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What's really interesting about these coin shortages is that they are exactly what we should expect as governments have created monopolies over the manufacture

by tc 18y ago

What's really interesting about these coin shortages is that they are exactly what we should expect as governments have created monopolies over the manufacture of coinage. Central planning always leads to the systematic misallocation of resources, causing these nasty supply surprises which the government then proceeds to blame on other actors. An unappreciated miracle of our world is how rare shortages are among truly free-market goods. For a deeper background, read: Get Government Out of Coin Manufacture http://news.ycombinator.com/item?id=386392 http://news.ycombinator.com/item?id=386392 Private Coinage http://news.ycombinator.com/item?id=386409 http://news.ycombinator.com/item?id=386409

mechanical_fish 18y ago
Here's a book I tried to read once: The Big Problem of Small Change. From http://press.princeton.edu/titles/7306.html http://press.princeton.edu/titles/7306.html : "The Big Problem of Small Change" offers the first credible and analytically sound explanation of how a problem that dogged monetary authorities for hundreds of years was finally solved. Two leading economists, Thomas Sargent and François Velde, examine the evolution of Western European economies through the lens of one of the classic problems of monetary history--the recurring scarcity and depreciation of small change. Through penetrating and clearly worded analysis, they tell the story of how monetary technologies, doctrines, and practices evolved from 1300 to 1850; of how the "standard formula" was devised to address an age-old dilemma without causing inflation. One big problem had long plagued commodity money (that is, money literally worth its weight in gold): governments were hard-pressed to provide a steady supply of small change because of its high costs of production. The ensuing shortages hampered trade and, paradoxically, resulted in inflation and depreciation of small change. After centuries of technological progress that limited counterfeiting, in the nineteenth century governments replaced the small change in use until then with fiat money (money not literally equal to the value claimed for it)--ensuring a secure flow of small change. But this was not all. By solving this problem, suggest Sargent and Velde, modern European states laid the intellectual and practical basis for the diverse forms of money that make the world go round today. Alas, I couldn't follow their math. (Maybe I should try again, taking more time.) But their historical examples were quite extensive.
- Tichy 18y ago
  Voted up for coining the phrase "a book I tried to read once" ;-)
newsycaccount 18y ago
>An unappreciated miracle of our world is how rare shortages are among truly free-market goods. Name some (specifically, name some in the United States).

by tc 18y ago

mechanical_fish 18y ago

Here's a book I tried to read once: The Big Problem of Small Change. From http://press.princeton.edu/titles/7306.html http://press.princeton.edu/titles/7306.html : "The Big Problem of Small Change" offers the first credible and analytically sound explanation of how a problem that dogged monetary authorities for hundreds of years was finally solved. Two leading economists, Thomas Sargent and François Velde, examine the evolution of Western European economies through the lens of one of the classic problems of monetary history--the recurring scarcity and depreciation of small change. Through penetrating and clearly worded analysis, they tell the story of how monetary technologies, doctrines, and practices evolved from 1300 to 1850; of how the "standard formula" was devised to address an age-old dilemma without causing inflation. One big problem had long plagued commodity money (that is, money literally worth its weight in gold): governments were hard-pressed to provide a steady supply of small change because of its high costs of production. The ensuing shortages hampered trade and, paradoxically, resulted in inflation and depreciation of small change. After centuries of technological progress that limited counterfeiting, in the nineteenth century governments replaced the small change in use until then with fiat money (money not literally equal to the value claimed for it)--ensuring a secure flow of small change. But this was not all. By solving this problem, suggest Sargent and Velde, modern European states laid the intellectual and practical basis for the diverse forms of money that make the world go round today. Alas, I couldn't follow their math. (Maybe I should try again, taking more time.) But their historical examples were quite extensive.

Tichy 18y ago
Voted up for coining the phrase "a book I tried to read once" ;-)

newsycaccount 18y ago

>An unappreciated miracle of our world is how rare shortages are among truly free-market goods. Name some (specifically, name some in the United States).