Selgin on Quasi-Commodity Money (Part 1)
George Selgin just send me his new paper on what he has termed Quasi-Commodity Money. George spoke briefly on this topic in his recent presentation at the Italian Free Market think tank the Bruno Leoni Institute. See my comment here on the presentation and my review on a related paper - "L Street – Selgin’s prescription for Money Market reform" Over at Freebanking.org George is complaining that he does not have enough time for blogging. Unfortunately I am in slightly the same situation. Greece is on the verge of default and so it is busy, busy times in the financial sector and I have promised to write a paper on monetary explanations for the Great Depression for the Danish libertarian journal the Libertas magazine and also need to write a preview for the republished version of the Danish translation of Milton Friedman's "Free to Choose" (Remember uncle Milt would have turned 100 this year). And then I need to review a couple of books for another magazine. So yes I share George's frustration about not having enough time for everything. Therefore, I will not write a review of George's paper today. However, I do promise to do that very soon as I know that what George has to say always is interesting and important. Until then here is the abstract of George's paper: "This paper considers reform possibilities posed by a type of base money that has heretofore been overlooked in the literature on monetary economics. I call this sort of money 'quasi-commodity money' because it shares features with both commodity money and fiat money, as these are usually defined, without fitting the conventional definition of either; examples of such money are Bitcoin and the 'Swiss dinars' that served as the currency of northern Iraq for over a decade. I argue that the attributes of quasi-commodity money are such as might supply the basis for a monetary regime that does not require oversight by any monetary authority, yet is capable of providing for all such changes in the money stock as may be needed to achieve a high degree of macroeconomic stability." As I will not be reviewing the paper this week but hopefully next week I would like to hear what my readers make of George's paper - I know I will probably be convinced that George's concept is correct once I have read the paper, but will my readers be as well?