Ron Paul was right! :o
http://www.in2013dollars.com/1792-dollars-in-1912?amount=1000
What was he right about?
How is this news? This is one of the central observations of Picketty's best seller book that has been on the market for two years.
Of course, stagflation is horrible for pretty much everybody but a handful of capital owners. You are not saying this proves that the US economy was in a good shape during that period, are you, Tim?
Oh yes, no wonder there was no growth and prosperity in the States during that time!
Quote from: Martinus on October 19, 2015, 03:08:31 AM
How is this news? This is one of the central observations of Picketty's best seller book that has been on the market for two years.
I think you may overestimate that book's prominence on account of having read it yourself. :P
Quote from: Martinus on October 19, 2015, 03:08:31 AM
How is this news? This is one of the central observations of Picketty's best seller book that has been on the market for two years.
Of course, stagflation is horrible for pretty much everybody but a handful of capital owners. You are not saying this proves that the US economy was in a good shape during that period, are you, Tim?
One of Picketty's central observations was that the inflation rate in the US from 1792 to 1910 was 0%? That's a strange observation to be including in a book about the relationship between return on capital and GDP growth.
I get the impression you don't know what stagflation is. It is unemployment combined with inflation.
Quote from: Tamas on October 19, 2015, 03:10:22 AM
Oh yes, no wonder there was no growth and prosperity in the States during that time!
Who said anything about there being no growth? Although at least during the first half of the period, it was rather patchy at best:
(https://upload.wikimedia.org/wikipedia/commons/4/49/GROWTH1850.JPG)
Now, prosperity is much more doubtful, especially when understood in the terms of welfare of the general populace - and that's even when you ignore the fact that a part of the populace was enslaved for most of the period.
God, I love "Austrian school" idiots.
Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.
QuoteNow, prosperity is much more doubtful, especially when understood in the terms of welfare of the general populace - and that's even when you ignore the fact that a part of the populace was enslaved for most of the period.
Yeah. The whole American economy worked out very wrong for the general populace. If only they embraced socialism, they could be reaching Russia's, or even Europe's heights by now.
I don't understand. Between 1792 and 1912, the US inflation rate is 0%. So what? I am quite sure the US economy in 1912 is much better compared with 1792. What is the point?
Quote from: Monoriu on October 19, 2015, 03:59:01 AM
I don't understand. Between 1792 and 1912, the US inflation rate is 0%. So what? I am quite sure the US economy in 1912 is much better compared with 1792. What is the point?
Gold standard was awesome and Federal Reserve sucks I guess.
Notice the wild swings in inflation/deflation given in Ti'm's link. There was a deflationary trend in the 19th century interrupted by gold rushes that increased the money supply. Without the gold rushes there would have been stagnation.
(There is a typo for "Tim's" above, but it seems somehow appropriate so i will leave it in)
Quote from: MadImmortalMan on October 19, 2015, 04:00:25 AM
Quote from: Monoriu on October 19, 2015, 03:59:01 AM
I don't understand. Between 1792 and 1912, the US inflation rate is 0%. So what? I am quite sure the US economy in 1912 is much better compared with 1792. What is the point?
Gold standard was awesome and Federal Reserve sucks I guess.
Wait a minute. I am no economist but I think the gold standard has pretty much been discredited after the Great Depression, no? Since the supply of gold is limited by physical availability, mining capacity etc, it seems unreasonable to constrain the supply of money by availability of gold. I mean, everybody sees the problems with an over-supply of money, but artificially linking the supply of money with the supply of gold doesn't seem a good solution.
Is somebody really suggesting that it is a good idea for the US to go back to the gold standard? :unsure:
Quote from: Martinus on October 19, 2015, 03:38:34 AM
Who said anything about there being no growth?
You did.
Quote from: Tamas on October 19, 2015, 03:55:13 AM
QuoteNow, prosperity is much more doubtful, especially when understood in the terms of welfare of the general populace - and that's even when you ignore the fact that a part of the populace was enslaved for most of the period.
Yeah. The whole American economy worked out very wrong for the general populace. If only they embraced socialism, they could be reaching Russia's, or even Europe's heights by now.
Given that the US economy suffered through the worst crisis just 10 years after the end of the period we are talking about, I would say it did not work out that well for the general populace. And what propped it up back again - and kickstarted America's immense growth (which happened in the 20th, not the 19th century) - were FDR's reforms, which would be considered extremely socialist by today's standards (including a 75% income tax rate on the top earners).
Quote from: Richard Hakluyt on October 19, 2015, 04:05:13 AM
Notice the wild swings in inflation/deflation given in Ti'm's link. There was a deflationary trend in the 19th century interrupted by gold rushes that increased the money supply. Without the gold rushes there would have been stagnation.
(There is a typo for "Tim's" above, but it seems somehow appropriate so i will leave it in)
I believe what caused those wild swings was the boom and bust cycle of unregulated banking.
Here are the average annual growth rates of the US economy, on a decade by decade basis, during 1870-2000, ordered from the lowest to the highest:
(1) Average Growth Rate 1921–1930: 1.27%
(2) Average Growth Rate 1911–1920: 1.28%
(3) Average Growth Rate 1931–1940: 1.54%
(4) Average Growth Rate 1871–1880: 1.64%
(5) Average Growth Rate 1881–1890: 1.65%
(6) Average Growth Rate 1951–1960: 1.75%
(7) Average Growth Rate 1991–2000: 1.94%
(8) Average Growth Rate 1891–1900: 2.04%
(9) Average Growth Rate 1901–1910: 2.13%
(10) Average Growth Rate 1971–1980: 2.16%
(11) Average Growth Rate 1981–1990: 2.26%
(12) Average Growth Rate 1961–1970: 2.88%
(13) Average Growth Rate 1941–1950: 3.87%.
As you can see, the biggest growth happened during 1940-1990 (so, from the FDR era until the beginning of the Reagan/Bush era), not during the gold standard era.
Isn't another problem with the gold standard these days that we found a practical use for gold besides currency/jewelry?
Quote from: Syt on October 19, 2015, 04:16:42 AM
Isn't another problem with the gold standard these days that we found a practical use for gold besides currency/jewelry?
I suppose you could find some other useless material to be used for the standard - of course that does not address the point that fiat currency is infinitely better in terms of the state's ability to run a sensible economic policy and I am surprised anyone is even arguing the opposite.
Quote from: Monoriu on October 19, 2015, 04:06:54 AM
Quote from: MadImmortalMan on October 19, 2015, 04:00:25 AM
Quote from: Monoriu on October 19, 2015, 03:59:01 AM
I don't understand. Between 1792 and 1912, the US inflation rate is 0%. So what? I am quite sure the US economy in 1912 is much better compared with 1792. What is the point?
Gold standard was awesome and Federal Reserve sucks I guess.
Wait a minute. I am no economist but I think the gold standard has pretty much been discredited after the Great Depression, no? Since the supply of gold is limited by physical availability, mining capacity etc, it seems unreasonable to constrain the supply of money by availability of gold. I mean, everybody sees the problems with an over-supply of money, but artificially linking the supply of money with the supply of gold doesn't seem a good solution.
Is somebody really suggesting that it is a good idea for the US to go back to the gold standard? :unsure:
:secret: No, but it was a neat coincidence, and I used the opportunity to stir the pot.
Quote from: Martinus on October 19, 2015, 04:14:59 AM
Here are the average annual growth rates of the US economy, on a decade by decade basis, during 1870-2000, ordered from the lowest to the highest:
(1) Average Growth Rate 1921–1930: 1.27%
(2) Average Growth Rate 1911–1920: 1.28%
These two decades being the lowest seem very counter intuitive to me.
Quote from: jimmy olsen on October 19, 2015, 04:24:45 AM
Quote from: Martinus on October 19, 2015, 04:14:59 AM
Here are the average annual growth rates of the US economy, on a decade by decade basis, during 1870-2000, ordered from the lowest to the highest:
(1) Average Growth Rate 1921–1930: 1.27%
(2) Average Growth Rate 1911–1920: 1.28%
These two decades being the lowest seem very counter intuitive to me.
Those were the last two decades on the gold standard.
Quote from: Tamas on October 19, 2015, 03:52:44 AM
Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.
It is rather hard to disprove an experiment about lightning by making a conclusion about pond scum, so he's not wrong that you can't conclude socialism failed given our examples of it. Though humans are hierarchical by nature and not communal, so it is handwaving away the obvious problem that "successful" socialism is unnatural and so virtually impossible to implement.
Saying that Picketty argues in favour of socialism is ridiculous.
Quote from: DontSayBanana on October 19, 2015, 06:36:29 AM
Quote from: Tamas on October 19, 2015, 03:52:44 AM
Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.
It is rather hard to disprove an experiment about lightning by making a conclusion about pond scum, so he's not wrong that you can't conclude socialism failed given our examples of it. Though humans are hierarchical by nature and not communal, so it is handwaving away the obvious problem that "successful" socialism is unnatural and so virtually impossible to implement.
The main problem with Picketty's book is people comment on it without having read it
Quote from: DontSayBanana on October 19, 2015, 06:36:29 AM
Quote from: Tamas on October 19, 2015, 03:52:44 AM
Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.
It is rather hard to disprove an experiment about lightning by making a conclusion about pond scum, so he's not wrong that you can't conclude socialism failed given our examples of it. Though humans are hierarchical by nature and not communal, so it is handwaving away the obvious problem that "successful" socialism is unnatural and so virtually impossible to implement.
The blatant racism/arrogance inherent in the "socialism can work if done by the right people" just adds to the enjoyment, BTW.
Quote from: Tamas on October 19, 2015, 07:15:19 AM
Quote from: DontSayBanana on October 19, 2015, 06:36:29 AM
Quote from: Tamas on October 19, 2015, 03:52:44 AM
Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.
It is rather hard to disprove an experiment about lightning by making a conclusion about pond scum, so he's not wrong that you can't conclude socialism failed given our examples of it. Though humans are hierarchical by nature and not communal, so it is handwaving away the obvious problem that "successful" socialism is unnatural and so virtually impossible to implement.
The blatant racism/arrogance inherent in the "socialism can work if done by the right people" just adds to the enjoyment, BTW.
But the history of the 20th century shows that socialist policies have in fact worked extremely well in more developed countries - such as the US - than they did in Russia.
I long ago figured out that the word "socialism" means radically different things to different people.
Well, socialism means social ownership and control of the means of production and cooperative management of the economy.
The US is not a socialist state, but social-democracy is a (generally successful) attempt to implement individual socialist policies in a capitalist democracy - and many post-war and post-New Deal policies of the US government fit the bill.
I am not sure what Tamas thinks Picketty is advocating but obviously he is not advocating changing the economies of Western countries into socialist ones - but to restore some of the social democrat policies that were rolled back during the Reagan/Thatcher era.
Quote from: Martinus on October 19, 2015, 09:02:16 AM
Well, socialism means social ownership and control of the means of production and cooperative management of the economy.
I would say that the definition is social ownership OR control/regulation, not AND control/regulation.
And therein lies the critical difference between socialism that gets people all bonkers, and socialism that every western country engages in as a matter of course, and yet people still pretend like it doesn't happen.
Quote from: Berkut on October 19, 2015, 09:05:39 AM
Quote from: Martinus on October 19, 2015, 09:02:16 AM
Well, socialism means social ownership and control of the means of production and cooperative management of the economy.
I would say that the definition is social ownership OR control/regulation, not AND control/regulation.
And therein lies the critical difference between socialism that gets people all bonkers, and socialism that every western country engages in as a matter of course, and yet people still pretend like it doesn't happen.
I think definition uses the term control in the sense of "ability to direct" and not in the sense of "ability to supervise", though.
I'm not sure what the point is. Small amounts of inflation is a good thing.
Quote from: MadImmortalMan on October 19, 2015, 04:00:25 AM
Quote from: Monoriu on October 19, 2015, 03:59:01 AM
I don't understand. Between 1792 and 1912, the US inflation rate is 0%. So what? I am quite sure the US economy in 1912 is much better compared with 1792. What is the point?
Gold standard was awesome and Federal Reserve sucks I guess.
The Gold Standard was introduced as a reaction to the Panic of 1873.
Sweden's economy went to hell a few years after implementing Socialism, and emergency reforms in the early 90s were necessary to save the country.
Quote from: jimmy olsen on October 19, 2015, 04:24:45 AM
Quote from: Martinus on October 19, 2015, 04:14:59 AM
Here are the average annual growth rates of the US economy, on a decade by decade basis, during 1870-2000, ordered from the lowest to the highest:
(1) Average Growth Rate 1921–1930: 1.27%
(2) Average Growth Rate 1911–1920: 1.28%
These two decades being the lowest seem very counter intuitive to me.
Because the last year in the sequence happens to be a very recessionary year. Classic example of how choice of endpoint can bias results.
Quote from: Richard Hakluyt on October 19, 2015, 04:05:13 AM
Notice the wild swings in inflation/deflation given in Ti'm's link. There was a deflationary trend in the 19th century interrupted by gold rushes that increased the money supply. Without the gold rushes there would have been stagnation.
This is the key point
A gold standard (or any commodity money) should give close to zero inflation over a long period, but short term instability can be a problem.
Also good point from Yi - the banking system matters too. From the Jacksonian era to Civil War, the US was on an effective gold standard in theory; however there was freedom of note issuing banks. Thus the currency was not stable despite the theoretical commodity peg.
Quote from: Tamas on October 19, 2015, 07:15:19 AM
Quote from: DontSayBanana on October 19, 2015, 06:36:29 AM
Quote from: Tamas on October 19, 2015, 03:52:44 AM
Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.
It is rather hard to disprove an experiment about lightning by making a conclusion about pond scum, so he's not wrong that you can't conclude socialism failed given our examples of it. Though humans are hierarchical by nature and not communal, so it is handwaving away the obvious problem that "successful" socialism is unnatural and so virtually impossible to implement.
The blatant racism/arrogance inherent in the "socialism can work if done by the right people" just adds to the enjoyment, BTW.
I've heard it from many conservatives in this country on this board as to why we can't have socialism in the US. It boils down to "we have black people here".
Quote from: Razgovory on October 19, 2015, 03:06:08 PM
I've heard it from many conservatives in this country on this board as to why we can't have socialism in the US. It boils down to "we have black people here".
You seem to talk to a lot of terrible people. Either Missouri is full of them, or you should find better friends. :P
Quote from: Valmy on October 19, 2015, 10:16:52 AM
The Gold Standard was introduced as a reaction to the Panic of 1873.
You sure about this? I thought the dollar was fixed to gold from the beginning.
Quote from: Admiral Yi on October 19, 2015, 03:50:59 PM
Quote from: Valmy on October 19, 2015, 10:16:52 AM
The Gold Standard was introduced as a reaction to the Panic of 1873.
You sure about this? I thought the dollar was fixed to gold from the beginning.
No it was bi-metal prior to that.
Bimettalism is inherently unstable - unless the mint ratio very carefully tracks fundamental values of the metals, then the cheaper metal tends to dominate via Gresham's Law. In the antebellum period, changes in the mint ratio and gold strikes out west tended to keep gold relatively cheap so there was a de facto gold standard.
How did it work? Was a paper dollar convertible for a fixed quantity of silver or gold, and the holder could choose the one he wanted?
Quote from: Admiral Yi on October 19, 2015, 04:21:05 PM
How did it work? Was a paper dollar convertible for a fixed quantity of silver or gold, and the holder could choose the one he wanted?
I'm not entirely sure how redemptions worked, but I assume it was always possible for a bank to satisfy its redemption obligation with coins. Which would effectively mean bank's choice.
So there would have been a dollar-gold-silver carry trade.
I'm for any currency system I know how to manipulate, and that one sounds awesome. :lol:
Assuming the facts are that gold is "cheaper" (given the mint ratio), then raw silver not used for manufacturing gets exported and existing silver coins are melted down and also exported. Only gold coins are left in circulation and banks presumably satisfy their redemption obligations by paying out in gold coin.
Quote from: MadImmortalMan on October 19, 2015, 03:46:01 PM
Quote from: Razgovory on October 19, 2015, 03:06:08 PM
I've heard it from many conservatives in this country on this board as to why we can't have socialism in the US. It boils down to "we have black people here".
You seem to talk to a lot of terrible people. Either Missouri is full of them, or you should find better friends. :P
GI Jew and the Bank Robber. Though to be fair, Tamas is all "down with statism" till brown people come surging over the border.
The Maud'dib hasn't posted here in many years.