Joe Salerno has commented on an interview by Lawrence White, an interview on the topics of the gold standard and banking. Salerno’s comments are here; White’s interview is in three parts: here, here, and here. I will offer my two cents on comments provided by each of them – plus a few words regarding comments made by George Selgin in the feedback to Salerno’s post.
White makes points about the bought-and-paid-for nature of many academic economists, the myth that the instability in price of demonetized gold is proof of the expected instability of gold if/when monetized, the myth that the gold standard amplified business cycles, the superiority of banking free from government edict and government backing, the fragility of the “jerry-rigged” gold-standard of Bretton Woods (although he credits the designers as “well-meaning”), and the value in debunking the superiority of central bank managed money as opposed to free-market money.
On each of these points, I am in agreement (except the “well-meaning” part).
As to the seemingly growing interest in the gold standard and other alternate money regimes that are gaining exposure:
LW: Among the policy think tanks, the Cato Institute’s annual monetary conference has kept the fundamental issues alive for more than thirty years. I see their efforts expanding and reaching a wider audience. The Heritage Foundation is now showing some interest. The Atlas Network is now championing sound money. The Gold Standard Institute is growing in visibility.
To this point, Salerno takes some exception:
JS: A glaring omission in White’s answer is, of course, the Mises Institute, which held its first conference on the gold standard over 30 years ago. Since that time it has campaigned tirelessly for the gold standard, devoting many of its conferences and publications to sound money. Its associated academic economists and other scholars have published thousands of pages on the subject.
It is an inevitable, and unfortunate, situation regarding this feud between certain academic Austrians and the Mises Institute. Inevitable, because on some levels certain of the differences can never be reconciled absent an abandonment of the position; unfortunate, because the two camps serve different, yet what could be complementary, roles. I will expand on this feud, using this specific debating point.
White specifically started his sentence with the term “policy think tanks.” While many scholars associated with the Mises Institute publish academic papers, contribute to economic journals, etc., I am certain that the term “policy think tank” cannot be applied to LvMI – nor do I believe the Institute would want to be burdened with that chain:
Think Tank: A think tank (or policy institute, research institute, etc.) is an organization that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture.
I associate such a thing with an organization that seeks to influence government policy – what other “policy” are they thinking about while in the tank? To my knowledge, most of those behind LvMI run as far away from government policy as possible – they are located in Auburn, Alabama, for goodness’ sakes. White’s inclusion of Cato and Heritage offer compelling evidence of my view – these are certainly think tanks dedicated to influencing government policy.
For this reason, White’s narrowed definition would thankfully exclude the Mises Institute, therefore – on a technicality – Salerno has no reason to complain. But not so fast: White offers examples in his response of influential organizations that in no way fit the definition of a “policy think tank,” for example The Atlas Network:
Our mission is to strengthen the worldwide freedom movement by identifying, training, and supporting individuals with the potential to found and develop effective independent organizations that promote our vision in every country.
We aim to cultivate, support, and inspire potential and existing free-market organization partners around the world. Currently Atlas Network serves more than 400 partners in over 80 countries worldwide.
This sounds like a well-organized meet-up group, not a policy think tank in the same vein as a Cato or Heritage.