*claims tax cuts can cure everything*

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20075421)

*buys gold*

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20075622)

2) It draws its analysis from simple axioms regarding human action. i.e: If I trade my tie for your shoe, that must mean in that instant you value my tie more than your shoe and vis versa for me.

All analysis stems from simple, common-sense ideas.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20075925)

It is based on fundamental axioms and then using deductive logic to construct and address various issues. Just repeating what Friedman said off-hand is not going to get you far bro.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20075995)

That is exactly the point. You cannot apply numeric models to any of this and it is wholly intellectually dishonest to do so. We only know the ordinal rankings of preference we cannot value things like utility. This is exactly why shit like "the public's best interest" is totally meaningless in an economic sense. IT is exactly AE that eschews all that nonsense.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076053)

You need to rid yourself of your pre-concieved notions of empiricism and economics.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076109)

Rofl, what? Phrases like that tell me you have little understanding of this subject matter. In AE, "money" is just a medium of exchange which was once a commodity that had a high marketability trait. Its existence does not in anyway hamper AE.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076187)

that's exactly the issue. u can't just define stuff that exists how you want. theres no guarantee you have the right definition. now if you can prove you do, or if you can come up with a falsifiable model, that's interesting.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076207)

can you give an example of this method in action?

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20105721)

OH WHAT A SCHOLAR

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076021)

We both agree that in a voluntary trade both parties must, by definition be better-off at that point in time thanks to the trade. Now, consider a labour trade: A shopkeeper hires a cashier for $3/hour. The same exact principle applies, the labourer (cashier) values the $3 dollars more than the hour they give up and the shopkeeper values the services more than the $3 (lets say the shopkeeper calcs the value of the cashier at $4/hour). Now, the gov't comes along and dictates that the min wage be $5/hour. What happens? Well, this labour trade would not happen (or it would until the shopkeeper can find an alternative, like automation or a more-skilled and therefore probably richer cashier who was productive enough to be valued at >$5/hour). In the absence of the trade, both parties are now worse off (since, they are now effectively denied the ability to engage in the original trade which we agreed benefited both).

Simple, easy, and yet millions of tards still think min wage laws help the cashier.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076174)

Why would that be true "by definition?"

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076240)

OH WHAT A SCHOLAR"

You seemed to think that this was obvious.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076284)

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076353)

Can you not fucking read?

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076411)

Can you not fucking read? (Not george).

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076416)

WTF does that even mean? If I trade with a swindler, I'm "by definition" better off?

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076431)

is adam not objectively better off and peter objectively worse off? remember your definition of currency.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076478)

Edit: http://mises.org/rothbard/praxeology.pdf

A good overview for you.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076333)

(Cow Goes Moo)

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20076822)

*realizes that we are running out of gas and need to get more*

*is mocked for his idea of getting more gas because he doesn't know how the fuel gauge works*

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20078583)

*rants to everyone about merits of social darwinism*

*uses student loans to rent shithole apartment with roommates*

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20077079)

You: "LOL @ freedom"

Published by Alan Greenspan in Ayn Rand's "Objectivist" newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967.

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization...

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity...

....

Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.

A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.

When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one — so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline — argued economic interventionists — why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely — it was claimed — there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors.

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form — from a growing number of welfare-state advocates — was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

(http://www.autoadmit.com/thread.php?thread_id=1885751&forum_id=2#20444169)