The Balance of Payments

In Full Archive by Nathan Lewis

We looked before David Hume’s essay “On the Balance of Trade,” from 1742. This essay has become strangely influential, even though it doesn’t really say what people claim it says. Rather, although there is a little confusion in his argument, Hume mostly argues the …

Why So Many Historians Agree With Ted Cruz On Gold

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on February 9, 2016.) http://www.forbes.com/sites/nathanlewis/2016/02/09/why-so-many-historians-agree-with-ted-cruz/#438b96e22e3a Echoing the recent sentiments of Steve Forbes, this week Republican presidential contender Ted Cruz told a group in New Hampshire: Money is … a unit of measurement. So, the reason why we see …

Blame Benjamin Strong 2: So Obvious It’s Hard to Believe

In Full Archive by Nathan Lewis

We’ve been taking a little look at Murray Rothbard’s influential 1962 book, America’s Great Depression. January 31, 2016: Blame Benjamin Strong Some people won’t like me for kicking sand in the face of Murray Rothbard. For them, everything is politics. Rothbard was one of …

Blame Benjamin Strong

In Full Archive by Nathan Lewis

Here’s something I’ve been meaning to get to for a long time. Let’s look at the description of the supposedly disastrous “inflation” of the 1920s, as described by Murray Rothbard in America’s Great Depression (1962), and see if it makes any sense at all. …

The Gold Mining Boom of the 1850s

In Full Archive by Nathan Lewis

(Note: This was originally written as a Forbes.com item, but it soon got too big for that venue.) The idea behind a gold standard system is to produce a currency that is perfectly stable in value. Alas, perfection is not really possible in these …

‘Nominal GDP Targeting’ Is Just Another Red Herring To Divide Conservative Monetary Consensus

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on January 21, 2016.) http://www.forbes.com/sites/nathanlewis/2016/01/21/nominal-gdp-targeting-is-just-another-red-herring-to-divide-conservative-monetary-consensus/#1dcd5c7f1c3e In U.S. history, various forms of “soft money” have been favored by Democrats and other lefty/socialist types. It is a natural extension of their vision of government influence and control in all aspects …

David Hume, “On the Balance of Trade,” 1752

In Full Archive by Nathan Lewis

Today, we will look at a famous essay by David Hume, “On the Balance of Trade.” It was written in 1752. Hume was an early “classical” economist, in contrast to the Mercantilist tradition which was dominant in Britain from 1600 until it was definitively …

Steve Forbes Shows The Way Out Of Governments’ Spiral of Self-Destruction

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on January 11, 2016.) http://www.forbes.com/sites/nathanlewis/2016/01/11/steve-forbes-shows-the-way-out-of-governments-spiral-of-self-destruction/ “Thank goodness for Steve Forbes,” is something you hear pretty often these days. I give him personal credit for igniting the Flat Tax Revolution with his 1996 and 2000 presidential campaigns – a …

The History of “Gold” Is Really the History of the Gold/Silver Complex

In Full Archive by Nathan Lewis

The History of “Gold” Is Really the History of the Gold/Silver Complex December 26, 2015 (This item originally appeared at Forbes.com on December 26, 2105.) http://www.forbes.com/sites/nathanlewis/2015/12/26/the-history-of-gold-is-really-the-history-of-the-goldsilver-complex/ Sometimes, funny-money promoters like to dangle the idea that the “gold standard,” in U.S. or world history, was …

Money and Credit 2: Credit

In Full Archive by Nathan Lewis

Money and Credit 2: Credit December 13, 2015 “Money and credit” have tended to be mishmashed together, but they are very distinct. This confusion stems from the common practice of banks in the past (mostly before 1914) to both issue currency and also make …