Tuesday, December 27, 2016

Money indexes stuff, stuff does not index money

Ludwig von Mises: Attempts to carry out economic reforms from the monetary side can never amount to anything but an artificial stimulation of economic activity by an expansion of the circulation, and this, as must constantly be emphasized, must necessarily lead to crisis and depression. Recurring economic crises are nothing but the consequence of attempts, despite all the teachings of experience and all the warnings of the economists, to stimulate economic activity by means of additional credit...
Ludwig and Magic Walrus are at odds.  What does Ludwig mean?

He is just citing measurement theory, the theory of using integer indices to order a set of things according, in this case, to the pricing model.  Everything else follows.  But the main  corollary is that money cannot be s managed business, it is a malleable surface that allows us to estimate the probability of arrival of goods..  oney, by cefinition, cannot be manipulated. Or, in other words, money generates a provable block chain and an accurate double entry accounting system. Difficult to hack.

When money doesn't work, pricing doesn't work and goods pile up in one spot while trucks are half empty in another.

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