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jmherbener
ParticipantParticipantHere are a few related items:
https://www.destatis.de/EN/Press/2022/09/PE22_374_43312.html This site documents the continuing move in Germany away from “conventional energy” toward “renewable energy” which is the underlying source of the energy crisis in Germany.
https://mises.org/library/saifedean-ammous-demolishes-green-energy
https://www.fraserinstitute.org/profile/robert-p-murphy
https://www.instituteforenergyresearch.org/about/robert-murphy/articles/
https://mises.org/library/fossil-future-alex-epstein
https://mises.org/library/destroying-america-save-it-bidens-nihilistic-destruction-energy-industry
ParticipantCoinage has a long history during which there has been a general increase in the stock of coins from production. This has been true for the precious metals most often used as money: gold, silver, and copper. As you say, we have no historical cases of a metal with a strictly limited potential that has been used as money. As a consequence, we must rely solely on theoretical analysis to determine the impact of Bitcoin’s limited stock on its suitability as money.
What we know from theory is that during economic progress the demand to hold money increases which tends to increase the purchasing power of money (i.e., tends to result in price deflation). Since the rise in its purchasing power makes the production of money more profitable, entrepreneurs will devote more resources to production. The resulting increase stock of money tends to to decrease the purchasing power of money. In this way, the market economy results in the efficient production of money in the same manner as that of other goods. Whether, on balance, the purchasing power of money increases (price deflation) or decreases (price inflation) the efficiency of the market economy is unaffected except in one special case. Suppose that the rate of price deflation (say 10%) is greater than the time-preference rate of interest (say 4%). Then money lent today would earn a 4% gain in purchasing power with a -6% rate of interest. But nobody would lend say $1,000 today to get back $940 a year from today. Instead he would simply hold onto the $1,000 and have $1,000 in a year. Whether or not Bitcoin, if it became money, would suffer from this problem is an empirical question that, as you say, we have no evidence to help us resolve. What we do know theoretically, however, is that in a free market entrepreneurs would adopt something else as money if such a problem arose with their current choice of the thing used as money.
Here’s an estimate of the world’s production of gold and Silver over time:
https://ourworldindata.org/grapher/gold-production
https://www.moneymetals.com/news/2017/12/18/world-silver-production-charts-001321
ParticipantPlease forgive the long delay in my response.
I don’t think it is essential to read HA to have a good grasp of AE. It is, however, essential to read HA to understand the historical and philosophical context of the development of AE.
MES strips away the history of and philosophy for economic thought that Mises includes in HA. MES sticks mainly to economic theory and policy and elaborates on the steps of economic analysis to a greater extent than HA.
Look at Bob Murphy’s Study Guides to MES and HA to better compare and contrast them.
https://mises.org/library/study-guide-man-economy-and-state
https://mises.org/library/study-guide-human-action-treatise-economics
ParticipantCoinage has a long history during which there has been a general increase in the stock of coins from production. This has been true for the precious metals most often used as money: gold, silver, and copper. As you say, we have no historical cases of a metal with a strictly limited potential that has been used as money. As a consequence, we must rely solely on theoretical analysis to determine the impact of Bitcoin’s limited stock on its suitability as money.
What we know from theory is that during economic progress the demand to hold money increases which tends to increase the purchasing power of money (i.e., tends to result in price deflation). Since the rise in its purchasing power makes the production of money more profitable, entrepreneurs will devote more resources to production. The resulting increase stock of money tends to to decrease the purchasing power of money. In this way, the market economy results in the efficient production of money in the same manner as that of other goods. Whether, on balance, the purchasing power of money increases (price deflation) or decreases (price inflation) the efficiency of the market economy is unaffected except in one special case. Suppose that the rate of price deflation (say 10%) is greater than the time-preference rate of interest (say 4%). Then money lent today would earn a 4% gain in purchasing power with a -6% rate of interest. But nobody would lend say $1,000 today to get back $940 a year from today. Instead he would simply hold onto the $1,000 and have $1,000 in a year. Whether or not Bitcoin, if it became money, would suffer from this problem is an empirical question that, as you say, we have no evidence to help us resolve. What we do know theoretically, however, is that in a free market entrepreneurs would adopt something else as money if such a problem arose with their current choice of the thing used as money.
Here’s an estimate of the world’s production of gold and Silver over time:
https://ourworldindata.org/grapher/gold-production
https://www.moneymetals.com/news/2017/12/18/world-silver-production-charts-001321
ParticipantI don’t think it is essential to read HA to have a good grasp of AE. It is, however, essential to read HA to understand the historical and philosophical context of the development of AE.
MES strips away the history of and philosophy for economic thought that Mises includes in HA. MES sticks mainly to economic theory and policy and elaborates on the steps of economic analysis to a greater extent than HA.
Look at Bob Murphy’s Study Guides to MES and HA to better compare and contrast them.
https://mises.org/library/study-guide-man-economy-and-state
https://mises.org/library/study-guide-human-action-treatise-economics
ParticipantPlease forgive the delay in my response.
MES strips out much of the historical development of and philosophical ground for economic thought that Mises includes in HA. MES sticks mainly to economic theory and policy and gives a more elaborate development of economics theory and policy than does HA.
I would not say that it is essential to read HA to have a good grasp of AE. But, it is essential to read HA to understand the historical and philosophical context of AE.
I suggest you look at Bob Murphy’s Study Guides to MES and HA to better compare and contrast them.
https://mises.org/library/study-guide-man-economy-and-state
https://mises.org/library/study-guide-human-action-treatise-economics
ParticipantCoinage has a long history during which there has been a general increase in the stock of coins from production. This has been true for the precious metals most often used as money: gold, silver, and copper. As you say, we have no historical cases of a metal with a strictly limited potential that has been used as money. As a consequence, we must rely solely on theoretical analysis to determine the impact of Bitcoin’s limited stock on its suitability as money.
What we know from theory is that during economic progress the demand to hold money increases which tends to increase the purchasing power of money (i.e., tends to result in price deflation). Since the rise in its purchasing power makes the production of money more profitable, entrepreneurs will devote more resources to production. The resulting increase stock of money tends to to decrease the purchasing power of money. In this way, the market economy results in the efficient production of money in the same manner as that of other goods. Whether, on balance, the purchasing power of money increases (price deflation) or decreases (price inflation) the efficiency of the market economy is unaffected except in one special case. Suppose that the rate of price deflation (say 10%) is greater than the time-preference rate of interest (say 4%). Then money lent today would earn a 4% gain in purchasing power with a -6% rate of interest. But nobody would lend say $1,000 today to get back $940 a year from today. Instead he would simply hold onto the $1,000 and have $1,000 in a year. Whether or not Bitcoin, if it became money, would suffer from this problem is an empirical question that, as you say, we have no evidence to help us resolve. What we do know theoretically, however, is that in a free market entrepreneurs would adopt something else as money if such a problem arose with their current choice of the thing used as money.
Here’s an estimate of the world’s production of gold and Silver over time:
https://ourworldindata.org/grapher/gold-production
https://www.moneymetals.com/news/2017/12/18/world-silver-production-charts-001321
ParticipantPlease forgive the delay in my response. MES strips away much of the historical development of and philosophical ground for economic thought that Mises has in HA. MES sticks to mainly to economic theory and policy and develops each in a more elaborate manner than HA.
I would not say that HA is essential for a good grasp of AE. It is essential for a complete understanding of the philosophical and historical context of AE.
I suggest you read Bob Murphy’s study guides to MES and HA to get a better sense of how they compare and contrast.
https://mises.org/library/study-guide-man-economy-and-state
https://mises.org/library/study-guide-human-action-treatise-economics
ParticipantPrivatization has received mixed reviews: https://www.jstor.org/stable/4411541?searchText=privatisation+in+the+u.k.&searchUri=%2Faction%2FdoBasicSearch%3Ffilter%3Ddisc%253Aeconomics-discipline%26Query%3Dprivatisation%2Bin%2Bthe%2Bu.k.%2B%26so%3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default%3A55e6cb098b34f79134df08b843e13cce&seq=6
Of course, there are two problem with these empirical studies. One is that history is complex and only human judgment can disentangle the knot of causal factors to isolate the impact of privatization on the empirical results. The other is that so-called privatization is really just a rearranging of the legal status of the ongoing public-private, or state capitalist, arrangement. The rearranged mix is bound to face inefficiencies from the remaining state interference not only in the organization and conduct of the enterprise itself but in the complementary areas of the economy that the enterprise relies on.
ParticipantHere’s Bob Murphy on the energy crisis:
https://www.fraserinstitute.org/sites/default/files/can-canada-avoid-europes-energy-crisis.pdf
ParticipantI’m not sure why the slides and references aren’t posted with the course. I’ll ask again about it.
In the meantime, many of the statistics come from census data. You might be able to find what you’re looking for here:
https://www.census.gov/history/pdf/histstats-colonial-1970.pdf
ParticipantArrow’s Impossibility Theorem has generated much commentary. Here’s an overview: https://plato.stanford.edu/entries/arrows-theorem/
ParticipantReal wages tend to fall during a period of price inflation because monetary inflation and credit expansion, which cause price inflation, reduce the efficient allocation of resources. During monetary inflation and credit expansion, entrepreneurs are malinvesting capital and misallocating resources. Labor productivity of market value suffers and the purchasing power of wages is reduced, i.e., prices of consumer goods rise relative to wages.
Also, asset prices move more quickly than wages because of financial markets. During a boom induced price inflation, investors bid stock prices up in anticipation of the greater profit they expect in the future. Since investors are willing to pay higher prices for claims to the assets of the companies, the assets themselves have higher prices. But since there are no financial markets for labor, entrepreneurs must bid more intensely for labor in order for wages to rise. During the bust induced price deflation, investors bid stock prices down in anticipation of the losses they expect in the future. So, asset prices fall more readily than wages which only go down as entrepreneurs reduce their bidding for labor. Of course, the disparity depends on the accuracy of entrepreneurial foresight. If entrepreneurs have more accurate foresight, the “lag” of wages will be decreased and if they have less accurate foresight, the “lag” of wages will be increased.
ParticipantOne could understand “accelerated” in the quote above as either faster in time or larger in degree. Speculation leads to faster adjustment and smaller degrees of price changes.
One could understand “speculators” in the quote above as either investors reacting to uncertainty with a greater movement in their underlying expectations or investors arbitraging across any given underlying expected price discrepancy. The former will move the price up and down, the latter will reduce any range of prices. In economic theory, foresight typically refers to the former aspect and speculation typically refers to the latter aspect of human action. Although, admittedly, there is ambiguity in the economics literature concerning the use of the term, speculation.
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