Re: Backed money (reply to Davidson)

["Gunnar Tomasson" <tomasson@xxxxxxxx>]

Mike:

Thanks for posting your paper.

On the basis of my own thinking through related issues in the 1970s, I agree
with the thrust of the view which you express, inter alia, as follows:

 "Two views of money can clearly be set apart at this point: The first is
that money's value is determined by supply and demand--by how much money is
chasing a given quantity of goods. This is the quantity theory view. The
other view, which I am advocating, is that the value of money is determined
by its backing. This is the real bills view or, perhaps more accurately, the
backing theory view. On this view, token money is valued according to the
same principles as any other financial security."

In this respect, I wonder if you are familiar with the fierce reaction of
James Mill to related ideas which Jeremy Bentham detailed in a 1810
manuscript, whose publication in France was apparently blocked by Mill after
he had solicited detailed negative comments from Ricardo thereon?

On a quick look through your paper, it seemed to me that you are well on the
way towards the Benthamite view of money which he, in correspondence with
Adam Smith, described as mere elaboration of Smith's own views thereon as
presented in embryonic form in Wealth of Nations.

Gunnar


----- Original Message -----
From: mike sproul <msproul@xxxxxxxx>
To: POST-KEYNESIAN THOUGHT <pkt@xxxxxxxxxxxxxxxx>
Sent: Wednesday, March 15, 2000 6:24 PM
Subject: Backed money (reply to Davidson)


> Paul:
>
> Well, sorry to say I haven't read your book, but on the other hand
> I'll bet you haven't read my cogitations on fiat/backed money, which are
> available for free at
> http://www.csun.edu/~hceco008/rbd2000.doc
>
> and
>
> http://www.csun.edu/~hceco008/critique.doc
>
> Fair is fair. How about posting pp. 94-101, or a summary thereof, on
> PKT?
>
> Best regards,
> Mike Sproul
>
>
>
>
>
>
>
> This question of backing vs. fiat money is really irrelevant.  If one
> believes that money is an institution created by society for used by law
> abiding citizens, then the answer to this entire puzzle is clearly
> spelled
> out on pp.  94-101 of my POST KEYNESIAN MACROECONOMIC THEORY book.
>
>
> >I don't know about China, but wasn't there a law to the effect that one
> >piece of stamped bark was to be accepted for so much silver on pain
> >of severe penalty?
>
>
> A law?  Heavens was it a civil law of contracts.
>
> What is so frustrating is, I can understand why mainstream economists
> may
> not want to read my POST KEYNESIAN MACROECONOMIC THEORY book
>
>