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The author or concept searched is found in the following 2 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Bullionism | Ricardo | Rothbard II 193 Bullionism/Ricardo/Rothbard: It was Ricardo's intention to revive and establish the bullionist position, not only against the anti-bullionists, but more importantly against the more respected and influential moderate anti-bullionist doctrine of Henry Thornton. Thornton was the most important theoretical opponent ofbullionism, and so Ricardo set out to take up the cudgels for Lord King, although, in doing so, he unfortunately (…) reverted to and elaborated the rigid and mechanistic approach of John Wheatley. >Henry Thornton, >John Wheatley. ThorntonVsRicardo: It was Thornton, however, who was his leading opponent, and Ricardo set out to convert him; as he wrote in High Price: Ricardo: Mr. Thornton must, therefore, according to his own principles, attribute it [the premium on gold bullion] to some more permanent cause than an unfavourable balance oftrade, and will, I doubt not, whatever his opinion may formerly have Rothbard II 194 been, now agree that it is to be accounted for only by the depreciation of the circulating medium.(1) Supply/RicardoVsThornton, Henry: In the course of the High Price, Ricardo set forth clearly the important point that there is no such thing as a shortage of specie or a great need for more of it: that, in effect, any level of the money supply is optimal: If the quantity of gold or silver in the world employed as money were exceedingly small, or abundantly great... the variation in their quantity would have produced no other effect than to make the commodities for which they were exchanged comparatively dear or cheap. The smaller quantity of money would perform the functions of circulating medium as well as the larger. Rothbard II 194 Time/equilibrium/Ricardo/Rothbard: To accomplish his impressive if unbalanced task, David Ricardo had to concentrate exclusively on long-run equilibrium states, and to ignore the market processes towards them. In that way, Ricardo set the stage for his later approach to all economic questions. 1. David Ricardo 1810. The High Price of Bullion. A Proof oft he Depreciation of Banknotes. |
EconRic I David Ricardo On the principles of political economy and taxation Indianapolis 2004 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
| Money Supply | Thornton | Rothbard II 173 Money supply/Thornton/Rothbard: [Thornton] conceded the theoretical possibility that increased money supply could bring about higher prices: as to the assertion that the increased issue of Bank paper was the cause of the dearness of provisions, he [Thornton] would not deny that it might have some foundation; but he would contend that its effect was far from being as great as was being alleged... Rothbard: Henry Thornton's book on Paper Credit(1) was a considerable expansion of his parliamentary speeches, and it was Paper Credit that took its place as not only the leading work on behalf of anti-bullionism, but also the most influential on either side of the debate. The timing was right, since the restriction was in particular need of defence in 1802. Rothbard II 174 In fact, Thornton acknowledged that the fall in price and the depression brought about by monetary deflation would be 'unusual' and 'temporary'. But he anticipated Keynes in focusing on allegedly sticky wage rates, for a fall [of prices] arising from temporary distress will be attended probably with no correspondent fall in the rate of wages; for the fall of price, and the distress, will be understood to be temporary, and the rate of wages, we know, is not so variable as the price of goods. There is reason, therefore, to fear that the unnatural and extraordinarily Iow price arising from the sort of distress of which we now speak, would occasion much discouragement of the fabrication of manufactures. RothbardVsThornton: There are two problems here. First, while the economic distress, due to faulty forecasting and excess bidding up of wage rates and other costs, will indeed be temporary, there is no reason Why the fall in prices should not be permanent. Prices had previously been artificially raised by monetary and credit expansion; their decline simply reflects the contraction of credit down to more realistic levels. The knowledge that the decline is permanent should greatly speed up the adjustment mechanism. Second, if workers persist in keeping their wage demands higher than the market, they have only themselves to blame for their unemployment. Keeping any price, including a wage rate, higher than market equilibrium will always lead to an unsold surplus of the good or service: in the case of labour, unsold labour time, or unemployment. Iflabourers wish to change their unemployed status, they need only Iower their wage demands to clear the market and allow themselves to be hired. Rothbard II 175 RothbardVsThornton: Thornton's work has been excessively hailed by von Hayek and other historians as being theoretically excellent if unfortunate in its political anti-bullionist conclusions. >Bullionism/Rothbard. But his theoretical weakness did not only consist of his excessive horror of deflation and his stress on the alleged empirical dominance of real factors in his analysis of inflation and depreciation. For this stress itself reflected a grave if subtle theoretical flaw in Thornton's entire monetary and balance of payments analysis. His entire analysis lingered disproportionately on the real and short-term factors, to the almost complete neglect of the tendency of the economy towards long-run equilibrium. To sum up: the correct analysis of complete bullionism (such as presented by Boyd and later by Lord King) stresses monetary factors leading to monetary equilibrium, while showing that real factors can only have temporary effects. The analysis of real factors is integrated with, and at all times subordinated to, the monetary factors, and short-run and long-run monetary processes are integrated as well. In Thornton's moderate anti-bullionist position (often miscalled 'moderate bullionist'), however, both real and monetary causal factors and processes are presented as separate and independent of each Other, With real factors presented as empirically more important. Time/price/circulation: Short-run factors are similarly stressed, to the neglect of long-run forces. Henry Thornton has been extravagantly praised by Schumpeter and other historians for adding velocity of circulation to the quantity of money as a determinant of overall prices. But, in the first place, we have seen that ever since the scholastics, the demand for money - the inverse of the 'velocity' - had always been integrated with the supply of money in analysing the determination of general prices. It is true that Thornton analysed the different influences on, and different variabilities of, velocity in considerable and pioneering detail: e.g. frequency of payments, development of clearing systems, confidence in the money, and variations of the same stock of money over time. But unfortunately, Thornton ruined this contribution by not realizing that velocity of circulation is simply the inverse of the demand for money and by treating the velocity as somehow different, and independent of, demand in helping determine the money relation of supply, demand and price. >Currency. 1. Henry Thornton. 1802. An Enquiry into the Nature and Effects of the Paper Credit of Great Britain. London: J. Hatchard and Messrs. F. and C. Rivington. |
Thornton I Henry Thornton An Enquiry into the Nature and Effects of the Paper Credit of Great Britain London 1802, 1939 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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