If you insist on empirical approach and how economists should be making testable predictions, why did Austrians then predict the housing bubble, while Keynesians didn't? Doesn't that disprove Keynesianism?

Hint: it doesn't, it just shows how you contradict yourself.

To phrase it like this is to misunderstand Austrian economics. Would you trust a mathematician that rejects empirical approach, or one who claims that measurement can prove or disprove mathematic theories?

The main one is the axiom of human action, in that humans use means to achieve ends. As an example of use, it can be explain why barter occurs: if person A possesses a good X, person B possesses a good Y, A values the possession of Y more than X, and B values the possession of X more then Y, they perform an exchange (I'm ignoring transaction costs and the existence of other people and goods for simplicity).

Austrian economics rejects the notion that empirical data can confirm or refute economic theory, because economics is based on human action. Just like like empirical data cannot confirm or refute math. By the way I participated in math competitions back in high school and if I recall correctly twice I ranked 4th in the country.

I live in an apartment, attended public schools, don't have a gun and am an atheist.

Furthermore, thank you for providing evidence for my claim that you don't actually have an argument.

Your posts would be considered more seriously if you provided actual arguments rather than the childish behaviour you're exhibiting. I find it particularly problematic if you use an ad hominem while simultaneously claiming your opponent is unscientific.

Austrian economics is based primarily on deductive reasoning and logic. That puts it into the same category as mathematics. Similarly as mathematics, it is based on axioms. Strictly speaking, it's not science, but a tool that can be used in science.

Why don't you provide actual arguments? You've demonstrated in the past that you are capable of that. Why the change and why are you hiding behind a pseudonym? What are you afraid of?

Where is the workshop, when is it and is it open for public?

Thank you for your reply sunnankar,

This is actually a very interesting point. I was originally under the impression that you are required to conduct your accounting in the legal tender. I had heard about the Kahre case, but if I understand correctly, it was about underreporting of value rather than use of a different currency for accounting, in other words, it does not have anything to do with the choice of currency as such.

I found this link which suggests that UK companies must conduct their accounting in pounds.

I was also under the impression that the choice of currency for accounting influences your tax liabilities. Then I ran a couple of simulations and it's not that simple. If the gain/loss is to be calculated based on the total balances, then the choice of accounting currency is irrelevant and leads to the same result (but because exchanges have fees, you'll end up with a lower profit). If however the gain/loss is only realised when you sell the foreign currency against legal tender (which, based on my research, seems to be the case), then the result is only the same if you sell all your balances of the foreign currency. If you conduct your business exclusively in foreign currency (say, Bitcoin) that appreciates against legal tender, and only sell your Bitcoins in order to have enough legal tender to pay taxes, you'll actually end up with a lower tax due!

It turns out that my original assumption that the choice of currency for accounting influences tax liabilities is erronous, irrespective of whether the choice is allowed or not. It's other accounting rules that influence tax liabilities, and it looks like paradoxically, they currently favour Bitcoin.

It is true that taxation is typically associated with legal tender, but that's not the only "hard" restriction. You're also required to conduct your accounting in legal tender, which influences the amount of tax owed.

No, I would say that in most "normal" countries typically you do not need to accept the "national" currency if you don't want to (there are some exceptions which have separate regulations, e.g. banks). First of all, if it was enforceable, there would by definition be no foreign trade, as in those cases at least one of the parties needs to use a different currency than their national one. Furthermore, if someone started enforcing it, all foreign investment would cease (e.g. the Swiss weren't very happy about the Hungarian "trick" performed on them from my previous example).

Typically the harsh restrictions are associated with closed economies, e.g. Cuba.

Well, nowadays this is more an exception than the rule. My research shows that there are precedents where courts upheld the currency specified in the contract even though it was foreign money (I don't have the link but there was at least one case in the UK). Last year, there were unhappy Hungarians who took out mortgages in Swiss Francs before the Forint depreciated. They lobbied to the state and the state allowed them to redenominate the contracts, but this was not automatic and required executive action.

As I said in the post just above this, it looks like the restrictions on the use of foreign moneys are inversely proportional to the desire of the people of a country. If the financial system and value are stable, and hence everyone is happy using it, there are less restrictions. As it begins to fail, more and more restrictions are imposed, until you have a situation like Zimbabwe where the use of other currencies was punishable by death. The USA introduced restrictions on the holdings of gold during the recession in the 1930s.

My point was slightly different. While it is true that we have legal tender laws, that's not what I was talking about. I was talking about propping up spending through money injections. This only has this effect to the extent that you can mislead people into thinking that the purchasing power is higher than it really is. If the misdirection didn't work, people would switch to other liquid assets. Even if we disregard legal tender laws, there is still the network effect which increases the threshold for the transaction cost difference required for the switch. If there was no network effect and no legal tender laws, people would switch to a more stable money as soon as they got the impression that there's something fishy going on with the printing press. That is why, if the inflation starts going more rampant, states increase the penalties for using other money. The network effect is in those cases too weak to compensate for the dramatic increase of transaction costs involved in using a currency with a rapidly decreasing purchasing power. The network effect normally compensates against a mild inflation even without excessive legal restrictions, which allows the people connected to the printing press to reap the benefits.

It's a type of externality: if money already exists and the producers of money can produce new money below their market price, they reap the difference. Once people lose confidence in the stability of value, the demand shrinks and with it also the price.

I was also attempting to explain that economic models using aggregates such as GDP only work if there is single money. There is no "Bitcoin country". And if you use Bitcoin as infrastructure for fiat money payments (such as Bit-Pay is offering), the whole concept of the quantity theory of money loses meaning.

I humbly disagree. Keynesians and their more modern derivatives (e.g. New Keynesians) do not fancy the idea of people having a choice of their own money. In their economic theories, money is forced upon the populace whether they want it or not. Their aggregate-based economic models require an assumption of a monopoly money.

The power of bankers comes from credit expansion, which can increase the money supply at lower costs than producing new gold. Without credit expansion, there is no reason why the profitability of facilitating loans be any different than the profitability of other businesses.

First of all, we know that money exists. So this is not an insurmountable problem, because the spread of any money that is nowadays in use already happened in the past. People initially did not use a particular money but later switched. And some of these even occurred without a corresponding act of state. I'm sure there were plenty of skeptics and naysayers who preferred the old way for one reason or the other. But Bitcoin's advantages over the alternatives (decentralisation, predictable supply, low transaction costs) are still here and, in my opinion, remain unchallenged. Either it's sufficient for a switch, or it's not. Other than helping to provide an pleasurable experience for the potential user, there is not much else that can be done.

You missed the point, which is that even if this was a problem, the alternatives do not fix it.

Without people wanting to hold a prospective medium of exchange, it would not become a medium of exchange. Unless you perform some trick (e.g. voluntary peg to another medium of exchange), a medium of exchange that decreases in value has to be forced on people.

The market price is not determined by production costs. It's the other way around: market prices of consumer goods influence the decisions of production processes and costs.

When ASIC mining gets widespread, the same thing would happen as when GPU mining outpaced CPU mining: the difficulty rises and the producers that produce above marginal costs would fall out.

Anyone can buy or mine bitcoins. Nobody has a legal privilege to prevent anyone else from creating or buying bitcoins. Calling this "parasitic" is symptomatic of ideologies that prefer violence and are driven by envy of other people's wealth.

Even if I take a neutral view on the economic validity of Gesell's theory, it still requires a monopoly production. Without force, it cannot work. This can be clearly seen on Gesell's work in the Bavarian Soviet Republic (freigeld was supposed to be legislated), or the Miracle of Wörgl (scrip and stamps were not produced competitively).

It is absurd and hypocritical to label voluntary production and trade as "parasitic" while simultaneously advocating the use of violence as an alternative.

This is why the Austrian approach is still the only one that make sense. Here's one of my favourite quotes:

Even if you were right in all your points, the only conclusion to draw from this would be that Bitcoin is pointless. If it cannot withstand the state, there is no reason to use it. Taxation will allow the state to sustain itself, and regulation could eliminate the transaction cost advantage Bitcoin has. Bitcoin would cease to exist. So even the hardcore pragmatic can readily conclude that an attempt to legitimise Bitcoin in the eye of the state is self-defeating. There is even a certain level of naivite in believing that lobbying protects you from the state. The target of lobbying is not the state, but your competitors.

The most rational approach, in my opinion, is to maintain the current "not illegal" status and stall regulation attempts until the fiat money collapses.

You are correct that Dollar comes from Thalers, but that does not invalidate my argument. See wikipedia:

Money is subject to the network effect. On a free market, I would expect a small number of dominant currencies (maybe even only one), however there could be small local currencies. Think browsers or operating systems.

The Euro is a political project, not a market one. The reason why it failed (or will soon) is a variant of the tragedy of commons (see Philip Bagus: The Tragedy of The Euro).

But in the past, there were times where gold and silver were dominant due to market forces. The various names for money, e.g. dollar, pound, mark, were merely different weight units (of gold/silver).

I see, thank you for the explanation. I need to think about it but I am intrigued.

By the way, I had a somewhat similar case in the past where an unexpected quirk caused a benefit to me. In the EU, I need to be resident in a country in order to have a health insurance there. However, because I have a business registered in a country where I'm not resident, I am obligated to have health insurance in that country as well, even though I pay the minimal contribution. This allows a broader spectrum of services being available to me.