Hey there! Sign in to join this conversationNew here? Join for free
    Offline

    1
    ReputationRep:
    (Original post by Captain Crash)
    I never said constant low steady inflation is a fact of life, just inflation. Given that it exists and nothing will change that, surely having inflation at a steady rate is better than wide unpredictable variations that potentially lead to deflation?
    Continuous inflation isnt a fact of life. Before the advent of a specific form of government interventionism, the value of money would fluctuate in both directions:



    Notice that for much of the history of the USD, deflation has been about as common as inflation. So to say that "inflation exists and nothing will change that" is simply wrong.

    EDIT: Here's another intersting graph:



    As you can see, the general trend until the advent of central banking in the early 20th century has been for the value of money to steadily increase (ie. deflation). This general trend is marked by a number of 'bumps' when the value of the currency suddenly dropped, coinciding with, in order, the Revolutionary War, the War of 1812, the American Civil War and the First World War. These mark times when the government printed money in order to finance the raising of armies and fleets. In the 30s this became a general trend, albeit the government had different reasons.

    Well, I'm full aware of the interest part of monetarism - I was referring mostly to inflation.
    'The interest part of monetarism'? I'm not quite sure what you're trying to imply, but altering the amount of money in circulation is how interest rates are manipulated by central banks. Do you think that they consent to lower or raise their prices to sub-optimal levels just because the government says it wants them to? This really isn't anything to do with monetarism (or something disputed by different factions), the central banks themselves and indeed Keynesians take this view.

    I'm talking about it because inflation is not as such the important factor. It is a tax on holding money, which I would argue is generally bad, but that isn't exactly anything special. Central banks do not set out to create inflation, it is a by-product of their manipulation of interest rates. And their manipulation of interest rates is (in my view) bad. It has all the same failings of other attempts by the state to plan the economy: the plan is almost always wrong, and when it is not honestly mistaken, it is being deliberately manipualted for cynical political gain.
    Offline

    1
    ReputationRep:
    (Original post by Captain Crash)
    Individual goods will inflate and deflate at 'real' prices anyway, as long as wages line up with general inflation
    So long as you have no savings, and live hand to mouth. Ever wondered why everyone is getting into so much debt these days and saving comparatively little?

    Well, no, but I don't think that's the point. The central bank doesn't aim to set the prices - indeed in real terms, inflation has a negligible effect.
    Obviously, since 'in real terms' means 'normalising for inflation'.

    However, the inflation or deflation of money in itself is an immutable reality quite aside from individual prices as long as you have currency, regardless of a central bank.
    Given that currency is ultimately a tradeable commodity in its own right, it is indeed almost certain that its price will change. The question is whether it should change according to how much people wish to pay for it, or according to the whims of a state agency.
    Offline

    1
    ReputationRep:
    (Original post by Collingwood)
    Given that currency is ultimately a tradeable commodity in its own right, it is indeed almost certain that its price will change. The question is whether it should change according to how much people wish to pay for it, or according to the whims of a state agency.
    This is exactly the crucial point. In fact, it goes even further: I think the main thing to take from the Austrians is their idea of the natural interest rate, that is, the interest rate that would occur in a free market in currency, as a kind of inter-temporal exchange rate. Just as the exchange rate between pounds and dollars measures the relative value of pounds and dollars, the interest rate - if left alone from government interference - measures the relative value of a pound now and a pound in a year's time. Just as rational economic calculation regarding the relative values of UK and US goods would be (and, indeed, was) impossible if it was a small policy committee and not the market deciding what the exchange rate should be, so the setting of the interest rates by 9 men in a single room makes rational economic calculation regarding the future impossible. And this, folks, is why there are massive booms and busts.
    Offline

    0
    ReputationRep:
    (Original post by DrunkHamster)
    The point (which he appears to truly have missed) is that Rawlsians shouldn't care about the Gini coefficient. It's the welfare of the worst-off that matters - and the bottom 10% in the US are better off than the bottom 10% in Sweden. Thus, Rawlsians should have no problem with US style capitalism.
    Ah, good point.
    Offline

    0
    ReputationRep:
    (Original post by Captain Crash)
    I'm intrigued as to how exactly libertarians envisage a system without inflation or, even worse, deflation.
    Either by freezing the monetary base and having money issued by banks that compete on a free market, and so have to issue money that is worth more to hold than competitors (in exactly the same way that devaluing the pound leads to fewer people trying to hold pounds, and selling them for other currencies instead); or by prohibiting fraudulent fractional reserve banking, and returning to a commodity based currency, with privately minted coins and privately issued money.

    As for deflation, what is that? In the last half of the nineteenth century the US saw falling prices and high growth. Things getting cheaper all the time in real turms is what productivity is all about.
    Offline

    0
    ReputationRep:
    This is probably out of topic but why do we use "Libertarian" to describe someone with Liberal views? I mean, if someone is for an unregulated free-market he is described as economically LIBERAL. If someone is for complete political pluralism, he is described as politically LIBERAL. If someone is for an entirely FREE society and multiculturalism, he is described as culturally LIBERAL.

    BUT if someone is all of these things he is called a "Libertarian" and not a Liberal. Why is that? Especially since the political meaning of term Libertarian was used by collectivists (anarchist-communists/syndicalists) to describe themselves. They were the first people to use that term politically. Locke and others for instance called themselves Liberals.

    And on top of that, I visited the Libertarian Party's website and took the "Are you a Liberal" test. Why would they name it "Are you a Liberal" test and then call themselves Libertarians? Yeah I am a Liberal but your party's name indicates that you aren't.



    If I show this result to an American friend of mine, he would urge me to join Mr Obama's calvacade of cartoon comedy (i.e. The Democratic Party).

    Why do we perpetuate this stupidity?
    Offline

    15
    ReputationRep:
    (Original post by emvard)
    This is probably out of topic but why do we use "Libertarian" to describe someone with Liberal views? I mean, if someone is for an unregulated free-market he is described as economically LIBERAL. If someone is for complete political pluralism, he is described as politically LIBERAL. If someone is for an entirely FREE society and multiculturalism, he is described as culturally LIBERAL.

    BUT if someone is all of these things he is called a "Libertarian" and not a Liberal. Why is that? Especially since the political meaning of term Libertarian was used by collectivists (anarchist-communists/syndicalists) to describe themselves. They were the first people to use that term politically. Locke and others for instance called themselves Liberals.

    And on top of that, I visited the Libertarian Party's website and took the "Are you a Liberal" test. Why would they name it "Are you a Liberal" test and then call themselves Libertarians? Yeah I am a Liberal but your party's name indicates that you aren't.



    If I show this result to an American friend of mine, he would urge me to join Mr Obama's calvacade of cartoon comedy (i.e. The Democratic Party).

    Why do we perpetuate this stupidity?
    Because of the way the word "Liberal" was hijacked in the middle of the 20th Century.
    Offline

    15
    ReputationRep:
    (Original post by tomheppy)
    oh dear, someone needs to take logic 101 (sorry,I'm not normally mean but libertarians...)!
    Amusing.

    (Original post by tomheppy)
    Give me a reason why that system will not work? There is a political spectrum not just hardcore capitalism or communism. Sure, the US has higher per capita GDP than Sweden (a leading restributive system) but only just and this is no reason to dismiss a redistributive system, perhaps Sweden has fewer natural resources. I am not against capitalism because I think it is for the best of everyone but we can alter the capitalist system to help the poor which we have a duty to do.
    Aside from the fact you've repeated a long existing argument without justifying it at all, you still didn't answer my original question: any further conjecture on your part is pointless without answering that question. Why is equality desirable? Or rather, as you put it: why is equality up until it produces undesirable results on an aggregate desirable? "Equality" is not a word you can shout and be immediately right, sorry.

    (Original post by tomheppy)
    Maybe more flock to America because ...um... IT IS A BIGGER COUNTRY or they have more RELAXED immigration systems. To put the immigration to a country down to it's gini coefficient is rubbish. Take somewhere like bulgaria which has a far lower coefficient than the UK but the GDP per capita is much smaller,perhaps people move here because they realise the worst off are generally better in the UK despite having more inequality of wealth. Most people don't give a **** about equality only their ABSOLUTE welfare. I am not a communist because communism tends to produce horrific results and capitalism is for the best of the worst off .
    The size of the country is irrelevant. The United States has the highest net migration rate in the world. It's also, by GDP, the richest country in the world (because, not in spite of, market capitalism). This is not just correlation. This is causation. The reason immigrants from every corner of the globe come to the United States is because they believe that it is the centre of capitalism; because they believe that they can escape the poverty of their own nations and live the American dream. Whether they can or not is a different matter, but it says something that it is not the welfare capitalist states such as Sweden or Britain that immigrants flock to, but the nation most symbolic of libertarian capitalism.

    And also, many immigrants risk their lives to leave their country. They give everything they have for it. And they choose to go to America, which really speaks volumes.

    On the other hand, I think it's you who need the logic class: I didn't state that gini coefficient had anything to do with immigration levels. My question was why is it that despite our country being more equal, the poorest choose to go to a less equal country. On the other hand, you did at least answer my question: "Most people don't give a **** about equality only their ABSOLUTE welfare." If that's true I don't know why you're bringing gini up in the first place.

    But let's think about this. DH has shown how the "bottom 10% in america are far poorer than europe" myth is false. It's plainly untrue that the absolute welfare of the poor is better in so much better in Sweden or Britain than America to warrant the decreased wealth of anyone who isn't poor.
    Offline

    0
    ReputationRep:
    (Original post by Bagration)
    Because of the way the word "Liberal" was hijacked in the middle of the 20th Century.
    Hahaha thank you very much. It was actually more of a philosophical question than an actual one.

    We gave in to American influence and adopted their meaning of Liberalism. The meaning wasn't "hijacked" in Europe. It was hijacked in America and that was long before the 20th century. Liberal always had a different meaning in America. Since before the American revolution.

    I just think it's sad to abandon such historical names as Liberal and Whig and adopt Libertarian which to me is utterly meaningless and historically empty.

    Just my opinion.
    Offline

    15
    ReputationRep:
    (Original post by emvard)
    Hahaha thank you very much. It was actually more of a philosophical question than an actual one.

    We gave in to American influence and adopted their meaning of Liberalism. The meaning wasn't "hijacked" in Europe. It was hijacked in America and that was long before the 20th century. Liberal always had a different meaning in America. Since before the American revolution.

    I just think it's sad to abandon such historical names as Liberal and Whig and adopt Libertarian which to me is utterly meaningless and historically empty.

    Just my opinion.
    I actually agree. I much prefer to use Liberal or Whig (in fact until very recently I called myslef a Liberal in my profile)
    Offline

    1
    ReputationRep:
    (Original post by emvard)
    Hahaha thank you very much. It was actually more of a philosophical question than an actual one.

    We gave in to American influence and adopted their meaning of Liberalism. The meaning wasn't "hijacked" in Europe. It was hijacked in America and that was long before the 20th century. Liberal always had a different meaning in America. Since before the American revolution.

    I just think it's sad to abandon such historical names as Liberal and Whig and adopt Libertarian which to me is utterly meaningless and historically empty.

    Just my opinion.
    In terms of the party, there is already a Liberal Party in this country. It's not very active, but I don't think the Electoral Commission can or would remove it. The American meaning is also becoming stronger over here, and a lot of the literature people read on libertarianism seems to be increasingly American. I don't really like the word, though.
    Offline

    0
    ReputationRep:
    (Original post by Collingwood)
    In terms of the party, there is already a Liberal Party in this country. It's not very active, but I don't think the Electoral Commission can or would remove it. The American meaning is also becoming stronger over here, and a lot of the literature people read on libertarianism seems to be increasingly American. I don't really like the word, though.
    Well, the "original" and glorious Liberal Party ceased to exist since new liberalism came about. Lloyd George and Keynes were not really Liberals. I mean, Social welfare and massive intervensionism have nothing, nothing to do with the 19th century Liberal Party which was a laissez-faire party, essentially. And as Ayn Rand used to say "Regulated Capitalism is the WORST system of all".

    By the way, I have never understood the difference between the current Liberal Party and the Liberal Democrats. They are both for the "third-way" aren't they?
    Offline

    0
    ReputationRep:
    There is a difference between the Old "Classical Liberals" and "Libertarians".
    Offline

    1
    ReputationRep:
    (Original post by emvard)
    Well, the "original" and glorious Liberal Party ceased to exist since new liberalism came about. Lloyd George and Keynes were not really Liberals. I mean, Social welfare and massive intervensionism have nothing, nothing to do with the 19th century Liberal Party which was a laissez-faire party, essentially. And as Ayn Rand used to say "Regulated Capitalism is the WORST system of all".

    By the way, I have never understood the difference between the current Liberal Party and the Liberal Democrats. They are both for the "third-way" aren't they?
    Yeah I agree, what I mean is that they are occupying the name on the electoral commission's lists.

    I think British liberalism was poisoned by utilitarianism. When socialism came into fashion as a 'pragmatic', 'scientific' and 'rational' way of doing things in the late 19th and early 20th centuries they had no effective ideological defence against it. It explains why the moribund Tories managed to survive while the Liberals collapsed, at least.
    Offline

    1
    ReputationRep:
    (Original post by Don_Scott)
    There is a difference between the Old "Classical Liberals" and "Libertarians".
    What is that? I'd be interested if you explained.
    Offline

    0
    ReputationRep:
    (Original post by Don_Scott)
    There is a difference between the Old "Classical Liberals" and "Libertarians".
    Ok suppose we had two parties. One Classical Liberal Party and one Libertarian Party. Where would these parties disagree?
    Offline

    1
    ReputationRep:
    (Original post by Collingwood)
    I think British liberalism was poisoned by utilitarianism. When socialism came into fashion as a 'pragmatic', 'scientific' and 'rational' way of doing things in the late 19th and early 20th centuries they had no effective ideological defence against it. It explains why the moribund Tories managed to survive while the Liberals collapsed, at least.
    I've started to think this myself. I reckon it's possible to trace what went wrong right back to JS Mill, mostly.
    Offline

    0
    ReputationRep:
    Well, if you look at the Classical Liberals like Mises or Hayek, they would never come to the same conclusions as the Libertarians. For example, they wouldn't support a form of anarchism.
    Offline

    0
    ReputationRep:
    (Original post by DrunkHamster)
    I've started to think this myself. I reckon it's possible to trace what went wrong right back to JS Mill, mostly.
    To be honest, liberalism has had a welfare liberal strain going back to Bentham.
    Offline

    1
    ReputationRep:
    (Original post by Don_Scott)
    Well, if you look at the Classical Liberals like Mises or Hayek, they would never come to the same conclusions as the Libertarians. For example, they wouldn't support a form of anarchism.
    http://en.wikipedia.org/wiki/Auberon_Herbert

    There's a man who was an actual Liberal MP in the late 19th century who was an anarchist and arrived at pretty much identical conclusions to modern anarcho capitalists.
 
 
 
Reply
Submit reply
TSR Support Team

We have a brilliant team of more than 60 Support Team members looking after discussions on The Student Room, helping to make it a fun, safe and useful place to hang out.

Updated: September 10, 2009
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Would you like to hibernate through the winter months?
    Useful resources
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.