Better money : gold, fiat, or Bitcoin? / Lawrence H. White, George Mason University, Virginia.

Format:

Book

Author/Creator:

White, Lawrence H. (Lawrence Henry), author.

Language:

English

Subjects (All):

Money.

Paper money.

Gold.

Bitcoin.

Physical Description:

1 online resource (xi, 236 pages) : digital, PDF file(s).

Edition:

First edition.

Place of Publication:

Cambridge, UK : Cambridge University Press, 2023.

Summary:

The recent rise of dollar, pound, and euro inflation rates has rekindled the debate over potential alternative monies, particularly gold and Bitcoin. Though Bitcoin has been much discussed in recent years, a basic understanding of how it and gold would work as monetary standards is rare. Accessibly written by a pioneering economist, Better Money explains and evaluates gold, fiat, and Bitcoin standards without hype. White uses simple supply-and-demand analysis to explain how these standards work, evaluating their relative merits and explaining their response to shocks, allowing for informed comparisons between them. This book addresses common misunderstandings of the gold standard and Bitcoin, using historical evidence to review the history of money with emphasis on the contest between market and government provision. Known for his work on alternative monetary institutions, White offers a reasoned discussion of which standard is most likely to provide a better money.

Contents:

Cover

Half-title page

Title page

Copyright page

Dedication

Contents

List of Figures

Acknowledgments

Introduction

I.1 The Chapters Ahead

1 Markets and Governments in the History of Money

1.1 The Origins of Money: Market versus State Theories

1.2 Why Silver and Gold Became the Dominant Commodity Monies

1.3 The Introduction of Coinage

1.4 Early Medieval Private Coinage

1.5 Valuation by Metallic Content

1.6 Governments Monopolized the Mints - and Debased the Coinage

1.7 Competing Private Mints

1.8 Private Deposit Transfer and Banknotes Developed to Remedy the Shortcomings of Government-Debased Coins

1.9 Government Central Banks Monopolized Banknotes and Clearing Systems, and Obstructed the Automatic Working of the International Gold Standard

1.10 The Internal Inconsistencies of the Postwar Bretton Woods System

1.11 The Arrival of Fiat Money and Cryptocurrency

2 How a Gold Standard Works

2.1 Types of Gold Standards

2.2 Difficulties of Transacting with Coins Only

2.3 Bimetallism

2.4 How Market Forces Determine the Quantity and Purchasing Power of Gold in a Small Open Economy

2.5 Why Inflation Was Low under the Classical Gold Standard

2.6 How Market Forces Govern the Global Quantity and Purchasing Power of Gold

2.7 The Dynamics of Gold Supply and Demand in Diagrams

2.8 Supply and Demand for Gold in a Growing Economy

2.9 Banking on a Gold Standard Economizes on the Use of Gold

2.10 The Effects of Shifts in Flow Supply and Demand

2.11 How Modern Banking Stabilizes the Purchasing Power of Gold in the Short Run

2.12 The Resource Cost of a Gold Standard

3 Common Misconceptions about the Gold Standard

3.1 "The Gold Standard Caused the Great Depression"

3.2 "The Gold Standard Prevailed between the First and Second World Wars".

3.3 "A Gold Standard Is Inherently Deflationary"

3.4 "Deflationary Periods under the Gold Standard Caused Depressions"

3.5 "Defining 'the Dollar' as So Many Grams of Gold Is Price-fixing, Inconsistent with a Free Market Economy"

3.6 "The Volatility of the Price of Gold in Recent Years Shows that Gold Would Be an Unstable Monetary Standard"

3.7 "A Gold Standard Would Force the Fed to Lower and Raise Interest Rates Sharply to Peg the Price of Gold, Which Would Destabilize the Economy"

3.8 "A Gold Standard Cannot Be a Good Idea Because So Many Economists Oppose It"

3.9 "A Properly Managed Fiat Standard Can Provide All the Price Stability of a Gold Standard with Smaller Resource Costs"

3.10 "Gold Has Objective Value"

3.11 "A Gold Standard Provides a Stable Measure of Value, Just As a Yardstick Provides a Stable Measure of Length, because It Fixes the Definition of the Monetary Unit"

3.12 "The Quantity of Money Is Self-Regulating under a Gold Standard - but Only if We Outlaw Fractional-Reserve Banking In Favor of One Hundred Percent Reserves"

3.13 "The Quantity of Money Is Self-Regulating under a Gold Standard - but Only if Banks of Issue Lend Exclusively on Real Bills of Exchange"

4 How a Fiat Standard Works

4.1 How Fiat Standards Arose

4.2 Why Is a Fiat Money Valued?

4.3 Supply and Demand for Fiat Money

4.4 The Quantity-of-Money Theory of the Price Level

4.5 How Fiat Standards Have Performed on Inflation

4.6 Inflation Is Burdensome Even When the Inflation Rate Is Correctly Anticipated

4.7 Unanticipated Inflation Is Even Worse than Anticipated Inflation

4.8 Fiscal Discipline under Fiat Money

4.9 Business Cycles Have Not Been Milder under Fiat Money Regimes

4.10 Seigniorage: The Profit from Issuing Fiat Money

4.11 The Danger of Fiscal Dominance over Monetary Policy.

4.12 The Case for a Fiat Standard

4.13 Can Fiat Central Banks Be Credibly Constrained?

4.14 Is a Private Fiat-Like Money Feasible?

5 How a Bitcoin Standard Works

5.1 What Bitcoin Is

5.2 The Background to Bitcoin

5.3 A Timeline of Bitcoin Developments

5.4 How Bitcoin Acquired a Positive Market Price

5.5 What was Nakamoto Trying to Achieve, and How Well Has Bitcoin Achieved It?

5.6 Transactions Demand for Bitcoin

5.7 Investment Demand for Bitcoin

5.8 The Supply of Bitcoin

5.9 The Supply Meets the Demand for Bitcoin

5.10 Who Bears the Cost of Operating the Bitcoin Network?

5.11 Is Bitcoin Socially Wasteful?

5.12 Cryptocurrency Markets Are an Ongoing Discovery Process

6 Comparing and Contrasting Gold and Bitcoin Standards

6.1 Contrasting Supply Mechanisms Create Differences in Purchasing-Power Volatility

6.2 Will Bitcoin's Purchasing-Power Volatility Be No Greater than Gold's under Full Monetization?

6.3 Legal Obstacles to Monetization of Bitcoin and Gold

6.4 Market Obstacles to Monetization of Bitcoin and Gold

6.5 Bitcoin and Gold Head-to-Head

6.6 Costs of a Gold Standard Compared to Costs of a Bitcoin Standard

6.7 Is Long-Run Fixity in the Stock of Bitcoin a Problem?

6.8 The Question of "Backing"

6.9 Conclusion: Let Potential Monies Compete

References

Index.

Notes:

Title from publisher's bibliographic system (viewed on 16 Mar 2023).

Includes bibliographical references and index.

ISBN:

9781009327442

1009327445

9781009327466

1009327461

OCLC:

1481799438