Georg Friedrich Knapp Was Not a “Chartalist”

“Chartalism” is generally conceived as a doctrine that states that money is a creation of the state. The father of chartalism, Georg Friedrich Knapp, even devoted the title of his magnum opus, The State Theory of Money, to highlighting this connection. Our purpose is to show that the chartalist theory, as developed by Knapp in his book, did not really argue that means of payment were necessarily a creation of the state. A close reading of his book reveals that means of payment could emerge outside the state and that even other pay-communities were able to create chartal means of payment. That is the main reason why Knapp’s theory of money was not radically incompatible with Carl Menger’s.

Business cycle theory: Where Minsky and Hayek agreed

Hyman Minsky’s and Friedrich Hayek’s theories on the business cycle are often regarded as fundamentally divergent even when they share certain points in common: while Minsky attributes the cause of economic fluctuations to the inherently speculative tendencies of financial markets, Hayek blames central banks for credit manipulation. This paper aims to demonstrate that the similarities between both authors are greater than generally believed and that actually some consensus exists in their writings: both authors think that the economic boom is the result of an unsustainable credit expansion and that the depression can be explained by financial or, ultimately, real constraints.

Property is only another name for decentralized creation of knowledge

Eric A. Posner and E. Glen Weyl argue in a recent paper that a private property regime is incompatible with allocative efficiency insofar as it allows owners to ask for monopoly prices to potential buyers. In order to remedy this defect without penalizing investment efficiency, they propose to implement a Harberger tax. In this paper we show that the Harberger tax is a mechanism that penalizes the informational investment necessary to reach efficient estimates of the fundamental value of assets and, therefore, a mechanism that move us away from both investment efficiency and allocative efficiency.

Libertarianism and Basic-Icome Guarantee: Friends or Foes?

The Basic-Income Guarantee is a governmental programme of income redistribution that enjoys an increasing predicament among academic and political circles. Traditionally, the philosophical defence for this programme has been articulated from the standpoint of social liberalism, republicanism, or communism. Recently, however, libertarian philosopher Matt Zwolinski also tried to reconcile the Basic-Income Guarantee scheme with libertarian ethics. To do so, he resorted to the Lockean proviso: to the extent that the institutionalization of private property impoverishes certain people by depriving their access to natural resources, these people deserve compensation and the most pragmatic way of providing this is through a Basic-Income Guarantee. This paper examines Zwolinski’s arguments and responds by demonstrating that the Basic-Income Guarantee is incompatible with libertarian ethics: the current levels of poverty are not caused by the institutionalization of private property and the Basic-Income Guarantee does not constitute a pragmatic approach to eradicate poverty.

The Issue of Free Banking during the Bullionist Controversy

The discussions of the Bullionist Controversy were closely related to the effects of inconvertibility on prices and exchange rates. However, during their discussions, economists had a need to address other important questions such as the convenience of free banking. In this paper, we will study the perspective of the different schools involved in the debate on this issue: we will show that their positions were wholly coherent with their underlying assumptions on the nature of monetary assets. The economists who viewed gold and banknotes as perfect substitutes, such as the radical bullionists, tended to favor a ban on free banking. On the contrary, the economists who viewed banknotes and gold as imperfect substitutes, such as the moderate bullionists and antibullionists, were inclined to favor free banking.