Hayek and Mises were the true giants of 20th Century economics.

@SpwnTheBitcoinOverlord

4 жыл бұрын

What about Rothbard? :-)

@guilhermemartins2606

4 жыл бұрын

Forget about the 20th century. They are the giants of economics of all time.

@sharpie6888

4 жыл бұрын

This is what a non-academic economist would say

@tommyrosati9326

4 жыл бұрын

Sharpie Not really. You could argue that for Mises, but Hayek made extraordinary contributions

@desirepirahde3986

3 жыл бұрын

Hayek is the greatest of all time. Keynes is very overrated and was a fraud.

The clarity of his thought is mind boggling!

Hayek was mistaken on the monetary policy views of Friedman. Friedman didn't want government monopoly on money, but we have a govt. monopoly on money, so he created a theory on how central banks should operate. Friedman was actually very sympathetic to free banking.

@Vuk11Media

10 жыл бұрын

***** Look up David Friedman's defence of his father. He clearly states that Milton Friedman was not interested in proposing his ideal view on society but rather in how to realistically make the world as it was less bad at the time. I quote also: "The fact that he thought an existing government institution modified in some fashion would be an improvement didn't mean he thought it would be an improvement over no government intervention at all. On the contrary, at various points he said and wrote that one proposal or another was not what he would want if one were starting with a blank slate, but was what he thought one should be moving to given where we were starting" And "I can report pointing out to him that, at least in a simplified model, a competitive market for privately issued currency produced the equilibrium behaviour of the money supply which he had argued for in his optimal quantity of money essay. He did not disagree".

@Vuk11Media

10 жыл бұрын

***** Because the man wasn't concerned with his ideal society, he spent his time trying to make the world at the time "less bad" proposing realistic changes, if he started talking about potential Anarchism he would have had no credibility, due to what he did say he was able to impact policy in many different countries. Judge him how you will, I just thought it was interesting.

@ShufflinRhino

10 жыл бұрын

On top of that, Hayek essentially predated neo-monetarism with his advocacy of nominal income targeting, should it be necessary that we have a central bank.

@SP3NTT

9 жыл бұрын

***** why why why would you put effort into something that will be rejected. Every time I get into a debate with an anarchist they base their whole argument on how people should be, instead of how people are. Be rational, you need to base theory on how the everyday consumer will act. Not on how they should act.

@stanalpha731

8 жыл бұрын

+Welsh77 did u just stumble upon friedman or sth? he's said abt a 1000 times that he fed should be abolished. and btw u nicely snuck in character traits of friedman u can't possibly claim to know. the fact that the man started out as a very small minority in terms of economic thinking (who joined with hayek in mont pelerin btw) and quickly dominated the entire field of economic thinking just shows 1. unshaken conviction of his own views 2. what i started my comment with i think a better explanation is that he understood in schumpeterian terms the unrealisable nature of market ideals and thus left that to dreams. 'the only world we can work with is the one we have today' robert unger. cya

People have to remember that money is a commodity just like any other, and is therefore subject to the very same effects and principles of supply and demand. We tend to view money a something different and separate, but this is a mistake, since it is simply another traded good and so should be viewed as such.

@bradley5210

9 жыл бұрын

51MontyPython You've given me something to think about

@stanalpha731

8 жыл бұрын

+51MontyPython it is way too distinct from the usual sense of commodity since money, and esp. additional money is not a physical product but a physical byproduct of the creation of products or savings. it is in some sense a parallel good i.e. it is certainly not a commodity 'like any other'. it does not get sold in the same way. we equate money to aspects of labour and interest, and those things drive demand supply, wouldn't u say? the demand for money comes from the demand/supply of non-money commodities. though that doesn't mean it's not subject to the laws of demand and supply.

@51MontyPython

8 жыл бұрын

Stan Alpha Money does too get sold. What are you talking about?? O_o And it is no more the "byproduct" of any other commodity than any other commodity is the "byproduct" of money. To say that it is the byproduct of the creation of products or savings doesn't even make sense. I honestly don't even understand what you're saying there. "...We equate money to aspects of labour and interest, and those things drive demand supply, wouldn't u say?" uh, _no._ O_o Money is money. Labor is labor. Obviously. The latter part of that statement also does not even make sense. Demand is driven by just that -- demand. It is also expressed through the commodity of money, _via_ supply and demand, just as demand for any given commodity would be expressed by whatever other given commodity would be the alternative to money in the case of a cashless barter system.

@c0p13dn4m3

8 жыл бұрын

+51MontyPython Commodities don't appear out of thin air. Money is simply a tool that makes transactions easier. It's not a commodity.

@51MontyPython

8 жыл бұрын

George Costanza No, it _is_ a commodity, precisely because it _does_ work in the same way as any other commodity, in order to help _produce_ any given commodity in the first place. It's called trade - i.e. "supply and demand." Yes, you do indeed point out the obvious, as if it to be in question ;)

It’s amazing to listen to one absolute giant in such an important discipline criticising another on an aspect of their theories where they, in large part, agree. Both outstanding luminaries. I particularly enjoyed the accusation of Friedman being a Keynesian! I don’t even think Keynes would be a modern Keynesian.

@____blank____

6 ай бұрын

It's very interesting to see that commentary. Friedman's Chicago school of economics lies between Keynesian and Austrian. Therefore, Hayek would definitely see him closer to the left, and Keynes would very likely consider Friedman an Austrian disciple. But in fact, economic theories form a spectrum.

Sounds like a prediction for Bitcoin!

@colinf7052

7 жыл бұрын

MrWoopydalan infact i recently read a article describing a few Hayekian reforms bitcoin and other crypto currencies could make that could make them a lot more better, popular, and accepted

@jaisheh

6 жыл бұрын

I just realized this.

@felixforster6687

6 жыл бұрын

And Altcoin markets

@thomasmolitor8020

5 жыл бұрын

You're correct in linking-back bitcoin today with Hayek's *competing currencies* principle. Mainly, Hayek was concerned with governments "having monopolies over the money supply." It's a moral issue: if governments have a monopoly over money and monetary policy devalues that money, then in effect, they are stealing from their citizenry, making theft an immoral act.

@icoresearchgroup4175

5 жыл бұрын

It does!

I wish he had lived long enough to see the invention of bitcoin and alt-coins.

@timothytaggart3289

5 жыл бұрын

Don't rely on bit coin or any cryptocurrency to be foolproof, to do so makes you foolish.

@razorblade7408

3 жыл бұрын

@@timothytaggart3289 I relied on the Argentinian peso... 🙄 And now I'm poor

@GG-ox3oq

2 жыл бұрын

Oh he can see Bitcoin and he’s turning in his grave

@ScandinavianHeretic

10 ай бұрын

@@GG-ox3oq Nah, he isn't.

@lukemccann

Ай бұрын

I’d say that’s the last thing he’s thinking about right now. God rest him.

FA Hayek was one of the greatest economists of all time!

@jgmediting7770

3 жыл бұрын

Doesn’t say much for other economists. You seem to be confusing being smart with being right.

@jeffblackard9753

Жыл бұрын

@@jgmediting7770 your right it doesn’t. So who was better and why?

@jgmediting7770

Жыл бұрын

@@jeffblackard9753 any economist who doesn’t promote the idea right wing systems are best for society. Which is the majority.

@jeffblackard9753

Жыл бұрын

@@jgmediting7770 any punk can run their mouth. Provide names and reasons why your left wing economist would be / are better as left ideology has been so successful that there are only seven communist nations on earth.

@jgmediting7770

Жыл бұрын

@@jeffblackard9753 man, you’re so ignorant. Go away.

He was right, look at the success of cryptocurrency!

@jmitterii2

9 жыл бұрын

Philip Karlsson It's been so successful it's flopped.

@chavezery09

8 жыл бұрын

+jmitterii2 I don't see any flopping here, friend. Despite the fact that it has dropped in value, it's still much higher in value than it was a year and a half to two years ago. It used to be worth about $3-4 per bitcoin and now it's hovering above $200 per bitcoin.

@nrehm092

8 жыл бұрын

Bitcoins are not a commodity and have no intrinsic value therefore they could never be a true alternative to fiat currency as gold ia

@chavezery09

8 жыл бұрын

Nizaam Rehman Their value is in computing power. Nothing holds intrinsic value. The idea that gold has any intrinsic value is silly. I say this as someone who values a gold standard over fiat currency.

@redbarron59_1vs7

8 жыл бұрын

+Nizaam Rehman fiat currency is no different than bit coin they are the same thing

I've watched this a few times now and am blown away each time by the prescient genius of this man. In the age of global communications - where undreamed of computing power rests literally in the hands of the common man - there is a way for Hayek's vision of competing currencies to become reality.

@gennariello8003

Жыл бұрын

Bitcoin my brother

@laughinggiraffe9176

10 ай бұрын

@@gennariello8003 Or Monero, Dash, Firo, Ripple. There are plenty of competitors, though the fiat currencies still have the force of the state behind them and more or less have monopoly power. Maybe we will see the last year of that in our lifetimes.

@NoahZeus

7 ай бұрын

Man this comment aged well.

@ph4nt0m22

6 ай бұрын

@@laughinggiraffe9176 Hayek advocated that Stability in value is presumed to be the decisive factor for acceptance. There is no such thing in crypto, wake up from your dream.

@thomaskraus5125

6 ай бұрын

Competing currencies would work best if governments were required to save a mandatory minimum rate of savings, and the rate of government spending was restricted to a level of spending that lagged the rate of growth of wealth formation in the private sector economy. We need to do away we fractional reserve financing, which creates inflation, and we should have the amount of money banks lend be determined by how much money they have on deposit so banks would have to pay higher interest on savings to attract capital. And charge lower interest on loans the the gap between the interest paid on bank deposits and the interest charged on loans should be set a rate. Each government agency would be required to set a fixed mandatory minimum percentage of their biweekly, monthly, quarterly, and/or yearly income as long-term savings and investment as most responsible families and or, businesses do.. The Central Banks 12 branches could then invest those sums of money in the Global Equity Markets through Exchange Traded Funds to stimulate the Global Economy choosing no favorites investing in entire markets. This system would be copied worldwide. All runs on banks happen when the interest paid on depositors savings falls too much below the interests charged on loans and interest paid on bank deposits in an inflationary economy, especially when the government comes to believe all income in the economy is partially theirs including savings and investments. Singapore taxes, neither citizens' savings nor capital gains, and their rate of inflation is 50% of America, and they do not tax inhertance, and because savings and investment are higher per capita than in America. It is really, very simple, shrink government worldwide by 2.5% over 27 years through accelerated retirements and invest the savings worldwide move to establishing a global minimum wage half that of the Australian Minimum Wage currently at A$23.23. With the intent of raising the Global Minimum Wage to Pariety with the Australian Minimum Wage by July 4th, 2050, after having every government agency worldwide, gradually synchronize tax and spending moving toward a global Flat Income Tax, phase out capital gains taxes, and taxes on savings and taxes on retirement funds or insurancy policy claims, sales taxes, inhertance taxes. In addition to having every government agency establish their own savings and investment accounts being required to save/invest 25% of their allocated budget without one of the 12 Central Banks, Insurance Company's or Investment Banks as families and businesses do. The Unied States Treasury would need to, in addition, save money by investing money to shure up Social Security and all other entitlements following the same methodology as commercial insurance companies use to fund their insurance policies. In any given year, insurance companies payout more in policy claims than they collected in insurance policy premiums while still earning a profit because when insurance companies establish an insurance fund, they Prefund the insurance policy's endowment in order to assure state governments the insurance company already has enough money on hand to cover policy claims for the first five years before they have sold their first insurance policy in the state. The Federal,, State, and Local Governments, have historically under financed government entitlements on a pay as you go basis, along with government workers, Healthcare Plans, and Retirement Plans, which risks their benefits in retirement running out before their lives have expired. Federal, state, and Local Governments can restructure their economies to share employees who do the same job processing entitlements working from the same offices filling out Universal Entitlement applications for government assistance checking boxes that apply and sending the applications off to the central processing field offices of the appropriate level of government. The same thing can be done with environmental policy having The Federal, State, and Local Governments environmental policy employees working together from the same office being shared expenses so as to reduce unnecessary redundancy in paper pushers now we live in the computer age where information gets processed faster than when the entitlement system was created and environmental policy was created. Additionally, Federal Deposit Insurance on Bank Accounts has been collected from the banking industry, but, not invested in the Global Equity Markets as Commercial Insurance Invested but added to the general fund of discreationary spending and spent on things unrelated to insuring bank depositors bank accounts which is why when there is a turn down in the banking sector and banks need to be saved from going under Congress has to appropriate money to bail out the banking industry because there is no relationship between the money collected by the Federal Deposit Insurance Company to insure bank deposits. Another Two Capital Funds needed are the Foreign Currency Reserve Insurance Fund, where 25% of Foreign Currency Reserves are invested into the Global Equity Markets From Which they originated with 76% of interest dividends and principle continously reinvested while 24% of dividends and interest and principle earned be repatriated back to the Central Banks Own Economy. We need to move toward a system less dependent on taxes alone to finance the operational costs of governments worldwide, covered by investment dollars instead of government taxes. The government can get out of the business of contracting with real estate developers to errect government, buildings, and would instead lease government acquired land to commercial real estate developers to errect a commercial office building for three-times the operational cost of a government field office located in a commercial office building where 80% to 90% of rental a space would be commercially owned and only 10% to 20% of space would be government offices. Air development rights would cover the cost of the salaries and benefits of government workers and utilities of government agencies. Two-thirds of the remaining air development rights lease revenue collected from the commercial real estate developers would be invested in the Global Equity Markets, and 1/3 would be used to pay down government debt and the other third would be used to create an additional reserve fund or savings. The federal, states, and local governments, over time, will no longer own the buildings, from which they do business, only the land on which the buildings are erected upon. Public Schools, Public Libraries, and Public Performing Arts Centers, instead of being erected as stand-alone structures, would be placed in commercial office buildings erected on government land and as described above air development rights lease revenue will cover government operational costs creatig perpetual reserves.

Salma really let herself go.

@el_equidistante

7 жыл бұрын

lol xD

@joshuahuman8442

6 жыл бұрын

Bahaha!!! That is hilarious!!!😂

This man was a genius!

I am a Libertarian that likes Austrian economics more than Keynesian. I still like Milton Friedman a lot and I see him as a really great libertarian combined with Hayek and Ludwig Von Mises

@jeffblackard9753

Жыл бұрын

Completely agree although I believe the perfect mix would be 80% Hayek 20% Friedman.

I would have loved to hear Hayek's thoughts on the few serious crypto projects that exist. As well as hear him talk about government defending their monopoly of money in that context. And genius aside, you gotta love this man's sense of humor! Always subtle and good natured yet packed with a good slap on the face.

@jeffblackard9753

Жыл бұрын

I would argue pound for pound he was the best economist of them all

@ph4nt0m22

6 ай бұрын

Hayek advocated that Stability in value is presumed to be the decisive factor for acceptance. There is no such thing in crypto, wake up from your dream.

@NicosMind That is more of a textbook on price theory. I understand why you could not find it, The stuff saved over at the IEA does not come up on search engines well. I will send you a PA with the URL

Thanks. I as well did not realize there was subtitles until I saw your comment. Thank you.

I like the idea of competing currencies theoretically, but in practice it seems like people would eventually settle on one strong currency for the sake of convenience.

@shawnradke

Жыл бұрын

yup! which is infinitely better than being forced to use one you don't want to BTC is probably going to be that

@thenoobprincev2529

9 ай бұрын

And That's exactly the point! Abolish the monopoly of the money market, and let it be a competetive market where agents are free to choose, thus giving the suppliers incentive to provide the most reliable and salable(esp across time) Money.

I think it is difficult to say that Hayek was wrong on monetary policy because it has never been tried. Keynesianism certainly hasn't worked and it could be argued that, especially in recent time, some aspects of Friedman's monetary policy have not worked very well, but Hayek remains the one theory that hasn't been tried. Primarily because it takes the power of the economy away from politicians, something they would never allow.

@yydd4954

Жыл бұрын

Cryptocurrency say Hello

@jeffblackard9753

Жыл бұрын

@@yydd4954 99% of said companies have shit the bed. Further monetarism is largely an idea that has lost its practicality as the world has converted from paper/coin to digital GOVERNMENT produced currency transfers.

@robertortiz-wilson1588

8 ай бұрын

Interesting to think about.

@naadde Very much agreed with that assessment. Libertarians better be careful. They are finally making real headway now. They need all of the allies they can get. And Miltons contributions over the course of his life was very beneficial to the Libertarian cause. He is not the Libertarians enemy. He is a strong and brilliant contributor. I personally have been very inspired by Dr. Friedman. And I am 100% Austrian.

@luisisilvab Captions can be turned on by the 'cc' button bellow the video to the left of the little speech mark button for annotations. In the same bar as the play button & video time.

@FrederikLambert There are subtitles you know. Read the annotation at the begining of the video.

I need to study more. When I hear Milton Friedman and Hayek speak I really feel out of my element.

@jgmediting7770

3 жыл бұрын

What they’re selling relies on that ignorance.

@NetzKaiser There are now captions (in english), which might help you understand.

Friedman did prefer free banking in a deeper sense, but Hayek's and Friedman's analysis of money were different. Hayek believed in the Austrian business cycle theory, correctly IMO, while Friedman saw fractional banking and a government liquidity backstop as efficient mechanisms. That said Friedman did usually say we'd be better off without central banks all together. Nonetheless Friedman was more about statistical relationships of little meaning to Hayek, who preferred a theoretical basis.

4:20 He speaks the truth, consider the liberty dollar.

@JupiterWeeklycom

3 жыл бұрын

Whoa 11yr old comment about bitcoin, nice.

This is 1985, Hayek was born in 1899.

Oh no, I was not saying he contradicted himself; I was simply proving that he did believe in a safety net. That is the reason I love Hayek; he combines free enterprise with the security for life.

@Malthus0 Hey Malthus how are you? I tried searching for that Israel Kirzner article but couldnt find it. What i did find was "Market Theory and the Price System". Would this be the same thing?

@shaqdaddy11 Captions are now available

@Malthus0 Couldn't you post it in here? I'm also interested in that. Thanks!

When you have to pay taxes, and other mandatory services, you have no choice but trade whatever currency you have into the established one, as Hayek said. It's really simple, if taxes weren't a think, the Federal Reserve could go on about it's day printing dollars, no problem. Far fewer people would use them.

@austinbyrd1703

2 жыл бұрын

Yes problem. Yes very very big problem. Cheap inflationary credit, whether spent by the government or private entities, inevitably causes huge problems. Government deficit spending & artificially cheap credit is inherently inefficient. Even when it isn't for some time, when it inevitably is, the only way to deal with malinvestment is liquidation. In which case you face a 'deflationary death spiral' of even your somewhat sound investments. So it's either you endure the recession, or through time you build up so many malinvestments your productive capacity is relatively sh&t. It's either you endure a credit crunch now, or something much much worse in the future. Downright currency collapse. Wealth isn't spending in undemanded/lesser demanded ventures. Wealth isn't over consumption. Wealth isn't distorted price signals. Wealth isn't even having a job. Wealth is demanded production. It's having more & better goods/services.

I find discussion on monetary policy and currencies very interesting. It's so interesting how Gold became something that was desired yet had no real desirability for use beyond jewellery in the ancient world. You can measure the value today as it's shown it worth in science and medicine.

There is only economics! No micro or macro in fact .

@BoshBargnani

5 жыл бұрын

Wow! Thank you professor.

@gabbar51ngh

3 жыл бұрын

Most of it is expanded keynesianism. Half of the shit people coming out of macro and micro economics class is hysterical. It seems that Marxist leninist Influence have spread over the academia

What did he say?

@Malthus0 awesome, this will help out a lot. I like the Milton Friedman vids, so i would love Hayeks views

"Money has many different meanings" lol :D

@tehflooper

6 жыл бұрын

crazieeez yes, there are M1, M2, M3 and so on

@crazieeez

6 жыл бұрын

buttcoin, dogecoin, 420coin, bitcoin, sugarcoin, keke

Sorry I live in the UK so am not sure about that. I remember that Peter Boettke has posted that type of advice on the blog coordination problem. Even at one point producing a list of austrian & market friendly institutions. Which unfortunatly I can't find at the moment, I will send you the link if I come across it.

@captcool420 That is what would happen most likely. However the point of competition is not necessarily having loads of competitors a la the perfect competition model. As Hayek points out competition is a discovery procedure & we don't know the optimum No. of competitors before the fact. As long as there are no barriers to entry the dominant firm will be constrained by real & even only potential competitors & be replaced if they take their eye of the ball. Someone will always fill their shoes.

As Friedman says we must compare what is real to what is real. Central banking is mired in all sorts of problems but it is a far better alternative to the free banking of the 19th century in term of both lessening the pain of downswings and price stability.

Use the 'cc' function :)

What does Hayek mean exactly around 1:35, regarding the quantity theory?

Does anyone know how old this video is, and how old Hayek was at the time?

One thing that bothers me is that a fair number of monetarists and especially Austrians speak as though expansion of the money supply is the sole determinant of price inflation. There is also this idea among some Austrians that expanding the money supply is always bad, even though not expanding it would lead to deflation if output increases.

It's interesting. I've read several books by and on Milton Friedman and have watched dozens of interviews and documentaries, again by and on Friedman, and I never heard or read Friedman opposing competing currency. Can someone be kind enough to send me a KZread link or a website that suggests he does, in fact, oppose such a monetary system?

I was thinking the same thing! To be so cognitively acute at such an age is remarkable.

I would also add that currently there seems to be some bad blood between the Chicago and Austrian schools, but as we can see with Friedman and Hayek, the disagreements were relatively minor. Murray Rothbard once accused even Friedman of being a statist, but I think Rothbard forgot one of his own dictums; that you should side with those whom you agree on the most issues, not reject them for the few issues on which you disagree.

Thank you for the reply. I'll do my own searching but if you come across the link that would be great man!

Hayek said there are two types of security. The security for life which is what is depicted in the paragraph you've cited. Note that it says bare minimum of food, shelter and clothing, SUFFICIENT to preserve health. The second security is different in that it is an arbitrary standard of living set by the "planners," as he named them who are simply the politicians in charge (at least that's how I see it). He did not contradict himself in his writing.

Doesn't the idea of competing currencies run contrary to the efficient operation of markets? Would the price signals that the markets operate on be confused, or at least slowed by the number of different competing currencies in circulation?

Obviously Hayek knows Milton better than I do, but perhaps he looks upon Milton with a critical eye where I charitably. I am sure Milton would prefer free currency, but given the established existing system, he is willing to work with it and make it least bad... perhaps.

Remaining accurate and lucid with so little space is no easy task. They need to make these boxes bigger.

@Malthus0 awesome! thanks!

Friedman uses monetary aggregates, and doesn't focus on relative price changes (Hayek). Price inflation is one type of inflation, where the money supply exceeds total output. The more general definition of inflation is increasing the money supply in excess of demand for cash holdings (which can lead to general price inflation or not). The latter results in relative price distortions causing misdirections of labor+capital into unwarranted economic activities, which must eventually be liquidated.

Prediction of Bitcoin is VERY accurate.

The old texts talk about demand-pull, price push and core inflation, but they are in fact, fictions. That they are still taught is a function of the dominance of keynesian economics well into the 1970s and even longer in the halls of academe. Even many Keynesians (assuming you include posts and neos) no longer accept those definitions and few other schools - least of all the Austrians - do.

@Malthus0 Yea it makes sense theoretically. I don't think there is much of an argument against that.

I do not think Hayek is claiming here that Keynes contradicted himself. Rather saying that Keynes in persuing his pragmatic objectives ended up providing the elements that would become text book macro. So where do you think Hayek contradicted himself? (btw for a scholarly comparison of the two Hayek's google 'The Salma Hayek versus Friedrich Hayek Scorecard')

Thanks, could you inform me of any websites or videos that talk more about this type of system. A book would be great. Thanks again!

@qstone777

2 жыл бұрын

Hey, I don't know if this will be of much relevance: Currency Wars by James Rickards might be interesting.

The price increased due to a significant increase in worldwide demand during the period when the world economy was in a (largely artificial) boom and has actually decreased signifcantly since the peak. It had little, if anything, to do with speculation which serves a vital market purpose, allocating resources to where they can generate the most good for consumers.

Friedman's work that was targeted to mass audiences only approached those issues that are relevant to mass audiences - general public policy and the like. The bulk of Friedman's work and importance comes not from things like Free to Choose, but from technical works of Economics like Theory of the Consumption Function. That's the Friedman Hayek is addressing here.

He didn't say that Friedman is against competing currencies. He said that Freeman believes that there is a direct relationship between the total quantity of money and the price level. (BTW, who would deny that printing & circulating more money creates inflated prices of goods since you would be devaluing the basic unit of currency?)

@Marine475 LOL, first I thought it is very absurd. But I think it is maybe because of a wrong translation. I put want and wish and demand on one level. But demand in economics only is effective demand. So not the mansion I like to own is demand and also not the big car. But if there would be a nice priced supply, which I can pay, it would be demand. Yes, it is true, Supply creating demand, but it sounds strange.

@AUSM92 True, I think one of the causes is that the Ludwig von Mises institute was headed by Lew Rockwell, who is a anarcho-capitalist, Friedman was very clear that he was not an Anarchist and that government served a very important (though very limited) role. I appreciate the arguments for both, but I think Friedman (on that issue) was just a little more realistic. After all, very few semi-modern "stateless" societies have existed, and none for very long.

@Malthus0 Please, Please add subtitles to this most fascinating talk. I watch it over and over and over and I can never completely understand what Hayek is saying. Please! Help!!

@dubified89 I don't recall him saying that, but I don't doubt it either. I think it's indexing the money supply to real GDP. That way inflation won't increase or decrease very much.

@axe863 The irony of that statement is that Friedman actually advocated for the abolishment of the Federal Reserve, and he argued that Monetarism would be the best monetary policy given the fact that we do have a central bank in the U.S. So it would appear that Friedman actually tended to agreed with Hayek on monetary policy but for some reason or another wasn't courageous enough to consistently go to bat against the Fed.

@Shotosboring1stpick If I understand you correctly then, I think you are mistaken. Austrians like Hayek do not assume perfect information in the first place. So there would be no point of modifying Austrian theory in the same way as the neoclassical perfect competition model needed to be modified. Israel Kirzner's paper ‘How Markets Work’ explains how the Austrian position differs & came to differ from the neo-classical.

wow great! I'll try applying there, though it sounds way out of my league :(

@Malthus0 how can i see them?

...Speaking of Leatherman [previous comment], consider that Victorinox (sole supplier to the swiss army) previously dominated the market to the point that multi-tools were colloquially termed Swiss Army knives even when made by off-brand manufacturers. Enter Tim Leatherman and the game changed. That's how money can work too.

@kusari86 Let me ask you a question.. How is it logical to assume that agents are extremely rational/fully flexible in every sense except for artificially induced interest rates and its effects? Can individuals not comprehend a mean reversion to the long run interest rate?

This is extremely interesting. I love Friedman, but I admit that I do not fully understand his monetary policy (or any monetary policy, they all seem quite convoluted) and I have always liked the idea of competition in everything else, so why not money? I also find it interesting how there seems to be an economic uncertainty principle; that is to say all quantities and values cannot ever be fully known at any given time.

thats a great comparison.i wish i had thought of it first.

@AndroidPolitician No, they have formulated a business cycle theory.

I'm not as well informed as you, but I recall watching an interview where Milton defended that the FED should limit itself to establish a constant supply of money or growing at a fixed or otherwise previously agreed upon rate. This supposedly underlies the assumption that it is possible to know how much money there is and what that rate should be. Hayek is probably saying that because with competing currencies that issue wouldn't be as important because there wd b multiple monetary policies.

The very first time I heard Hayek I had no idea what he was saying. I don't even have to watch the video to be able to comprehend his English/German accent.

@captcool420 true, however if that currency should ever become compromised it would be better to have an alternative ( a legal alternative of course ) as opposed to a monopoly which is what you get with the dollar and the ever approaching collapse that comes with it.

This is the first KZread video about economics I have seen that actually has a majority of intelligent comments in it. Maybe it's because it doesn't have the psychotic rivalry between libertarians and those on the economic left but rather highlights differences among libertarian economists.

It's my understanding that Milton Friedman became a supporter of centralized banking in his later years. Earlier on he advocated competing currencies. In his later years he advocated central banking. Is that what you were saying? i found your comments to be hard to understand in the way they were written. If Im wrong and or incorrect in any way please explain to me your understanding of Milton Friedman's views on monetary policy. Specifically the view he held late in life...

I'm a neophyte here but why don't these guys meet and talk? Hayek and Milton should've met if there were differences. Each man liked and was a soft of fan of the other, quoted the other.

@jewishdad7675

6 жыл бұрын

Slavik Orzhakhovsky there are a couple images of them together which would indicate they have met each other.

@rodrigoparedes7764

6 жыл бұрын

Hayek and Friedman were both founding members of the Mont Pelerin Society, they met many times. I was friend of a Mexican economist who met Ludwig von Mises, Friedrich Hayek, and Milton Friedman in an MPS meeting in Europe.

@Daniel-it6ls

6 жыл бұрын

I think they did, if I remember correctly they met with Mises as well as some others and Mises called them all socialists. I saw a video of a speech by Friedman where he described this.

@sharann3482

5 жыл бұрын

Slavik Orzhakhovsky they mer very often in their Mount Pelerin Society Club where they wrote the Neoliberal policies of Reagan Thatcher and Schröder

You've posted a lot. I can demonstrate beyond doubt that the New Deal not only did not improve things but, in fact, made the Great Depression far worse (one of my areas of specific expertise is the Depression) but it will take far longer than this medium accomodates so I will send you a PM when I've compiled my notes. Til then...

Human trafficking occurs overwhelmingly where it is condoned (or legally enforced) by the state. And it does so in countries where private property rights are not protected.

Have you read ch 8 of 'The Road to Serfdom"? Sound familiar?

Several economists iommediately attacked the study's reliance upon wage rates instead of compensation and the failure to consider changes in condition with regard to assets owned and disposable income. Thomas Sowell tore apart a whole section of the study where it discussed the relative decline in household wealth during a period when household size was shrinking (as more people moved into houses) and personal individual wealth was actually INCREASING.

@bondurango Well since gold in the US no longer accepted in that way, I'm not sure what you're getting at here. Friedman is advocating 2 DIFFERENT currencies, with differing values the Lira and the Pound for example. So if you had different institutions ( 2 different banks for example) issuing 2 different currencies, backed by their assets there would be a different value assigned to them. 1 unit of currency from bank A would not equal 1 unit of currency from bank B.

long live freedom to choose!

@3min he makes an excellent case for the ideas behind something like what we have with the crypto currencies. We have options. He is a Free Market capitalist so he would appreciate that there is competition in digital currencies. Let the people use which ever one they want, is a way of letting the market decide.

As for speculation and 'animal spirits' devaluing economic theory it may devalue 'an economic theory' perhaps one that does not take them into account but it does not devalue theory in general.

It seems each generation of free market economist regards the previous as sliding toward statism. Mises felt that way about Hayek, and then Hayek about Friedman.

@kusari86 What does "systematic risk" factors mis-pricing have to do with risk free interest rates? Its an assumption of linear stable systems vs highly nonlinear complex processes which is the main "cause" of this problem. There are 100's of "causes"

Friedman was a key player in the removal of the gold standard, and the move towards fiat monetary nationalism/floating exchange rates. Friedman was a mechanical quantity theorist-- that there's a 1-1 relationship between the money supply and prices (b/c V is constant). Unfortunately, it's simply not true; humans are not robots. They react differently to different situations (V is not constant). Thus, the FED doesn't control the entire supply of money--destroying his theory (M not controllable)

@Shotosboring1stpick Actually, its Stiglitz that did most of the pioneering work on asymetries of information. Lucas and Friedman, especially Lucas, often worked on the absurd assumption that people have perfect information and act on it rationally all the time.

@mongobobo, Free markets can only exist primarily if property rights are respected. I didn't know Somalia had property rights?

@WanderingSeer Don't read anything into it.

You seem to be quite knowledgeable. Spare a moment to give an undergrad some advice? I've been looking into free market economics, and very much admire the works of Hayek and Friedman. I live in California. Where/What schools are you aware of that I could attend if I wished to pursue this discipline? Places that are feasible. I'm currently attending a small liberal arts college.

@shivamghimire400

Жыл бұрын

did you find your answer?

If there is anything in the field of public policy and economics more riveting than an argument between intellectuals in the Libertarian field would someone please inform me?

@Malthus0 I think this sums up why so many economists have a problem with Austrian economics. They cant comprehend that someone who would call themselves an economist would also admit to not having perfect knowledge.

Banking is what Hayek called a 'loose joint' in the self regulating capacity of the market. However banking itself is not the problem. There is no need for villages to go about counting up their things bank-less. The problem is the multiplier effect of fractional reserves which means that the interest rates coordinating function lags behind. Signalling the wrong thing for a while after the fundamentals have changed. This effect goes into hyper drive when central banks get involved.

@publicanimal re: the value of gold... It is not only the supply and demand of the gold that is being measured. It is also (perhaps primarily) the supply and demand of whatever currency thay you are valuing the gold in. To me, gold is like a magic mirror that gives you the true value of the value of the currency that it is being valued in. Or the true value of a stock exchange, or whatever.

I was not trying to state a fact. I just wanted someone to go into more detail about the theory.