Friedrich Hayek on Politics, Milton Friedman and Gold

[@Myndir]

Milton Friedman did eventually admit (in the mid-80s, I think) that Hayek was right to propose privatizing money and that this was probably the best solution.

[@mannix1969]

Interesting to see two people who I admire greatly in the field of economics disagree on monetary policy. I agree with Hayek that government should not be in the business of printing money and that private institutions should each be allowed to print their own currency. The consumer can make an individual decision as to which currency to use.

[@nicholasgergetz5941]

They didn't disagree in principle. Friedman agreed in principle. Hayek points out that Friedman didn't *pursue* it because it was not politically practical.

[@brotherbig4651]

Actually Friedman did not have much respect for Hayek. He thought the logics and methodology of the Austrian school are not always consistent. For those are consistent, the end of the logic are agnostic. He even thought Hayek was not a serious scholar. They did not have good relation.

[@RecursiveRuminations]

These two guys, Hayek and Friedman would have been thrilled to see decentralized global projects like cryptocurrencies.

[@brotherbig4651]

Gabe Wilberscheid Friedman is not a fan of gold.

[@NicitoStaAna]

Bitcoin has a finite supply. Btc supporters claim that bitcoin is a currency (a thing that is used for trade) Okay Let's say a country uses btc as their main currency. What happens when that country's wealth or gdp/capita increased? Im assuming your familiar with supply/demand law. More people have more money/wealth to buy things. To simplify: let's say bread. Demand increases so either supply decreases or price increases (or both scenarios happen) for bread. Note: when you price a product below the equilibrium of supply/demand. It'll be a shortage. Place it too high it'll be a surplus. So much as possible everyone wants to place the price near the equilibrium. No one wants to decrease supply because it's shortage. So the price of bread increased (in btc btw) Continue doing this for thousands of years eventually bread will reach 1 bread=21 million btc. (The total supply of btc) To increase the price of bread any futher would be like asking for gold more than the total gold the earth has. So who has to move? Demand side or supply side? (Demand is uncontrollable. It's controlled by the customers. You can't control the customersas they have free will) so supply has to move. Which will cause a shortage. Replace bread with each and every single product that country has and now understand that chaos it would bring if we didn't allow printing of money. Good side of printing Printing is used to accomodate the supply/demand of the currency/the economic state of the country. Bad side of printing money Governments can print haphazardly for their own purpose/projects. They can control the population and manipulate their own currency for economic gain. (China somehow does this but I don't get how. they apparently do) Btc CAN be used as currency. If somehow BTC market capitalization is evaluated to the total "value" of the world. (Which is impossible. You might be able to convince some but do you think ,we the people, would allow someone/some whales to have that high percentage of the world's total valuation?) Value by the way is arbitrary and to peg a value to gold, btc, salt is just pegging them to the supply/demand of said product. So it is chaotic and should be allowed to follow the supply/demand of it rather than fixing it's supply to serve it's price. No Btc doesn't make economic sense until the protocol includes printing btc based off it's "current economic state" So how much btc should be printed? No one knows. That's the several million dollar question for every country everyday. That's the job of their own economists/analysts (Hence I believe that cryptocurrencies that print based off it's supply/demand is much more of a currency than whatever bitcoin is)

[@stevemcgee99]

yes, Friedman was a pragmatist. His lectures did promote more ideal, and accurate policy implications, but his policy recommendations were a compromise at best. Seems like it's best to stay true to one's principles when one is NOT going to be subject to elections. It will enable the politicians to compromise from that position, instead of the kind of compromise we get from these economists's compromised positions.

[@stevekopn]

Yes, everyone has their own role(s). Good piece.

[@Paul-A01]

Fast forward to today, bitcoin!