. If there arise individuals who use force to impose a fiat system, that doesn’t imply that the gold standard “failed.”. For if we start understanding failure in that way, then it would mean a “successful” monetary system is one that withstands and resists all human choice. Such a monetary system would not even be a monetary system created by man at all.
      In other words, just because violent people prevent X from taking place, that doesn’t mean X is a “failure.”

      The standard of success is not what violent thugs “allow” to transpire.

  6. Ken B says:

    A parable.

    Rory Mustard founds a schismatic church within the Pentecostals, which he calls the 100.
    Rory teaches that not only must you speak in tongues, but you must speak in 100 tongues.
    If you don’t do this, Rory declares, you’re no Pentecostal. His acolytes, including Boddis, Fajer, and Mob,
    loudly repeat this claim. They publish books flock to the internet declaiming
    “100 is Penetecostal and Pentecostal is 100. They are the same” and “Anyone not 100 abets theft.”

    One day along comes Gelgin, who speakes in tongues, but only a dozen or so.
    “I’m a pentecostal too. I’d rather swallow toads than agree that you have to be 100 to be a good true Pentecostal.
    And I’m not alone, thank heavens.”

    Who in this parable is most like Frenchie?

    • Major_Freedom says:

      The author.

    • Bob Murphy says:

      Ken B. is it actually possible that in your analogy, you didn’t even get to the part of the exchange that prompted this post and my Frenchie analogy?

      Yes, of course it’s possible. This is the internet.

      • Ken B says:

        Chapter 2

        Mob cries “my hackles! They are raised!”
        Gelgin, “Wow I say anything that happens. I just meant I can be a good Pentecostal without buying that 100 tongue stuff. That’s not what Pentecostalism is really about.”
        Mob: “Frenchie.”

  7. George Stilglitz IIIV says:

    well, who cares about fractional reserves, private bankers (such as the Goldmanites in Jersey City, NJ), will want the ability to issue banknotes in the future free market of private money production. Floating rates, at the end of legal tender laws, reveal note quality with silver/gold bullion as final payment. How is this potential outcome non-Rothbardian, should contracts remain voluntary and media is no longer compulsory?

  8. Bob Murphy says:

    Last thing and I will bid farewell: If Britain starts firebombing Germany, and then Churchill says, “Even though I didn’t mean to, apparently the Fuhrer interprets my actions as an attack,” this is a ridiculous thing for Churchill to say. Whether you like Hitler or not, you should be able to understand that.

    I am being dead serious: I honestly don’t know what is worse, if you guys (Daniel, Ken B., et al.) truly don’t understand what I’m saying in posts like this; or, if you DO understand, and just like to waste everyone’s time.

    • Ken B says:

      Yeah, if that were my last word I’d bid farewell too.
      What Selgin said is less aggressive, and less implausible, than stuff routinely said around here, not least by you, about Krugman, neo-cons, Neil degrasse Tyson, government workers, and Abraham Lincoln. You finished a post the other declaring vast swathes of your adversaries to be villains. And you get the vapors if Selgin indulgences in a little snappy derision.

      • Bob Murphy says:

        Ken B., do you *really* not see that you’re totally missing the point? This is really amazing.

        Did I ever complain about Selgin attacking us? No, I referred to his trademark pugnacity or something like that, and then I went after his rumba line.

        What I’m saying in this post is that Selgin attacks us, then says we’re nuts for thinking he attacked us.

        So yeah, if the Rothschilds put up a blog post saying, “We’re not villains Murphy you liar,” I would be Frenchie if I responded, “Gee whiz, even though it wasn’t my intention, for some reason the Rothschilds thought I was attacking the founders of the central banks.”

        • Ken B says:

          No when you liken him to Frenchie you are characterizing the nature of the attack. Had you likened him to say Mr Magoo not noticing he’s putting his hat on a stranger thinking he was a hatrack then maybe. But as I said, that,s not the salient thing about Frenchie.
          And Selgin’s first remarks where closer to a Magoo hatting than a Frenchie comment as I recall them.

  9. George Selgin says:

    You miss the point, Bob. I wasn’t “trying” to attack 100-percenters. I was just dissing them in passing, my main intention having been something else altogether. When I’m trying to attack them, I am much nastier, as all the world knows.

    In any event the responses, including yours, concerned not my well-known opinion of 100-percent banking, but my (supposed) view that doing economics doesn’t require any thought.

    • Bob Murphy says:

      Wait, you thought this post was about you George? No, I just like to fight with people in the comments. Can’t believe you thought this was about you.

      • George Selgin says:

        Yeah, I tend to do that. Carly Simon once wrote a song about it.

        • Transformer says:

          “Although the first priority of every believer in monetary freedom must be to combat bogus arguments for monetary central planning, we cannot do this effectively unless we are just as relentless in exposing the 100-percent reserve movement for the moronic cult that it is, to keep its clownish convictions from giving the entire movement for monetary freedom, if not free market economics more generally, a bad name.”

          Bob, I think you should offer to debate Selgin on FRB.

          • RIchard Moss says:

            Why? What makes you think Selgin might have a bone to pick with anti-FRBers?

    • Major_Freedom says:

      The 100% reservists are on just as shaky a ground as the 100% demandists.

      And interestingly enough, the same type of counter-arguments against the 100% reservists are applicable to the 100% demandists.

      “Since it is not unjust for an individual car parking lot owner and their customers to agree to selling and buying more tickets than there are parking spots, means that it is not unjust for all parking lot owners and all their customers to agree to sell and buy more tickets than there are parking spots.”


      “Since it is not a bad thing for an individual firm to experience a decline in revenues due to failing to convince their customers to exchange their money for the firm’s products to cover the firm’s costs, means that it is not a bad thing for all firms to experience a decline in revenues due to not convincing all customers to exchange their money for the products of all firms to cover the costs of all firms.”

      Just like it is a flawed argument to say “The Fed should inflate to stop ALL price deflation regardless of productivity”, so too is it a flawed argument to say “The Fed should inflate to stop ALL aggregate demand declines regardless of what was invested in.”

      There is a great video of you on MSNBC where you explained the difference between good deflation and bad deflation. It was well done. You made a point about computers and iPads declining in price, and how it is wrong to believe that because those prices are going down, prices of other things must go up. Yet the same counter-argument applies to demand. According to you, if the demand for hoola hoops and Ford Pintos goes down, then the demand for others things must go up.

      • Tel says:

        If the ticket says, “this ticket entitles you to a parking spot” then it is totally dishonest to issue more tickets than there are spots.

        If the ticket says, “this ticket entitles you to the opportunity to take a parking spot should one happen to be available” then there is a clear understanding that spots are over-allocated, and there may be good reason to do that. It’s a completely different agreement.

        • Matt M (Dude Where's My Freedom) says:

          Heh, this specific example has become a HUGE issue at the university where I work, to the extent that it now says in large bold letters on the $200 parking pass people buy “PASS DOES NOT ENTITLE YOU TO A PARKING SPOT. NO GUARANTEE OF PARKING AVAILABILITY EXISTS.” because they do in fact sell a ton more passes than there are spots.

  10. George Selgin says:

    P.S.: Having decided that SNL was not funny back when Chevy Chase was still on it, I have no idea who Jon Lovitz is.

  11. skylien says:

    Can’t you just all stop with this drive-by shooting stuff (= don’t actively provoke), and don’t treat others as if they were complete retards just because of one disagreement?

    And by the way I still believe that the discussion is basically a semantic one. Can’t it be solved by viewing current “demand deposits” just as basically contracted low yield low risk mutual funds optimized for financial flexibility which of course would be available in ancapistan as well (just without any form of tax payer back stop)? No one should lose his face this way..

    I don’t want to start the discussion with that question here. Just say no or yes if you agree or not… I will look into this further on my own. (A link to any source or book about this specific question would still be great).

    • Tel says:

      I think that’s how building societies used to work, anyone depositing money was actually buying shares in the society, which were generally redeemable at face value, but only backed by the same as any corporate share would be in the event of bankruptcy. Thus, part of the agreement was you are NOT putting your money in a bank.

    • Major_Freedom says:

      George can take it. He’s no wuss.

      • skylien says:

        That is not what I worry about.

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