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Régimes monétaires et cultures économiques

Jörg Guido Hülsmann*

This paper was presented at the III. ECAEF/CEPROM Conference on “Concurrent Currencies: Curse or Cure?” in Monaco on Dec. 6, 2018. These academic conferences in honor of Jacques Rueff are planned and organized by ECAEF (European Center of Austrian Economics Foundation, Liechtenstein) and hosted in Monaco by CEPROM (Center of Economic Research for Monaco).

La liberté monétaire est-elle un mal à éviter, ou au contraire un remède à rechercher ? Cette question a été abordée maintes fois dans l’histoire de la pensée économique depuis le 16e siècle. Elle a été abordée essentiellement, et à juste raison, des points de vue économique et politique. Sans doute trouvons-nous ici le cœur de la question. Il est nécessaire d’avoir des idées claires sur les conséquences économiques et politiques qui découlent de la liberté monétaire, par opposition au traditionnel monopole régalien, avant de trancher sur sa mise en place, ou non.

III. ECAEF/CEPROM CONFERENCE, MONACO 2018
Concurrent Currencies. Curse or Cure? Papers of the III. ECAEF/CEPROM Conference

Cependant, il convient de porter l’attention également sur ses ramifications culturelles. L’on peut reconnaître l’arbre par tous ses fruits, pas seulement par ses avantages et inconvénients économiques. Les institutions monétaires ne mènent pas une existence autonome, séparée du reste de la vie humaine. Elles ont forcément des ramifications sur le vivre ensemble des citoyens ; sur leurs priorités ; sur leurs manières de regarder le monde ; sur ce qu’ils aiment et détestent ; sur ce qu’ils considèrent être un problème ; et sur ce qu’ils pensent être une solution.
Mais quel est le poids de cet impact culturel de la monnaie ? Surtout, comment se manifeste-t-il concrètement ? Quels sont les mécanismes qui sont ici à l’œuvre ?

Le temps qui nous est imparti ne permet malheureusement pas de faire un tour complet de la question. Nous allons nous concentrer sur les mécanismes les plus importants, et nous allons les mettre en relief en comparant deux régimes monétaires diamétralement opposés, celui de la liberté monétaire, d’un côté, et le régime de l’interventionnisme monétaire qui prévaut aujourd’hui dans la quasi-totalité des pays du monde.

Dans ce qui suit, nous allons donc d’abord esquisser les traits caractéristiques de ces régimes monétaires et leurs conséquences sur les prix (I). Puis nous allons rappeler les principaux points de critique qui sont typiquement adressés à l’interventionnisme monétaire (II) avant de présenter, en plus de détail, ses conséquences culturelles (III) …

Read the full version here ->
Régimes monétaires et cultures économiques (PDF)


*Jörg Guido Hülsmann is a German-born economist of the Austrian School of economics who studies issues related to money, banking, monetary policy, macroeconomics, and financial markets. Hülsmann is professor of economics at the University of Angers’ School of Law, Economics, and Management. This paper was presented at the Annual Conference of the Center of Economic Research for Monaco (CEPROM), held at the Oceanographic Museum in Monaco, 5 – 6 December 2018, Monaco.

Gold Money in a Digitalised World Economy

by Thorsten Polleit*

This paper was presented at the III. ECAEF/CEPROM Conference on “Concurrent Currencies: Curse or Cure?” in Monaco on Dec. 6, 2018. These academic conferences in honor of Jacques Rueff are planned and organized by ECAEF (European Center of Austrian Economics Foundation, Liechtenstein) and hosted in Monaco by CEPROM (Center of Economic Research for Monaco).

(1) What this paper is all about

The emergence of new technologies and their impact on peoples’ lives – the buzzwords are digitalisation and digital transformation – brings far-reaching change. In fact, it may even revolutionise the world’s current monetary system by giving people a free choice of
currency. Needless to say that such a development could turn out to be fairly disruptive, inducing economic and political change on a possibly grand scale: The propagation of new technologies among consumers and corporates – distributed ledger technologies (DLT) in particular – could ultimately pose a challenge to the prevailing state-controlled fiat currency architecture.

III. ECAEF/CEPROM CONFERENCE, MONACO 2018
Concurrent Currencies. Curse or Cure? Papers of the III. ECAEF/CEPROM Conference

At the very heart, a free choice in currency and its concomitant competition among currencies, if let loose, would presumably also affect the state as we know it today and with it the established economic and political-social order. – The purpose of this paper is twofold. First, it wants to explain that a free market in money is nothing to fear, that it is the ‘natural order of money’ and as such highly desirable from an economic and socialethical viewpoint. Second, the article attempts to outline that a free market in money is practicable and feasible, and that the idea of a free market in money has already gained quite some ground in recent years.

Right at the start I should emphasise that a free market in money is the direct result of what Ludwig von Mises (1881 – 1973) termed the sound money principle: “[T]he soundmoney principle has two aspects. It is affirmative in approving the market’s choice of a commonly used medium of exchange. It is negative in obstructing the government’s propensity to meddle with the currency system.” And further: “It is impossible to grasp the meaning of the idea of sound money if one does not realise that it was devised as an
instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights.”

This paper has been structured as follows: It starts with some fundamental insights into monetary theory (2). To make a case for afree market in money, the economic and ethical deficiencies of today’s fiat currencies will be highlighted (3). Against this backdrop, the functioning of a free market in money will be outlined and its potential for development will be illustrated by (i) latest moves in various US federal states to officially treat gold and silver as money and (ii) recent attempts to provide a digitalised gold trading and payment system (4). After some remarks about the economic and social-political consequences a return to a free market in money might entail (5), the article concludes with some considerations as to whether a free market in money will (still) be possible (6).

(2) Fundamentals of Monetary Theory

Let us start with a simple question: What is money? Answer: Money is the universally accepted means of exchange, and as such, it is a good like any other. However, it money the most liquid good: It has the highest marketability of all goods. Monetary history informs us that precious metals, gold and silver in particular, have been the preferred means of money.

Why is that so? Well, a good that shall serve as money must have specific physical properties. For instance, the good in question must be scarce, homogenous, durable, transportable, divisible, mintable, and it must represent a relatively high value per unit. In basically all countries and civilisations, two commodities have been dominant whenever they were available to compete as money with other media: gold and silver. Money originated from the spontaneous actions in the free marketplace, as pointed out by the Austrian economist Carl Menger (1840 – 1921) in his landmark book Grundsätze der Volkswirthschaftslehre published in 1871.

Endowed with a minimum intelligence, people will sooner or later engage in a division of labour, resulting in a specialisation of production. To reap the fruits of a higher productivity of labour fully, trading becomes necessary. To make trading most convenient, people will take recourse to an indirect means of exchange. And the most commonly used indirect means of exchange will ultimately be voluntarily chosen as money. Menger also pointed out that money has developed from commodities such as precious metals. This idea was later (praxeo-)logically explained by  Ludwig von Mises, who put forward the so-called regression theorem.

Three additional monetary theory insights should be noted here. – First, the optimal number of monies in an economy is one – for if all people use the same money, the efficiency of economic calculation is optimised. That said, in a free market system there would be a tendency towards the emergence of a single money …

Read the full version here ->
Gold Money in a Digitalised World Economy (PDF)


*Thorsten Pholleit is Honorary Professor of Economics, University of Bayreuth (thorsten.polleit@uni-bayreuth.de). This paper was presented at the Annual Conference of the Center of Economic Research for Monaco (CEPROM), held at the Oceanographic Museum in Monaco, 5 – 6 December 2018, Monaco.

ECAEF wishes a peaceful 2018

ecaef peaceful 2018
ECAEF Peaceful 2018

We all at ECAEF wish you Merry Christmas and the Very Best in a Peaceful  2018. Please safe the dates:

Feb. 5, 2018:
International Vernon Smith Prize
Winner Ceremony
Vaduz


May 25, 2018:
15. International Gottfried von Haberler Conference
Topic: “Karl Marx, born in 1818 and Still Going Strong?”
Vaduz


Dec. 6, 2018:
III. ECAEF/CEPROM Conference
Monaco


II. ECAEF/CEPROM Conference, Monaco

November 23, 2017

A Case for Europe’s Small States
in the third Millennium

An academic Cooperation of CEPROM and ECAEF


The II. ECAEF/CEPROM Conference (International Jacques Rueff Conference) was an academic one-day co-operation of CEPROM (Center of Economic Research for Monaco) and ECAEF (European Center of Austrian Economics Foundation, Liechtenstein). It took place at the Musee Oceanographique de Monaco, Principality of Monaco, on November 23, 2017.


Introduction by Kurt Leube | Defined in broad terms the small states of Europe are countries that have little territories and small populations – usually both – but enjoy sovereignty, international recognition and share all or at least most of the features of larger states. This differentiates them from other small political entities such as overseas territories or special administrative regions.

Europe is home to the five smallest continental states in the world that have been autonomous or independent for most of their centuries long history and were rarely invaded: Vatican City, Monaco, San Marino, Liechtenstein and Andorra. The majority of them ranks among the most prosperous states in the world. Though, more often than not these small states were situated in places, unattractive to larger surrounding nations and repeatedly military powers left them more or less alone, sometimes for centuries. However, geography alone was not enough to allow small states to survive for centuries on a tumultuous continent. Their development and endurance are mostly due to at least four major factors: Political genius, legal systems that serve the people, accountability and trade.

ecaef ceprom conference monaco
Jacques Rueff (1896-1973) 7th Minister of State of Monaco

Due to the fact that small states are more flexible, more able to weather economic storms, and less capable of waging serious wars, they are more accountable to their people and more creative. It seems to be no coincidence that on the whole there is more entrepreneurial spirit, individual freedom or trustworthiness to be found among the people living in small states. These virtues can only be discovered and self-responsibility practiced in matters with which most residents are familiar and where the consciousness of one’s neighbor rather than some distant knowledge of the need of other people, guides their actions. Citizens will typically take an actual part in public affairs only when they concern their own social and physical environment. However, the faster these feelings of social cohesion between individuals or groups dry up the resolution of social problems will increasingly be assigned to an omnipotent and thus inevitably intrusive bureaucracy. Where the range of political measures expands beyond an endurable size and swell so large that the necessary knowledge to cope with them is more or less under the control of a huge administration, the commitment and creative ideas of private persons must necessarily fade away.

However, the recent quelling of secessionist movements reveals Europe’s different course. Europe (i.e. the EU) seems to be bound to spread out even more of the toxic effects of centralization, synchronization or redistribution. The thinly veiled duplicity of routinely used words makes it easier for policy makers of large political unions to ever expand the role of an all-powerful government. By ways of progressively pushing for more harmonization and centralization of tax issues and welfare or of forcing people to abandon their local customs, rights and traditions, Europe not only surrenders her classical liberal heritage. In its current course, the EU is also bound to destroy Europe’s vital remnants of individual freedom, competing markets and her entrepreneurial spirit.

To understand the prophetic power of Friedrich A. von Hayek’s (1899-1992) vision, we need to ponder about his statement that serves as subtitle for the conference. To his quotation “We shall all be the gainers if we can create a world fit for small states to live in”, we should not only add that minimizing the aggregation of power would also make us safer. We should also oppose the making of ever-larger political alliances, in the belief that this will bring peace and security.

At the recent II. International ECAEF/CEPROM Conference in Monaco, some of the internationally most renowned scholars and experts in the field have analyzed and discussed the philosophical underpinnings, the current condition and the future of the European Small States. The following papers for download are in the original version and have not been edited.

Kurt Leube
Academic Director of the conference


You can download the conference papers:

Dinner Speech
by Detmar Doering

Small, Sovereign and Resilient: Lessons from the not-so wild Wild West
by Terry L. Anderson

Decentralization, Subsidiarity, Secession: States in Knowledge-Based Societies
by Karl Peter Schwarz

Is Small Still Beautiful? A Swiss Perspective
by Henrique Schneider

Limited Places offer Unlimited Thoughts
by Carlos Gebauer

Small States
by Michel Hunault

Reflections on Smallness
by Antonio Martino

II. Jacques Rueff Conference

2nd Jacques Rueff Conference, Monaco
Jacques Rueff (1896-1973) 7th Minister of State of Monaco

“We shall all be the gainers if we can create a world fit for small states to live in.” Friedrich A. von Hayek


November 23, 2017

Topic:

A Case for Europe’s Small States
in the III. Millennium


The II. International Jacques Rueff Conference is an academic one-day co-operation of CEPROM (Center of Economic Research for Monaco, MC) and ECAEF (European Center of Austrian Economics Foundation, FL).

Academic Director:  Kurt R. Leube, ECAEF
Administrative Director:  Emanuel Falco, CEPROM
Media Contacts: Nicolas Saussier, CEPROM
Conference Date: November 23, 2017
Participation: by invitation only
Location: Musee Oceanographique de Monaco, Principality of Monaco
Conference Languages: English and French; simultaneous translation

Conference Venue:
Opening Dinner at the Hotel Hermitage in the presence of H.S.H. Prince Albert II. for invited guests and speakers only, Nov. 22, 2017. Dinner speaker: Detmar Doering (D)

Conference Program:
09:00-9:30  Registration
09:30-9:45  Welcome by H.S.H. Prince Albert II and H.S.H. Prince Michael of Liechtenstein

Session I:
Historical Reflections and Current Challenges (9:45-12:15)
09:45-10:00  Chair: Detmar Doering (D)

10:00-10:30  ‘Small, Sovereign and Resilient: Lessons from the not-so wild Wild West’ – Terry L. Anderson (USA)
10:30-10:45  Discussion
10:45-11:15  Coffee break
11:15-11:45  ‘Decentralization, Subsidiarity, Secession: States in Knowledge-Based Societies ‘ – Karl Peter Schwarz (A)
11:45-12:00  Discussion

12:00-14:00  Luncheon for speakers and invited guests

Session II:
On the Benefits and Drawbacks for Small States (14:00-15:45)
14:00-14:15  Chair: Peter Fischer (CH)
14:15-14:45  ‘Is Small Still Beautiful? A Swiss Perspective’ – Henrique Schneider (CH)
14:45-15:00  Discussion
15:00-15:30  ‘Limited Places offer Unlimited Thoughts’ – Carlos Gebauer (D)
15:30-15:45  Discussion
15:45-16:15  Coffee break

Session III:
A Case for Small States in the III. Millennium (16:15-18:20)
16:15-16:30  Chair: H.S.H. Prince Michael of Liechtenstein (LI)
16:30-17:00  ‘Reflections on Smallness’ – Antonio Martino (I)
17:00-18:15  Panel discussion: Anderson, Gebauer, Schneider, Schwarz, Martino
18:15-18:20  Farewell Remarks: Kurt R. Leube (A/USA)

18:30-19:30  Farewell Reception at the Palace for speakers and invited guests, hosted by H.S.H. Prince Albert II.