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5461. From Constitutional to Fiat Money: The U.S. Experience

Author:
Richard H. Timberlake
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the course of more than two centuries, the United States has had two monetary systems. The first was a gold-silver standard that was framed in its essentials by the U.S. Constitution. In practical terms, it said that any legal tender money created by the federal union or the states or the "people" had to be gold or silver coins, or redeemable in gold or silver coins of specified weight and fineness. Since both gold and silver were constitutional media, the country had a bimetallic standard that ultimately became a monometallic gold standard.
Political Geography:
United States

5462. The Coming Fiat Money Cataclysm and the Case for Gold

Author:
Kevin Dowd, Martin Hutchinson, and Gordon Kerr
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
A recurring theme in monetary history is the conflict of trust and authority: the conflict between those who advocate a spontaneous monetary order determined by free exchange under the rule of law and those who wish to meddle with the monetary system for their own ends. This conflict is perhaps most clearly seen in the early 20th century controversy over the "state theory of money" (or "chartalism"), which maintained that money is a creature of the state. The one side was represented by the defenders of the old monetary order-most notably by the Austrian economists Ludwig von Mises and Friedrich Hayek, and by the German sociologist Georg Simmel. The other side was represented by the German legal scholar Georg Friedrich Knapp and by John Maynard Keynes. They argued that on monetary matters the government should be free to do whatever it liked, free from any constraints of law or even conventional morality.
Topic:
War
Political Geography:
Germany and Australia

5463. Why Monetary Freedom Matters

Author:
Ron Paul
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
I've thought about and have written about the Federal Reserve for a long time. I became fascinated with the monetary issue in the 1960s, having come across the Austrian economists, especially Hayek and Mises, and I was very impressed with August 15, 1971, because the predictions made in the 1960s came about. As a matter of fact, Henry Hazlitt made that prediction in 1944 when the Bretton Woods system was set up. He said it wouldn't work and it would fall apart—and it did—so that was a strong confirmation.
Political Geography:
United States and Australia

5464. Where Is Private Note Issue Legal?

Author:
Kurt Schuler and William McBride
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
During the 18th and 19th centuries and for part of the 20th century, more than 60 countries had free banking. The major characteristics of free banking are competitive issue of notes (paper money) and deposits by commercial banks, low legal barriers to entry, little regulation unique to the industry, and no central control of reserves (the monetary base) within the national monetary system (Dowd 1992, White 1995). Among the countries that had a form of free banking was the United States. Even after the freest period of free banking ended, with the Civil War, banks continued to issue notes until the federal government effectively monopolized note issue in 1935.
Topic:
War
Political Geography:
United States

5465. Making the Transition to a New Gold Standard

Author:
Lawrence H. White
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Suppose for the sake of argument that we all agree to the following proposition: If we could change the monetary regime with zero switching cost, merely by snapping our fingers, we would prefer the United States to be on a gold standard. In the most general terms, a gold standard means a monetary system in which a standard mass (so many grams or ounces) of pure gold defines the unit of account, and standardized pieces of gold serve as the ultimate media of redemption. Currency notes, checks, and electronic funds transfers are all denominated in gold and are redeemable claims to gold. We then face the question: What would be the least costly way for the United States to make the transition to a new gold standard? We need to choose a low-cost method to ensure that the agreed benefits of being on the gold standard exceed the costs of switching over.
Political Geography:
United States

5466. Natural Rates of Interest and Sustainable Growth

Author:
Roger W. Garrison
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The evolution of macroeconomic theory and monetary policy has brought us to a state that calls for critical reflection. It is undoubtedly true that no newcomer to the field can even begin to understand the current state of macroeconomics and policy formulation without understanding just how, dating from the pre-Keynesian era, the profession has arrived at this state. High theory today takes the form of stochastic dynamic general equilibrium analysis, while policy discussion, which concerns itself with economy-wide disequilibrium, centers on the effectiveness (or ineffectiveness) of old-style fiscal and monetary stimulants. The market is a process and so too is the theorizing about it. The history of macroeconomic thought reasserts its relevance at times of economic crises and almost inevitably leads us to the question "How far back do we have to go to start all over?"
Topic:
Monetary Policy

5467. Toward a Global Monetary Order

Author:
Gerald P. O'Driscoll Jr.
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
I will begin by disputing that there is a global monetary system. We do not have a system in any meaningful sense. There are 182 independent currencies in the world. Some currencies are fixed in relation to other, larger currencies (e.g., the Hong Kong dollar to the U.S. dollar). Some currencies move within a band against other currencies (e.g., the Singapore dollar and the Chinese yuan). Many currencies float on foreign exchange markets, but few float freely. Four major currencies float against each other: the U.S. dollar, the euro, the pound, and the yen. Countries also change their foreign exchange regime (e.g., Mexico in recent decades).
Topic:
Foreign Exchange
Political Geography:
Mexico and Singapore

5468. Political Philosophy Clearly: Essays on Freedom and Fairness, Property and Equalities

Author:
Aaron Ross Powell
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Political Philosophy, Clearly, part of Liberty Fund's "Collected Papers of Anthony de Jasay" series, gathers nearly two dozen essays from the prominent economist and philosopher. From them emerges a fascinating overview of de Jasay's thought on the nature of order, justice, and the state.

5469. China's rise and middle power democracies: Canada and Australia compared

Author:
Andrew O'Neil and James Manicom
Publication Date:
05-2012
Content Type:
Journal Article
Journal:
International Relations of the Asia-Pacific
Institution:
Japan Association of International Relations
Abstract:
Assessments of how international actors are responding to China's rise typically focus on rival great powers or on China's Asian neighbors. In these cases, relative power, geographic proximity, and regional institutions have conditioned relationships with China. The relationship of China with the developing world has mainly been defined by power asymmetry and the appeal of the Chinese governance model to authoritarian regimes. Largely absent from this discussion is an understanding of how Western middle power democracies are responding to China's rise. This article compares how Canada and Australia – two Western democratic states with prominent middle power foreign policy traditions – are responding to the rise of China. The two case studies are similar in many respects: both are resource-based economies with a track record of bilateral and institutional engagement in the Asia-Pacific, and both are key US allies. These similarities allow differences in the Canadian and Australian responses to China's rise to be isolated in the political, economic, and strategic realms.
Topic:
Bilateral Relations
Political Geography:
China, Canada, and Australia

5470. Japan's response to the changing global order: the case of a 'Gaggle of Gs'

Author:
Hugo Dobson
Publication Date:
05-2012
Content Type:
Journal Article
Journal:
International Relations of the Asia-Pacific
Institution:
Japan Association of International Relations
Abstract:
Over recent years, media, academic, and policy-makers' attention has focused on changes in the global order from a unipolar to a multipolar world. The emergence of the Group of 20 (G20) since 2008 as the 'premier forum for international economic cooperation', which includes a number of developed and developing countries, and its 'eclipse' of the Group of 8 (G8) summit are acknowledged as some of the most salient symptoms of this shift. This article takes the intensive period of 'G' summitry between 2008 and 2011 as a pertinent case study to begin to explore the concrete responses of key protagonists to this reconfiguration of the architecture of global governance specifically and thereby the recent shift in the global order more broadly. In the specific case of Japan, widely assumed to be a declining power, the article highlights both consistency and change in the responses of and strategies employed by Japanese policy-makers within 'G' summitry. Various theoretical positions can account for this to differing degrees which also bring into relief the ultimately contradictory trajectory of Japan's response to the changing global order.
Topic:
Disaster Relief
Political Geography:
Japan