tag:blogger.com,1999:blog-6245381193993153721.post7200251640899063607..comments2024-03-28T17:08:15.784-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Mises’s Regression Theorem: A CritiqueLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-6245381193993153721.post-20811273300921940632016-04-20T14:30:15.584-07:002016-04-20T14:30:15.584-07:00Mises and Hoppe are both right from their respecti...Mises and Hoppe are both right from their respective points of view. However, I think ivanfoofoo is correct when he states posters are merely arguing semantics here.<br /><br />Money as a utility (a tool) for the exchange in equal or lessor value of goods and services. Money is also a hedge (protection) against future damages and/or a safety net (security) against unforeseen future loses. Think in terms of insurance and savings. If you die, your surviving beneficiaries will receive the contributions (payout) from your insurance policy upon your untimely death. As to savings, that's money set aside in the event of some unforeseen immediate lose (i.e., a blown tire or broken A/C unit) that can quickly be repaired of replaced using your cash reserves. But regardless of how you slice it, money whether used indirectly (to spend) or directly (as protection or security against some unforeseen future event) is still being "exchanged" for something.<br /><br />So, in that sense, Mises was right. Unless you're stuffing your money in a mattress, your money (generally) is always in circulation doing something. You're either exchanging it for goods or services of equal or lessor value, or you're investing it as a hedge against inflation or a protection against immediate or future lose.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-13478515019487410232012-12-28T02:12:22.792-08:002012-12-28T02:12:22.792-08:00Your comment implies that utility can only be deri...Your comment implies that utility can only be derived from the "consumption" of a good whereby the good is destroyed.<br /><br />That is false. One can derive utility from a working fire/smoke detector in your home when the good in question is durable. In fact, it need never go off at all (i.e., you may never have a fire) and yet you still derive utility from it.<br /><br />Money's utility is similar to the utility derived from smoke detectors.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-78302019960232761742012-12-27T14:40:27.861-08:002012-12-27T14:40:27.861-08:00The utility of bread is that you can consume it. N...The utility of bread is that you can consume it. Niether looking forward to consuming bread, nor the comfort of knowing you will not go hungry in the immediate future is a use of the bread. Indeed they can both be delusions (the bread may be moldy, and your fiat money may become debased to the point of failure). The fact is that money is never consumed, rather it is exchanged for goods and services which are consumed , or exchanged for other financial instruments (but these too, are never consumed, only exchanged). Von Mises was right.mr burnshttps://www.blogger.com/profile/12535191969377526338noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-88000663412783467952012-06-09T13:46:05.706-07:002012-06-09T13:46:05.706-07:00As invanfoofoo argued, the "direct utility&qu...As invanfoofoo argued, the "direct utility" money has in giving security or pleasure/status in hoarding it only exists after it has already gained a value as a mean of exchange, an indirect utility, in the first place. It cannot develop this direct utility with out first developing the indirect utility as a mean of exchange, so the Regression Theorem STILL applies.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-34859739931290867512012-01-23T00:01:38.372-08:002012-01-23T00:01:38.372-08:00Lord Keynes, I see your blog has been infected by ...Lord Keynes, I see your blog has been infected by a problem which I’ve also got on my blog. This is that when anyone clicks on a link going to a post under which there are some comments, they are taken to the comments, not to the top of the post.<br /><br />I haven’t figured this out yet, but will let you know when I have. It’s got something to do with so called “permalinks” I think. I’d be grateful if you’d return the favour if you get the answer first. My blog: http://ralphanomics.blogspot.com/Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-54031390519320601492012-01-17T04:44:05.043-08:002012-01-17T04:44:05.043-08:00I think this is purely a semantic issue. It's ...I think this is purely a semantic issue. It's somehow true that money has the utility given by it's liquidity. But all its utility is ultimately based on the purchasing power it has. Without goods or debts, money won't have any utility.ivanfoofoohttps://www.blogger.com/profile/07899286403907746852noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-82439403205288468892012-01-16T05:33:20.090-08:002012-01-16T05:33:20.090-08:00"Wrong. Money buys you security because it ha..."Wrong. Money buys you security because it has direct utility in settling a debt claim."<br /><br />That doesn't refute what ivanfoo said. That confirms it.Davidnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-8359398567202668672012-01-14T14:38:40.867-08:002012-01-14T14:38:40.867-08:00Wrong. Money buys you security because it has dire...Wrong. Money buys you security because it has direct utility in settling a debt claim. <br /><br />Why do think people use money in exchange in the first place? They use it because like all other valuable things it has utility to them. <br /><br />The idea that money has no utility other than that arising from the possibility of obtaining other economic goods in exchange for it is so stupid because they can be no reason for why one would be able to obtain other economic goods for something unless the thing first has a utility in potentia.<br /><br />Mises claiming people are in the habit of exchanging utility (power) for something off non-utility (no power) based on the hope the it (a powerless thing) will have value in some future exchange (power ex nilo i.e. economic creationism). <br /><br />People aren't that irrational and speculative. People understand that the legal power of a claim against future debt liability is something that will be a economic good in view of that certainty of that debt. <br /><br />Money is social power and power is a good with direct utility. Austrians can't seem to understand that value comes from power relations not individual subjective desires. <br /><br />Economic value is a metaphorical relation and therefore not something any deductive praxeology could every study.<br /><br />See Henry C. Carey on value.Septeus7noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-20989736864962429392012-01-13T16:37:38.452-08:002012-01-13T16:37:38.452-08:00I still don't get the point. Money has no dire...I still don't get the point. Money has no direct utility. If you like sitting over piles of money because you get some social status that way, that's ultimately because money can buy you goods!ivanfoofoohttps://www.blogger.com/profile/07899286403907746852noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-39884807879302261032012-01-13T12:15:06.990-08:002012-01-13T12:15:06.990-08:00"THE REASON you write stuff like this is beca...<i>"THE REASON you write stuff like this is because of your deep seated Keynesian hatred of TIME. You fear it because you can't control it so you call for violence against it."</i><br /><br />First: "Major Doofus"? <br /><br />Second: I call for "violence" against ... time? <br /><br />I am guessing this is ironic and your post is a joke (mainly by the handle) ... or at least I hope so!Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41745204074627156402012-01-13T11:40:07.882-08:002012-01-13T11:40:07.882-08:00THE REASON you write stuff like this is because of...THE REASON you write stuff like this is because of your deep seated Keynesian hatred of TIME. You fear it because you can't control it so you call for violence against it. <br /><br />Mises may have been a statist and a liar, but he was a first order mind who UNDERSTOOD that violence against time and economics was NOT the answer. <br /><br />Just another Keynesian ignoramus for whom ignorance of economics, fear of time, and calls for violence is seen as a virtue.Major Doofusnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-59727036726235373022012-01-13T09:17:22.066-08:002012-01-13T09:17:22.066-08:00Also, your assertion that I am just "re-defin...Also, your assertion that I am just "re-defining" Mises's definition of money is false: Mises is simply wrong in thinking money provides no direct utility. <br /><br />Even if you accept his definition of money as the thing which allows indirect exchange as a medium of exchange, it is STILL a flaw to think money has no direct utility.<br /><br />utility = satisfaction or pleasure derived from something<br /><br />One obtains direct satisfaction from holding money as it diminishes one's anxiety or worry about future uncertianty or future unexpected liabilities/obligationsLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-70611661856849455802012-01-13T09:04:00.404-08:002012-01-13T09:04:00.404-08:00And, by the way, "David"/Major_Freedom, ...And, by the way, "David"/Major_Freedom, you're not fooling me with this new handle.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-20534363617295197892012-01-13T09:01:27.802-08:002012-01-13T09:01:27.802-08:00"Mises defined the commodity being utilized i...<i>"Mises defined the commodity being utilized in action for indirect utility a 'money.'"</i><br /><br />And that definition is flawed and incomplete.<br /><br /><i>"If you showed a praxeologist a commodity being utilized in action for direct utility (e.g. measurement, unit of account, etc), or for any other use besides being utilized in action for indirect utility, then they will say "The purpose of this commodity is not what I define a money as requiring, therefore I will not define that commodity to be a money."</i><br /><br />(1) Modern fiat money is not a producble commodity.<br /><br />(2) yet modern fiat money can be held as a security against uncertainty.<br /><br />The idea that you have a way out by declaring that "this is not money!" is absurd.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-40289379509955119292012-01-13T08:52:46.064-08:002012-01-13T08:52:46.064-08:00"There are plenty of problems with Hoppe'...<i>"There are plenty of problems with Hoppe's article, but it is a good example of what I am talking about."</i><br /><br />Hoppe argues:<br /><br /><i>"Because money can be employed for the instant satisfaction of the widest range of possible needs, it provides its owner with the best humanly possible protection against uncertainty. In holding money, its owner gains in the satisfaction of being able to meet instantly, as they unpredictably arise, the widest range of future contingencies. The investment in cash balances is an investment contra the (subjectively felt) aversion to uncertainty. A larger cash balance brings more relief from uncertainty aversion. .... The marginal utility of the added cash is higher than (ranks above) the marginal utility of the nonmoney goods sold or unbought."</i><br /><br />This can only mean money can provide direct utility as a protection/security against uncertainty.<br /><br />If this is admitted, then Mises's whole purpose in thinking up the Regression theorem was a waste of time: the imagined circularity was an illusion.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-33669092255636610342012-01-13T08:26:05.123-08:002012-01-13T08:26:05.123-08:00"But there is a severe flaw underlying Mises’..."But there is a severe flaw underlying Mises’s whole intellectual program in producing his Regression Theorem: the truth of the assumption that money only has indirect utility.... The view that money only has utility through its exchange value is also held by neoclassicals... This idea held by Austrians and neoclassicals should be rejected."<br /><br />I think you'll find that a number of Austrians already reject this. William Hutt's paper on the Yield from Money Held is a good example.<br /><br />http://mises.org/daily/3449<br /><br />There are plenty of problems with Hoppe's article, but it is a good example of what I am talking about. Hutt was a fellow traveler of the Austrians and his paper is very popular in Austrian circles.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-40975725401229860532012-01-13T08:17:59.610-08:002012-01-13T08:17:59.610-08:00"But there is a severe flaw underlying Mises’..."But there is a severe flaw underlying Mises’s whole intellectual program in producing his Regression Theorem: the truth of the assumption that money only has indirect utility."<br /><br />That "assumption" is actually a DEFINITION. It is what Mises DEFINES money to be.<br /><br />You are confused because you are focusing on the material itself, the commodity. Thus, you see a material, a commodity stored in some warehouse, being used a common "measurement", or "unit of account", etc, and then you presume that because this is a "money" and yet is not being used as a "medium of <i>exchange</i>", Mises' account of money must be wrong.<br /><br />But you're not proving him wrong by denying the definition he used to characterize money.<br /><br />Mises was a praxeologist. All economic phenomena and what "economic things" really are is ultimately derived by how that those "economic things" are utilized in ACTION.<br /><br />Mises looked at what people are doing, and he noticed that commodities were being utilized <i>in action</i> for their own utility, that commodities were utilized <i>in action</i> for indirect utility, and that commodities were utilized <i>in action</i> for both direct and indirect utility.<br /><br />Mises <i>defined</i> the commodity being utilized <i>in action</i> for indirect utility a "money."<br /><br />If you showed a praxeologist a commodity being utilized <i>in action</i> for direct utility (e.g. measurement, unit of account, etc), or for any other use besides being utilized <i>in action</i> for indirect utility, then they will say "The purpose of this commodity is not what I define a money as requiring, therefore I will not define that commodity to be a money. I will only define that commodity to be a money if you show me that it is being universally accepted/utilized <i>in action</i> for indirect utility, i.e. being used in indirect exchanges."<br /><br />So when you say:<br /><br />"But money as the most liquid asset has greater utility than most financial assets, except perhaps the debt instruments we call fractional reserve demand deposits or transactions accounts."<br /><br />When you say "liquid", that already presumes exchanges, and "most liquid" means universally accepted in exchanges.<br /><br />Money for Mises was defined by its praxeological purpose, not the physicality of the commodity itself.<br /><br />You can't refute Mises in this way. You cannot refute him by taking his definition for money, stripping it away from its praxeological foundation, then focus on the physicality of the commodity itself, then shoe horn it into other uses like measurement or unit of account, then say that because it is not being utilized <i>in action</i> for indirect exchanges, that it entitles you to say "Aha! Here we have a "money" (which you define by its physicalility, not its praxeological use), and here we have an example of money being used for something other than indirect exchanges! Mises was falsified!"<br /><br />No, he wasn't. Your error was in the stripping of the money away from the praxeological foundation from which Mises DEFINED money to be. <br /><br />You can never refute someone based on merely disagreeing over the definitions they use. That is called playing semantics.<br /><br />Just another hopelessly confused and "desperate to refute at all costs even it means lying and misrepresenting the argument" post on Mises / Austrian economics.Davidnoreply@blogger.com