A Reasoned Discussion of Economics and the Nature of Money

This is the continuation of a conversation started on Facebook regarding how to handle the current economic recession, that evolved into a general discussion of economic theory and philosophy.

Participants:

  • Walter I Baltzley:  A Doctoral Student studying Information Technology at Walden University, who has a Masters in Software Engineering from that school, along with a Bachelors Degree in Management Information Systems from the Iowa State University College of Business.  He has no political ties or affiliations, and does not ascribe to any specific school of economic thought.
  • Terry McIntyre:  …ascribes to  the Austrian School of Economics.

Defining Terms:

Shared Definitions:  In economics, the definitions for many terms are still contested and the subject of debate; the terms listed here have been agreed upon by both participants and serve as a solid basis for discussion of differences.

Contested Definitions:  These are terms for which the participants have differing definitions; the goal is to eventually resolve these differences by modifying or establishing new terms that both can agree upon for the purposes of this discussion.

Foundational Theories

Shared Theories:  In economics, theories are even more hotly debated than definitions–but there are some things that everyone agrees on.

Contested Theories:  These are the theories on which our participants disagree–the goal is to resolve these disagreements by proving one, both, or neither to be correct; and to develop higher theories that more accurately reflect reality.

Conclusions:

This section will contain the outcome of our discussion.  It will describe which, if any, economic theory we discover to be correct, and how we think this will impact our lives going forward.

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One Response to A Reasoned Discussion of Economics and the Nature of Money

  1. wbaltzley says:

    ***NOTE: This conversation has been abbreviated from its original form. I have omitted posts that were not relevant to this specific conversation, or which discussed the formation of this page:

    Walter I Baltzley: Ok…you claim that inflation is the “root of all evil”–please explain your logic. Don’t just cite Von Mises or rattle on about the evils of Keynes, actually build a rational argument that explains your position…

    Terry McIntyre: I can write this in longer form, but monetary inflation – creation of new money out of faith and promises – misleads investors. Surely you noticed at least one boom/bust cycle, since we just experienced one ending in 2008. People made decisions to buy homes based on a false belief that housing prices would keep going up. When they stopped rising, a lot of bad investments were exposed. Why do I say they were misled? Think of inflation as a bias. We measure investment decisions by the increased price. Monetary inflation skews prices upward. Decisions are influenced, at least in part, by that bias – not by fundamental business factors.

    Walter I Baltzley: … how do you define “money”? How is “money” created, and from where does it derive its value–or in other words why do we exchange our labor and property for “money”? …

    Terry McIntyre: …In an ideal world ,money would be any voluntarily accepted medium of exchange. In such a world, greenbacks and FRNs would probably, in my estimation, collapse. They are backed by the force of government…

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