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What's wrong with Austrian Economics???
- Thread starter jueco2005
- Start date
Quote from jueco2005:
I do not believe we can not have a full reserve system. Although such undertaking could take decades to avoid harming the economy.
This is akin to saying that you do not want to treat an infection and let's just slap on a bandage.
What we can do right now is to increase the reserve %. The lower the reserve requirement, the more dangerous FRL is and vice-versa.
This might put the financial system in a better direction but it won't do much for the overhaul that is needed.
I personally do not believe that a full reserve banking system is necessary nor the answer, when the bigger problem lies in the private central bank scheme as well as fiat currency, among other issues.
You're certainly entitled to your opinion regarding whether or not I am ignorant. I disagree, as you'd expect, and would just point out that, given that one cannot possibly know and be an expert in everything, one has to make choices. At least I am honest about it and don't pretend I am knowledgeable, where in reality I am not.Quote from Anaconda:
Well right there you already show ignorance. Austrian economics is more of a study of history, rather than theories. You do not have to agree with it to find it interesting to learn about.
As for recent implementations of full reserve banking or free market banking, you can look up Scotland in the 1800s. The nation is mostly immune to the panic that underwent in Britain right prior to the implementation of a central bank.
As to full-reserve banking, I don't need to look up anything. That's a subject I am well familiar with.
Finally, given just how well-informed and educated you seem to be, I think you should know that the Bank of England has been "implemented" in 1694, rather than the 1800s.
Quote from Martinghoul:
Finally, given just how well-informed and educated you seem to be, I think you should know that the Bank of England has been "implemented" in 1694, rather than the 1800s.
Yes you're correct, I pegged it to the period of free market banking of Scotland during which England was undergoing some fun turmoil on behalf of its central bank. My mistake.
There is no need to be an expert in Austrian economics, but it is wise to a decent knowledge base of it. Not all Austrians push for full reserve banking or even a gold standard. The core of the concept is really a study of money & history.
Do you actually believe in the current monetary system?
Here's my answer to this question, prefaced with a bit of philosophising...Quote from Anaconda:
Do you actually believe in the current monetary system?
I believe that in political economy, just like in many other areas of human endeavor, there's no such thing as an absolute wrong or an absolute right. Every stage of human development offers trade-offs, choices between lesser and greater evils.
Do I believe that the current economic setup we have is perfect? Of course not... Do I believe that it's the best economic setup that we can realistically have, given where we are today, in terms of our political and moral achievements? For the most part my answer to that would be a resounding yes. Does that mean I believe in the current system? I don't know, you decide.
Moreover, I would say exactly the same thing about other concepts/institutions, such as capitalism, democracy, central banking (and, specifically, the Fed) etc. One thing I wouldn't apply my conclusion to would be the US of A political process.
Quote from Martinghoul:
Do I believe that it's the best economic setup that we can realistically have, given where we are today, in terms of our political and moral achievements? For the most part my answer to that would be a resounding yes.
I really fail to understand how anyone could believe that if they are knowledgeable about what is going on. The irony is that the whole system was set up as a huge scam. Fractional reserve banking is essentially fraud and embezzlement and was treated as such centuries back.
Moreover, I would say exactly the same thing about other concepts/institutions, such as capitalism, democracy, central banking (and, specifically, the Fed) etc. One thing I wouldn't apply my conclusion to would be the US of A political process.
Politics, big business and international banking powers are heavily intertwined. It should also be stated that it is the political machine which is subordinate to the others.
Quote from achilles28:
Austrians believe in sound money, minimal tax, full-reserve banking and no Central Bank. There is nothing inherently dangerous about this.
Austrians believe in eliminating taxes altogether, because they advocate eliminating government itself and letting "the market" (i.e. a rich oligarchy) solve all our problems. Dangerously naive.
Well, we're just gonna have to disagree on this...Quote from Anaconda:
I really fail to understand how anyone could believe that if they are knowledgeable about what is going on. The irony is that the whole system was set up as a huge scam. Fractional reserve banking is essentially fraud and embezzlement and was treated as such centuries back.
My considered view, without going into too much gory detail, is that to try to abolish fractional-reserve banking in a modern society would be to deny basic human greed. As recent history has demonstrated, you can't suppress, regulate away or otherwise proscribe fundamental human drives.
As to you last point, I think we have discussed it before. We had all sorts of wonderful things centuries back. Are you equally eager to bring back serfdom and vassalage?
Most critics of the Austrian School of Economics share a common trait which is they don't really know what it says, they just know is contrary to their prejudices, most likely, of the marxist, keynesian or monetarist variety.
Austrians are not against all forms of taxation, or even government. But they are against the bloated Leviathan the government is right now and against the highway robbery taxation currently is.
Through history, oligarchies have been able to exist only due to political power, enforced e.g. by a "government". Think about european royal families, russian or latin american oligarchs. The free market has always been the #1 enemy of oligarchs, and socialism/statism their best friend.
That's why the banking oligarchs are delighted by the current revival of Keynesianism and Socialism.
Socialists like Paul Krugman like to distort what Austrians say into something anybody could disagree with, like Mad max anarchy or a pirate economic system like Somalia, but these have nothing to do with the Austrian School.
Austrians are not against all forms of taxation, or even government. But they are against the bloated Leviathan the government is right now and against the highway robbery taxation currently is.
Through history, oligarchies have been able to exist only due to political power, enforced e.g. by a "government". Think about european royal families, russian or latin american oligarchs. The free market has always been the #1 enemy of oligarchs, and socialism/statism their best friend.
That's why the banking oligarchs are delighted by the current revival of Keynesianism and Socialism.
Socialists like Paul Krugman like to distort what Austrians say into something anybody could disagree with, like Mad max anarchy or a pirate economic system like Somalia, but these have nothing to do with the Austrian School.
I think Austrians do not believe in proscribing fractional-reserve banking, they are against making it mandatory and government-protected.Quote from Martinghoul:
My considered view, without going into too much gory detail, is that to try to abolish fractional-reserve banking in a modern society would be to deny basic human greed. As recent history has demonstrated, you can't suppress, regulate away or otherwise proscribe fundamental human drives.
It's like casinos. Austrians are not going to ban casinos not deny your basic right to go to a casino if you want to.
But Austrians are definitely against raising taxes from the people to refund the gamblers' casino losses, and against subsidizing the casino industry.