Philosophy of Money
Here is the course syllabus.
Check back periodically for additional readings or information. Scroll to bottom for new posts!
For week of 1/24 -- chapter VIII of Carl Menger's Principles of Economics -- on line here, and G. F. Knapp's The State Theory of Money (1924) -- PDF here (pp. 1-44)
You'll recall from the syllabus that I will be posting questions for weekly
response. These need be no longer than a paragraph, provided that they
demonstrate active engagement with the material. They may be direct
answers to a question, or sometimes a question or reflection of your own.
These can simply be an email to me, but (a) send it from your BSU account as
opposed to your personal account, and (b) put "Weekly response #x" in the
subject line, where x=the actual number. Email them back to me by Sunday
Weekly response #1: this short video combines an account of money's origins with an explanation of inflation. Is this analysis Mengerian? Explain. Is inflation contrary to money's purposes?
For next week, read this from Ludwig von Mises - his book The Theory of Money and Credit is available entirely online, here: http://www.econlib.org/library/Mises/msT.html --read Part 1.
For Thursday, read chapter 1 of Simmel's book.
Weekly response #2: on page 73, Simmel makes an analogy with aesthetic value. Explain what he's trying to show, and whether you think the analogy works.
As we work through Chapter 3 of Simmel, Another work by Mises, Chapter 1 of his book Human Action, is directly on-point.
That's online too: http://www.econlib.org/library/Mises/HmA/msHmA.html
Weekly response #3: what does Mises mean by "praxeology"? How does Mises' understanding of human action compare with Simmel's?
Thursday, Feb 16, we will meet in the DMF Auditorium (Science bldg 120) rather than our usual classroom so we can hear a guest speaker. Roll will be taken, this counts as a regular class meeting.
For 2/28, here's some Marx to read, on alienation: https://www.marxists.org/archive/marx/works/1844/manuscripts/preface.htm Mainly the "First Manuscript," and particularly the section entitled "Estranged Labour" ("estranged" being another word for "alienated").
Weekly response #4: reflect on whether Simmel or Marx is more accurately describing the effects of a money economy.
Additional reading for this week: the same link to Mises' book Human
Action, above, but now see chapters 11, 12, 25 and 26. Also, chapter I
Critique of the Gotha Programme.
Here is a helpful short video which helps illustrate the point about prices as information signal. More sophisticated presentation in this famous 1945 paper by Hayek, The Use of Knowledge in Society.
You'll recall from the syllabus that in addition to the weekly responses, your are to write two short papers (3-5 page range). No WR this week; instead get started on the first paper, which is due March 17th. This should be a WORD document (meaning a .doc or a .docx) formatted thus: double-spaced, 1-inch margins, 12-point Times New Roman font, page numbering on, your name, date, and PHIL252 top left of first page - but then email it to me as an attachment from your @bridgew address. Slides on paper writing guidance.
This is due in my inbox 9:00 am March 17. Topic: Evaluate the role of money (or its absence) in conveying knowledge in both the planned economy Marx describes and in a market-driven system. Is Mises and Hayek's criticism, the "knowledge problem," a valid one, or does Marx have a better solution than Hayek and Mises understand?
Mises again: "In an exchange economy, the objective exchange value of commodities becomes the unit of calculation. This involves a threefold advantage. In the first place we are able to take as the basis of calculation the valuation of all individuals participating in trade. The subjective valuation of one individual is not directly comparable with the subjective valuation of others. It only becomes so as an exchange value arising from the interplay of the subjective valuations of all who take part in buying and selling. Secondly, calculations of this sort provide a control upon the appropriate use of the means of production. They enable those who desire to calculate the cost of complicated processes of production to see at once whether they are working as economically as others. If, under prevailing market prices, they cannot carry through the process at a profit, it is a clear proof that others are better able to turn to good account the instrumental goods in question. Finally, calculations based upon exchange values enable us to reduce values to a common unit. And since the higgling of the market establishes substitution relations between commodities, any commodity desired can be chosen for this purpose. In a money economy, money is the commodity chosen."
Optional Saturday seminar in March:
Info here (extra credit opportunity - must register and sign in)
Week of 3/21: It's hard to imagine teaching a course like this and not including the famous speech by Francisco D'Anconia on the meaning of money from Ayn Rand's 1957 novel Atlas Shrugged. Have a look at that, and then have a look at this essay by economist Steven Horwitz in which he explains the philosophy of money underlying it.
We will return to a discussion of fiat money vs commodity-based money, and the effects of inflation and other manipulations of money, later on.
Next unit for the semester is on inequality and state policy regarding money. We will begin with the range of options for state redistribution of wealth: at one end of the spectrum would be complete egalitarian redistribution; at the other would be none whatsoever. Regardless of the morality of either option, neither is remotely feasible politically. So while we may return to a consideration of those, we should begin with options such as the existing welfare state and its chief conceptual competitor, known variously as the UBI (universal basic income) or BIG (basic income guarantee). Begin with this overview. Pro piece here. Con piece here.
Weekly response #5: is wealth inequality a serious problem? Why or why not? Remember, just a paragraph for weekly response - here I'm just looking for you to begin articulating your thoughts on this issue. Note: question is about inequality per se, not poverty. So, e.g., if everyone were equal but poor, would that be ok? If no one were poor, would you still care about the inequality?Weekly response #6: your reactions to Prof. Horwitz's lecture.
Weekly response #7: after looking at DeSoto's analysis of barriers to mobility in the 3rd world, what parallels do you see with poverty in the US?
I mentioned we would come back to a discussion of cryptocurrencies; now seems like a good time. Here are some readings on Bitcoin. Tucker More Tucker Carden Patterson Tucker again
Weekly response #8: your thoughts on Bitcoin, given what we've learned this semester so far about money.
We talked in class about the idea that inflation and stimulus spending are good on one model and bad on another - on the first, the idea is that these are useful and possibly necessary tools to respond to a serious situation; on the second, the idea is that these activities exacerbate and are even responsible for the problems in the first place. The leading proponent in the 20th century of the former is J. M. Keynes; his main intellectual opposite is F. A. Hayek. For Keynes, here is a web version of his book The General Theory - minimally, read ch 22-24; optionally ch 3, 8-9, 16-17. For Hayek, see the essay "Reflections on the Pure Theory of Money of Mr. J. M. Keynes" and optionally look around in his book Pure Theory of Capital, esp. ch 26.
Interestingly, the Keynes-Hayek debate has been made into a rap video which accurately captures the basic arguments and even manages to include some direct quotations. Be sure to watch this as well. Weekly response #9: reflect on which model seems more plausible. Update: Keynes-Hayek rap battle round 2
Weekly response #10: will be emailed to you, due April 30. This email will include what I wanted to cover Thursday. Again, sorry about the scheduling mixup that results in my not being there.
FINAL PAPER ASSIGNMENT: as before, 3-5 pages is the range. Same formatting and delivery instructions as the first paper (scroll up). Due: 9:00am, May 8th.
Topic: Choose ONE of these prompts.
(1) expanding on weekly response #9 - besides using inflation to cover costs such as war, some argue that it's helpful to create inflation to relieve the burden on consumers with high debt. Do you think so, or not? Why or why not?
(2) expanding on weekly response #8 - is it right to consider Bitcoin money, and is it a good thing or not?