Don,
Weeeeeee! :-)
I agree that the differences extend beyond the monetary system and are also related to:
>>Mainstream economics assumes an economic structure imposed from above, employs economic history, mathematical models and statistics to try to draw economic conclusions. Austrian economics rejects these constructs completely as deeply flawed and invalid. <<
But the monetary system is a big part of that and it's the thing that the Austrians focus the most attention on when discussing various booms and busts. Essentially if the monetary system was perfect (Ho Ho), there would be fewer mainstream economists telling us what to do. IMO it's also the most important thing to investors.
I agree that increases in gold were not totally arbitrary. That was one of the advantages over the long term that I was thinking about. But I still think gold was and would be flawed - even a 100% gold standard. If you look at the historical record the inflation figures look something like this. (I realize that we weren't on 100% gold)
+2, -2. +6, -3, -3, +2, -2
The net of that made up sample is zero. Wonderful!
But try to manage your employee compensation, budgets, input prices vs. long term contracts to sell etc.. under that scenario.
Even if the gold flow wasn't arbitrary, was more economically sound, and the sum was wonderful, it didn't match the short term activity and made conducting business difficult. That's a small part of why so many people wanted to get rid of it. (correctly or incorrectly)
Wayne |
