Re: Banks vs Capital Markets

[Greg Nowell <GN842@xxxxxxxxxxxxxxxxx>]

Actually Geoffrey the bills of exchange model of money is not fashionable on this
list, though I think it is the correct historical accounting for the evolution of
capitalism as a system.  One of the reasons it is *not* fashionable is that the
"tax driven" theory of money, which sees the govt demand for currency as somehow
special rather than merely additive to the mass of credit transactions already
occurring, is that there is a strong desire to privilege the nature of govt money
in order to add an ergodic component to the process of asset valuation.  I have
criticized this as a form of "hydraulic Keynesianism" creeping its way into this
otherwise pristine domaine of non-ergodicity.  -gn.

GGard97342@xxxxxx wrote:

> In a message dated 15/03/2000 15:46:26 GMT Standard Time, hliu@xxxxxxxxxxxxxx
> writes:
>
> > Subj:  Re: Banks vs Capital Markets
> >  Date:    15/03/2000 15:46:26 GMT Standard Time
> >  From:    hliu@xxxxxxxxxxxxxx (ÁÎ×Ó¹â Henry C.K.Liu  ¹ù¤l¥ú)
> >  Sender:  owner-pkt@xxxxxxxxxxxxxxxx
> >  Reply-to:    pkt@xxxxxxxxxxxxxxxx
> >  To:  pkt@xxxxxxxxxxxxxxxx (POST-KEYNESIAN THOUGHT)
> >
> >  The gold standard made it impossible for central banks to respond to large
> > increases in output with offsetting expansion of
> >  the money supply.
>
> So the commercial community invented its own currency, as it had been doing
> for about 40,000 years. See the figures for the growth of bills of exchange
> from 1832 to 1837 in Henry Tooke's paper of 1844. The standard teaching about
> the Gold Standard is, I again declare, romantic fiction.
>
>  >I must
> >  admit, that not being academically trained as an economist, I have some
> > difficulty in following the technical discussions,
> >  fascinating as they are.
>
> I am sure that if Henry Liu cannot cannot follow the discussions they are not
> worth following. His contributions are magnificent. I suppose architects like
> him are always conscious of the need to have firm foundations. Academically
> trained economists are too fond of breaking the basic rules of science.
>
> Geoffrey Gardiner

--
Gregory P. Nowell
Associate Professor
Department of Political Science, Milne 100
State University of New York
135 Western Ave.
Albany, New York 12222

Fax 518-442-5298