Saturday, March 1, 2008

A reply to weissgarnix (amv)

Today, another producer for the economic blogworld has commented on our His synonym reveals modesty (not my strength as you may have noticed). He calls himself and his blog "weissgarnix" which means something like "knownothing." He discovered my most recent quarrel with Thomas Fricke on Wirtschaftswunder. As readers of this blog know, I heavily disagree with Mr. Fricke on most economic issues. Weissgarnix seems to agree with me on some points at least (he explicitly points out my post on the definition of inflation). Further he makes two suggestions both of which I would like to comment:

  1. Weissgarnix recommends that I should shift focus to the economics of Heinsohn and Steiger. I am no expert on this literature. All I know is that both reject the "exchange paradigm" and propose to derive the existence of money and the nature of financial capitalism from an alternative perspective, based on property rights. Although I am convinced that property right are crucial for any progress (not only economic, but also for civilization at large), I am not sure if we can derive the existence and functions of money from ownership. This, of course, connects to the Fugger-approach to money: A rich guy (rich not only absolutely, but - and this is more important - in relation to others such as his name becomes synonymical with creditworthiness) issues an I.O.U which becomes money and circulates because it is a risk-free claim to the rich guy's property. If this is what Heiner and Steinsohn really mean than I have serious doubts. For is not money the precondition for the accumulation of wealth (i.e., the accumulation of capital)? If it is huge property which gives money its existence, this property had to be produced without money! I do not think that a barter system is that efficient! I prefer the Menger approach to money.
  2. Coffee. house is in English. Weissgarnix wants it in German. He hints to the undeniable fact that the market for Econblogs in general is in oversupply but that econ-blogging in German is still relatively scarce, thus profits higher. I am not sure about the "language-elasticity of demand" but weissgarnix may be right. We surely will discuss it. Yet, we do not regard it as a principle or iron law to write in English (as my post on inflation mentioned and linked above shows). We simply presumed that most people interested in economics have no resentment with English ... after all, most economics is written in English.

Anyway, thank you for your benign remarks! Until next time.