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« Imposed versus Adopted Monetary Rules | Main | Two Opportunities for Undergrads »

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I'm not convinced merely permitting alternative monies is sufficient. Menger showed how money emerges from barter. But his mechanism doesn't imply the best money will emerge; nor does it imply that a better money will supplant an existing money. Simply put: salability continues to favor the incumbent after legal privileges are removed.

See:
Kirzner, Israel. 1992. “Knowledge Problems and their Solutions: Some Relevant Distinctions,” in Kirzner, The Meaning of Market Process: Essays in the Development of Modern Austrian Economics. London: Routledge.

White, Lawrence H. 2002. "Does a Superior Monetary Standard Spontaneously Emerge?" Journal des Economistes et des Etudes Humaines, 12(2).

Selgin, George. 2003. "Adaptive Learning and the Transition to Fiat Money." Economic Journal, 113: 147-165.

First, it is great that Richard was invited to testify and put these ideas on the record. Second,thanks to Pete for posting this.

Will Luther is arguing there are network effects operating here and he is correct, of course. Granting Hayek's argument about the superiority of evolved institutions, we now have a money and banking system established by statute and fiat. They can only be undone by statute (as Richard recognizes). Repealing, rewriting and enacting require a plan. There is nothing "natural" about it.

Not even Ron Paul wants to simply abolish the Fed without first creating an environment in which parallel institutions can emerge. That requires serious attention to institutional details. If one is in a statist trap, one must plan for freedom.

Again, thanks to Richard and Pete. And to Will for raising an important caveat.


The goal is not the best money, the goal is freedom.

Do the differences of Market Monetarists and Keynesians mfnaiest themselves in a real way? I have the inclination that from the practitioner's point of view both would look the same: very similar action in the monetary and fiscal policy. In engineering we call such a situation (difficult to translate) something like: Who cares about the design philosophy? Fuck the philosophy, lets make working products. I think that there must be some benefit for your academics in making such a difference in something that looks the same from the practitioners' point of view. Is it the number of articles in nice journals? More publications? I understand that, no problem. Measures of results are what they are, be they number of sales, profit, or journal articles.But still you folks seem the same from my point of view.

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