Leland Yeager offers an illuminating discussion of a serious problem that has historically plagued monetary theory and continues to do so to this day: the failure to clearly distinguish between the individual and the overall viewpoints when analyzing monetary phenomena.
It is an error in economics, as prevalent as it is patent, that all commodities, at a definite point of time and in a given market, may be assumed to stand to each other in a definite relation of exchange, in other words, may be mutually exchanged in definite quantities at will. It is not true that in any given market 10 cwt. of one article = 2 cwt. of another = 3 lbs. of a third article, and so on.
[This article is excerpted from volume 2, chapter 10 of An Austrian Perspective on the History of Economic Thought (1995).
[This article is excerpted from volume 2, chapter 10 of An Austrian Perspective on the History of Economic Thought (1995). An MP3 audio file of this chapter, narrated by Jeff Riggenbach, is available for download.]
While it is important that attention be paid to the slow recovery and to “What is holding the economy back,” the two most recent boom-bust episodes should have more clearly focused attention of economists on the need for significant monetary reform.
There was a lively and enlightening discussion this past Monday at NYU’s Colloquium on Market Institutions & Economic Processes (formerly named the Austrian Economics Colloquium), when Peter Klein presented an excerpt from his new book , Organizing Entrepreneurial Judgment, co-authored with Nicolai Foss and published by prestigious Cambridge University Press.
In a piece for Bloomberg, reporter Sanat Vallikappen begins, “Go away, American millionaires.” Valliikappen then goes on to explain that wealth management firms the world over are declining to open offshore accounts for Americans.
“I don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”
Victoria McGrane reports for the Wall Street Journal that the FDIC says it has it all figured out as to how it will unwind those huge, complicated, multinational financial institutions should the need arise. McGrane writes,
The FDIC, known more for its bank deposit insurance, is working to persuade major investors, analysts, economists and bankers that it is building an apparatus that could cleanly guide a massive financial firm to failure without a taxpayer bailout.
Bookies in Britain have suspended betting on the “do” side of the proposition as to whether Greece leaves the Euro Zone. Ladbrokes gave up cutting the odds on a Greek departure and has stopped taking action. “It is safer for us to suspend betting than to keep cutting the odds,” a spokesman for Ladbrokes told CNBC. “We have been slashing the odds repeatedly over the last few days.”
“If we get some positive news we will open the book again,” he said.
