Legal tender laws – and tax demands.

Fisher was no good on money – as Frank Fetter showed in theory, and Irving Fisher being utterly astonished by both the bust of 1921 and the bust of 1929, showed in practice.

Even Hayek had his flaws (bad ones). He seemed to think that bank credit money was a good idea (it is not).

As for problems with private money….

That the government demands its money in tax?

Private money “really stupid”.

What is “really stupid” (and that is being polite) is fiat money – money whose only value is based on government threats.

The government is pushing this fiat money stuff to the outer limits – we really are heading to “Paper Money Collapse” (acccept it is not even paper).

“So you trust private bankers more?”

No I do not – please see above.

Money should be a commodity – not the toy of governments OR the toy of bankers. After all that is what money was – before governments (and government backed bankers) started to abuse it beyond all limits.

“Which commodity”.

No prizes for guessing what I value.

You value it as well.

Or if you do not……

Give all of your gold and silver to me.

By the way – Gresham’s law is indeed based on RIGGED exchange rates.

If you “fix” the exchange rate of gold and silver then (indeed) one or the other will fall out of circulation.

I continue to maintain that if one currency (i.e., the government’s currency) is required to be accepted at face value, people would hoard a competing private currency that was backed by something tangible (gold or whatever).

Laird, yes, in the situation you describe, you can have a situation the functions of money separate – people begin to use one currency for saving, and TRY TO use the legal-tender one for exchange. It does not last very long, though – the people who sell goods will ignore the legal-tender requirement. Black markets develop. The supposed rank enforcers themselves (police, secret services) are paid in useless money, and begin to exchange it too. It’s not an equilibrium you can maintain for long without total repression, and at that stage, you have bigger problems.

I grant you that in theory, if a legal-tender requirement were sustainable, your predicted outcome would hold.

Yeah, yeah, yeah. And you come here not to praise Caesar but to bury him.

Seriously, though, is it not possible that you are missing the point of the SMPC? Whether or not one likes central banks running monetary policy, they exist and they do, and there is a valuable contribution to be made in examining what the MPC might do and what it should do.

It’s all very well being purist, but one still has to work in the real world. The IEA has published legions of reports that look at using market mechanisms to improve state services, without necessarily agreeing that the services need to be provided by the state at all. It also publishes reports that suggest replacing state with private services, while subsidising low income service-users, without saying that the ultimate end game should not be a world of free and prosperous citizens able to afford to purchase services with their own resources.

Is your claim that “the institute is promoting socialism” not the equivalent of saying that the Taxpayers’ Alliance/Institute of Directors Tax Commission, which advocated cutting taxes to c.35% of GDP, are supporters of big state socialism (35% of GDP being large by comparison to historical norms and higher than many other countries today) because they’ve not advocated eliminating all taxes entirely?

Really, a lot of thought went into it. It even manages to answer Antoine’s criticism about the relative advantages of being an early vs a late adopter. Succeed or fail, I’m pretty sure you’ll be hearing more about it.