Thread: Help me stamp this idiot back into his hole.

In 2006 I wrote An Answer to Stephen Zarlenga, in which I replied to his paper, A Refutation of Menger’s Theory of the “Origin of Money.” When he refused to respond, I publicly offered him $250 for a rebuttal.

At that time I was also offering the Austrians $1000 for a rebuttal to my Critique of Austrian Economics. Robert Murphy had the courage to respond, but Zarlenga did not.

Zarlenga recently wrote in his newsletter, obliquely refering to me, "Professional dis-informers and other opportunists make every effort to block our progress by spreading falsehood, doubt and discouragement. We ignore them." Apparently, ignoring his critics is his only defense.

In Zarlenga's most recent newsletter he gloats:

"What do you get when a religion masquerades as a science?

"You get what's know today as "Economics!"

"Why do we identify it as a religion?

"Because it is a belief system based on faith,

"Where enshrinement of those beliefs is independent of evidence, pro or con;

"Where its bad effects are regularly dismissed as "anecdotal;"

"Where it's high priests, the economists, such as Ludwig Von Mises, assert that their theories (beliefs) cannot be dis proven by mere facts (!);

"And where they actually get away with those statements that are so destructive to sound thinking methodology.

"A recent example is the official 18 point statement released by the G20 group of countries after their emergency meeting last Weekend (Nov. 15th and 16th). Lawmakers and citizens should regard it as an insult to the intelligence of all thinking and working Americans...

"This is horrible. They are saying that one of the main causes that facilitated the problem – the notion of so called free market ideology – must still reign unchallenged. This while the only reason anything is still standing in their ridiculous financial world is because of our government...

"There's that old destroyer again – "Free market principles." Its their heavy artillery in the class warfare those who these people represent are committed to. You see how desperate they are to bolster this ideology."

Now this idiot has been endorsed by Dennis Kucinich on the floor of Congress!

Let's make a concerted effort to remind Zarlenga of the critique he dodged in 2006.

And I am sure Kucinich's collegues in Congress would be interesting in hearing how he has embraced someone who refers to free-market principles as "that old destroyer" and as "heavy artillery in their class warfare." This isn't a socialist country yet - most congressmen would be aghast to hear such talk from one of their own.

YouTube - Dennis Kucinich talks about Steve Zarlenga

Why should anyone be shocked when an idiot endorses other idiots???

My Answer to Stephen Zarlenga is an academic paper focusing on the origin of money.

At a more practical level, regarding what the socialists are actually proposing for us today, my Critique of Montagne's Mathematically Perfected Economy is relevant, as Montagne and Zarlenga have essentially the same proposal. I write:

"The basic flaw in the logic of modern socialists (Montagne, Cook, Zarlenga, etc.) is confusion between motivation and capability. “He’s privately controlled!” the socialist sneers at the Federal Reserve chairman, the unspoken assumption being that, were the socialist put in charge, he would immediately open the floodgates of wealth and prosperity for us all. It would be a veritable socialistic paradise, if only the Benevolent One were given the authority to print money! But, the fact is, the Fed is in a box. If a socialist were put in charge, he would be in the same box. Basically, if a central bank prints too much money, they debase the currency. Small countries like Zimbabwe are in a much tighter box than big countries like the United States, but a box it is.

"Montagne’s claim (sometimes called the Debt Virus Theory), that spending paper money directly into the economy, rather than buying Treasury Bills as the Fed does, is not inflationary can only be sustained with a gross re-definition of the word “inflation.” But re-defining words like “inflation” does not revoke the laws of economics. If you are taking a curve too fast in your car, you cannot avert a crash simply by re-defining “road” to include what used to be known as “median.”

"Arguing with socialists is a bit like Alice's meeting with Humpty Dumpty – common words like "inflation" just seem to mean whatever the socialist chooses them to mean. So, rather than following Montagne down that linguistic rabbit hole, I will simply point out that his plan has already been tried, albeit without the hubris of calling itself mathematically perfected. During the Revolutionary War, the Continental Congress spent paper money directly into the economy and we all know what happened to them. They won the war but the expression “not worth a Continental” still resonates with us today. Ten years later, their government went the way of the Weimar Republic. Fortunately, unlike the Weimar Republic, which was replaced by the Nazis, the Continental Congress was replaced by the United States of America, which turned out to be a pretty good government. So, hyperinflation does not always lead to tyranny, though that is something to beware of whenever one contemplates debasing the currency."

Also relevant is my Critique of Richard C. Cook's Program for Monetary Reform, which begins:

"Richard C. Cook has written a paper titled, An Emergency Program for Monetary Reform. It is based on re-defining the terms 'Gross National Product' and 'national income,' which most economists consider synonymous, to be different, and then proposing that the difference be paid to all U.S. citizens as a cash stipend..."

Matthew 15:14] Let them alone: they be blind leaders of the blind. And if the blind lead the blind, both shall fall into the ditch.

Originally Posted by American

Matthew 15:14] Let them alone: they be blind leaders of the blind. And if the blind lead the blind, both shall fall into the ditch.

A fine sentiment.

That is the same thing that the Germans were saying in the early 1930's when Hitler was making speeches about his "final solution."

And, a decade later, when the cattle cars were rattling past on their way to the concentration camps, those were the same people who were saying, "Gosh, there sure are a lot of cattle being shipped these days."

Of course, since there was no beef in the stores, logic alone should have told them that it wasn't cattle in those rail cars. But there is nobody so blind as those who refuse to see.

As Zarathustra said, "He who would fall, I would yet push." Yes, the socialists are destined to fall, as socialism has always fallen. But I say, let us help them to fall faster.

The conclusion of An Answer To Stephen Zarlenga is as follows:

"I explain in my book (1999, p. 188), though in more abstract language, that the reason that the townsfolk can accept a cattleman’s coins is because the cattlemen themselves accept each other’s coins only until the next clearing house meeting. Cattlemen have private armies and, if a townsman is refused redemption, he has no recourse except to spread the word that he caught that man out. But that is sufficient because the cattleman who is caught short cannot survive the next clearing house meeting. His peers have private armies too. This is a point that has mystified many. They see coins of various marks accepted freely in town and they do not realize that they are accepted freely in town only because they are not accepted freely at the clearing house.

"The townsfolk do not accept a money substitute (coins in antiquity, checks in 1844) because the issuer 'vied for their acceptance' as Kindleberger (1996, p. 62) claims. They accept it because the issuer is alive, which is taken as evidence that he has survived the latest clearing house meeting. If they go to the feedlot to redeem a man’s coins and find that his cows are all gone and, in their place, the cattleman’s head has been put on a stake, then they know that his coins are no good anymore. The material the coins are made of, gold, is not yet considered money (it will be thousands of years before gold, not cattle, is money), but it has use-value and can be sold to the mint in the same way that flour can be sold to the baker. It is back to this use, the minting of cow-tokens, that Mises’ regression theorem traces the value of gold, not to the making of pretty necklaces.

"In conclusion, I must commend Zarlenga for his scholarship in researching events that took place thousands of years ago. It may seem that, having conceded to Zarlenga the bulk of his argument that gold coins were tokens for cows, there is little difference in our positions. But the one point that Zarlenga misses is the keystone, without which his whole thesis collapses: Cow-tokens were issued by the people who owned the cows.

"The church elders did not just write the equation '130 grains of gold = one cow' on the bulletin board at their temple and expect people to obey it. How could that work? The only reason someone would accept a gold coin is because the issuer was known to have a herd of cattle and to have proclaimed that anybody who brought one of his coins back to him would get a cow. Zarlenga is right that the merchants in town did not issue the coins, but he did not look far enough when he decided that the city government did. The coins were issued by a rural cattle baron. They circulated in the city, but they were not issued by any entity, public or private, in the city."


REFERENCES

Aguilar, Victor. 1999. Axiomatic Theory of Economics. Hauppauge, NY: Nova Science Publishers, Inc.

Kindleberger, Charles. 1996. Manias, Panics and Crashes. New York, NY: John Wiley & Sons, Inc.

YouTube - Kucinich: Federal Reserve No More "Federal" Than Federal Express!

At 5:00 minutes into this speech, Kucinich states "once we [socialists] control money again, we spend the money into circulation."

This is just the Debt Virus Theory all over again.

Originally Posted by Onion Eater

Regarding what the socialists are actually proposing for us today, my Critique of Montagne's Mathematically Perfected Economy is relevant, as Montagne and Zarlenga have essentially the same proposal. I write:

"The basic flaw in the logic of modern socialists (Montagne, Cook, Zarlenga, etc.) is confusion between motivation and capability. 'He’s privately controlled!' the socialist sneers at the Federal Reserve chairman, the unspoken assumption being that, were the socialist put in charge, he would immediately open the floodgates of wealth and prosperity for us all. It would be a veritable socialistic paradise, if only the Benevolent One were given the authority to print money! But, the fact is, the Fed is in a box. If a socialist were put in charge, he would be in the same box. Basically, if a central bank prints too much money, they debase the currency. Small countries like Zimbabwe are in a much tighter box than big countries like the United States, but a box it is.

"Montagne’s claim (sometimes called the Debt Virus Theory), that spending paper money directly into the economy, rather than buying Treasury Bills as the Fed does, is not inflationary can only be sustained with a gross re-definition of the word “inflation.” But re-defining words like 'inflation' does not revoke the laws of economics. If you are taking a curve too fast in your car, you cannot avert a crash simply by re-defining 'road' to include what used to be known as 'median.'

"Arguing with socialists is a bit like Alice's meeting with Humpty Dumpty – common words like 'inflation' just seem to mean whatever the socialist chooses them to mean. So, rather than following Montagne down that linguistic rabbit hole, I will simply point out that his plan has already been tried, albeit without the hubris of calling itself mathematically perfected. During the Revolutionary War, the Continental Congress spent paper money directly into the economy and we all know what happened to them. They won the war but the expression 'not worth a Continental' still resonates with us today. Ten years later, their government went the way of the Weimar Republic. Fortunately, unlike the Weimar Republic, which was replaced by the Nazis, the Continental Congress was replaced by the United States of America, which turned out to be a pretty good government. So, hyperinflation does not always lead to tyranny, though that is something to beware of whenever one contemplates debasing the currency."

Originally Posted by Onion Eater

The conclusion of An Answer To Stephen Zarlenga is as follows:

"I explain in my book (1999, p. 188), though in more abstract language, that the reason that the townsfolk can accept a cattleman’s coins is because the cattlemen themselves accept each other’s coins only until the next clearing house meeting. Cattlemen have private armies and, if a townsman is refused redemption, he has no recourse except to spread the word that he caught that man out. But that is sufficient because the cattleman who is caught short cannot survive the next clearing house meeting. His peers have private armies too. This is a point that has mystified many. They see coins of various marks accepted freely in town and they do not realize that they are accepted freely in town only because they are not accepted freely at the clearing house.

"The townsfolk do not accept a money substitute (coins in antiquity, checks in 1844) because the issuer 'vied for their acceptance' as Kindleberger (1996, p. 62) claims. They accept it because the issuer is alive, which is taken as evidence that he has survived the latest clearing house meeting. If they go to the feedlot to redeem a man’s coins and find that his cows are all gone and, in their place, the cattleman’s head has been put on a stake, then they know that his coins are no good anymore. The material the coins are made of, gold, is not yet considered money (it will be thousands of years before gold, not cattle, is money), but it has use-value and can be sold to the mint in the same way that flour can be sold to the baker. It is back to this use, the minting of cow-tokens, that Mises’ regression theorem traces the value of gold, not to the making of pretty necklaces.

"In conclusion, I must commend Zarlenga for his scholarship in researching events that took place thousands of years ago. It may seem that, having conceded to Zarlenga the bulk of his argument that gold coins were tokens for cows, there is little difference in our positions. But the one point that Zarlenga misses is the keystone, without which his whole thesis collapses: Cow-tokens were issued by the people who owned the cows.

"The church elders did not just write the equation '130 grains of gold = one cow' on the bulletin board at their temple and expect people to obey it. How could that work? The only reason someone would accept a gold coin is because the issuer was known to have a herd of cattle and to have proclaimed that anybody who brought one of his coins back to him would get a cow. Zarlenga is right that the merchants in town did not issue the coins, but he did not look far enough when he decided that the city government did. The coins were issued by a rural cattle baron. They circulated in the city, but they were not issued by any entity, public or private, in the city."


REFERENCES

Aguilar, Victor. 1999. Axiomatic Theory of Economics. Hauppauge, NY: Nova Science Publishers, Inc.

Kindleberger, Charles. 1996. Manias, Panics and Crashes. New York, NY: John Wiley & Sons, Inc.

Excellent post......

Originally Posted by Truth Detector

Excellent post......

Thanks.

I was temporarily suspended or I would have thanked you sooner.

In case you're wondering, it was this poll (Tashah is an IDF veteran): http://www.debatepolitics.com/polls/...n-shields.html (Is it wrong for the IDF to use human shields?)