The Right and Wrong of Money Production
We now have the definitive answer to the question, is government monopoly of money production ethical? Moreover, writes Michael King, it is explained in a way they can easily understand and hopefully pass on. I am talking about the wonderful new book by Jörg Guido Hülsmann, The Ethics of Money Production. As my students can attest, it would be difficult to overstate my appreciation for this book. In fact, I am tempted to conclude my review here and simply say, get it, read it, and then read it again! FULL ARTICLE
Comments (65)
N. Joseph Potts
Paper money and fractional-reserve banking aren't institutions (they're practices), and hence shouldn't be abolished. There ARE institutions that protect and promote these practices, and either they, or the parts of them that do this, most definitely should be abolished.
No need to abolish the Federal Reserve. Just rescind its federal charter and rescind federal (and state) chartering of banks. Oh - and don't forget to repeal the legal-tender laws. I think that should about do it.
Published: February 18, 2009 9:15 AM
Tim Kern
Sure, it's "wrong." Politicians run the monetary system, so it's naturally designed to suit their purposes. What they have not figured out is that the inflation that they are creating will allow cheap money to pay off dear debts: foreclosures will stop as people get their hands on the dough that was really designed to make only the bankers rich -- and then people will own their own homes. "Toxic assets" will be redeemed, people will again become independent of the creditors, and the bankers will lose the control over all aspects of our lives.
Of course, this requires that the peasant class can get its hands on the currency, and that requires that the banks indeed loan it out at low rates! (If they don't, we won't have the inflation that the administration so badly wants.)
Those who can survive in the short run will thus be able to wrest some freedom back from the banking/political elites. The elites' short-run ploy will bankrupt only those (in the peasant class) who are already irredeemably bankrupt; those people will provide votes in the short run, but no more wealth to our rulers.
The next step, forcing production from the peasants, will involve, well, um... force, and then the pols will understand that the peasants really would rather be taken care of and that they will fight pretty hard to not have to work.
The final step can go one of only two directions, patterned after either the American or the French revolutions. That one is too close to call. Either way, keep your powder dry and your ink at the ready.
Published: February 18, 2009 9:21 AM
Peter Surda
I read the book (the PDF actually, thanks for making it freely downloadable) shortly after it was published and I can also recommend it to everyone. I am not a christian so I don't really care how the church views the money, but that doesn't diminish the value of the book from my perspective. Rather, mentioning christianity puts the production if money into historical context, which is helps to understand how we arrived to the current mess.
Published: February 18, 2009 9:59 AM
Arend
Based on the author, the title of the book and the table of contents it is a must buy for me. However, some parts of the review seem to suggest to me that this ethical exposition on money is somehow some sort of Catholic/Christian inspired treatise on ethics or at least sees this as the object to point the discussion on.
But however the many Christians that live throughout the world, that doesn't in any way justify the statement that ethics can be built on such shakey ground as religion.
But if it's good for the marketing, it's ok by me. But then I'll just remain with the stuff of Mises, Hayek and Rothbard which have no doubt everything in their works that Hülsmann has in this book (without the bs).
Published: February 18, 2009 10:06 AM
Jeffrey Tucker
JGH reaches deep into the history of Western ideas to present a historical-ethical case, based in large part on the thought of Nicholas Oresme, who was a Bishop.
I know that many regard this as unfortunate, but it so happens that religion, and Christianity in particular, played something of a role in the history of ideas. Of course, another option would be to pretend that Christianity never existed and has nothing to offer us by way of understanding history or ethics. That's certainly an option.
Published: February 18, 2009 10:25 AM
ajax
Anyway this can be sold thru Amazon?
Published: February 18, 2009 10:43 AM
Allen Weingarten
The article “The Right and Wrong of Money Production” is a book review of the Ethics of Money Production, by Jörg Guido Hülsmann. Here Michael King demonstrates (by his classroom) the significance of taking an ethical approach concerning money production, so as to clarify the virtues and value of Dr. Hülsmann’s book. He writes that there “is a paucity of literature that offers both a thorough grasp of economics and a moral assessment of monetary institutions. The impeccable timing notwithstanding, this book fills a glaring void. Let us hope it is only the beginning.”
Allow me to take a quantum leap to address the need to employ this beginning to provide an overall approach to the moral perspective that is needed in economics. To this end, I now enclose the following.
MORAL ECONOMICS
“Moral economics” is herein defined as viewing economic policies from the point of view of traditional morality. So (within our civilization) it is self-evident that one should neither steal nor lie. Yet this begs the question as to why to make a case for something that is taken as given.
I submit that *having a moral policy is the primary economic issue*, and is even more important than having a science of economics. One reason for this is that policies derive from human aims (which are essentially in the moral plane) and only secondly from technical considerations. This is largely a matter of what the public believes is right, which has derived from the advocacy of wealth distribution. To counter this, it is imperative to have a competitive moral vision. In addition, it is necessary to have a common comprehension of the technical issues, which are generally too complex for most of us to manage. Here, a moral view is simple, easy to understand, and to apply. For example, it may be difficult to comprehend: the Austrian Theory of the Business Cycle, but obvious to note that fiat money is as much theft as is counterfeiting; or the consequences of the minimum wage, but obvious to note that one has no right to interfere with a contract between consenting adults. Even when issues cannot be fully reduced to common moral conceptions, they provide insights that are far clearer than scientific formulations.
Moral economics takes as given a relation between the aspirations of man and his technical operations. At first glance this would appear to be consistent with Austrian economics, for it begins with the value of goods and services in terms of how they meet the desires of the individual. Thus value rests on a metaphysical foundation. Nonetheless, Austrian Economics focuses upon the strictly scientific analysis of what occurs after the collective averaging of prices result. This view is akin to analyzing the path of a bullet as independent of whether the shooter intends good or evil. There is then the human dimension, and the separate technical dimension. Professor Israel Kirzner writes “there is value in the value-free pursuit of economic truth, and no contradiction between a passionate pursuit of liberty and the dispassionate undertaking of science.” Yet in practice, the science tends to leave out much that is required for human purposes.
The science surely cannot include those aspects of policies which depend upon the moral aims and understanding of man. Nor can it explain the extreme correlation between the moral and the science, such as regards the outcome of government intervention. Note that a moral economic policy ought to reward the productive, while Wertfrei (value-free) economics demonstrates what will be productive. *The only way their conclusions could clash is if what was productive would reward the non-productive, which is virtually a contradiction in terms.*
What is the relation between the moral and the economic causes? I view the former as the underlying cause, since that is the fundamental human situation; I view the latter as the proximate cause, since it is the mechanism for carrying out the human aims. Note that this is not refuted because there are strictly economic causes, anymore than a gunman’s culpability is not refuted because the bullet did the damage. Nor does this deny that the motive and the mechanism are intertwined, where each influences the other.
The moral view of economics is that justice and morality rewards the productive, while injustice and immorality deprives them of what they deserve. *By ‘immorality’ I specifically mean theft, fraud, and irresponsibility.* It is then immoral to distribute wealth, or to intervene in the economy. In theory, morality is fundamental, since outcomes derive from it, while in practice, one can trace economic disasters to an immoral practice. In theory, if people were conscientious, they would do what is productive, so morality would not give rise to failure; in practice, one never finds a failure that did not involve immorality (except of course for natural disasters). We may note that government intervention in the economy (as in religion) is in itself immoral, for it restrains the liberty to do as one pleases.
It can be said that immorality provides the necessary and sufficient conditions for economic failure. It is necessary, for without it, people would choose to be productive; it is sufficient, for depriving others of their rights undermines productivity at its root. In contrast to the Wertfrei model for economics (where the morality of the shooter is independent of the path) the moral model is that the morality of the ‘shooter’ determines the path of the ‘bullet’.
The application of moral economics is that of assessing each economic policy by whether it is moral or immoral. Clearly a contract between consenting adults is moral, as it is based on their freedom of choice. So is allowing people to keep the fruits of their labor, for one has the right to what is his. It should similarly be evident that money that is unredeemable is immoral. When a counterfeiter prints money, it is immoral, for an innocent recipient loses when his money is rejected; it is also immoral if it is never discovered, because the non-counterfeit money is devalued. The same holds for debased coins, and for fiat money – it either becomes unredeemable, or the value of all currency is reduced. This is not to say that everyone loses equally, since the debtors are better off, while the creditors are worse off. This however is also immoral, since it encourages the irresponsibility of indebtedness. A Ponzi scheme is fraud, for it pretends that the wealth stems from the product, whereas it derives from the financing and false advertising. Lending and borrowing are moral, for it is a contract between consenting adults. However, when a bank lends what it cannot redeem, it is fraudulent. When a government borrows, as a means of redistributing wealth, it is theft; when it conceals the cost, it is fraud; when it passes the cost to one’s children or grandchildren, it is irresponsible. So whereas lending and borrowing are moral activities, the manner in which it is practiced through government is not. To belabor the point, deposit banking (where valuables are held until the moment requested) cannot create any problems of insolvency. However, when the banker tells the depositor that he can always pick up his valuables, but then loans it out, it is fraud. It is similarly fraud to provide credit it cannot redeem, either because what is turned in cannot be covered, or because if it never happens, it has the same effect as fiat money. (In addition, the expanded currency is invested in areas that are not responding to market needs, but that is best analyzed by scientific economics.)
We may note that government has but three ways of obtaining funds: by taxation, inflation, and borrowing. In practice, all: are used to distribute wealth (which is theft); conceal what is happening (which is fraud); penalize the productive (which is irresponsible).
The moral policy for dealing with economic failure is to allow those who failed to pay the price, and the sooner the better. Otherwise those who failed will not have learned their lesson, whereas others who are innocent will be stuck with the bill. There are but three ways for economic deterioration to occur: poor business practices, fraud, or government intervention. The remedies are to let poor businesses fail, prosecute fraud, and preclude intervention. Finally, let us note that the theory & application of moral economics can be covered in a few pages, while understanding merely the fundamentals of scientific economics takes many hundreds of pages.
IN SUM:
a moral economic policy is the primary economic issue;
it is based on fundamental human aims, and is simple, easy to understand, and to apply; the science of economics leaves out much that is required for human purposes;
there is an extreme correlation between moral and scientific analysis, where their conclusions cannot significantly clash;
morality rewards the productive, while immorality deprives them;
*immorality (theft, fraud, or irresponsibility) provides the necessary and sufficient conditions for economic failure*;
the application of moral economics is to assess each economic policy by whether it is moral or immoral;
transfers of wealth, current banking practices, fiat money, and government borrowing are immoral; the moral policy is to allow failures to occur as soon as possible, and to place the burden on those who failed;
the moral approach to economics is easy to understand and to apply.
Allen Weingarten
Published: February 18, 2009 11:53 AM
DNA
Question to defenders of fractional reserve banking:
Let's say A and B each give 10 oz of gold to banker C, with the understanding that A and B can ask for it back, under risk of refusal by C. Let's say C lends out 10 oz of gold. The question is, who owns the remaining 10 oz? A, B, or C?
If you answer that it depends on the particular contractual arrangement between A and C and between B and C, then do you acknowledge that A and B cannot both have valid claims on this gold? In others words, that either (a) C is the rightful owner, so that A and B have entered into de facto loan contracts, or (b) A (B) is the rightful owner and B (A) has entered into a de facto loan contract? Do you agree that any valid contract between banker and customer must spell these things out clearly? If so, how can there be any legitimate banking function beside lending on the one hand and warehousing on the other?
Published: February 18, 2009 1:27 PM
pbergn
I thought that morals and ethics don't go together well with true Capitalism... I thought the whole system is premised on the idea that the individuals, given freedom and driven by their own selfish needs, will do what is right for all of them, eventually....
Wasn't this the whole point of Austrian School of Economics, where there is no such thing as "right" or "wrong" - only spontaneous exchanges?
Anyway, in all honesty, does one really need a book to figure out that excessive quantity of anything dilutes its value?!
The real issue here is HOW to keep the quantity of money in check, which is political in nature, and does not have anything to do with economic policies...
Published: February 18, 2009 2:07 PM
pbergn
To: DNA
Great question, DNA!
Finally someone gets it what banking is all about...
Published: February 18, 2009 2:14 PM
Beta Hater
This is a great book. It is well written and provides an excellent ECONOMIC analysis of money and various financial systems. However, this book is short on ETHICS.
More specifically, this book does not contain a theory of ethics. Hulsmann does not outline a theory of ethics, so the ethical pronouncements made throughout the book have no ethical foundation. Here's an example: "Legal monopoly, as we defined it, diminishes the full use of one's property" (pg. 148). We have no way of deciding whether legal monopoly is ethical or not. Why is limiting the use of another's private property unethical behavior? Hulsmann does not answer this question in this book. Individuals can rely on intuition or Catholic tradition, but intuition and religion can hardly be relied upon when trying to convince others.
Of course, libertarian ethical theory provides the ethical foundation Hulsmann needs. Libertarians will sympathize with Hulsmann's ethical pronouncements because they have a theory of ethics. However, readers unfamiliar with libertarian ethics may not be convinced. This book would be much improved if it began with a chapter on Argumentation Ethics.
Long story short, this book is great on economics but short on ethics.
Published: February 18, 2009 2:24 PM
Abhilash Nambiar
This article was obviously written to target Christian readers and it shows. And of course just like the Bible, its internal inconsistency shows. Something that Christians can easily identify with.
However, the unambiguous message that comes out loud and clear is that Guido Hülsmann's book, The Ethics of Money Production is a great book and highly compatible with Christian values so all Christians should go and read it, especially since it is available in pdf form on the Mises website for free. I whole heatedly agree. But is it is a good book to read regardless of your religiosity.
Also to note the greatness of Western civilization predates Christianity. The arrival of Christian traditions has had made both positive and negative impacts on Western civilization. I won't go into details here. However I find it very interesting to note that Christian philosophies that are compatible with pre-Christian Western philosophies that are better at surviving here and now. Looks to me that the Western civilization has co-opted Christianity rather than the other way round. Christianity as everyone knows is as native to Western Civilization as Communism is to the Chinese.
Published: February 18, 2009 3:57 PM
fundamentalist
Pbergn: “I thought that morals and ethics don't go together well with true Capitalism... I thought the whole system is premised on the idea that the individuals, given freedom and driven by their own selfish needs, will do what is right for all of them, eventually....”
You may be thinking of Adam Smith’s main point in “Wealth of Nations.” Smith said that self-interest (not selfishness) would cause people to act morally. The free market would punish selfishness.
Pbergn: “Wasn't this the whole point of Austrian School of Economics, where there is no such thing as "right" or "wrong" - only spontaneous exchanges?”
Austrian econ assumes the morality of private property and the immorality of theft and fraud. Outside of traditional morals, Mises and Hayek tried to keep morality out of economics and focus on the means to achieve desired ends.
In general I think it’s best to keep morality out of economics because the ethics arrived at in any system of ethics depends entirely on the beginning assumptions, and proving that those assumptions are not only true but the appropriate ones is difficult. Ethics is easy for traditional Christians because we have the Bible and centuries of great natural law to fall back on. It’s much more difficult for non-Christians. For example, the Rothbard/Hoppe system defending property starts with self-ownership and procedes to property rights. On the other hand socialists might reject self-ownership as an appropriate starting point, even though they might agree that self-ownership is true. Socialists might want to start with the principle of alienation from the product of one’s labor, or the equality of mankind.
Abhilash Nambiar: “Looks to me that the Western civilization has co-opted Christianity rather than the other way round. Christianity as everyone knows is as native to Western Civilization as Communism is to the Chinese.”
I would agree with you if I knew only what is taught about Western history in public schools. But if you learn real history, you’ll find that Western European and American civilizations are pure Christian. For example, modern science devleoped in Western Europe and not China because of Christianity’s emphasis on reason, a major theme of the Bible, old and new. China, and the two great Islamic empires, Ottoman and Persian, were far ahead of the West in technology before the 17th century, but neither developed modern science. Capitalism and modern ideas of liberty, such as religious freedom and equality under the law came out of the Protestant Reformation and the Dutch Enlightenment, not the French Enlightenment, which gave birth only to socialism and authoritarianism.
Published: February 18, 2009 4:15 PM
Matt
To bring Religion into economics is traveling on a dead end road. One cannot mix Faith and Reason
and come to a sensible conclusion, although it has been tried numerous times with countless books in an attempt to explain the illogic as being logical.
The problem we face today as in the past is that the morality of Self-Sacrifice the sacrifice of a greater good to a lesser one which is Religiously derived is used to justify just about any law passed.
There isn't a day that goes by that you will not hear one or more politicians use the word "Sacrifice" and the public and Press just nod their heads mindlessly.
What in essence we have then is a NOT separation of Church and State but a commingling of religious (Faith) and Rational Doctrines based on Logic and Reason within a supposed Secular State, this in the final analysis make the Federal Reserve and its Fiat money possible. In other words anything goes as long as you have a big enough gang with guns backing it. Remember the Inquisition? Where was Thomas Aquinas then?
We have a Constitution and a good many parts of it have been thrown into the waste basket because we DON'T have a separation of Religious Morality and Secular State.
Published: February 18, 2009 4:17 PM
fundamentalist
Matt: “One cannot mix Faith and Reason…”
Strange. Judaism did it for 1,500 years and Christianity has done it for 2,000. The appeal to reason is the chief method of discussion in both religions and their holy books.
Matt: “The problem we face today as in the past is that the morality of Self-Sacrifice the sacrifice of a greater good to a lesser one which is Religiously derived is used to justify just about any law passed.”
Actually, the morality of the left, what there is, came from the anti-religious French Enlightenment, as Hayek wrote in “Fatal Conceit.” It did not come from Christianity. And I could be wrong, but I don’t think Marx was very religious.
Published: February 18, 2009 4:54 PM
pbergn
To: fundamentalist
Thanks fundamentalist. I am with you on this one...I meant exactly what you have clarified.
I agree with other commenters that there is no place for religion in the science of economics or in any other sciences for that matter. They don't mix well...
After all, most of the "bad" things are done with good intentions (e.g bailouts)...
Published: February 18, 2009 5:01 PM
JD
Excuse my ignorance, Isn't "Usuary" a definite No-No in the three major religions (Jud/Christian & Moslem, I know)? Isn't that the over-riding issue at hand here. That being said, we could come to the conclusion that it is nearly universally corrosive to the individual, and to a larger extent the "State" for a majority of the world's population.
True enough religion, & to a larger extent Christianity has dropped the ball in this deparment (Usuary). The Nuevo Evangelical Pilgrimage of the latter part of the 20th century, failed because they as a whole were warped/naive into thinking that if they got in control they could change the course of the country from a Moral Perspective. Of course they failed miserably because the "State" can't be used effectively as a "Moral Compass." The State fails at everything, well....... except misery and wholesale killing!!
The way I see it is Austrian Economics is reaffirming, (to a certain extent) moral/ethical guides that have already been espoused many moons ago. They just go into quite a bit deeper than the Bible & Koran do. The Austrians are identifying Evil, which to them is "Universally" corrosive the world over, Centralized Power & Usuary, which go hand-in-hand with the modern state's monopoly of the money supply.
We can almost all agree on Freedom of Choice, but......
just be able to handle the consequences that come your way as a direct result of those actions.
Published: February 18, 2009 5:25 PM
Allen Weingarten
There is a question as to whether morality pertains to economics. Let me address the difference between the theory of a discipline and its application. Ludwig von Mises develops economics as a science that is Wertfrei, while Leonard Read, in “Economics: A Branch of Moral Philosophy” Jan. 1972, writes “...its mastery becomes...that one should never do to others that which he would not have them do unto him.” Here, whereas von Mises masters the theory of economics, Read addresses its application to economic policy, which involves morality and philosophy. Thus what is apodictic on one level, involves judgment and interpretation on a broader plane.
There is a science of economics that is independent of our intentions, and in principle should be agreed upon by all. On the other hand, economic policy depends upon our diverse intentions, and cannot escape the differences within the moral dimension.
A free market should operate by the laws of economic science, but it can only do so under a set of laws that protect a moral foundation. Were interchanges based on murder, theft and fraud, a very different outcome would exist than one that restrained them.
Allen Weingarten
Published: February 18, 2009 5:25 PM
JD
Excuse my ignorance, Isn't "Usuary" a definite No-No in the three major religions (Jud/Christian & Moslem, I know)? Isn't that the over-riding issue at hand here. That being said, we could come to the conclusion that it is nearly universally corrosive to the individual, and to a larger extent the "State" for a majority of the world's population.
True enough religion, & to a larger extent Christianity has dropped the ball in this deparment (Usuary). The Nuevo Evangelical Pilgrimage of the latter part of the 20th century, failed because they as a whole were warped/naive into thinking that if they got in control they could change the course of the country from a Moral Perspective. Of course they failed miserably because the "State" can't be used effectively as a "Moral Compass." The State fails at everything, well....... except misery and wholesale killing!!
The way I see it is Austrian Economics is reaffirming, (to a certain extent) moral/ethical guides that have already been espoused many moons ago. They just go into quite a bit deeper than the Bible & Koran do. The Austrians are identifying Evil, which to them is "Universally" corrosive the world over, Centralized Power & Usuary, which go hand-in-hand with the modern state's monopoly of the money supply.
We can almost all agree on Freedom of Choice, but......
just be able to handle the consequences that come your way as a direct result of those actions.
Published: February 18, 2009 5:42 PM
Abhilash Nambiar
To fundamentalist:
'For example, modern science developed in Western Europe and not China because of Christianity’s emphasis on reason, a major theme of the Bible, old and new.'
Unfortunately for you the emphasis on reason in Western civilization is a pre-Christian tradition, going back as far as Aristotle. I am not denying that the emphasis you say certain influential Christians placed on pure reason, simply emphasizing that it has a pre-Christian origin. Besides when the knowledge through reason conflicted with Christianity guess what happened? I am thinking Galileo, he was expelled because of his science. But Kepler too was excommunicated because his ideas of theology disagreed with his church, the Lutheran Church. Hypatia of Alexandria was another victim. I will go into details some other time. Today the biggest opponents to the teaching of evolution are fundamentalist Christians.
Even the institution of marriage in its current form, the one that exists with the husband and wife as equal partners in a mutually beneficial arrangement, one that is so vehemently defended by Christians today has a non-Christian, capitalistic Western origin. Mises had recognized it in his book Socialism, look to Chapter 4 The Social Order and the Family.
As for China's contribution to science. Gun Powder for instance came from China. That is chemistry right there. Google Ancient Chinese discoveries. You will find it of great interest. I agree Western Scientific tradition is way advanced, but it is older than Christianity. As for the lack of scientific achievements in the Islamic world, I agree the totalitarian nature of Islam is largely responsible for it.
Christianity has had an interesting love hate relationship with science in the Western world. It has been a stormy marriage with lots of ups and downs. We are currently living through one of the downs. I urge you to look into it in greater detail instead of jumping to conclusions.
I do not want to continue this conversation any further at this point. We are drifting away from the relevant topic.
Published: February 18, 2009 6:11 PM
DNA
Abhilash Nambiar makes some good points, but his example of Christian opposition to evolution (by no means universal across denominations) is not very fair, because secular liberals only accept the theory to the extent that they can wield it as a weapon against their Christian opponents; they hysterically and violently reject, e.g., the theory's very clear and compelling explanations for various measures of disparity between racial groups.
Published: February 18, 2009 7:45 PM
Abhilash Nambiar
DNA,
I never said that opposition to the teaching of evolution is universal across Christian sects. My point was the the relationship between science and the Christian faith is not as harmonious as some people like to believe. Yet it is much better than the relationship between science and the muslim faith or science and the hindu faith. Both groups claim their religions to be 'scientific', they are wrong.I also agree that secular liberals are using evolution as a tool against their christian opponents.
The 'theory's very clear and compelling explanations for various measures of disparity between racial groups.' does not bother me, even though I am not white, except when used as an instrument to legitimize genocide (which has not happened recently) or to enforce forced segregation or forced integration (which has happened recently). Theories are value neutral, people are not.
Published: February 18, 2009 8:05 PM
Arend
@ "# fundamentalist
#
Matt: “One cannot mix Faith and Reason…”
Strange. Judaism did it for 1,500 years and Christianity has done it for 2,000. The appeal to reason is the chief method of discussion in both religions and their holy books."
True. But it doesn't mean that Reason cannot go perfectly without Faith. There isn't anything in Reason (and in Objective Ethics for that matter) that is inherently tied to Faith.
That in history some and maybe most of the greatest scholars were Christians isn't a falsification of aforementioned statement. Francis Bacon thought that science could lead him to rediscover the knowledge before the banishment of human beings out of the Garden of Eden. As great a motivator religion might be, it doesn't follow from that religion has anything to contribute to the contents of science or ethics .
Also, don't underestimate the power of public opinion and 'oppression' towards scientists who would express their unbelieve in religion.
Published: February 19, 2009 2:49 AM
greg
Funny, I have young people ask me about investing. I tell them to invest in a shovel, learn to use it and if in the future you get into a financial bind, you will have a trade to fall back on. Basically, never be afraid to get your hands dirty.
Published: February 19, 2009 7:32 AM
fundamentalist
Abhilash Nambiar: “Unfortunately for you the emphasis on reason in Western civilization is a pre-Christian tradition, going back as far as Aristotle.”
It’s older than Aristotle. The Hebrew emphasis on reason goes back to Moses, about a millenium before Aristotle. The first Christians were all Jews and carried the Jewish tradition of reason forward.
Abhilash: “Today the biggest opponents to the teaching of evolution are fundamentalist Christians.”
That’s because they haven’t been fooled by the cult of scientism taught in public schools. They are able to think and reason for themselves. Leading the debate against evolution are some really good scientists. The evolution/creation debate is not about reason, but about good science vs. junk science.
Abhilash: “I agree Western Scientific tradition is way advanced, but it is older than Christianity.”
Science is older than Christianity, but modern science developed in Western Europe only about the 15th or 16th centuries. Everything Western scientists knew during that time they learned from Muslim scholars. China was far ahead at the time, too. So why did the student exceed the teachers? Totalitarian states is part of the answer, but the other part is the emphasis on reason in Christianity that is lacking in near and far eastern religions.
Abhilash: “Christianity has had an interesting love hate relationship with science…”
That’s actually a myth promoted by public education. As a recent article on this web site noted, Newton is probably the greatest scientist in history. He was also a devout believer and very good theologian. So was Pasteur and many of the founding fathers of modern science. Many top scientists today are devout Christians, such as Francis Collins, head of the human genome project. Christianity has never had a problem with science, just with some crackpot theories that scientists propose.
Allen: “A free market should operate by the laws of economic science, but it can only do so under a set of laws that protect a moral foundation.”
Exactly! Socialists often falsely claim that capitalism would permit theft and fraud, but it never has. The morality of property and the rule of law have always been assumed and are absolutely essential to capitalism.
Arend: “But it doesn't mean that Reason cannot go perfectly without Faith.”
Exactly right. It is a trait of human nature that separates us from animals.
Arend: “As great a motivator religion might be, it doesn't follow from that religion has anything to contribute to the contents of science or ethics .”
Christianity offered an atmosphere in which modern science could flourish—solid ground for epistemology. It’s hard for us to imagine today, but before modern science much of the world was not convinced that the universe followed any kind of rules or order. The gods, or whoever controlled events, were seen as arbitrary creatures. Other civilizations did not pursue their technological lead because they didn’t believe laws of nature existed. Christianity proposed that because God is rational, and therefore his creation is rational, too. This confidence inspired early scientists, such as Newton, to delve into God’s “secrets.”
Published: February 19, 2009 8:36 AM
Pat
I think Fundamentalist's point is interesting and definitely justified from historical perspective. But my take on the issue is that it has more to do with individual interpretations of religious teachings rather than the religion itself. It is a fact that a lot of scientists during the 16th-21st centuries were religious and some of them in fact embarked on those research to get closer to God (But so did some of the scientists in the Islamic golden age. For example, Ibn Khaldun's contribution to economics and other fields of science. http://en.wikipedia.org/wiki/Ibn_Khaldun).
However, I think Christianity (Or any religion for that matter) per se would necessarily lead to the same level of development that we have today. But that is different than saying Christianity or religion has prevented the development of science.
I think it depends on the degree to which society (religion being part of the foundations of that society) accept the concept of individual liberties. My guess is that some societies in Christendom gave the individual a little bit more space than before (e.g.: Holland in the 16th century).
Published: February 19, 2009 9:45 AM
Pat
"However, I think Christianity (Or any religion for that matter) per se would necessarily lead to the same level of development that we have today."
I meant to say "would not necessarily lead to"
Published: February 19, 2009 10:22 AM
Abhilash Nambiar
fundamentalist: The first Christians were all Jews and carried the Jewish tradition of reason forward.
Highly doubt that the tradition of reason in the Western has a Jewish origin. Jews where a part of (but not limited to) Western society and yet for the longest time they insulated themselves from it. They had very strict protocols for interactions with the mainstream society and only the religious scripture was allowed for reading in their ghettoes. Clearly a society well entrenched in its dogmas. The pressure for them to reform came from outside and where it was absent, reform did not take place. Although I must add, where it did take place, they did extremely well. You might find
The Wealth of Nations: Ideology, Religion, Biology, and Environment by Hans Herman Hoppe to be of interest
http://mises.org/multimedia/mp3/hoppe/5.mp3
fundamentalist: Many top scientists today are devout Christians, such as Francis Collins, head of the human genome project.
You certainly have a very interesting perspective on events. It is true that in the most scientists of the past believed in some form of Christianity, but most scientists of today prescribe to at the least to some form of agnosticism. Francis Collins is an exception to this norm. Unless you think that is a myth too.
fundamentalist: Christianity has never had a problem with science, just with some crackpot theories that scientists propose.
Here you have a problem. The problem has its root in the difference between the economic science and the physical sciences. Economic science is of course more readily compatible with Christianity. Economics (at least Austrian economics) is synthetic a prirori. It is possible ex ante how to separate sense from non-sense, no lab experiments needed. In the physical sciences it is not that easy to decide ex-ante which ideas are nonsense. Tests have to be performed, we only know ex-post which ideas are crackpot. So you the good Christian has no way of knowing before hand whether an idea is truly crack pot.
And if it is not? And then what if it disagrees with your cherished beliefs as you understood it till then? What you do then? Depends on your nature I would say.
But I wouldn't worry too much, if I where you, Christian theologians always find imaginative ways to reconcile their faith with the latest scientific discoveries. And there is competition among them here as well, so the form of reconciliation that suits you might be right around the corner.
Published: February 19, 2009 10:32 AM
fundamentalist
Pat: “However, I think Christianity (Or any religion for that matter) per se would necessarily lead to the same level of development that we have today.”
The problem with thinking about progress is that looking backwards from our high ground in science it all seems inevitable. That’s especially true given the pervasiveness of the theory of evolution and its application to all fields of study. We tend to see the pass as one long struggle upwards from the mud of ignorance. But history didn’t happen that way at all. Take economics development as a model. From pre-history until the advent of capitalism in the 16th century, very little changed. Even in the 17th century, most people had about the same standard of living as did the people in ancient Babylon. Then, very suddenly, Western Europe exploded with economic growth. There was not gradual, inevitable slope of progress. There was no progress for millenia, then explosive growth.
Something very similar happened in science—very little progress until the 16th-17th centuries, then explosive growth in knowledge. The gradual, inevitable evolutionary tale doesn’t fit. Before the explosion most people didn’t see the world as a rational place ruled by laws. It was a scary world governed by irrational gods and spirits. I don’t think Hindus or Muslims would be offended when I say that their gods control events directly, not through laws or principles, and they tend to be capricious. Obviously, such a short summary will do damage to the rich teachings of both religions. A central tenet of Islam is that Allah is not bound by any principle; his sovereignty is absolute. He sometimes rewards the evil and punishes the good in order to demonstrate his sovereignty. But the important point is that the Hindu and Muslim gods did not work in nature through principles and laws. Christianity, following its Jewish roots, always proposed a rational God. That’s why modern science developed in a Christian atmosphere.
Pat: “My guess is that some societies in Christendom gave the individual a little bit more space than before (e.g.: Holland in the 16th century).”
That’s part of it, too. But why did they give individuals more space? The Dutch Reformers gave the world individualism because of the importance they placed on individual, as opposed to corporate, salvation, and the equality of the individual before God.
Abhilash: “Highly doubt that the tradition of reason in the Western has a Jewish origin.”
What I meant was that Christianity was originally a sect of Judaism and remained one until the Jewish rebellion of 120 AD. Christianity got its emphasis on reason from its Jewish roots. That’s why Christians revered Aristotle from the very beginning and adopted much of his way of thinking. It wasn’t foreign to them.
Abhilash: “…most scientists of today prescribe to at the least to some form of agnosticism. Francis Collins is an exception to this norm.”
I agree that agnosticism dominates the sciences. I don’t have a problem with that. Truth isn’t a matter of consensus. If I thought consensus was important, I certainly wouldn’t be interested in Austrian economics.
Abhilash: “In the physical sciences it is not that easy to decide ex-ante which ideas are nonsense. Tests have to be performed, we only know ex-post which ideas are crackpot.”
There are many religiously agnostic scientists who who are also agnostic about the theory of evolution. Have you seen Ben Stein’s film “Expelled: No Intelligence Allowed”? Many won’t come forward because it will ruin their careers. Keep in mind that much of the scientific community accepted Darwin’s theory almost the day he published his book, without any evidence of its validity. 150 years later the evidence for Darwin’s theory is almost non-existent. See Roger Lewin’s (not a Christian) book “Bones of Contention.” And yet it’s almost universally accepted as a fact. Where is the logic and science in that? Besides, many people like to portray Christianity as opposed to science, but the only theories some Christians disagree with is the theory of evolution. Christians have no problems with the 99.9% of science that deals with the rest of the world.
Published: February 19, 2009 1:51 PM
Abhilash Nambiar
fundamentalist
I have seen the movie Expelled. I know Christians are extremely capable of rational discourse (not all of them of course), but Expelled mocks the very idea. It is extremely dishonest. A movie like that is far more damaging to the Christian faith than the work of any genuine scientists.
I have below a link to a conversation with Associate Producer Mark Mathis by people at the Scientific American. I do not know what opinion you have about Scientific American, but the conversation is unedited.
http://www.sciam.com/article.cfm?id=a-conversation-with-mark-mathis
As for evidence for Darwin's theory, it is overwhelming. It is also bit over-rated, in the sense it does not automatically exclude one from viewing the same facts in other ways. But for that you have to pick and choose. There is no need for that. If you want to believe in God and evolution it is still very possible. I know people who do.
Published: February 19, 2009 2:12 PM
Abhilash Nambiar
fundamentalist
Here is another way of thinking about what you said:
'What I meant was that Christianity was originally a sect of Judaism and remained one until the Jewish rebellion of 120 AD. Christianity got its emphasis on reason from its Jewish roots. That’s why Christians revered Aristotle from the very beginning and adopted much of his way of thinking. It wasn’t foreign to them.'
Aristotle was not foreign to most Christians because most early Christians where Westerners just like Aristotle. The concept of reason was not foreign to Westerns because it is rooted in the Western civilization.
Christianity is actively evangelistic. Various Christian sects where actively competing for followers then as they are now. The sect that eventually dominated in the West chose to embrace those concepts that Westerners already identified with. That is the idea. My idea. For as we already know Christianity despite all its European trappings has a distinctly non-European origin. If it is true, we will have better understanding of the relationship between Christianity and the Western world. By itself that is not a challenge to Christian theology, so there is no need for worry.
Published: February 19, 2009 2:39 PM
Alex
DNA: Concerning fractional reserve banking, I don't know of a present banking arrangement where one deposits gold. The present system is a contractual situation, whereby a depositor lends money to a bank for convenience or to earn interest. Also, for all FDIC depository institutions, there is a contractual arrangement, where the federal government insures deposits to a limit. The bank invests in risky assets and may go broke. That is understood by depositors, who naturally do not even attempt to evaluate the risk of the banks they deposit their money in. Instead, they look for the words: "FDIC insured."
Published: February 19, 2009 3:26 PM
DNA
Alex,
Come on, we all know that gold is not used as money today, that's not the point of my question.
To clarify: I'm asking defenders of FRB to give me an example of a *valid* contractual arrangement between a bank and several customers, that is something different from a loan (where the banker is the owner of the money [for some term]) or a demand deposit (where the customer remains the owner [and the banker is a custodian over some term]).
Published: February 19, 2009 3:33 PM
fundamentalist
Abhilash: “I know Christians are extremely capable of rational discourse (not all of them of course), but Expelled mocks the very idea. It is extremely dishonest. A movie like that is far more damaging to the Christian faith than the work of any genuine scientists.”
You must not have paid attention. There are no Christians in the movie except for the guy representing intelligent design. And Ben Stein is Jewish. I’m sure there were some minor facts that the film got wrong. That happens to everyone. But it couldn’t possibly be as dishonest as proponents of evolution are. For examples of dishonesty, check out “Icons of Evolution” by biologist Johnathan Wells. I’ll be glad to watch the interview when I get time.
Abhilash: “As for evidence for Darwin's theory, it is overwhelming.”
That’s simply not true. You are probably thinking of micro evolution, the change from one species to the next in the same kind of animal, such as from one species of dog to another. Creationists and intelligent designers have no problem with that; it’s nothing but selective breeding which every farmer practices. But the evidence for macro evolution, the change from one kind of animal to another is almost non-existent. I refer you to Roger Lewin’s book “Bones of Contention” which catalogues the evidence. Lewin is an evolutionist.
Evolutionists pull the old “bait and switch” routine on impressionable students by showing them the overwhelming evidence for micro evolution and then claiming that it is evidence for macro evolution and pretending the two are the same thing. Very dishonest.
Abhilash: “Aristotle was not foreign to most Christians because most early Christians where Westerners just like Aristotle. The concept of reason was not foreign to Westerns because it is rooted in the Western civilization.”
No the early Christians were Jews. Many educated Jews had incorporated Aristotles’s reasoning into their thinking centuries before Christ because it fit well with the emphasis on reason in the Old Testament, and Christians continued the practice long before Constantine made Christianity the religion of the empire.
Published: February 19, 2009 5:02 PM
Alex
DNA:
Perhaps I'm misunderstanding the point of your post. I understood that it was meant to demonstrate in some manner that fractional reserve banking was fraudulent. Many here have argued that point, and I thought that was also your implication. If the point of your post was not to demonstrate that fractional reserve banking commits fraud on depositors, what was your point?
Published: February 19, 2009 5:34 PM
DNA
Alex, you are misunderstanding my point, I'm afraid. I oppose FRB and am trying to get its defenders, who believe that all kinds of important details can be swept under the rug by invoking the voluntariness of an agreement, into clarifying just what kinds of valid contracts can take place under their desired system, apart from loans on the one hand and demand deposits (warehouse agreements) on the other.
Published: February 19, 2009 5:52 PM
Abhilash Nambiar
fundamentalist
What you said towards the end was wrong in so many ways, that I won't even try to dissect it. You are beginning to sound like one of the fundamentalist Christians I was talking about, the one that is having a stormy relationship with the physical sciences because his cherished beliefs disagrees with what modern science teaches us. Your namesake is very appropriate. I was hoping to avoid this conversation early on, but you dragged me into it. I was offering several olive branches, yet you prolonged the argument.
Look man, if you have are having a crisis of faith that is your problem. But picking and choosing and re-ordering facts to suit your pre-conceived world view is not advisable. Not only is it intellectually dishonest, it is also counter-productive. You will only end up making things harder on yourself, that is not necessary.
I am stopping now. This is not the place to discuss religion, this is the place to learn economics. Take care.
Published: February 19, 2009 6:40 PM
fundamentalist
Abhilash: "...if you have are having a crisis of faith that is your problem."
I'm not having a crisis of faith. I can discuss the scientific errors in the theory of evolution all day long. You are the one whose faith in evolution is threatened. You're afraid to read anything that might damage that faith. I can guarantee you that I know more about evolutionary science than you do. I have studied it for 30 years. Most people I discuss evolution with are just like you, totally ignorant of the science they claim to support, and totally unwilling to read anything by the other side.
I didn’t listen to the podcast, but I read the transcripts of below and I have to say that either Rennie and Steve saw a completely different film from the one I saw, or they are the dishonest ones. Here are some examples:
Rennie: “You know, I think, it goes right to the methodology of the film that they almost don't want to get bogged down in the specifics, certainly not the specifics of the science.”
The film was not about the scientific evidence for and against evolution. If they had paid attention, they would have realized that the film is about the persecution of people who challenge the junk science behind the theory of evolution. Philip Johnson wrote a book with a similar theme back in the 90’s because he saw friends who were devout evolutionists who were fired or otherwise persecuted for nothing but questioning some of the holy dogma of evolution. All Stein was trying to do was demonstrate the fact that evolutionary scientists refuse to allow any questioning of the theory whatsoever. Rennie and Steve are mad because the film isn’t a head to head point by point discussion of the scientific evidence.
Rennie: “get the idea from the film that there is this conflict between religious explanations for phenomena and [science and] that science doesn't want them [religious explanations], but you never understand why that would be.”
I didn’t get that idea at all. The film rarely mentions religion at all. It portrays people who have scientific difficulties with the theory and are persecuted for it.
Steve: “Right. (laughs) And almost no scientific ideas are actually presented in this film.”
Exactly! That is not what the film is about. Did these guys even watch it?
Rennie: “It's just basically posited in the film that science hates religion and therefore it is forbidden….”
That’s simply not true and very dishonest. The film never pits science against religion. It’s always scientists against scientists.
Rennie: “You know, it's not that it's fundamentally intellectually inappropriate to try to make some kind of connection between ideas derived from what Darwin wrote and the ideas that the Nazis used in developing their sort of genocidal plans. I mean, everybody acknowledges that some of that was there. The problem is that the film never really makes it clear that those were perversions of the ideas of evolution. The Nazis' justification for the Holocaust, and [in] so far as they were based on science, came from the idea of eugenics, but eugenics is actually more closely related to the ideas of animal breeding than it is to anything that you really find just in Darwin himself; [it] doesn't have anything to do with natural selection.”
Wow! Talk about blatant dishonesty! Eugenics was the logical conclusion of theory of evolution, not perversions. Anyone who knows history knows that. Evolutionists don’t like to see the ugly side of their pet theory, but honest ones can’t deny the connection with the Holocaust. Eugenics and the Holocaust were all about taking charge of the evolutionary process. Evolution is all about survival of the fittest, which means there must be conflict between species and competition for resources. Weak members must die so that their genes don’t pollute the pool. The Holocaust was all about the superior genes of the Arian race eliminating the weak genes of the Jews and others.
Steve: “And let's not forget that some groups of humans have been subjugating and killing other groups of humans for a long, long time before there was any Darwinism to pin it on.”
No one said that only the theory of evolution caused mass murder. But Nazis made it clear that the theory of evolution was their primary motivation.
Rennie: “Exactly! And if you looked at this film's presentation of the intellectual roots of the Holocaust, you would see that they only seem to go back to Darwin and the theory of evolution. You would have no idea that they went back to any deeper notions of old anti-Semitism that's pervaded European society…”
The film wasn’t about the history of anti-Semitism in Europe. If Stein had made the film Rennie and Steve are debating it would have been hundreds of hours long. Honest people understand that you can’t give the history of mankind in an hour long film.
Steve: “Eugenie Scott is the director of the National Center for Science Education, which fights efforts to dilute the teaching of evolution and to introduce into the classroom unscientific doctrines like creationism and intelligent design.”
This is exactly the attitude that Stein criticizes in his film. Honest scientists who have honest scientific difficulties with the theory of evolution get portrayed as “diluting the teaching of evolution” and introducing “unscientific doctrines.” As in the film no one mentions religion, but Steve And Rennie cannot stop talking about it.
Published: February 19, 2009 7:04 PM
Abhilash Nambiar
fundamentalist
I will not be dragged into your evolution vs religion debate in this forum (believe you me, I am tempted). I have no lofty goals to convert you into an 'evolutionist'. However, I have a book recommendation very much in line with the ideals of the Mises Institute. 'Thinking as a Science' by Henry Hazlitt, a man I am sure you very much admire and so do I.
http://mises.org/books/thinking.pdf
Published: February 19, 2009 7:56 PM
Abhilash Nambiar
If you have already read it, we have nothing more to talk about for now.
Published: February 19, 2009 7:59 PM
fundamentalist
Abhilash: “I have a book recommendation…”
I haven’t read the book, but I admire Hazlitt greatly and will probably agree with everything he wrote. However, can’t you summarize the points you want to make with the book? That’s how blog discussions work. Unless this is your attempt to bow out gracefully.
I have a book recommendation for you: “Genetic Entropy & the Mystery of the Genome” by John C. Sanford, professor of genetics at Cornell for 20 years. Dr. Sanford demonstrates that genetic improvement via natural selection is impossible given what we know about genetics.
Published: February 20, 2009 8:12 AM
Abhilash Nambiar
fundamentalist
You know what, it is a very egalitarian concept to force ideas on to people who do not care for it against their will, for the express purpose of homogenizing thought. Part of the problem in the world today is this the egalitarian revolt against nature. Which is an interesting essay by the way of Murray Rothbard
Egalitarianism As A Revolt Against Nature
http://mises.org/books/egalitarianism.pdf
There are those that disagree with me of course.
That is why despite the fact that evolution is one of those things that I can be almost absolutely certain about, I am not trying to force you into that mode of thinking.
After all the concept of the division of labor, helps incorporate people with various skills. Skills for which knowledge of evolution or creationism or ID are not at all essential. So I have been trying not to link to evolutionary websites on this blogs despite the temptations. Even the one to Scientific American I feel, I went too far. I can even tell you what is wrong with the book you recommended and provide links, but I won't for now. That is not what I am here for.
I know you admire Hazlitt (note: I recommended the book of a person you admire, you did not reciprocate in same kind), and we can agree that he was a clear thinker. I do not know what impact it will have on your views on evolution, yet on reflection it seemed like a good book to recommend in this context. So recommending a good book from an author you admire and haven't read can't be all that bad now can it? Whatever good comes out of it, I will accept it. And no I won't summarize it, because I would like you to read it, time permitted of course. Here is the link again:
http://mises.org/books/thinking.pdf
I would like to end on a note that I think you and I can agree on. The creationist and the evolutionists have opposing world views. One of them is lying for sure. Whoever is lying will pay a heavy price in the court of public opinion, because people do not like being lied to.
Published: February 20, 2009 10:13 AM
Alex
DNA:
Thanks for your reply. However, in what sense are deposits "warehouse agreements?" They are loan agreements, aren't they.
Since this discussion is one of morality, I assumed that you were talking in terms of banking ethics, of fraudulent practices of modern day banking.
I think there is fraud in the modern day banking system, but this fraud takes place at the central bank level, and the fact that central banks create money out of nothing. This money is counterfeit and, as all counterfeit money does, robs (taxes) the public of real resources.
At the end of your original post you said:
".... how can there be any legitimate banking function beside lending on the one hand and warehousing on the other?"
If we reintroduce gold, for example, as real money, and I deposit this gold at my bank, the arrangement will either be a warehousing arrangement or a loan arrangement. If a warehousing arrangement,and the bank-warehouse lends out some of this gold, it is committing an immoral act -fraud. If the arrangement is a lending one, then the bank has every right to lend out my gold and doing so is not unethical.
Now, any lending arrangement can be problematic in that if the borrower's assets (the bank's assets) are bad, the borrower may default, but that can be the case even if all actions in the banking system are all above board (perfectly ethical).
Published: February 20, 2009 10:15 AM
fundamentalist
Abhilash: "That is why despite the fact that evolution is one of those things that I can be almost absolutely certain about..."
How can you be so certain 1) when you have read so little from the opposing side and 2) Many evolutionists aren't certain about it. They accept it as the least objectionable theory. Have you read Roger Lewin's book "Bones of Contention?" He is an evolutionist and a scientist. He includes nothing about religion whatsoever. But he has problems with the evidence.
Abhilash: "I can even tell you what is wrong with the book you recommended and provide links, but I won't for now."
How can you be so certain when you haven't even read the book?
I haven't read Hazlitt's book, but I have read a few that are similar to it. "Human Action," for example, is a lesson in how to think, especially the parts on espistemology. I doubt I will find anything surprising in Hazlitt's book, but I want to read it so I can recommend it to others.
You probably recommended the book because you are so certain that I oppose evolution because I can't properly. But the truth is just the opposite. Books like Hazlitt's are what persuaded me to oppose the theory of evolution, which is riddled with circular reasoning and many other logical fallacies, not to mention the fact that there is virtually no evidence to support the theory.
If you don't want to pursue this discussion on line, I would be happy to continue it in private. My email is rdmckinney@cox.net. But I don't expect to hear from you. Challenging your irrational faith in evolution seems to really upset you.
Published: February 20, 2009 10:38 AM
ehmoran
Abhilash Nambiar,
How can you say that either creationists or evolutionists are lying. How can you possibly know that?
Was any human being around when the World was "CREATED"? Is there a complete written history covering the entire "EVOLUTIONARY" tract since the World was "CREATED"?
That's one of the problems with someones view on anything, maybe, how the past became the present. This likely is one reason DISCUSSION, LISTENING, and possibly THOUGHT MODIFICATION must be out primary objective as a Society.
You see, seems like many, if not most, will always remain egalitarian because they truly don't understand what actually transpired in the PAST?
And no one has enough time to have read all the History to say anything DEFINITELY about how we got where we are?
Published: February 20, 2009 10:43 AM
DNA
Alex,
Warehousing gold (or whatever commodity serves as money in a particular market) is not a loan, as the customer retains ownership of this gold (or more accurately, the equivalent weight in gold, a distinction spelled out in de Soto's magnificent book, Money, Bank Credit, and Economic Cycles) and the banker must return this gold *on demand.* He receives a fee for this service, and the customer receives the benefit of not having to lug around the physical gold and to use his deposit receipt as a money substitute. In a loan agreement, the gold becomes the banker's property for some specified period of time (during which he presumably, but not necessarily, lends it out to someone else) and the customer has no claim on it until that time.
The supporters of FRB fancy that there can be some kind of middle way between these two functions, and I'm not seeing it.
Published: February 20, 2009 10:53 AM
Abhilash Nambiar
ehmoran I am sure we can have a very interesting conversation on this totally unrelated topic that is of great interest to many people who come here. But I have already devoted my time to fundamentalist, he will get an email from me. There is only so much of me to go around you know. Sorry. Perhaps some other time.
Published: February 20, 2009 11:37 AM
fundamentalist
ehmoran: "Was any human being around when the World was "CREATED"?"
That's one of the problems. We have no history and controlled experiments about events in the distant past are impossible. So we're left with extrapolating our knowledge of how things work today into the past. For example, we know with certainty two important laws that the theory of evolution violate: 1) the second law of thermodynamics and 2) the law that life can not come from non-living matter. Neither law have ever been refuted, but evolutionists just ignore them.
Another way we can examine origins is by projecting what the world would look like if the model, or theory, is true. For example, Darwin proposed that his theory would be validated in the future by the discovery of transitional fossils. 150 years later we have a handful of fossils people claim are transitional but are very controversial. To cover over this embarassing lack of evidence, evolutionists invented the hopeful monster theory (punctuated equilibrium) in the 1970's and later the idea that evolution happened in such remote places that we just haven't found the fossils yet. Both are slight of hand techniques to distract the public from the fact that the theory has almost no evidence to support it after 150 years of research.
Published: February 20, 2009 11:58 AM
ehmoran
Abhilash Nambiar,
I have no desire to have a conversation with you concerning this subject, obviously from the attitude of your apparent egalitarian response. Besides, it only would end being a ONE SIDED conversation thus wasting everybody's time!
I was just making a point that HUMILITY is VERY, VERY, rare in this World of shallow thinking, confusion, and misguidance.
Published: February 20, 2009 12:00 PM
ehmoran
fundamentalist ,
Just one thing, the argument concerning Creation and Evolution has been used to fashion the argument of Natural or Anthropogenic Climate Change and neither side wants to prove the other RIGHT or WRONG because there's no MONEY in IT!!!
Concerning Creation and Evolution; IT really doesn't matter what happened; DOES IT?. Its just an argument to see who's smarter than the other. There is and never will be a CONCLUSION.
But, look at Aristotle, he argued the Primary Mover discussion and Aristotle and his followers likely set the World back by 400 years in knowledge because no one was allowed to dispute his reasoning and SCIENTIFIC views.
The pure problem with EVOLUTIONISTS and ATHEISTS is that they think they are GODS of the World. Now, that's pure arrogance. They consider, at worst, others as BUGS with no right to breath the air surrounding them.
Most have no Social Morality because they have no foundation except, possibly, that taught by their Ancestors. But, generally, they consider their Ancestors as being WRONG also. So where is their morality grounded.
Regardless of religious view, Christ, as viewed from historic documents, was PURELY compassionate and humanely and socially good and a total threat to the Establishment. Especially TODAY'S establishment and their desire to oppress FREE and OPEN-THINKING objective to the Establishment's VIEW.
Keep the FAITH.
Published: February 20, 2009 12:46 PM
Pat
Ehmoran: "Concerning Creation and Evolution; IT really doesn't matter what happened; DOES IT?. Its just an argument to see who's smarter than the other. There is and never will be a CONCLUSION."
You are right and I agree with you. But when you have a worldview that depends on the truth of one theory (Especially if it affects your well-being), it is important to have a conclusion that favors your worldview. Which is why it is not easy to accept alternative views. That is what makes free speech vital. And so hated by those who would rather maintain the monopoly of ideas. Of course, a little humility wouldn't hurt a person.
Published: February 20, 2009 1:48 PM
ehmoran
Pat,
DIDO!!!
Published: February 20, 2009 1:50 PM
Alex
DNA:
I completely agree with your first paragraph. As you say, "In a loan agreement, the gold becomes the banker's property for some specified period of time (during which he presumably, but not necessarily, lends it out to someone else) and the customer has no claim on it until that time." And this is the deal involved in present frb, is it not? I was not aware that in the context of today's banking that some people claimed that depositors enter into some implicit agreement with the banks and FDIC that is, in fact, not a loan deal (with taxpayer guarantee), but something between a loan and a warehousing agreement.
Published: February 20, 2009 3:29 PM
DNA
Alex,
I'm not really commenting on the current monetary/banking system (which all austro-libs would agree is rotten to the core), I'm addressing those defenders of FRB who contend that, even on a free market, FRB would be completely legitimate if done honestly. I reject that it can done honestly.
Published: February 20, 2009 3:58 PM
DNA
Or put differently, if it *is* done honestly, then it is either a warehouse arrangement or a loan contract. There's no other alternative.
Published: February 20, 2009 4:07 PM
fundamentalist
Ehmoran: "Concerning Creation and Evolution; IT really doesn't matter what happened; DOES IT?.” Its just an argument to see who's smarter than the other. There is and never will be a CONCLUSION."
I don’t guess anything really matters. It’s part of the journey to discover truth. I see the evolution/creation debate much like the socialism/austrian debate. The socialism/austrian debate has been going on at least since the French revolution. In that debate their will never be a conclusion in the sense of uninimity. Of course, Austrians have been losing the debate for the past 80 years. We’ve lost in academia and in politics, so in that sense there has been something of a conclusion.
The evolution/creation debate is a version of the ancient debate about the existence of God which has gone on at least since Solomon ruled in Israel in the 10th century BC. So, no, there will never be a conclusion in the sense that there will be unanimity. There has been something of a conclusion for quite a while since the consensus in the scientific community is all evolution. Just as the consensus in economics is all Keynesian.
Should the fact that Austrians have lost the debate cause us to give up? Is it really worth the effort? The only answer I can give you is that I care about the truth. I have no illusions about transforming the US into a capitalist economy. But I want to keep the flickering flame of truth alive in case someone in the future is interested. The same is true with creationism.
Pat: “ Which is why it is not easy to accept alternative views. That is what makes free speech vital. And so hated by those who would rather maintain the monopoly of ideas. Of course, a little humility wouldn't hurt a person.”
In order to recognize truth, a person has to put himself in a frame of mind in which he doesn’t care about the consequences; he wants the truth more than anything else. People don’t accept the truth because something else is more important to them. For socialists that might be keeping alive the socialist dream of utopia. For evolutionists it could be many things, but as Stein depicted in his film, it’s often a fear of career damage.
I’m not sure how humility applies in such debates. Its opposite, arrogance, is thinking you know more than you do. At least that is how Hayek uses it in “Fatal Conceit.” I don’t think evolutionists or creationists are arrogant. Both have good arguments on their sides. I happen to think Creationists have the better science on their side. The alternative is to be agnostic, but that’s not humility. It’s laziness.
Published: February 20, 2009 4:20 PM
ehmoran
fundamentalist ,
The only problem with the economic debate is we have no reference point: Austrian economics has NEVER been instituted. There has NEVER even been a true "FREE-MARKET". Throughout history, Gov'ts have always been involved and in direct competition with private enterprise. They'll never allow the institution of Austrian Economics into the Establishment. IT threatens the Powers to BE.
In the late 1790's, Hamilton issued Treasury bills looking for Private investment. Now who's going to compete with a Military State for MONEY.
In the early 1900's, we incorporated Socialism and have become Socialist. And the present state of the US proves Socialism is a COMPLETE failure. Imagine that. Has anyone ever thought of this????
The biggest problem today is the majority want to be told everything is fine, they want to be told what the truth is.
"Questioning everything or questioning nothing, this is the path of least resistance and requires the least amount of learning." and this is amazingly true today.
Many assume that all the information they need can be found on TV. In this World of rapid information deployment through the internet, there's no excuse for ignorance, as long as curiosity and personal advancement remains intact.
Published: February 20, 2009 4:36 PM
Gerry Flaychy
Concerning the question of the ownership of money, here's a way we may see it.
To own something is to own rights on this thing. Among those rights, there is, among others, the «title to property», and the «right to use».
For example, if I rent my house, I keep the «title to property», but I lose the «right to use» for the term of the rent.
If I lend a certain amount of dollars, or gold, I keep the «title to property» on this amount, but I lose the «right to use» on this amount for the term of the loan. It is precisely because I keep the «title to property» on it that I can claim this amount at the end of the term. I cannot claim something if I have no right at all to property on it.
In the case of demand deposit, I neither lose the «title to property» nor the «right to use». But the «right to use» is also conferred to the banker: both the depositor and the banker have the «right to use» on the same amount, but the banker has it as long as the amount stay in my account at the bank. If I want it back he has to give it to me, or if I make a check, he has to honoured it. It's a kind of priority of use.
How does is sound to you ?
Published: February 20, 2009 6:40 PM
newson
another great book by hulsmann, and a perfect complement to huerta de soto's "money, bank credit and economic cycles"
Published: February 20, 2009 8:14 PM
DNA
Gerry Flaychy,
If the banker has to return the amount of deposited money on demand, I cannot see how both banker and depositer have some sort of common right to use; the banker's right is severely restricted by precisely his obligation to honor a request for redemption. Warehousing and lending are completely different functions.
Published: February 20, 2009 9:06 PM
Gerry Flaychy
DNA, first of all, I think that warehousing should definitively be discarded because warehousing is for specific goods, and it is this very same specific goods that has to be returned, no other one.
For example, if I have a 100 $ bill with a specific number and I want to have back this specific good on demand, no other 100 $ bill, I cannot do that with a demand deposit account, because what I deposit in this kind of account is an amount of money, which is not a specific good. I cannot have back the specific good that I gave to the banker, only the same amount of money.
Moreover, if I deposit a check of 100 $ instead of a 100 $ bill, the only way that the banker can give it back to me,
it's when that check has bounced ! !
Published: February 20, 2009 10:39 PM
fundamentalist
ehmoran: "The only problem with the economic debate is we have no reference point: Austrian economics has NEVER been instituted. There has NEVER even been a true "FREE-MARKET".
That's true, but we have had periods of less state intervention to compare to periods of greater intervention. Compared to today, the US in the 19th century was pure capitalist fee markets.
And we can compare across countries today. For example, we can use the Heritage Foundation's index of economic freedom and compare growth. And the US is almost as socialist as Europe, but we enjoy greater wealth, faster growth and lower unemployment. Then we can compare individual countries such as those of Eastern Europe, Russia and China before and after they abandoned socialism.
The evidence is there for those who care about the truth.
Published: February 20, 2009 10:52 PM
DNA
Gerry Flaychy,
You should definitely read de Soto's
outstanding book Money, Bank Credit, and Economic Cycles for some clarification on these issues. It can be downloaded for free from this website.
Published: February 21, 2009 7:20 AM
Gerry Flaychy
DNA, thank you for your suggestion of the De Soto's book. I already read the first chapter and did a fast reading of the second.
It's interesting but we have to be aware that his text is based on the Spanish Civil Code and spanish jurisprudence, which is not necessarry the same laws and jurisprudence that the ones in the USA. For example, I don't think that in Spain they have the Common Law as in the english countries. We have also to be aware that his text may contain his personal views or interpretations on the subject.
I have also remarked that he is using the word «ownership», which is a general word who can be interpreted in different ways, instead of using the name of the specific right he is refering too, which can be misleading. As I have already said, we do not own things but rights on those things, and each one of those rights on a particular thing may be owned by a different owner. So it is important to know to which right precisely we are refering to.
That will be all for the moment.
Published: February 21, 2009 11:52 AM
Nicholas Page
Oh Boy. An evolution vs creationism debate here as well. Any place is good enough for these guys and their fist fights. The stupid creationists are everywhere are they not? Correction, the stupid creationists who resent being called stupid.
Published: April 21, 2009 12:46 AM