Hugo

On the contrary, I will just point out again that your purility and immaturity do your argument far more damage than is offset by your slinging of silly insults. It's something you have a problem with. Grow up and learn to debate properly or stop wasting our time. You cited it before, I offered a refutation, and you offered no counterpoint. Repeating what you would like to be true does not make it so. More to the point, we should note that you have only ever mentioned the names, and not any kind of understanding or even that you know what the theorems are! You certainly have never tried to apply them in an argument. I think your accusations of ignorance cover your own ignorance. Whatever you say. You've proven yourself so ignorant thus far that unsubstantiated one-liners like this one can be safely ignored by persons of intelligence. In case you're interested, here is David Friedman making the author of that site look like a complete fool.

Eureka declines to reply, again. No matter - I expect he will bring up exactly the same arguments again in a few weeks or months. This is his usual pattern. Imputations that I am too tiresome for debate or suffering from "psychological problems" are obviously false by virtue of the fact that, despite repeated promises to do so, Eureka seems incapable of leaving me alone. He alleges that he doesn't have time for me, and yet he repeatedly makes time for me. The actual reason is that he can't answer my arguments, as he has repeatedly demonstrated, and for reasons best left to his psychiatrist he takes this very personally rather than in the spirit of academic debate, lashing out in unwarranted personal attacks and slander, then retreating to sulk until another day. I'm not sure what I had imputed that he said, which he did not. In my last post, I only alleged that he had drawn ideas from the works of Dickens, the Hammonds and the Commissions based upon which they wrote. In Eureka's own words: In the same thread you also made repeated references to the commissions I am talking about. You are lying. Your disdain for learning, self-education and knowledge would make Mao Zedong proud. Perhaps I should take a leaf out of your book and hold you in disgust for your mindless conformity to English grammar. How unoriginal and ignorant your repetition is. I don't believe there is anything to be called on here. If you feel you have something then by all means, shout out, but I'm sure you'll just elect to bluster that I'm not worth your time instead - a convenient, if false, excuse. In your own words, again: Another lie?

The fact that you are here, regurgitating the argument, gives the lie to that statement. I already addressed that. I noted that the worst abuses of children occurred under the care of the government and that early legislation was directed at the state rather than industry. Child exploitation became a thing of the past in the free market before the state stopped exploiting the children in its care, and the exploitation that took place in the free market was far lesser than that which the state committed. Your argument amounts to asking the wolves to police the sheep. You had told me that your understanding was based upon Dickens, the Hammonds and other writers who used those committee reports as the basis for their works. You had your information second-hand, but those reports, like it or not, are the foundation of your knowledge on this subject. I did read what you wrote. You wrote that you did not care for foreigners nearly as much as for Canadians. I drew a conclusion based on the information you had given me. Now you are repeating the same story again: you say that we should avoid free trade with China not because they brutalize their people, but because they might rip us off. I don't see how I must be a mind-reader, just being an English-reader seems to be working! But it is not up to you. The free market is based on trust and honour. Those who are not trustworthy and honourable find themselves increasingly cast out from the benefits of the market. The individuals involved in the trade will have to make their own assessments of how trustworthy their Chinese partners are likely to be and decide whether or not to trade based upon that. Many of them, as I said, are deciding on India instead. What you are asking for is the right to override their free will. Take a look at the figures for unauthorised satellite dishes in China. The attempts to tighten are the last gasps from the Chinese government. Political control is impossible without economic control. As I have said before, one cannot have political freedom if the state owns every printer, publisher, radio station and TV network. The reverse is also true. First of all, I at least treated your link to an argument. You were rude enough to act as though I had never spoken, ignoring my links completely. Secondly, I don't think the Mises Institute is a "radical libertarian" site. Such unjustified, ad hominem attacks weaken your position. Reactionary labelling without justification doesn't get you anywhere. No, you are not. Conservatives are in favour of free trade and minimal government, you don't favour either, so you can't carry the label. You are a socialist, or at best an interventionist. I think you should question the historical facts a little more carefully. Don't accept everything you are told. Once you know the underlying theory it's easy to see how the facts fit into it. The fact is that the myth of the benevolent union has as much place in economic theory as the flat earth does in astronomy. I've already demonstrated why, and you have offered no defence except to bleat a repetition of your original statement without further evidence or logical argument.

Rubbish! Government fiat money is very real. Governments decide what is legal tender and what is not, and how much new currency to mint (or the fractional reserves it allows to banks, which is the same thing). There is no private money anymore. The fact that "private financial instruments" are involved in dealings is irrelevant until those instruments are also in the business of issuing currency. For instance, you have claimed that the Federal Reserve is private and nongovernmental, which is a lie. Consider that the Fed made very profound shifts in monetary policy in the years of 1953, 1961, 1969, 1974, and 1977, and in all of those years, the presidency changed. Coincidence? I think not. Policies of "packing" the Fed director positions with friendly people go back to the founding of the Fed itself. FDR used this policy to great effect. Robert Weintraub observed that "a Chairman of the Federal Reserve Board who ignores the wishes of the President does so at his peril." Consider too that Arthur Burns was Chairman of the Fed during the terms of office for Nixon, Ford and Carter. In Nixon's time, he followed a loose monetary policy, apeing Nixon's policies, and then when Ford came to office he dutifully followed his "Whip Inflation Now" line and contracted the money supply. Then when Carter was elected, he followed Carter's desire to raise the supply rate again. Doesn't sound too independent. Chicago capitalism is an inferior doctrine to Austrian. I would summarise Milton Friedman in much the same way that you summarised Keynes: some occasionally useful thoughts, but for the most part misguided and wrongheaded. Monetarism is wrong as a theory, as the Japanese stagnation has illustrated. Although it appears to offer a valid explanation, the prescriptions that follow don't solve the problem at all, therefore, one must conclude that the diagnosis has missed something vital. A miss is as good as mile, in this case.

Quite aptly, yes. Apples and oranges are different, but they are both eaten for nutrition. Explain how, or at least provide an example. No, it is not. Deficit spending is when you borrow money and spend it. A government could spend from a deficit without inflating, for instance, by selling bonds. In this case, the expenditure is from a budget deficit but is from real capital. Inflation is creating new money from nothing and then spending it. That's an entirely different beast. My point exactly. Why did you not tell me how you define inflation?

What never ceases to amaze me is how many times you can lose an argument, stick your head in the sand and pop up a few weeks or months later spouting exactly the same nonsense. We already had the child-labour argument in another thread. You gave up, your points were indefensible. The funniest point is that by far the worst exploitation of children was when they were in the "care" of government institutions. No less a person than Friedrich Engels condemned British governmental exploitation of children. When the laws were finally passed, they were not an attack upon capitalism but upon the state itself. You were also unable to answer my contention that the reports on which your understanding of child labour are based were completely derelict as evidence, consisting mostly of testimony by doctors who had never seen child labour, or even a factory, in person and who refused to testify under oath. The other thing that amuses me is that child labour is as old an institution as humankind. We went through thousands of years when children had to work as soon as they could walk. This seemed to be an immutable fact of life. Then we had capitalism and industrialisation, and soon after that child labour became history, and of all things you blame capitalism for child labour! To make an analogy, this is like blaming the police for a burglary after they caught the burglar who broke into your home.

This stems from an originally Marxist fallacy. Marxists believe that all things have an innate value, which they usually figure as the total of labour invested in a given good. This is a ridiculous claim to make and, although Cartman is probably not a Marxist, the fact that he spouts Marxist fallacies is indicative of how prevalent these modes of thought have become. Value is not objective, it is subjective. Objective qualities can be measured in a quantifiable way, such as mass, size and so forth. Value is a subjective quality, and cannot be converted to objective qualities. The value of an item depends upon the beholder, his preferences and his circumstances. In a city, $100 is more valuable than a gallon of water. Alone in a desert, the reverse is true. Nothing about either the water or the $100 has changed, however. This being the case, it is impossible to prejudge which trades are beneficial and which are not, except for oneself. If a free trade has been made, it was mutually beneficial. If one party stood to lose from the trade he would not make it. This example refutes your point, Cartman, because it demonstrates not a trade but a coercion. You are told that you must have automobile insurance to drive, but this is not the case. You must have gasoline to power your car, and this is the result of an immutable physical law that cannot be overridden by human will alone. However, the demand for insurance follows no physical law. The free market is not the cause of this problem, but potentially the solution. If this is the case, and you demand better and propose to use law to make it so, then you are coercing your employer. You force him to pay greater than your marginal value for your labour. Goods and services produced under such circumstances are not likely to be saleable. The reason why you were underemployed in the first place was probably a glut of the goods, or too small a profit margin, or just a lack of consumer demand. Insisting on your full employment makes this problem worse, so you are either going to force your employer out of business or commit a further coercion against the consumers by forcing them to buy. Consider too that in our modern economy, virtually everybody is a creditor and an employer. To coerce employers is to coerce everybody. What you say in this example is that your concept of value should override somebody else's, against their will and desire, or in other words, you want to be a despot. None of these are examples of free trade. War and crime are coercions, and disease and famine are the results of non-human action. You cannot eradicate the less fortunate. Some people are born stupid, or ugly, or with other unfortunate attributes. Ants are (almost) equal, people are not. Furthermore, you are making a grave mistake here. You are trying to claim that a deal that one party was forced into is a free exchange. This is rubbish, night is not day, up is not down and your point is wrong. A free exchange is one in which both parties consent of their own free will. No, it isn't. The American system is a terrible socialist travesty of a healthcare system. The reality is that the largest economies of this world are mostly democracies. Democratic politicians want votes, and an easy way to get votes is to tax the minority, inflate the currency and give the proceeds to the majority in order to convince them to vote for you. This is why our economies are interventionist, it is not a better mode of operation at all. Consider that all of the "largest economies" in the world were once absolute monarchies and feudal states too. Does this mean that absolute monarchy and feudalism is the best system for a state? At one time, circumnavigation was not practiced because the world was thought to be flat. Did that make the world flat? Or was it the case that virtually everybody in the world was mistaken about the fundamental nature of our planet? Regardless, the point is wrong anyway. Governments may not acknowledge the superiority of the free market, but people do, and free trades go on every day. The "theories" you deride also correctly explain economic functions that can be readily observed, including the phenomena of interventionism. Your argument falls down on two counts: firstly, you are arguing for the wrong reasons, secondly, you are arguing based on flawed conclusions. You don't want to halt trade with China because you feel pity for the Chinese people in their oppressed existence, you want to because a Chinese can go hang before you'll see a Canadian lose a dollar. Also, you believe that halting trade with China will somehow loosen the Communist grip on the country, and that increased trade with China will tighten it, but the opposite is true. As more capitalism and private ownership becomes a fact of life in China, it will become increasingly difficult for the Chinese government to keep a tight control. This is a link from the American Federation of Labor and Congress of Industrial Organizations, which describes itself as "a federation of 60 national and international labor unions." As such, it has an extremely biased perspective. Reading through this body of text, we find that it is basically one long post hoc ergo propter hoc fallacy. They list a few facts, true, but fail to link them together in any meaningful way or to explain the theory by which they are linked, merely sprinkling these random factoids around coupled with wholly subjective opinion in a way that is likely to lead a reader to their conclusion without ever making an actual argument. I don't think it should be taken seriously. The facts do not support your opinion. For example, by the time child labour laws were passed, child labour was all but extinct. It had been driven out of existence by forces of the free labour market. Labour unions had no part in this. It's interesting how you conveniently "forgot" my example of Dell. Regardless, IBM is just one software giant that Microsoft has unseated. Novell, Sun, SGI, SCO, and more are all examples of previously dominant software companies whose hold was broken by the upstart Microsoft. IBM did not partner with MS, they bought an OS from MS and bundled it. Then they decided to go their own way, but the competing product of MS beat them out. It remains the standard because the sum of its faults are less than those of the competition. MS may be the dominant standard, which explains a lot of this, however, it did not get there by beating people until they bought Windows. It was far more friendly and open to developers, unlike IBM, it did not tie the software to any particular hardware, unlike Apple, and it offered lucrative deals to hardware manufacturers for bundling, so that consumers could save money. But we know that you don't like consumers saving money. Wrong. Sex is to rape as trade is to burglary.

Here's the contradiction. We say we like free trade. We say we won't trade with China because they don't like free trade. After we say that, we don't like free trade either! Total rubbish. A trade is an agreement in which both parties genuinely believe they have profited. How could this not be good (bearing in mind that "good" is completely subjective)? What you are saying is that it's "too absolute" to claim that everything I find good, I find good, or to make an analogy, it's "too absolute" to claim that water is always water.

I see. So, you are protesting against free trade using an example of government-restricted trade. In other words, a massive self-contradiction. What's your evidence? So far, I see nothing but bluster. Middle-class incomes in America have been shrinking, however, this is a product of inflation and increased government control over the economy (federal taxes were 2% of family income in 1950, but 30% today). Outsourcing has nothing to do with it, and nor does technological progress, something you also doubtless oppose. Declining incomes correspond far more closely with inflation and state economic participation than they do with globalization. No, this is not true. Unions cannot bring these things about, it is impossible for them to do so. The only thing that can bring about greater rewards for a worker is greater investment of capital in him to increase his productivity, which unions cannot provide. In fact, they discourage it, by using violent means to assure above-marginal wage rates for some workers at the expense of others who lose their jobs, which discourages capital investment in the worker by reducing the net value of his work to his employer, and is therefore counter-productive. Your statement makes about as much sense as saying that unions can make water flow uphill. Microsoft drove OS/2 out of the software marketplace. IBM is no longer a software provider because of Microsoft. IBM is still a fairly major player in the IT industry, but the once-pipsqueak Microsoft is now a greater player. Dell, again, has come from nowhere and completely marginalised IBM's once-dominant PC business. Now there's talk that IBM will withdraw from PC manufacturing altogether and concentrate on processors. IBM has had to largely re-invent itself as a consultancy firm. Briefly. You don't know the history of the IT industry, clearly. Who were the "many", then, and where are they now? Where's your evidence? What are the investment figures in China and how do they compare to India? What are the forecasts? I thought you said unemployment figures were irrelevant just a few paragraphs above? Anyway, 4.5% is a catastrophic unemployment rate for Japan in light of their history and culture, given that in the 1980s it never topped 2.8% and that Japan has a culture of lifetime unemployment. The Japanese government also falsifies the figures by paying companies "employment adjustment subsidies" to keep employees on the payroll without doing any productive work. Do you know what the Nikkei index is today? 11,074. In 1989, it was over 40,000. In 1992, it was 15,000. In 2001, it was 12,000. Ever since 1998, Japanese economic growth has actually been negative. No, but then I never told you I was sexually attracted to them. You told me that you care far less about third-worlders than about Canadians. Why, if not racism? Then what is your alternative version of history? If you want me to post the figures of German and Chinese economic problems as well as the Japanese, I'll do so, but until you show that you have any facts to back up your statements at all I think it unfair that I am the only one proving my points! "We" are exporting back to "them." We're exporting money.

That was a terrible excuse for a reply, August. You started off with a confession of ignorance disguised as an ad-populum fallacy, and followed it with a dismissive comment on an economist you apparently don't know or understand very much to begin with. These comments hinder, rather than help, your viewpoint by demonstrating your lack of qualification to have one. I suggest you try again, properly this time!

This doesn't cause a problem. Firstly, gold is lost to wear and tear (although durable when stored, it isn't when handled daily). The most important consideration in the free market, though, is gold mining. Gold is mined because it costs less than 1oz of gold to mine 1oz of gold. If gold falls in value due to new reserves, once the price of mining 1oz of gold for a given mine rises above 1oz of gold it ceases to be profitable and closes. Thus, the gold supply tends towards equilibrium. However, with fiat money the cost of introducing new money is merely the cost of printing it! Money needs to be a commodity that is universally valued in order to be useful. Market forces have established that gold is generally the best commodity for this purpose. Through history, practically every and any commodity has been tried as money, but through the ages gold has won through as the best. It is easily marketable, relatively valuable per given unit of volume and thus easily transportable, durable and in relatively stable supply. It doesn't evaporate and can be transformed from coin to bullion and back again as many times as you like. It can't be counterfeited since the test to establish the purity of gold is pretty simple and impossible to defeat. Neither wealth nor gold can come from nothing. Modern gold-standard theorists don't even insist that the commodity be gold, it can be silver or, in theory, anything, nor do they insist that gold be money. It's merely the case that gold (and possibly silver, although its current value at 1/80 that of gold makes it less portable and valuable, and there's no reason you couldn't have both) happens to be the best commodity. The gold standard is the case for market-originated commodity money, and nothing more. The Bank of Nova Scotia offers a gold-warehousing service. They keep your gold for you, for a fee (3 cents per 100oz. per day), and issue you a certificate. The warehouse does nothing but store your gold, and the certificate is as good as gold for payment. Just an interesting snippet! Ludwig von Mises. Now you know another. That was not why I trotted out these figures. Sweal theorised that growth is accompanied by inflation because growth causes inflation. These figures prove him wrong. That is all I seek to say with them. Don't read too much into it or try to put words into my mouth. "Real capital" is whatever people say it is, August. Gold is valuable because people universally think it has value. If people universally rejected gold as having value it would be useless as a commodity, and when that happens, let me know! So far in history, though, people of all times and cultures have valued gold in a relatively consistent fashion. Exactly, economics is a science of human behviour. However, when inflation happens we know what the situation is: money is decreasing in value compared to all other commodities.

I agree with Sweal. This is indeed a terribly arrogant presumption and is exactly the sort of attitude that led to the perversion of the Church after its adoption as a state religion, the notion that the Church is somehow an arbiter for God and that priests are some kind of spiritual authority figures is ridiculous and anti-Christian. When Christ picked his disciples, he did not pick holy men but ordinary working folk. It's my experience that people who go to church generally don't understand religion, actually. Churches, in my opinion, spend far too much time trying to justify what they think and do, and far too little time asking whether or not what they think and do is justified. I think organised Christian religion has been more responsible for the perversion and distortion of the message of Christ than anything else in history.

I'm not sure where I was saying differently. Gold-standard inflation is different, being artifically created only by coinage debasement and occasionally naturally created by large inflows of precious metal, as when Europeans started plundering the precious metals of the New World. But this is rare and its effects are comparatively moderate. 1717. Sir Isaac Newton, who was Master of the Mint at the time, fixed the pound to gold at £3.17.10½d per 22 carat troy ounce. This arrangement was formalized in 1821 (although silver was not officially demonetized in 1717, it virtually died out as a currency thereafter) and I think this is where the confusion arises. Between 1700 and 1913, GDP increased from $10,709 to to $224,618. That is an increase of 1997%. I was off somewhat (I forgot to deduct the initial 100% - silly error, my apologies). For the period 1913-1998, GDP increases from $224,618 to $1,108,568, an increase of 394%. Averaged out, this means in the 85 years between 1913-1998 the growth was 394%. In a given 85 year period between 1700 and 1913, growth would have been (on average) about 796%. That's double the rate of growth between 1700 and 1913 as compared to 1913-1998. Per annum, we're looking at about 4.5% growth after 1913 as compared to 9.3% for the two centuries beforehand. No, they don't, because you don't know the inflation rates for those countries. Unless you can find enough examples where inflation is greatest at the fastest period of growth and least at the slowest to outnumber the examples where the opposite is the case, your hypothesis is not borne out by the facts. I'm taking British figures because I know the British rates of inflation. Furthermore, if you allege that these effects were caused by the British Empire, you must tell me what effect you think these events had on the British economy and explain them in such a way as to tie them in to the economic figures. Dr. Hans F. Sennholz, head of the Department of Economics at Grove City College, states that the pound sterling has lost 90% of its value (I remembered it slightly wrong) since 1931 and has suffered four major devaluations. Also see Jacques Rueff, The Age of Inflation (Gateway Editions, Henry Regnery Company, Chicago, Ill., 1964). I know. Thus it is a useful way of comparing economic growth to inflatory rates because the growth can be seen without inflatory effects. But it doesn't. Economic growth always (initially) follows inflation, it never precedes it. Think about this: do central banks cut the interest rates to stimulate the economy, or do they cut them because the economy was stimulated? The figures that we're examining above also bear out this point. The fastest growth accompanied and was followed by no inflation. After Britain went off gold and began to inflate the currency, growth slowed. No, investment is taking existing capital and investing it for future capital. Inflation is about taking nothing and investing it for future capital. No, the workers demand more units of currency, but the same amount of money. I'm sorry I didn't make the distinction more clearly. Here's an analogy. Say I sell only oranges in sacks of 10. You want 20 oranges, so you buy two sacks. Then I start only selling oranges in sacks of 5. You still want 20 oranges, so you buy four sacks. Your demand for "units of oranges" (as we measure them in sacks) has doubled, but you are still getting the same amount of oranges. No, there are phases of inflation, or at least of an inflatory economy. Initially, the supply of money increases faster than prices. Then prices keep pace, then increase of prices outpace the increase of money, then the currency collapses. This is obviously going to cause confusion, though, since there are about 6 accepted definitions of inflation. The one that I use and the one I believe is most correct is the artificial expansion of the money supply (people also use it to mean rising prices, which is an effect of inflation, and they can even use it to mean economic growth, amongst other things). No, this isn't the case. Inflation disrupts the normal relationship between consumption and saving/investment. In an inflatory environment, people will consume and spend far more than they invest. Initially, this produces increased demand and an apparent quickening of the economy, but because no new investment is happening to meet this demand (investment is discouraged outside market means) you then run into problems. These disruptions get bigger and bigger until the scheme collapses and the market tacks back to where it would have been, in a recession. No, they don't reach an equilibrium. The problem with this type of thinking, as von Mises and Rothbard took pains to point out, is that economics involves humans. It's not a physical science. Humans are smart and they figure out inflation, and they attempt to compensate for it, which means that the inflatory measures become a race against time. Human action negates inflatory gains unless the inflation is quickened, and eventually humans realise what is going on and desert the currency entirely, since they realise that money is always going to be worth less tomorrow and the inflation won't stop.

Intel, Coca-Cola, Novell, Cisco, Carrier and so forth are all American firms. They may manufacture those things overseas, but those profits come back home. I don't see mass unemployment, and this is already the case. If what you said was true we would expect to have seen rising unemployment since globalisation began in earnest, and we have not. The facts simply don't support what you are saying. Go look up the unemployment figures. I think you'll find that unemployment is far more closely linked to the money supply than to outsourcing of anything. It is not obvious. There are a lot of economists who vehemently disagree with everything you are saying. I said it, not August. The reason why we have environmental pollution is the tragedy of the commons, as August has so often said, that which is owned by everyone shall be cared for by no-one. If you want to preserve the environment, sell every square inch of the earth's surface, sell the atmosphere and privatize (capitalize) everything. Then the environment will improve. Don't believe me? See the example of private forestry in the southern USA, which in a few years reversed environmental damage which public ownership had failed to prevent for decades. As to safety and working hours, capitalism brought about better wages, more workplace safety and better working hours. As the demand for labour increases relative to the supply and the pace of capital growth increases, those demanding labour are forced to offer more. That doesn't mean just money. It means they'll have to offer whatever the labour force demands. Put down your Das Kapital, it contains no useful information and is full of silly errors. Jesus is about being nice. You won't find an economic system that's about "being nice", if that is what is important to you, I suggest you become a monk rather than a socialist. Capitalism just takes the human predisposition for not "being nice" and turns it into nice results. It didn't seem to stop Microsoft, which was at the time a three-man operation, toppling the giant of the IT industry, IBM. Wal-Mart was once a two-bit company that had to face down the giant, all-powerful Sears - and won. All of these big corporations you see as being so evil and unstoppable started as small operations and successfully beat down the big corporations of their day - and it will all happen again. In a century, Wal-Mart will be forgotten, and your intellectual heirs will be whining about some other retailer that is wholly unknown today. Well, why don't you explain some of these levels, then. My point is that democracy does not necessarily give you the right to do anything. Even if you could get 20 million people in Canada to agree to murdering the other 10 million and stealing their property, would that make it right? Would it make it your right to kill them? Yes, and their economies are suffering because of it. China is already being shunned by many outsourcers in favour of countries like India. Most Fortune 500 companies now think of China as a bad investment. The Chinese economy is slowing, unemployment is on the rise, there is widespread discontent in the rust belt and the Chinese government is generally believed to have been falsifying the figures that seemed to indicate good economic growth in recent years. Japan has been in economic stagnation for 11 years, thanks to mixed-economy theories and trade-surplus doctrine. Germany tries to follow the same policy as Japan, with the exact same result. What you want is for Canada and the USA to follow the same policy as them, but for some unknown reason you think that something completely different will happen this time. Explain why history will fail to repeat itself with us. "We" don't send anything to "China." Some individuals in Canada happen to do some business with some individuals in China. Where they live and work is not really relevant. The same argument could be used to argue for only doing business in your hometown and refusing to buy anything made or sold elsewhere, or as August is fond of saying, of insisting on tailoring your own clothes and growing your own food. You accuse me of sneering at some stores, and then you say this? My comments were made in jest. Yours appear to be serious. Remove the rafter from your eye, friend. Why? Are you racist? I read a funny column recently in which an economist recalled talking to a biology teacher. The teacher objected to the fact that her textbooks now had to carry disclaimers warning that evolution was "just a theory", and was complaining that she had to defend evolution against these stupid, 18th-century ideas. To which the economist replied, "How do you think we feel? We spend all our time defending free trade against stupid, 17th-century ideas!" Money is a commodity. It's only more important than other commodities because of the fact that it is universally accepted in trade.

As I said before, to another poster, it's pointless trying to argue that you have some kind of authority here because you cannot prove it. All you can prove is what you know in the course of debate, and so far you have demonstrated that you had heard of one written work by Keynes, and that you didn't understand it. Yes, it does. You see, the primary difference between the stable-money period before 1913 and the unstable period thereafter was the abandonment of the gold standard. Inflation is far easier off the gold standard, while on it, it's only possible with coin debasement which is a primitive method with obvious limits. The mechanics of growth off the gold standard are theoretically the same as they are on it, however, inflation when not on gold becomes far easier. These figures don't support your hypothesis. Between 1700 and 1913 (Britain went onto gold in 1717), we have over 2100% GDP growth in Britain and virtually no inflation (relative price stability). Between 1913 and 1998, we have 394% GDP growth (a slowdown, not an acceleration), and 400% inflation. If a currency inflation causes growth, and the inflation is "backed" by that growth, then we are saying that the inflation caused itself, which is not possible. Monetary expansion must be backed by capital expansion beforehand, not afterwards. Yes. You have heard of index-linking? Basically, if the economy has a habitual 5% inflation rate, then people will demand a 5% yearly salary increase, suppliers will insist on 5% annual price increases and so forth. When this happens, the inflation has become self-defeating, because it no longer produces growth. The only way to produce further growth is to increase the rate of inflation, so if you have the aforementioned scenario, and you want 5% growth, that means you have to increase the rate of inflation to 10%. There is not an increased demand for money, there is an increased supply of money. Because demand has remained a relative constant, this devalues the money. People don't demand more money, they demand the same money, but because the money has been inflated, they must demand more units of currency to get the same money. This is what I meant. This only happens when inflation enters its final phase and people abandon the currency. Until that point, prices increase first in line with inflation and then faster than inflation, which discourages saving and investment, since saved and invested money will be worth less at maturity than it was when initially invested. You are to be commended on your intellectual honesty. I mean that in all seriousness. This is shaping up to be a good thread. The growth is only temporary. The prices and wages adjust to the inflation rate, which makes it self-defeating. See above.

No problem. My apologies for the confusion. Then why would it make a difference? You purport to offer third-world citizens a better choice, then in the next breath you say that there is no such thing as choice, or that it is fleeting and scarce. Yes, and they will be. If you want to help third-world workers, the best thing you can do is to buy more third-world-made products. Right now, because relatively few products are made in the third world (certainly not enough to fully industrialise the labour force), there is a greater supply of labour than there is demand, so the price of labour is very low. If you buy more third-world goods, your demand increases, and entrepreneurs will make sure that supply will increase too (there's a dollar to be made here). More factories will be built in the third world. As long as they are built faster than new workers are added to the workforce, the supply of labour will decrease relative to the demand, pushing the cost of labour higher. On the other hand, if you boycott third-world products, you reverse the process and push wages in those countries even lower. Perhaps, and it's important to remember that it does have an impact (opportunity cost) but that's not the point. If a union demands that wages be increased from $10 to $15 an hour, everybody whose labour was worth $15 an hour or less is now unproductive and must be fired. A union can only obtain an increase in wages if some workers are to be laid off. The alternative to unemployment now is unemployment in the future, because to increase wages without laying off workers will reduce profits, discouraging investment and slowing the growth of the company. I'm not against unions per se, but unions with the power to override market functions are a stupendously bad idea. If Marx was correct then the world should have been in big trouble a long time ago. Instead, we all continued to get richer.

That was a bit of tongue-in-cheek humour. I was jokingly asserting that you might be a Beverly Hills type who walks into a store and demands it be closed while you shop and that all ten assistants be swarming around you. I don't think that's actually the case. Do you get my point, though? I never said that you believed any differently. I said if you believed that Wal-Mart should be closed etc. If you don't, then that's just fine with me. The option is to bring them into the real and sustainable increase in welfare that capitalism produces. This means starting at the bottom, just as Western nations did a few centuries ago. Yes, it might take them a while to get to our level, however, it will probably take them less than it did us, since they have existing rich nations to trade with, which was not the case when Britain was entering her capitalist phase. It takes longer to work, but capitalism is the best and the only sustainable welfare scheme in the world. Redistribution of wealth is great if you want a quick-fix that can't be kept up in the long-term - if you're an elected politician, basically. Show me the guns. I note that you didn't offer any refutation of what I actually said. You picked up on a minor detail of my first point, neglecting to dispute or embellish it in any way, and then instead of refuting any of my arguments about sweat-shops you decided to regale us with a hypothesis backed only by an extremely limited piece of anecdotal evidence. That means your prices will go up, so Canadians will be able to buy less. What you are proposing, then, is international redistribution of wealth. Redistribution is both immoral and economically counterproductive.

Then it's really quite simple. You've made a sound economic decision. You have decided that the service of not being treated like cattle has more value to you than the price difference between Wal-Mart and this mysterious snooty shop you buy things at. But if we respect your economic decision and the value you place on being treated like a lord, should you not respect the economic decisions of others, and the value they place on being treated like a lord? Some people think that being treated nicely is worth less than the price difference between Wal-Mart and its competitors. If you want to shut Wal-Mart down because of this, you are basically presuming that you have the right to tell others what they should think. You don't. And let me guess: the government should step in and help us, hmmm? Cartman doesn't think this is the case. Anti-sweatshop people seem to think that the Chinese could be working cushy jobs as developers for Microsoft or something, and that Wal-Mart has shepherded them all into its evil factories at gunpoint. The truth is that life as a Chinese peasant is absolutely miserable. Most of them will die before they reach 50 years old, but not before they see half to two-thirds of their children die before the age of 5. Most of them will work 16 hours a day or more of back-breaking labour without any mechanical or even animal assistance. Some of them have been given the opportunity to work in a factory for what, to a Canadian, seems like a pittance. They took it and made an economic decision. Cartman seems to think he has the right to override their economic decisions too and send them all back to the paddy fields to die young. Ah. So you think you own the environment, then. Otherwise, you would be telling people what to do with things that aren't yours, wouldn't you?

You have your cause and effect mixed up. Inflation produces growth, albeit only temporarily, not the other way around, and an economic downturn occurs when inflation stops or slows, not the other way around. Inflation produces an influx of money from nowhere, which will be spent, producing growth. In time, prices will adjust upward to reflect the new influx of money (money is now worth less compared to other commodities). This can be seen in the history of the pound sterling. For centuries, when the pound sterling remained a gold-coin backed currency, it retained its value despite roaring economic growth in the 18th and 19th centuries. On the other hand, the pace of economic growth has been slowing since the turn of the 20th century, and yet since that time the pound sterling has lost 80% of its value. This refutes your argument. For it to be true, the reverse would have had to have happened - the growth in the 18th and 19th centuries would have had to produce a massive devaluation of the pound, and the relative stagnation of the 20th century would have had to keep it relatively stable. Inflation causes temporary economic growth, but because the inflated currency is not backed by capital, the growth is only temporary. When the inflation stops, all that was put into the economy will be destroyed, since that which went in came from nowhere, so that which goes out will go nowhere. Basically, inflation tends to destroy profit margins because, as the inflatory mindset begins, debtors and workers start demanding more money that is progressively larger than the inflation rate. This destroys real profit margins and eventually renders whole sectors of industry unprofitable, thus causing companies to fold, unemployment rates to multiply and so forth. The capital used in their construction and growth is essentially lost because nobody else, in the inflatory climate, will be able or willing to purchase it. The lines of business that collapse under inflatory policy aren't necessarily the ones that were generated under it. For instance, inflation vastly favours debtors at the expense of creditors. But taking the economy as a whole, inflation produces a temporary growth spurt that will quickly collapse unless the currency is further inflated. A-ha! But what if the government repays in inflated currency? Explain how, or link to someone who does.

There was actually a thread here which deviated into a discussion of copyright. You posted in it, too, so you can't have been unaware of it!

I have already seen that link. What does "compulsory saving" actually mean? Taxation! It's a word game. A lot of Keynesian theories like this depend on deception in order to work, like the full employment policy, which hopes that nobody would notice the rising prices consequent to inflation. Keynes hopes to deceive workers into accepting lower wages without their realising that he has hoodwinked them. His downfall is that people simply aren't that stupid. As do you! What tracts of Keynesian analysis have you posted so far, exactly? This argument about war funding is the first indication that you know of a single Keynesian theorem - and alarmingly, it seems that you are completely mistaken about its nature!

Guilty as charged, and I apologise. I was just trying to illustrate that "important" does not equate to "beneficial." I admit that my example was extremist. I believe his ideas were wrong, fundamentally flawed. It follows that the application of a wrong idea will almost certainly fail to produce beneficial results. I can criticise his ideas as theories, and then bring out examples of their application as further illustrations of their flaws. In the other thread. To summarise briefly, funding from inflated currency is bad because it either has to be deflated again (leading to recession), or can continue to be inflated (leading to abandonment of the currency and economic crash). Nor can one remain stationary, i.e. to inflate "just a little" and stop there, because the artificial boom created by currency expansion can only avoid being turned into a bust as long as the currency expansion continues. If it stops, all the investment created with inflated currency collapses. Like I said, most of his ideas weren't original. Therefore I said "Keynesianism", by which I meant the theories that Keynes popularised rather than those which he actually came up with. Actually, that's wrong. He did advocate the raising of taxes to pay for war. I was wrong when I claimed that he advocated deficit spending in this particular work, I was confusing it with his earlier pieces - but thank you for pointing out another Keynesian self-contradiction!

Regarding the Paul Krugman article: I think this guy has misidentified the cause of his co-op recession. The initial problem was that the currency was not correctly matched to the true value of capital. The recession was inevitable. In economic history, this is exactly the same thing as when the US, British and French governments went back on the gold standard in the 1920s. The dollar was undervalued, the pound and franc overvalued, which was a primary cause of the Great Depression. The problem was not a lack of inflation to stimulate the economy, but a failure to properly link the value of a currency to the goods it was to be bartered for. The inflationary measures he mentioned fixed the problem not because inflation can prime an economic pump (it can't), but because it corrected the earlier mistake of currency parity.

(Moved from the other thread) I know it's "von Mises", I'm just shortening it. It does not matter that neither is mainstream (von Mises might be considered to be mainstream, or at least those he influenced were - Ayn Rand, for instance), their criticisms are correct. I agree that he was important economist. Hitler was an important politician. I believe that Keynes was important for all the wrong reasons, and that his ideas, like those of Marx, have been very destructive. Whether or not he is an important contributor to economic theory is another matter. As I said, he has been accused by many of plagiarism. The general consensus amongst capitalist economists is that he was a popularizer of other theories rather than a thinker. Not only that, but these theories are usually just plain wrong. You mentioned liquidity preference. The state of the Japanese economy today destroys this myth. According to Keynes, Japan was caught in a liquidity trap in the early 90s, and the Japanese government should have cut interest rates to recover. They cut them to nothing, and failed to recover. Thus, there isn't a liquidity trap, even though according to Keynes, there must be. I found a good column on this example for you here. A fraud can be regarded as a tax. If a con-man persuades you to hand over $100 for a good he does not have and has absolutely no intention of giving you, he has defrauded you - and taxed you $100. Value is in the eye of the beholder. The only value that exists in anything is what people give it. That being said, money is a good. It can be bartered for other goods. If the quantity of other goods increases (physical capital growth) but the quantity of money does not, it follows that money will become worth more in exchange, as long as demand is roughly constant. This talk of "paper assets" is misleading, since paper money is generally an inflationary tool rather than a sound currency. This is a couple of sentences more than you have trotted out. Keynes was a socialist, and anyone who purports to "save capitalism" is generally a socialist too. If you want to save capitalism, the best thing you can do is leave it well alone. Those who advocate state interference in the economy are shilling for Marx. It's wrong, quite simply. It advocates inflationary defecit spending to pay for war, which as has been shown, is a very stupid economic policy. Keynes also believed that war can be good for an economy, which means he basically doesn't understand Bastiat's broken-window fallacy. This is shameful, since it was written almost a century before the book in question. Keynesianism actually got the world into the Depression in the first place, thanks to US and European policies of deficit spending and loose monetary policy which were advocated by Keynes. It's a mistake to believe that FDR had any radically different policies than Herbert Hoover. Hoover's Keynesian policies helped cause the Depression, and FDR's continuation of them helped prolong it, and nothing more.

Post moved to relevant thread.