Who Was the Better Monetary Economist? Rothbard and Friedman Compared | Joseph T. Salerno

gold is an asset and paper is debt.. that's why paper money unbacked by a real asset has always failed i dont know how you can compare the two.

When we were on a gold standard people used bank notes not gold (w/exceptions like the gold rush). Bank notes are a debt claim on the bank as is paper money. Banks hold many assets as well. You have still not answered the question.

i have given you 2 examples of how they are different... surely you know a bank note used to be a receipt for gold that was held in the banks vault... like a title is now proof of ownership of a car, but nobody would call a title a car .. but you could show someone that you owned a car by showing them the title, but you would need to actually have to have a physical car if you wanted to sell it.... a bank note was only valuable because you could get the asset with it.. the note itself was not

I didn't ask the difference between them, i asked about the difference of the type of impact they would make on the economy assuming same initial conditions. "bank note was only valuable because you could get the asset with it.. the note itself was not" In case you have any fed notes right now in your bank account i would gladly take those worthless pieces of paper, otherwise you just disproved yourself.

your original question wasnt so elaborate.. thus my confusion of what you were asking. your new question assumes that a computer or central planner can copy market conditions and thus mimic the rates at which money would have otherwise entered the market... i think the entire premise your question assumes is incorrect and i would gladly give you the fed notes in my pocket absent a federal law requiring me to accept them for all debts.... as i would soon be forced to accept more

This is just an assumption so you can see what is the real difference on the economy between the two. It is no different then how Mises and Rothbard use the ERE to talk about interest rates.

but i can make an assumption that the sun won't come up tomorrow and make a weather forecast based on that.... but i think you can agree it won't be correct you want me to draw a conclusion based on incorrect assumptions, i fail to see what point you are trying to make, sorry

Whats an incorrect assumption? Do you think the ERE is incorrect, because if it is then alot of Austrian explanations of events are invalid? Using assumptions in theories is meant to give an approximate way of looking the world, like a map, you assume an inch=1 mile, in reality this is not true. All economic models assume things that are not completely true, it just matters how much those assumptions impact the purpose of what you are trying to find out.

do you even have a point? i thought i made it clear that no computer or central planner could mimic market reactions. your assumptions assume they can. if you have a point please make it

Hmm, so you have yet to answer any question, you just say that you don't like my assumptions,many Austrians use assumptions that don't look like reality. "do you even have a point?" Same one as i always had. "no computer or central planner could mimic market reactions" So if gold m/s grew 1% at t , 2% t+1, -1% t+2, 4% t+3, a computer would not have been able to print the exact same quantity those years?

i say there is no computer or planner that could possibly know how much gold would enter the market over any given time span. if you think there is then make that argument. otherwise stop asking a question that assumes there is. even in your new question, you must deal in % .. when in reality that is just your guess as to what might happen... prove or argue that it is based in reality, then go from there

I still don't understand why you are making a big deal out of that assumption, have you read Mises or Rothbard and seen the assumptions they make? Anyway David Friedman(Milton's son) has a good post on the topic today on his blog, you should read it.

i'm making a big deal because i disagree with your assumption, and since it is your assumption that leaves it up to you to explain how you arrived at it...if you knew so much about it, i'm sure you could explain it... thats all i was asking for... its your assumption after all, i'm seriously wondering if you have put any thought into it at all, or if you just copy/paste from somewhere else .. oh well

Look, that assumption would matter if i was arguing that the Fed can target an optimal quantity of money but, I'm not, I just want to know the different Cantillon effects those two would have if the initial conditions were the same. Again no different then the assumptions made in the ERE.

i have stated my problem with your assumption... rather than explain how it is realistic, you just keep saying that it doesnt matter... if the initial assumption has no bearing on the final outcome, then there would be no need to make the assumption to begin with. you just refuse to see that if making an initial assumption, you must be able to back it up

Okay, lets try this, tell me how much gold had been dug up and used in a 5 year span in the past 500 years, I'll tell you how much money could have been printed to get the exact same result. Just out of curiosity have you ever read any econ textbooks?

hindsight is always 20/20.... but tell me how much gold will be dug in the next 500 years? ... when you can, we'll discuss your assumption

Why would I want to do that?

Between 1oz and 9^99oz.

Which is why it would be good if they target some variable like NGDP, since short of Free Banking this i think would be a good proxy for knowing when money demand is going up and we good still get productivity induced deflation without having to worry too much about monetary disequilibrium.

exactly my point, you have no idea, and no way of knowing

"But after Lincoln, the FEDERAL GOVERNMENT became the reigning sovereign." Sure if you ignore all the unconstitutional stuff the Jefferson did Louisiana purchase, treatment of Native Americans, Embargo, that really made the Federal govt. seem like it owned you when he made it illegal to trade with other people. Jefferson=Statist

But my point all along has been the Cantillon effects, not the optimal quantity of money, so this argument does not matter for this discussion.

Rothbard(Hoppe,Salerno,etc.) thought you could, (they)he wanted to ban consenting adult from having contracts with banks.

I think that also, I don't know how people can hate Lincoln so much yet like Jefferson, they are clearly the same.

" paper-money can equal a gold standard" I don't think paper money can ever equal a gold standard, i think you are wrong. Seems like someone here does not know much as well.

Have you ever read any of their work on banking, they want to ban FRB, and institute a 100% RR.

I'm guessing reading comprehension is not one of your strong suits. I clearly said i favor free banking, but since we have a central bank one rule they can follow would be the one that i mentioned. "these bullshit-terms" Which one, I'll show were Austrians have used the same term also.

"Likewise, the COST of finding and digging up gold is another variable which affects the price." MARXIST!!!!! You have not been reading your Rothbard have you? "COST..digging up..affects the price" Labor theory of Value got debunked a long time ago. Price are determined by the buyer subjective preferences, not objective cost.

Because i'm radically realistic, so i'm also very pragmatic when it comes to these type of things.

Read Ch.4 of Rothbard MES or read Murphy's "Problems with the Cost Theory of Value","Subjective-Value Theory ". Have you ever read any of this?

Ah nothing like good old name calling.

Marx argued that the central planner ought to calculate prices using the labor theory of value by adding the costs of finding and digging up good, transport it, etc. Rothbard, in "What has the government done to our money" argues that mining and coinage is a very real expense which, just like with everything else will eventually add to the cost of a commodity. Unlike Marx, however, Rothbard argues that the finished product cannot be rationally priced without the free market price mechanism.

Great point. That's why the Soviets always looked to the west to set prices. They had no "compared to what?" models. A day late and a dollar short. Mises' quote about the "...blue collar housewife..." having a better handle on things couldn't be more true.

not true... obviously the cost of an ounce of gold is PARTLY paying for the labor, obviously not entirely as there are profits, payments for capital goods needed to mine, etc obviously the LTV is wrong but like anything, labor has a subjective value, the capitalists running a given mine simply choose an amount to pay them that will still leave money for the other costs of mining (and selling) the gold/silver/etc

watch?v=sGRCQ2EKGVQ wrong. Please tell me, if this is the case, why are gold and silver prices under the average and marginal costs? I'll tell you, value is subjective.

Partly this, partly that, wholly subjective.

A computer expanding the base at 3% per year would devalue the currency at that rate against other currencies. A 3% increase in the gold supply of a gold-backed currency would strengthen the currency at that rate against other currencies. A 3% increase in the printing of gold-backed currency would have to occur to maintain parity. A 3% increase in gold as currency would push prices up but the value of the gold currency would remain the same against other currencies.

I was mostly just talking about a PE model/Cantillon effects. In a GE model we have to talk about floating/fixed EX rates, rational epections, forward guidance, arbitrage opportunities etc..

rothbard wasnt a monetarian

The better economist is RICHARD WERNER. Richard Werner is exact and to the point.

Wow! I love george selgin- but also love Murray and Milty and fritz... and Joe and all the Mises scholars and economists

The intro was hilarious

Like them both but Friedman was better

Wait so he dissed Rothbard in the beginning and then by the end went on to say that he was superior to Friedman?

Predicting the natural occurrence of forest fires is extremely difficult when you have an army of arsonists out there.

Intriguing talk.

Milton Friedman was able to predict stagflation. By the way, Krugman wrote a NY Times article in 2003 about the real estate bubble. What did Rothbard do?

Peter Schiff is a permabear; he talks about bubbles and collapses happening every year. His clients did not make money with that strategy.