New Nobel Laureate in economics:
Remember that under the gold standard, there was no law that restricted your debt-GDP ratio or deficit-GDP ratio. Feasibility and credit markets did the job. If a country wanted to be on the gold standard, it had to balance its budget in a present-value sense. If you didn’t run a balanced budget in the present value sense, you were going to have a run on your currency sooner or later, and probably sooner. So, what induced one major Western country after another to run a more-or-less balanced budget in the 19th century and early 20th century before World War I was their decision to adhere to the gold standard.
h/t FreeBanking
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Did the standard of living of the working class improve more from 1900 to 1950 or from 1950 to 2000?
Kind of hard to say, considering that standard of living isn’t something that is easy to measure. Simple income statistic data won’t reflect reality either. Technology and changing social and political conditions play an important role. You have to account that the first half of the 20th century was spent in brutal and bloody wars that drained the manpower and resources from the economy for decades, obviously not contributing much to the rise of the living standard.
But even then I might argue that as far as the standard of living in capitalist countries progresses, the growth in living standard is in relation to what was before, rather than a change in income. It might be a subjective thing. A certain family or household might feel that it’s social standing and living comforts have increased astronomically during the upward social mobility of the first half of the 20th century, yet the next generation might not feel much of a change even as their incomes rose in the latter half in greater proportion than that of their predecessors. Conversely, the opposite may be true. So it’s quite dangerous to claim that growth of government spending on welfare programs directly corresponds to higher living standards. People have different preferences too. Someone who doesn’t find electronics appealing might not benefit from the living comforts brought about by things like video or internet, so the change in technology during the last 20 years might not play a large part in his spending habits. Someone else might feel his or her life was revolutionized by these things, even when actual income might not have changed.
Please don’t confuse causation and correlation.
LOL!
The former. There was less socialism then.
Who cares what that nobel laureate thinks. He’s a statist. Just like all those other mainstream idiots, he uses mathematical jargon and unrealistic models to deduce false predictions others using those futile regressions can refute with fallacious numbers. It is important to simply respect his view since he somehow sees gold as important in backing money, but he is an FRB erudite. Let’s face it, his university does not teach a banking class of the Austrian School. In the words of Rothbard: “Some, in fact, have explicitly discarded economic analysis altogether in their study of business cycles, while most writers use aggregative “models” with no relation to a general economic analysis of individual action. All of these commit the fallacy of “conceptual realism”—i.e., of using aggregative concepts and shuffling them at will, without relating them to actual individual action, while believing that something is being said about the real world. The business-cycle theorist pores over sine curves, mathematical models, and curves of all types; he shuffles equations and interactions and thinks that he is saying something about the economic system or about human action. In fact, he is not. The overwhelming bulk of current business cycle theory is not economics at all, but meaningless manipulation of mathematical equations and geometric diagrams.”
things change, and it will have a lasting impact for future generations but not necessarily all negative
Something to note, Larry White is also a statist. It is no surprise he scurries to dirty his pants on the ground he kneels upon to kiss that statist economist’s feet. White is like that noble laureate, a sucker for their overpriced education, and a sucker for swindling and FRB. I suggest Robert Murphy, that dude knows what he’s talking about. All the other mainstream infused regression and FRB lovers spew the same rhetoric…..”we shall manipulate the money supply as ‘we’ see fit.” They would all love being in charge of a centrally planned economy.
Please don’t tarnish Murphy’s name by mentioning him in your vitriolic diatribes. Murphy, thank goodness, is a professional and a gentlemen; you won’t find him calling anyone a “statist” (as if that’s supposed to mean anything, anyway) merely on account of a theoretical disagreement.
Statist isn’t even a very good insult. If you’re going to attack someone, do it right. A statist? You mean they don’t buy into your particular view of anarcho-capitalism? Oh, horror of horrors.
Yeesh.
I’m simply calling White what he is. He has demonstrated his love for the expansion of the money supply by banks. He counts on the same tool the FED uses except that it would occur in free banking. His idiotic ideas don’t take into account the arising of central banks, and his aggregative calculations completely overlook individual value scales and subjective value theory the proper way Murphy explains. Perhaps there is more investigating to be done on your behalf good fellow.
If I followed Sargent’s advice, I’d mount a spear on my steering wheel to reduce my chance of getting hurt in a car accident.
The cure for the woes created by fiat-currency systems is more likely to come from the resident guru-of-the-week speaking for Occupy Wall Street than from the entire cast of statist American economists.
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