[jmherbener]

Here are a few titles:

John Chown, A History of Money (Routledge, 1994)

Arthur Burns, Money and Monetary Policy in Early Times (Augustus M. Kelly, [1927] 1965)

William Gouge, A Short History of Paper Money and Banking in the United States (Augustus M. Kelley, [1833] 1968)

Elgin Groseclose, Money and Man (Frederik Ungar, 1961)

A. Barton Hepburn, History of Coinage and Currency in the United States (Mcmillan, 1903)

Jonathan Williams, et al. Money: A History (Palgrave Mcmillan, 1998)

[jmherbener]

There are two reasons that problematic unemployment cannot occur on the unhampered market economy. The first is the diversity of resources in their productive capacities. Because of these differences in productivity, each person is the efficient producer (i.e., the low cost producer) of something compared to other persons. So each person can out compete other persons in his area of comparative advantage.

The second reason is that human person are scarce relative to the surface area of the earth. In other words, there are sub-marginally productive (and therefore, idle) land sites, but not sub-marginally productive persons. Each person who is willing to work in the division of labor can find employment at a wage commensurate with the value of his labor’s productivity. As the human population rises, more entrepreneurs can start up more enterprises to employ more persons as long as we don’t run out of surface area on the earth to put the additional people and their production processes.

These two reasons combined form the argument behind the law of association, i.e., that everyone who has any labor ability at all can participate in the division of labor.

The argument against those who claim that it benefits labor to prevent capital accumulation is that the principle cannot be generalized and hence, it is nothing more than special interest pleading. As soon as one generalizes the principle, i.e., no one should work with any capital goods whatsoever, one can see the fallacy. The argument then is really that all other workers must work with capital so that I and my workers in the weaving industry, say, can maintain our standards of living working without capital. But, standards of living depend on our productivity which depends on our capital stock. So the weavers who retain their jobs with the new capital goods will have a higher standard of living than before. The workers who move into other lines of production with have their wages determined in the same way as everybody does, by the value of their labor’s productivity, which depends heavily on the capital goods they have to work with. Hopefully for them, capitalists and entrepreneurs will continue the process of capital accumulation and thereby, raise their wages and standards of living in the future.

[jmherbener]

How widely traded a good is depends on the number of people who trade it. It’s possible that a large number of people trade in something because each of them puts the good to a different use, but it’s also possible that a large number of people trade a good who put it to the same use.

Of the small number of commodities that are most widely traded, precious metals are preferred because they possess properties that make them more suitable media of exchange: portability, durability, divisibility, and so on. Living things, like cattle, are inferior media of exchange on these grounds.

There’s no circularity, but there is an historical dynamic of money’s development. People trading in a barter world would select a widely traded good to make indirect exchanges. If they select cocoa beans, then they can come to replace cocoa beans as a medium of exchange with gold nuggets (once they perceive the superiority of gold over cocoa beans) by introducing gold as a redemption claim (i.e., a money substitute) for cocoa beans at the market rate of exchange. Then cocoa beans and gold nuggets as media of exchange would compete for users. At the next step, entrepreneurs could introduce gold coins as a form of certification, produce them and see if people preferred them over gold nuggets sufficiently to make their production profitable.

[jmherbener]

A few more articles on the Coase Theorem:

http://mises.org/journals/qjae/pdf/qjae13_4_3.pdf

http://mises.org/journals/qjae/pdf/qjae14_1_4.pdf

There will be relevant articles in the book, Rethinking Green: Alternatives to Environmental Bureaucracy, which is edited by Bob Higgs:

http://mises.org/journals/qjae/pdf/qjae10_1_7.pdf

Also, take a look at the book edited by Walter Block, Economics and the Environment:

http://walterblock.com/wp-content/uploads/publications/EconomicsandtheEnvironment.pdf

[jmherbener]

According to its official release, the Bank of England’s balance sheet has been shrinking since the first of the year:

http://www.bankofengland.co.uk/markets/Pages/balancesheet/default.aspx

[jmherbener]

The hammer is used up in production as are all tools, equipment, and so on. Entrepreneurs depreciate the market value of their plant and equipment to reflect this fact. They do not depreciate the monetary value of their cash holdings.

Perhaps Mises’s discussion of these matters in his book, Theory of Money and Credit, will help clarify things,

http://library.mises.org/books/Ludwig%20von%20Mises/The%20Theory%20of%20Money%20and%20Credit.pdf

[jmherbener]

In criticizing indifference curve analysis, it’s important to remember, that neoclassical economists don’t claim that people think in indifference curves, but that the economist can model human action by the behavior of economic agents that do so. In any case, Austrians make several points against indifference curve analysis.

Here is a short note by Peter Klein:

http://web.missouri.edu/~kleinp/misc/giffen.pdf

Here is longer piece by Walter Block:

http://www.walterblock.com/wp-content/uploads/2009/06/Reply-to-Caplan-on-Austrian-Economic-Methodology.pdf

[jmherbener]

The IS-LM model has been a staple of mainstream, undergraduate macroeconomics for several decades.

The IS curve purports to plot all points of the rate of interest (i) and the level of income (y) which are brought about by equilibrium between saving and investment. Investment is inversely related to i and saving is directly related to y. At a larger y, saving will be larger and therefore equal to investment only at a lower i. The IS curve, therefore, slopes downward to the right when plotted on a graph with i on the vertical axis and y on the horizontal axis.

The LM curve purports to plot all points of equilibrium between i and y which are brought about by equilibrium between the money stock and money demand (so called, liquidity preference). Although the money stock is independent of either i or y, liquidity preference varies directly with each. With a given money stock, the increasing effect of a larger y on money demand would have to be offset by a decreasing effect of a higher i to maintain equilibrium. The graph of LM slopes upward to the right when superimposed on the IS graph.

The intersection between IS and LM illustrates the only combination of i and y that has the entire economy, both the “real” and “money” aspects, in equilibrium.

The fundamental problem with IS-LM is the erroneous theories underlying it. Time preference determines both the interest rate and the extent of saving-investing. Money demand relative to the stock of money determines the purchasing power of money. Furthermore, it has no theory of production, no capital theory.

Roger Garrison compares and contrasts the Austrian, Keynesian, and Monetarist approaches to macroeconomics in his book, Time and Money. Here is an overview by Garrison:

http://www.auburn.edu/~garriro/b6time.htm

[jmherbener]

Like our Fed, the Bank of England targets the interest rate banks pay to borrow reserves from other banks. In the U.S. this rate is called the Federal Funds Rate. In England it’s called the Bank Rate. When the central bank targets the rate, they strive to keep it at the target by offsetting any change in demand banks have for reserves by increasing supply through the purchase of assets from banks.

As I understand its official release on the policy, the Bank of England has decided not to expand the quantitative easing program. The QE program was a special program to counter the financial crisis. So, if it wants to increase bank reserves to keep the Bank Rate at 0.005, it can use the regular program of purchasing bank assets.
In the U.S., the regular program is called “open market operations.” Technically, it’s a separate program from the QEs.

http://www.bankofengland.co.uk/publications/Pages/news/2013/002.aspx

[jmherbener]

Two sources you might consult are Gabriel Kolko’s book, The Limits of Power: The World and United States Foreign Policy 1945-54 and Michael Cox’s article, “The Tragedy of American Diplomacy? Rethinking the Marshall Plan,” Journal of Cold War Studies 1 (2005), pp. 97-134.

Here are two pieces that cite Cox and Kolko:

http://www.sscnet.ucla.edu/polisci/faculty/trachtenberg/cv/jcws%28marshall%20plan%29.pdf

http://nevinpower.weebly.com/uploads/6/0/5/3/6053998/the_marshall_plan_-_the_extension_of_empire.pdf

[jmherbener]

Perhaps it is because economic theory is about the universal causal structure of human action and marketing is about how some people persuade other people to take particular actions in particular circumstances. If so, then, it’s likely that psychology would develop more insights about marketing than economic theory.

Austrian economists have written a lot about entrepreneurship. So that might be the literature to read to investigate what insights can be drawn in economic theory about marketing. Here is a start:

http://library.mises.org/books/Peter%20G%20Klein/The%20Capitalist%20and%20the%20Entrepreneur%20Essays%20on%20Organizations%20and%20Markets.pdf

And here’s an article advocating developing an Austrian economics of marketing, advertizing, and other business practices:

http://www.mises.org/journals/qjae/pdf/qjae5_2_4.pdf

Also, there have been attempts to develop marketing theory along Austrian lines:

http://edoc.hu-berlin.de/diplom/broeckelmann-philipp-2004-05-17/PDF/Broeckelmann.pdf

[jmherbener]

What made the Great Depression great was that regime uncertainty suppressed investment so that not only did the mal-investments not get liquidated but the capital stock was consumed overall from lack of investing.

During WW2, government policies consumed even more of the capital stock as the capital structure was re-oriented toward war production. What led to the post-war boom was the reasonable expectation on the part of capitalists and entrepreneurs that the regime would be moving toward freer markets.

During the bust after the post-WW1 boom, the Harding administration moved toward freer markets and the liquidation and reconfiguration of the mal-invested portions of the capital structure was over rather quickly.

[jmherbener]

Richard Cantillon wrote about the non-neutrality of money in the first full treatise ever written on economics. Here is a new translation of the work, written in the early 1730s and published posthumously in 1755:

http://library.mises.org/books/Richard%20Cantillon/An%20Essay%20on%20Economic%20Theory.pdf

In fact, the non-neutrality of money, i.e., the production effects that occur when the money stock is increased, are called, “Cantillon Effects.”

[jmherbener]

Mises addresses this in chapter one of Human Action:

http://library.mises.org/books/Ludwig%20von%20Mises/Human%20Action.pdf

[jmherbener]

Again, this seems like a commonplace to me. Why couldn’t Marx recognize, like anyone (regardless of their political thought) can, that if people won’t accept their government’s money the country is in trouble?

It’s a daunting task to read all of Marx to see if he said such a thing. Instead, you might send Rogers an e-mail and ask him for the citation.

Here is a short commentary on Marx’s theory of money:

http://internationalviewpoint.org/spip.php?article286

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