This paper relates Smith’s dictum that “the division of labor is limited by the extent of the market” to evidence from anthropology and sociobiology to offer an increasing returns model of the evolution of exchange institutions from autarky, through various intermediate stages, and finally to monetary exchange as the extent . . .
Piers writes that stable-value cryptocurrencies are necessary for smart contracts to take off. I’d like to stake out the reverse claim: that smart contracts are necessary for stable-value crypticurrencies to take off.
Background on the Stablecoin Problem
I’ve argued in the past that fractional reserve banking is an essential part of a . . .
Discussions of adjustments to the quantity of money tend to take for granted the method by which new money enters the economy. Nearly all adjustment flows through financial markets. But Friedman’s helicopter thought experiment has again become relevant with the advent of crypto-currencies, which are able to adjust the money . . .
The volatility of Bitcoin has caused many to dismiss its potential. Bitcoin is, however, very similar to another money commodity with an essentially rigid supply that saw much greater historical success: gold. The paper considers the factors that allowed currencies on the gold standard to adjust their short-run nominal supply . . .
Winner of the Mont Pelerin Society’s 2012 Hayek Essay Contest. The essay first discusses the weaknesses of national central banking, and how those flaws are corrected in both free banking and an international central bank. Second, it draws from Hayek’s wider economic and political work to evaluate both alternatives according . . .
Among Austrian economists, there is a fundamental philosophical split between the “evolutionists” following Hayek, and the “moralists” following Rothbard. The former see the world in terms of dynamic, spontaneously ordering evolution of norms, where the latter see the world in terms of fixed and universally applicable ethical norms. This is . . .