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George Selgin Dances On (as Predicted)


George Selgin responded to my earlier post. The substance of his response is captured in the following passage


According to Joe Salerno, the implication of the first of these passages is “that those of us who pursue a research program within the praxeological paradigm continually sweat and fret about using terms or formulating concepts in exactly the same way as Mises did ‘a century ago.’” Joe then goes on to point out, with what (I can’t help observing) seems like a fair amount of fretting and sweating, that plenty of Austrian economists, including Mises himself, have in fact not hesitated to depart from Mises’ 1912 definitions. To this I say can only say, Bully for them! But why is Joe pointing this out to me? He should be telling the legions of self-styled Austrian economists, most of whom presumably formed their opinions by reading various Mises Institute publications, who burst a blood vessel every time someone uses the term “inflation” to mean a general rise in prices, or the term “money” to refer to a fractionally-backed bank deposit or note.

My reply is brief:

1. I can assure George that I was as cool as a cucumber in responding to his original post. Academic debate, especially with a worthy opponent like George, is a salutary and relaxing mental exercise, and nothing to get physically exercised about.

2. Why am I responsible for “the legions of self-styled Austrian economists”? Actually these legions are of his own making. They formed as a result of his ill-tempered and rude responses to non-economists, many of whom were young students, who questioned, however mildly, George’s version of free banking orthodoxy. If George developed a thicker skin, I’ll bet that the legions would dissipate. In other words: Lighten up George, they are trying to get your goat.

3. George, very grudgingly, agrees with me that most contemporary Austrian economists associated with the Mises Institute do not worry overly much about using the term “inflation” to mean a rise in prices. (To wit: “To this I can only say, Bully for them.”) Yet he still manages to smear the Institute by asserting, without adducing any evidence, that the Selgin-created legions of self-styled Austrians have had their opinions formed by reading Mises Institute publications. Furthermore George’s insinuation that these publications promote the view that “a fractionally-backed bank deposit or note” is not money is truly outrageous. Mises, Hayek, Rothbard, Huelsmann, Hoppe, Cochran, Garrison, myself, etc, all include un-backed bank notes and deposits, i.e., fiduciary media, in the money supply. Indeed the very core of the Austrian business cycle theory, as George well knows, is that fiduciary media are indistinguishable from and perfect substitutes for fully-backed notes and deposits. Yeah, I know George, Bully for us.

Joseph Salerno is academic vice president of the Mises Institute, professor of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

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