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Book part
Publication date: 19 February 2020

Samuel Demeulemeester

This chapter discusses the “seigniorage argument” in favor of public money issuance, according to which public finances could be improved if the state more fully exercised the…

Abstract

This chapter discusses the “seigniorage argument” in favor of public money issuance, according to which public finances could be improved if the state more fully exercised the privilege of money creation, which is, today, largely shared with private banks. This point was made in the 1930s by several proponents of the “100% money” reform scheme, such as Henry Simons of the University of Chicago, Lauchlin Currie of Harvard and Irving Fisher of Yale, who called for a full-reserve requirement in lawful money behind checking deposits. One of their claims was that, by returning all seigniorage profit to the state, such reform would allow a significant reduction of the national debt. In academic debates, however, following a criticism first made by Albert G. Hart of the University of Chicago in 1935, this argument has generally been discarded as wholly illusory. Hart argued that, because the state, under a 100% system, would be likely to pay the banks a subsidy for managing checking accounts, no substantial debt reduction could possibly be expected to follow. The 100% money proponents never answered Hart’s criticism, whose conclusion has often been considered as definitive in the literature. However, a detailed study of the subject reveals that Hart’s analysis itself appears to be questionable on at least two grounds: the first pertains to the sources of the seigniorage benefit, the other to its distribution. This chapter concludes that the “seigniorage argument” of the 100% money authors may not have been entirely unfounded.

Details

Research in the History of Economic Thought and Methodology: Including a Symposium on Public Finance in the History of Economic Thought
Type: Book
ISBN: 978-1-83867-699-5

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Article
Publication date: 1 May 1997

Anghel N. Rugina

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and…

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Abstract

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and the future, potential, best possible conditions of general stable equilibrium which both pure and practical reason, exhaustive in the Kantian sense, show as being within the realm of potential realities beyond any doubt. The first classical revolution in economic thinking, included in factor “P” of the equation, conceived the economic and financial problems in terms of a model of ideal conditions of stable equilibrium but neglected the full consideration of the existing, actual conditions. That is the main reason why, in the end, it failed. The second modern revolution, included in factor “A” of the equation, conceived the economic and financial problems in terms of the existing, actual conditions, usually in disequilibrium or unstable equilibrium (in case of stagnation) and neglected the sense of right direction expressed in factor “P” or the realization of general, stable equilibrium. That is the main reason why the modern revolution failed in the past and is failing in front of our eyes in the present. The equation of unified knowledge, perceived as a sui generis synthesis between classical and modern thinking has been applied rigorously and systematically in writing the enclosed American‐British economic, monetary, financial and social stabilization plans. In the final analysis, a new economic philosophy, based on a synthesis between classical and modern thinking, called here the new economics of unified knowledge, is applied to solve the malaise of the twentieth century which resulted from a confusion between thinking in terms of stable equilibrium on the one hand and disequilibrium or unstable equilibrium on the other.

Details

International Journal of Social Economics, vol. 24 no. 5
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 August 1988

Anghel N. Rugina

The unity of our spirit makes it impossible to work toward a certain end without thinking that this end can and must be achieved, even if only in the distant future and through…

Abstract

The unity of our spirit makes it impossible to work toward a certain end without thinking that this end can and must be achieved, even if only in the distant future and through the work of later generations… Objective examination in the ups and downs in the history of law cannot and must not extinguish our faith in justice as a supreme human ideal. Even in the face of events which represent a setback or a deviation, that ideal remains unshaken as a criterion of value; without it, deviation would be meaningless. Even if contradicted by empirical facts, this ideal does not lose its ethical and deontological truth. These contradictions between “is” and “ought to be” can be neither permanent nor general. Giorgio del Vecchio, Man and Nature

Details

International Journal of Social Economics, vol. 15 no. 8
Type: Research Article
ISSN: 0306-8293

Article
Publication date: 1 May 2000

Anghel N. Rugina

States that a more humane society is the ultimate goal of modern society, along with economy and form of government. Posits that in this study the theory of cheating the masses…

Abstract

States that a more humane society is the ultimate goal of modern society, along with economy and form of government. Posits that in this study the theory of cheating the masses under capitalism and socialism‐communism, is valid ipso facto under fascism and any form of dictatorship. Looks at the problem of methodology and history and discusses: the use of deception; accumulation of illegitimate power; and the spreading of instability, and the exploitation of the masses. Concludes that the great transformation in the West and the East may develop of its own accord, but not necessarily without help, for the betterment of mankind unless pointed in the right direction.

Details

International Journal of Social Economics, vol. 27 no. 5/6
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 February 2001

Anghel N. Rugina

Discusses the heritage of John Maynard Keynes in terms of application and results of his new economic philosophy over the last four decades. Compares the Keynesian school of…

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Abstract

Discusses the heritage of John Maynard Keynes in terms of application and results of his new economic philosophy over the last four decades. Compares the Keynesian school of thought with other classical and contemporary economists in relation to foundations of monetary and economic analysis, the economics of stable equilibrium, and the economics of disequilibrium. Comments on Keynes’ concept of economic stability, his view on the instability of money and monetary reform, his concept of monetary policy and of the pure theory of money, and his misjudgement of the mixed nature of the modern gold standard. Examines the provisions of the US Federal Reserve Act (1913), focusing on the Federal reserve systems’ nature and functioning, cited by Keynes as a prototype of a modern gold standard. Concludes with an examination of the international aspect of the modern gold standard.

Details

International Journal of Social Economics, vol. 28 no. 1/2
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 August 2003

Nick Potts

This article contends that Marxist economic analysis can shed more light on the likely effect of the euro on the EU economy, and the UK economy if the UK were to join, than…

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Abstract

This article contends that Marxist economic analysis can shed more light on the likely effect of the euro on the EU economy, and the UK economy if the UK were to join, than conventional neo‐classical macroeconomic analysis. Accumulated wealth/rentiers are incorporated into a model of the economy, in order to analyse how inflation affects the distribution of total social wealth between rentiers and business. The model suggests that rentiers gain, and business in general loses, from a state of price stability. Goes on to concentrate on inter‐firm issues by developing a multi‐sector model of the economy. The model is employed to illustrate how leading firms are also likely to benefit from price stability in the euro zone to the cost of business in the euro zone in general.

Details

European Business Review, vol. 15 no. 4
Type: Research Article
ISSN: 0955-534X

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Article
Publication date: 1 April 2006

Ahamed Kameel, Mydin Meera and Moussa Larbani

Having argued in the part I paper that the interest‐based fiat monetary system is not compatible with the objectives of the Islamic law or the Shariah, this paper seeks to argue…

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Abstract

Purpose

Having argued in the part I paper that the interest‐based fiat monetary system is not compatible with the objectives of the Islamic law or the Shariah, this paper seeks to argue why commodity moneys, like the gold dinar and silver dirham, are compatible with the maqasid.

Design/methodology/approach

This is a theoretical paper that integrates information from the Qur’an, the traditions of the Prophet, the writings of early Islamic scholars and historical observations vis‐à‐vis the objectives or the maqasid al‐Shariah and makes logical deductions therefrom.

Findings

The theoretical conclusion is that while fiat money is counterproductive to the maqasid al‐Shariah, commodity moneys like the gold dinar and silver dirham, are indeed compatible with the maqasid. The Islamic economic system is, therefore, fundamentally a “barter” system, i.e. an exchange economy where goods and services are exchanged value for value, but avoids the problems associated with barter by taking some of the commodities exchanged in the economy, that have the characteristics of money, as money. Gold is argued to be the best Shari’ah money.

Research limitations/implications

Empirical investigations may shed further light.

Practical implications

If the theoretical deductions and contentions of the paper are correct, then their practical implications cannot simply be understated. For the Islamic economic system to emerge in reality, or for that matter any process of Islamization of knowledge/disciplines to succeed, it is foremost crucial that commodity moneys gradually replace fiat money.

Originality/value

The paper establishes that commodity moneys like gold and silver are Shariah‐compatible moneys, whereas the current fiat money is not.

Details

Humanomics, vol. 22 no. 2
Type: Research Article
ISSN: 0828-8666

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Abstract

Details

The Banking Sector Under Financial Stability
Type: Book
ISBN: 978-1-78769-681-5

Article
Publication date: 1 January 1998

Bradley T. Ewing and James E. Payne

This paper examined the cointegrating properties of narrow money demand. Results suggest income and interest rate are sufficient for the formulation of a long‐run stable demand…

Abstract

This paper examined the cointegrating properties of narrow money demand. Results suggest income and interest rate are sufficient for the formulation of a long‐run stable demand for money in Australia, Austria, Finland, Italy, UK, and US. However, for Canada, Germany, and Switzerland, the nominal effective exchange rate should be incorporated.

Details

Studies in Economics and Finance, vol. 19 no. 1/2
Type: Research Article
ISSN: 1086-7376

Article
Publication date: 1 February 2001

Anghel N. Rugina

Suggests the reorganizations of the international monetary fund, re‐directing its path towards conditions of stable equilibrium. Discusses basic deficiencies of the Bretton Woods…

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Abstract

Suggests the reorganizations of the international monetary fund, re‐directing its path towards conditions of stable equilibrium. Discusses basic deficiencies of the Bretton Woods Agreement of 1944 which set out the purposes of the internaitonal monetary fund. Suggests basic conditions for stable equilibrium at the international level, before making recommendations for a new sounder foundation of the international monetary fund in relation to its administration, the prerogatives and rules of functioning of its monetary department, an exension of monetization of other suitable commodities to serve as international liquidity reserves, and the fund’s banking department.

Details

International Journal of Social Economics, vol. 28 no. 1/2
Type: Research Article
ISSN: 0306-8293

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