Keynes v Hayek, recorded on 26 July 2011 at the London School of Economics.

Speaker(s): Professor George Selgin, Professor Lord Skidelsky, Duncan Weldon, Dr Jamie Whyte
Chair: Paul Mason
Paper Bugs, or, Stupid Arguments Against Gold

Eduardo Porter responds to recent pro-gold testimonials of various Republican presidential candidates and conservative talking heads. Such persons aren’t exactly heavyweights when it comes to making good arguments for returning to gold. Yet in trying to show just what lightweights they really are, Mr. Porter mainly succeeds in revealing his own featherweight grasp of monetary economics and history.

For his opening salvo Mr. Porter turns to R.A. Radford’s famous article on the employment of cigarettes as money in German P.O.W. camps, noting how, according to Radford, the prices of other goods sometimes fluctuated dramatically in response to new cigarette deliveries or to cigarettes’ gradual disappearance in the absence of such. This experience, we are assured, proves that a gold standard is a dumb idea since gold, “as money,…share’s tobacco’s basic drawback” of being a commodity.

This would be an unanswerable argument against the gold standard were it not for two minor issues: first, gold isn’t tobacco; second, P.O.W. camps aren’t ordinary economies. Those who plead for a return to gold have a right to be understood to be extolling the merits of a gold standard rather than those of a tobacco standard or a cowrie shell standard or some other commodity standard; and the instability exhibited by any standard in a P.O.W. camp might not supply an accurate indication of the same standard’s likely performance in a more usual economic setting. I would bet, for example, that the real price of cigarettes was subject to more violent changes within the confines of Stalag Luft III than in the surrounding German economy; and since the war the real wholesale price of cigarettes, in the U.S. at least, has actually been pretty stable, with changes in excise taxes accounting for most observed changes in their retail price. Finally, there isn’t even any good reason for supposing that cigarettes were a poor monetary medium for P.O.W. camps, given the available options.

While the general thrust of Mr. Porter’s essay is that one has to be daft to say nice things about the gold standard, he is generous enough to allow that this might not be the only reason for Ron Paul’s defense of gold. After all, Porter informs us, “much of his [Paul’s] wealth is tied up in gold-mining stocks.” Consequently, Porter reasons, Paul “would certainly benefit if even more American’s caught the gold bug.” But would he? Have a look at any plot of the real price of gold, and ask yourself whether, if you had “much of your wealth” in gold mining, you would be pleading for a return to the gold standard, or pulling hard for a continuation of the fiat-money status quo. Besides not making sense, and being nasty, Porter's argumentum ad hominem is profoundly silly. Would he have us conclude that Paul is pro-life only because he’s a pediatrician, or that, since he favors drug legalization, he must be long on marijuana, coca, and poppies?

Fractional Reserve Banking: Options?

“In order to overcome these objections to the claim that fractional reserve banking accords with the principle of freedom of contract, White and Selgin then, as their last line of defense, withdraw to the position that banks may attach an “option clause” to their notes, informing depositors that the bank may at any time suspend or defer redemption, and letting borrowers know that their loans may be instantly recalled.[26] While such a practice would indeed dispose of the charge of fraud, it is subject to another fundamental criticism, for such notes would no longer be money but a peculiar form of lottery tickets.[27]

It is the function of money to serve as the most easily resalable and most widely acceptable good, so as to prepare its owner for instant purchases of directly or indirectly serviceable consumer or producer goods at not yet known future dates; hence, whatever may serve as money so as to be instantly resalable at any future point in time, it must be something that bestows an absolute and unconditional property right on its owner.

In sharp contrast, the owner of a note to which an option clause is attached does not possess an unconditional property title. Rather, similar to the holder of a “fractional reserve parking ticket” (where more tickets are sold than there are parking places on hand, and lots are allocated according to a “first-come-first-served” rule), he is merely entitled to participate in the drawing of certain prizes, consisting of ownership or time-rental services to specified goods according to specified rules. But as drawing rights—and not unconditional ownership titles—they only possess temporally conditional value until the time of the drawing, and they become worthless as soon as the prizes have been allocated to the ticket holders; thus, they would be uniquely unsuited to serve as a medium of exchange.”

          — Hans-Hermann Hoppe, Against Fiduciary Media

anonymous asked:

I'm trying to write a story, and I have the characters, the plot but it's messy and not really put together right now because I don't know what I'm trying to say with this story. Are there are ways to figure out what you want to say with your story, what is my commentary on the theme of the story? I just don't know what I'm trying to say, and I'm at a loss to figure out how to figure it out. Thank you!

“The best things that happen in our writing happen not because we will them, but because we let them happen.”

-Peter Selgin, 179 Ways to Save a Novel

One of the first things I learned when I started taking creative writing classes was that theme is not a starting point. Trying to figure out what you’re trying to say before you say it can often affect the soul of the story, because you end up forcing characters onto paths they weren’t meant to take. 

Didn’t stop me from discussing the challenge in a past post, however. There isn’t one right way to do things, so never be afraid to try new approaches.

But when it comes to determining what your story is trying to say, start by looking at what issues your character and plot decisions raise. A good story has characters that evolve, and when we evolve, we often learn lessons about life. Those lessons create themes. Therefore, if you’ve got characters that are evolving and learning, overcoming adversity, and challenging their weaknesses, you’ve got themes already. You might not know what your story is saying yet, but it’s probably saying something.

Focus on resolving the “mess” your story is in. Does your story have a beginning, middle, and end? Do you have a climax? Do all the events of your story contribute to getting to that climax? And as I said, do your characters evolve? Do they end the story with a different perspective/opinion on something? Do they handle problems with more resolve and strength? Do they learn skills they didn’t have at the beginning? 

If you’re at a complete loss, think about it in this progression:

  • Step one: Think of an interesting story. 
  • Step two: Find a way to craft that story with cohesion, conciseness, and complexity. Use your characters to achieve this, by having their choices directly cause the outcomes. Create a plot that’s driven by character decisions.
  • Step three: Read your complete draft and marvel at the meaning that was just sitting there, unintentionally gaining momentum as the story progressed.

The point is that deep meanings grow from the roots of good plot and good character. So try to start there. If there’s inconsistencies in your plot, or things that don’t make sense, brainstorm threads to tie things together. If your characters are doing things that don’t seem believable, evaluate the choices and either change the character’s motivations or change the choices they make. 

Solve problems at the micro level, and when you’ve got something complete and cohesive to judge, you can start identifying the themes. 

To my anon, focus on telling a good story, first and foremost. There are too many writers that never say anything because they spend too much time trying to think of what to say.