The Austrian School Theory to be Presented Before Congress: Gold vs. BitcoinMay 8, 2012
Economist Jeffrey Herbener will be presenting a statement before the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives today in which he presents the Austrian theory of money and credit, and in which he makes the case for market management of the money supply.
I disagree with some of what Herbener is presenting, so let’s go over the part of his speech that bothers me.
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In short, Bitcoin addresses all of gold’s shortcomings. Bitcoin is clearly a more “socially optimal” form of money than gold. Further, since Bitcoin is entirely digital, it can be transmitted across a wire transaction, thereby eliminating the need for expensive insurance and shipping costs. These costs needed to be accounted for under free banking, where banks would accept notes issued by other banks at a discount to cover the cost of transporting the gold between banks. With Bitcoin, this is not an issue. In fact, since Bitcoin is a global network, it would retain its full value between banks on differing continents!
While I appreciate the gold standard and Herbener’s address to Congress, I think it is time we stop advocating for Roman era money and start advocating for a 21st century upgrade.
http://www.libertariannews.org/2012/05/08/the-austrian-school-theory-to-be-presented-before-congress-the-problems-i-see-with-herbeners-presentation/ It is an old article but it seems not to be referenced in this forum. I like its conclusion.
