22 Feb 2021

BMS ep 181: Could Gold Discoveries Cause the Austrian Boom-Bust Cycle?

Bob Murphy Show, Business cycle 2 Comments

Re: this post, here is the audio and below is the video of my discussion with Walter Block and Bill Barnett:

2 Responses to “BMS ep 181: Could Gold Discoveries Cause the Austrian Boom-Bust Cycle?”

  1. Name says:

    Thanks for this episode. (I think) I learned some insights about ABC Theory. It made some sense how Block/Barnett were emphasizing fraud/coercion. The fraud point of view seems like an abstract way to look at ABCT (as opposed to the interest rate/prices viewpoint). The essential gist I picked up was that fraud is a necessary condition for free markets to misallocate resources. In other words, it’s perhaps meaningless to talk about “misallocation” in the absense of fraud/coercion.

    This is probably too simplistic, but here is my thinking. Consider how we cannot measure personal utility and hence cannot know apriori if someone prefers good X or good Y. For the same reasons, we cannot know apriori if one possible (voluntary) allocation of resources (by individuals) is better than another allocation. But we do know that voluntary exchange is better than coercive/fraudulent exchange. So it seems since the gold influx scenario is all voluntary, there is nothing we can say; it doesn’t make sense to call it “misallocation”. But when fraud is involved, and causes a different allocation of resources than would otherwise have happened, then we can say this is misallocation.

  2. Tel says:

    Bob, maybe you can get this guy on the show to discuss the national debt.


    He’s a smart guy … very pragmatic … leaning slightly quantish, but some of his arguments strike me as great sounding sophistry. The graphs he uses only go up to 2019, and frankly I thought 2019 was an OK year.


    If you look at that chart, you would have to notice that it was leveling out reasonably well in the late Obama and early Trump years but one heck of a discontinuity came along in 2020, and not really related to monetary policy.

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