Open thread, Feb. 9 - Feb. 15, 2015

MrMind

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I wonder how libertarians can believe in both the gold standard and in the cornucopianism of natural resources. These ideas make contradictory assumptions, otherwise you have to justify why element 79 in the Periodic Table deserves a special Malthusian status that doesn't apply to all the other elements.

You see this contradiction in Ayn Rand's novel Atlas Shrugged, where the Operating Objectivists can create mountains of goods - copper, coal, steel, petroleum, wheat, etc. - when they live under a proper political order. But they mysteriously can't seem to do this trick for gold.

Historically, gold had a lot of attractive properties for use as currency:

Compactness: high value/volume ratio.
Low upkeep/maintenance cost (due to chemical unreactivity)
Difficulty to counterfeit. This applies to all the elements really, although you could in theory produce sub-Nickel elements economically through nuclear reactions. However physical law prevents this for heavier elements.
Ease of verification (distinctive color plus chemical resistance allows easy 'field tests')
Inherent value independent of legal status as currency (jewellry, electroni

... (read more)

14knb11y

I think you've missed an important distinction in libertarian groups. Goldbugs tend to be more Malthusian than Cornucopian. In fact, Goldbugs are usually bulls on all commodities and perma-bears on everything else. Goldbugs tend to be paleo-libertarians like Mises Institute/Lew Rockwell etc. The Cornucopian libertarians tend to be cosmotarians like Reason Foundation/Cato Institute, etc. E.g. Julian Simon was a member of Cato.

4NancyLebovitz11y

I'm a libertarian, and I think you've got an interesting question there. Libertarianism was developed when technology wasn't changing as fast as it is now, and the gold standard is a solution to a real problem of serious inflation. I've still not sure it makes sense that people need to be fooled(?) into making sensible purchases and investments though mild inflation. However, cheap oil does support the cornucopean hythpothesis, and it didn't take a libertarian society-- just modern tech and governments that aren't extremely oppressive. Anyway, I don't know if there's a libertarian consensus about gold these days, or whether an electronic currency is a reasonable substitute. Before the big drop in the price of oil, I saw people doubting peak oil (the idea was that exploration is regulating by the expectation of returns, so it wasn't going to look as though there was more than 30 years worth of oil), but I didn't see anyone predicting cheap oil. Has anyone seen that sort of prediction? Incidentally, there's oil from shale in Atlas Shrugged-- with no hint of what tech would be needed to get the oil out.