The drawback of a monetary constitution
My previous posts have been fairly positive towards the idea of a monetary constitution: a binding rule on monetary policy makers that these policy makers cannot change. A monetary constitution is particularly appealing for those who desire monetary affairs to be brought under the rule of law. But there is one problem with monetary constitutions that should impel us to examine them more critically.
A monetary constitution—like all constitutions—runs into a quandary with respect to enforcement. Someone must enforce the rule on the monetary authority, or else it is not binding. Who will be the enforcing authority? And what if it is not in their interests to enforce the rule?
Quis custodiet ipsos custodies?
Either it is in the monetary authority’s interests to follow the rule proscribed by the monetary constitution, or it is not. In the case of the former, the monetary constitution is redundant. In the case of the latter, it is ineffective. Lysander Spooner knew his subject well when cautioning against constitutional worship.
What then is left for proponents of lawful money? I would argue that one of the above positions, that incentive-compatible constitutions are redundant, is reached too hastily. Constitutions can be important, not because they bind, but because they coordinate. There are many monetary rules that, if they were followed, could improve the lawfulness and economically stabilizing effects of money. Which should we pick? Economics can help us narrow the potential list, but it is unlikely that a single, all-around best will leap out at us. We need some way of coordinating around an equilibrium with an economically and politically viable rule; a monetary constitution may very well help.
Given the difficulties with constitutional enforcement, the monetary constitution around which we coordinate ought to be self-enforcing. Economics can help us here, too, by showing us precisely which proposals provide agents the right incentives and information to uphold the proposal. Ultimately any durable and effective monetary constitution must be able to cope with the host of incentive and information problems that market and political actors confront on a regular basis.
Source: http://soundmoneyproject.org/2015/10/the-drawback-of-a-monetary-constitution/
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
LION'S MANE PRODUCT
Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules
Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.
Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.
