In your last post, you said that I mischaracterized things you’ve said. I will try to be more precise in the future. I respect your pov and knowledge and assume you respect mine.
A strict gold standard is a complete fantasy so its alleged superiority is irrelevent.
Do you believe that since pure capitalism has never existed,”its alleged superiority is irrelevant”? If so, we disagree. If not, how do you distinguish these two seemingly contradictory positions you hold?
Hamilton's motives cannot be seriously questioned by any student of the era.
I distrust elitists and aristocrats. I associate Hamilton with this class. You have a positive view of Hamilton. You believe his policies contributed to the growth of the economy; I believe his policies contributed to the advancement of specially privileged interests, at the expense of everyone else, I am more interested, however, in current issues and solutions than this historical debate. Many politicians of every stripe proudly describe themselves as Jeffersonians. Very few proudly describe themselves as Hamiltonians.
I don't say existence of the bank in wealthy countries is proof of anything but certainly is a point in its favor.
Okay, replace the word “proof” with “evidence.” I don’t think it is even evidence. I would accept it as evidence if you pointed to countries not faring well AFTER moving beyond central banking as I advocate. Of course, no such society is in evidence…yet.
money supply grows when business activity picks up
You seem to be putting this forth as a general principle rather than a necessary characteristic of a debt based monetary system. If so, we disagree. I favor a monetary system with a rigidly fixed money supply (I’d agree to an MS that grows at a specific rate just because people are hung up with the concept of declining prices. However, the method of distribution of the increase is crucial (the current method through the banking system is horrendous. I would accept, for example, issuance of new money in proportion to taxes paid.)
Good money can be almost anything it all depends upon the institutional arrangements and the integrity of those controlling them.
We agree, here, and this is where my interests lie. If I seek good money on the basis of past models, I favor gold over the current regime. You don’t. Thinking outside the box, however, all I want is “honest” money---money that has “scarcity integrity”. Debt money that is created and distributed by an elite financial sector that requires all kinds of special privileges enforced by government to keep it from collapsing (because of its inherent unsoundness) is not my idea of good money. I have a proposal for a fiat currency along these lines that I will post here for your comments if you are willing/interested in doing so.
While complete capitalism has never been tried the gold standard has and has never proven satisfactory for any but limited amounts of time. War always throws a nation off that standard and slow economic growth accompanies its use.
There are not two contradictory issues here. The economic systems and the monetary systems are not the same thing. In fact, you might say that the USSR was on the gold standard in international trade since its money was worthless outside the country.
It is remarkable how the 200 yr. old lies of the Jeffersonians still hold sway over those who have never researched the subject. The actual aristocrat, Jefferson, condemns one born so far beneath him socially, Hamilton, and it is actually believed. Hamilton understood that the wealthy must be linked to the government in order for it to not slide into class warfare. The man who sweated in battle at Monmouth and froze at Valley Forge is slandered by one who spent much of the War hobnobbing with French aristocrats. A man who owned hundreds of fellow humans (the ultimate in aristocracy and elitism) condemns one who established the New York Society for the Manumission of slaves. Whose life was lived like an aristocrat (financed by British and Scottish banks) drinking fine french wines while sitting on expensive imported furniture and who sacrificed an opportunity to become a member of that aristocracy of wealth? Hamilton's elitism was limited to associating with truthful people with integrity which excluded most of the Republicans around Jefferson.
Jeffersonian fantasies are rampant true but how many who worship at that shrine know anything about the man? Very few. I once admired Jefferson until I began to examine what he had actually DONE not what he had said. There is a gigantic difference. On the other hand studying the life of Hamilton only increases my admiration.
No country will ever close down its central bank because to do so will collapse its economy. But it is false that the economy of the U.S. was not negatively affected by the closing of the Bank in the U.S. Both times depression resulted the second one was the worst until 1929. Only because of the chance discovery of gold in 1848 did it lift because of the increased money supply.
If the money supply does not increase when business activity increases the velocity of circulation must also increase or else the increase in shut off. Velocity cannot increase that rapidly with a gold standard. Thus, using the simple quantity theory equation P*Q=M*V one can see that output (P*Q) cannot increase unless either M, V or both increase.
It is not the absolute quantity of money which is significant but the per capita amount. (This is the reason the gold standard does not work since it cannot keep up with population increases, yearly loss through wear, clipping and removal for industrial/decorative use.) Having a MS affected by jewelry preferences is insane. Buying a gold necklace worth a grand with paper money has little or no impact on the economy as a whole using monetized gold to make it has a impact far beyond the individual since the act of making the jewelry actually decreases the MS and thus slows economic growth. Germany's inflation seems to have taught the world a needed lesson.
I don't quite understand your comment about the distribution of an increase in the MS. Sorry.
Without a Central bank private interests created money with minimal State involvement. No evidence I have seen indicates that this was an improvement and all that I have seen indicates that it was much worse. I don't believe the Central banking systems of advanced countries have ever collapsed particularly not recently. Nor do I believe it likely to happen.
I will be happy to comment on your proposal but don't pretend to be a monetary expert so its value is limited.