Rothbard generally seemed to come back to gold as his "naturally limited money supply"
so 2-3% supply inflation wasn't a concern for him.
I'm critical of the "maximum deflation is gud" argument because deflationary conditions penalize the investors of capital.
This is Keynesian thinking. Deflation only disadvantages investors who rely on debt and credit-financed expansion, because falling prices increase their fixed cost burden and real debt burden.
that's just obviously false.
deflation incentivizes ALL market participants to hold their money.
all holders of the money reap the reward of the economic ventures of others. if economic growth occurs, their money increases in purchasing power whether ir not they participate.
purchasing power increases directly along the economic activity generated by *anyone*
it is a poor incentive structure where everyone benefits from the activity of the few.
also the prospective entrepreneur or any capital venture needs to be confident they can not only beat the market but has the additional hurdle of needing to beat the rate of monetary deflation.
i agree deflationary cycles are normal and good.
permanent structural deflation is not.
btw
John Keynes was loudly against constantly increasing the money supply. I know what you mean but its more accurate to call it "MMT" than "Keynesian"
Bitcoin maxis just started calling everything they dont like "Keynesian."
No. You’re confusing incentive with entitlement.
In a deflationary system, holders earn increased purchasing power because they delay consumption, which is itself a form of economic discipline, not parasitism.
Investors have no guaranteed nominal growth. they must create real value, otherwise they simply don’t earn capital at all.
The fact that unproductive capital fears deflation proves its fragility.
Permanent mild deflation driven by productivity is not a bug - it’s the healthiest form of wealth distribution.
And please stop whitewashing Keynes: he was the pioneer of government monetary control, even if today's MMT supporters are now even surpassing him.
You’re not debating Bitcoin maxis - you’re debating economic reality.
But they do gain capital. Holders siphon capital off of productive people chasing what they hold. It's not just delaying consumption that generates this increase in purchasing power, it's others producing things that they want to trade for the money they hold, it's delaying consumption *until more things are produced by others* that results in this gain. It's Tue exact inverse of the cantillion effect.
Deflation doesn't deprive anyone of capital. No one is expropriated, no one is exploited.
Well, maybe tortured at some point.
Are you conflating capital with money?
Think of it. In an inflationary system, your money loses purchasing power as money is printed. Who receives that purchasing power? The person who gets the newly printed money of course. Where did that capital come from? It was siphoned from the productive people, because now it can be used to buy their goods with no effort.
In a deflationary system, your money gains purchasing power. Where did that gain in purchasing power come from? It came from the fact that more production is chasing the same amount of money. You gain capital produced by someone else.
Both of these have terrible secondary effects. Inflationary environments encourage production above market optimum, deflationary markets do the opposite.
No, capital and money aren’t the same.
Inflation steals purchasing power via dilution, deflation rewards patience as others voluntarily increase production.
Deflation doesn’t siphon - it reflects higher output chasing stable money.
Inflation misallocates capital, deflation corrects it.
Where does that reward for patience get produced?
creation of value
Yeah, whos creating that value?
who is in the kage to create added value for others
I don't follow.
because you are a marxist and do not understand subjective value theory
Lol I'm a Marxist? Do you know where my quote in my bio is from?
I've followed you a little while. Youre a very smart person. Smarter than this. Youre dodging the question for a reason, it's because you understand exactly what I'm getting at.
the answer to the question is that the capital allocator creates the reward for the saver. the saver is rewarded for risk they didn't take.
that isn't "earning."
lionizing it as reward for deferred gratification is just some Protestant headtrip.
if anyone is espousing socialist ideas its you, trying to rationalize the structural reallocation of the value created by the speculator and entrepreneur.
Savers take risks - the risk of opportunity costs, future uncertainty, and deferred consumption.
Without savers, there is no capital to deploy. Entrepreneurs rely on deferred consumption to finance production.
Calling voluntary exchange "structural redistribution" is absurd - it's basic market coordination, not socialism.
Socialism is forced redistribution.
there is no opportunity cost or any risk when the hoarder is guaranteed a return for doing nothing.
There’s never a guaranteed return in a free market. The risk is real: time, uncertainty, technological shifts, and opportunity cost.
"i should get paid for doing nothing because life is uncertain"
get a helmet.
You confuse doing nothing with deferring consumption.
Savings provide the capital that makes production possible - no capital, no entrepreneurship.
The helmet is for those who think you can have investment without prior savings.
There is no assurance the money is ever spent. Nothing prevents the hoarder from just sitting on theor stack and reaping the reward of *other peoples* economic ventures.
in fact they're incentivized to do so.
You have no way to distinguish between "doing nothing" and "deferred consumption".
you just making it up and saying "trust me bro, they'll invest at some point."
If hoarders just sit on their stack, how exactly does the purchasing power of their money increase without others voluntarily producing more goods and services?
Who is forcing anyone to produce for them?
yes.
their purchasing power increases because of the economic ventures of other people.
the hoarder gets a free ride.
there is no coercion. you want to structurally design it to be that way.
pretty sure we're just talking in circles now
┐( ˘_˘)┌
Exactly, no coercion.
The saver enables capital formation by delaying consumption.
Without savings, those ventures you speak of wouldn’t have capital to operate.
Calling that a free ride is like calling oxygen a parasite for feeding fire.
thats a extremely tortured metaphor and you didn't respond to my point at all
we're done here.
No saving = no capital.
No capital = no investment.
No investment = no growth.
No growth = stagnation & poverty.
Consumption alone doesn’t build wealth. It burns it.
nice strawman you got there 👍
lol horseshit
to recap
there is no austrian economist ever that advocates for creating the most deflationary environment possible
or a cap on the amount of monetary units
nothing you've said has shown otherwise
characterizing my argument as if I was against saving is a retarded strawman
But hey
I guess when you really don't have anything to say
except for repackaging Human Action
it's best to just strawman and claim victory
Mises, Hayek and Rothbard rejected government monetary expansion, which means keeping the money supply constant or decreasing.
Rothbard was against the state and didn't know about crypto, so gold was money for him. With a natural upper limit.
Hayek wanted currency competition and was in favor of deflationary currencies becoming dominant in the market.
Or the workers make make the wheels turn...
Yes I'm aware of the maxi rhetoric about fiat everything and how Bitcoin fixes it.
That doesn't mean setting up structural deflation is a good idea.
so your stance is
because of the buyers virtuous restraint
they somehow "earn" greater purchasing power
and that increases as to the amount of total economic expansion that occurs, which they had nothing to do with.
sounds very scientific.
I didn't "whitewash" Keynes, I corrected your mistake that advocating for amounts of monetary expansion is a Keynesian position. It isnt.
The saver earns purchasing power because they delayed consumption and allowed capital to be allocated by others who took the risk.
Without savers, there is no capital pool to finance production at all.
The increase in purchasing power is the market reward for patience and for not consuming scarce resources prematurely.
That’s called time preference, a term in austrian economics, long before bitcoin.
Yeah yeah human action.
Mises didn't argue the money supply should be set up so that AS MUCH AS POSSIBLE it was structurally deflationary.
just that a tendency towards deflation was natural and good.
and I'm not disagreeing.
You're based, fren. For me, there's nothing negative about the amount of money going down. Most people don't even understand money.
