I started watching it. The guy at the start (James C. Scott) points out that widespread regular taxation started around 1600. That is exactly when progress really got going. The renaissance, science, economic growth. For most of human history there were no taxes and little progress.
For this Scot a most fascinating episode. I tend to Bob’s side (on NAP grounds) but George was also very good. I’m probably the only person to occupy a 50 minute train journey from Edinburgh to Glasgow by constructing a set of balance sheets for myself, my own bank, the bank in which I was planning to open another account and the Bank of England. For the record, I did open the new account and then had a few beers…
Hey Bob, I was trying to explain why MMT was nonsense to a friend and was navigating through the morass of terms that they use, then I had the realization that MMT (and chartalism in general) is just an obscurantist form of fractional reserve banking without any reserve requirements. Then I could just apply the standard Austrian critique of fiduciary media to it.
It’s substantially easier to do that then to argue on their terms.
Are budgetary constraints a useful shorthand for real resource constraints? I think the MMT guys would say no.
But if you could fund the green new deal via the printing press could you not also fund it by raising taxes?
“But if you could fund the green new deal via the printing press could you not also fund it by raising taxes?”
(I haven’t listened to this episode, yet.)
They are both a form of taxation, so they do just about the same thing, and the effects are essentially the same in that your wealth is being commandeered by the government, leaving you with less purchasing power, and ultimately resulting in people making economic decisions that allow them to pay less taxes and thereby defund the government project.
The difference in the two approaches is that it takes longer for people to pull their resources away from projects that are funded with the printing press because they cannot see that the creation of unbacked money has deleterious effects.
Whereas with taxation people can immediately see their purchasing power being siphoned away.
Both approaches result in higher costs in terms of opportunities foregone:
Taxation – being taxed means that I have to work harder or longer to be able to afford both the things I want *and* the taxes;
Printed money – while printed money means that other people who get the newly printed money first are now able to compete with my older printed money for the supplies of goods that I want, thereby reducing supply and ultimately raising prices, which costs me more to buy the same amount of goods.
Here is my layman’s understanding of Bob vs George on fractional reserve
banking. If anyone wants to correct me or comment, I would appreciate it.
(Note: Bob’s comment about internally contradictory contracts, e.g. “selling a square
circle”, was interesting. But I haven’t thought at all about how a FRB contract would be
internally contradictory, so I will assume it isn’t)
George seems to be saying that ABC Theory only applies if the holders of fiduciary all
demand society’s saved scarce goods at the same time. In other words, while the
outstanding fiduciary creates a mismatch between potential demand and the
supply of saved scarce goods, this is only a potential mismatch. And whether this potential demand is realized is not something apriorism/praxeology can answer. But that only history can; i.e. on whether
people in this society at that time used their fiduciary to demand saved scarce
goods.
I might be misunderstanding ABC Theory, but
George’s position seems to make sense to me. Specifically, that the question of instability
of FRB is not answered by praxeology, but rather history. And if I understand
correctly, Bob is trying to say “No, the instability can be shown apriori via
praxeology”. However, I do believe that as a matter of practicality, an FRB
is unstable, and that even with competition in a free market a society using
FRBs will eventually experience business cycle(s) (just not necessarily so,
logically).
What I don’t know is why a free society would ever voluntarily choose to use
FRBs as their money, instead of a 100 percent reserve money. What are the
advantages of FRBs that would drive individuals to use FRB fiduciary as money
over 100 percent reserve money?
Off topic (as usual, got away with it the other times). Has this been announced?
https://themonopolyonviolence.com/
Has anyone watched? Any good?
I started watching it. The guy at the start (James C. Scott) points out that widespread regular taxation started around 1600. That is exactly when progress really got going. The renaissance, science, economic growth. For most of human history there were no taxes and little progress.
For this Scot a most fascinating episode. I tend to Bob’s side (on NAP grounds) but George was also very good. I’m probably the only person to occupy a 50 minute train journey from Edinburgh to Glasgow by constructing a set of balance sheets for myself, my own bank, the bank in which I was planning to open another account and the Bank of England. For the record, I did open the new account and then had a few beers…
Hey Bob, I was trying to explain why MMT was nonsense to a friend and was navigating through the morass of terms that they use, then I had the realization that MMT (and chartalism in general) is just an obscurantist form of fractional reserve banking without any reserve requirements. Then I could just apply the standard Austrian critique of fiduciary media to it.
It’s substantially easier to do that then to argue on their terms.
Are budgetary constraints a useful shorthand for real resource constraints? I think the MMT guys would say no.
But if you could fund the green new deal via the printing press could you not also fund it by raising taxes?
“But if you could fund the green new deal via the printing press could you not also fund it by raising taxes?”
(I haven’t listened to this episode, yet.)
They are both a form of taxation, so they do just about the same thing, and the effects are essentially the same in that your wealth is being commandeered by the government, leaving you with less purchasing power, and ultimately resulting in people making economic decisions that allow them to pay less taxes and thereby defund the government project.
The difference in the two approaches is that it takes longer for people to pull their resources away from projects that are funded with the printing press because they cannot see that the creation of unbacked money has deleterious effects.
Whereas with taxation people can immediately see their purchasing power being siphoned away.
Both approaches result in higher costs in terms of opportunities foregone:
Taxation – being taxed means that I have to work harder or longer to be able to afford both the things I want *and* the taxes;
Printed money – while printed money means that other people who get the newly printed money first are now able to compete with my older printed money for the supplies of goods that I want, thereby reducing supply and ultimately raising prices, which costs me more to buy the same amount of goods.
Here is my layman’s understanding of Bob vs George on fractional reserve
banking. If anyone wants to correct me or comment, I would appreciate it.
(Note: Bob’s comment about internally contradictory contracts, e.g. “selling a square
circle”, was interesting. But I haven’t thought at all about how a FRB contract would be
internally contradictory, so I will assume it isn’t)
George seems to be saying that ABC Theory only applies if the holders of fiduciary all
demand society’s saved scarce goods at the same time. In other words, while the
outstanding fiduciary creates a mismatch between potential demand and the
supply of saved scarce goods, this is only a potential mismatch. And whether this potential demand is realized is not something apriorism/praxeology can answer. But that only history can; i.e. on whether
people in this society at that time used their fiduciary to demand saved scarce
goods.
I might be misunderstanding ABC Theory, but
George’s position seems to make sense to me. Specifically, that the question of instability
of FRB is not answered by praxeology, but rather history. And if I understand
correctly, Bob is trying to say “No, the instability can be shown apriori via
praxeology”. However, I do believe that as a matter of practicality, an FRB
is unstable, and that even with competition in a free market a society using
FRBs will eventually experience business cycle(s) (just not necessarily so,
logically).
What I don’t know is why a free society would ever voluntarily choose to use
FRBs as their money, instead of a 100 percent reserve money. What are the
advantages of FRBs that would drive individuals to use FRB fiduciary as money
over 100 percent reserve money?