Years ago, I came up with this phrase:
When you shoot from the hip, you risk blowing off an important appendage.
As a debater for over 55 years, let me tell you the best way to be upended: go after your opponent for having argued A, only to learn in the rebuttal that he was arguing for B.
You are supposed to ascertain this before the debate begins.
Worse, the audience expected you to respond to B.
Still worse: your attack on A makes you vulnerable to your opponent's re-stating of B. He is probably pretty good at defending B.
The person who does this without giving careful consideration to his target's argument has shot from the hip. He has not devoted enough time to thinking through his opponent's position and possible response.
A critic made this mistake with me recently. I thought you might be like to see what can happen to someone who makes this mistake.
PUTIN AND THE GOLD STANDARD
I wrote a detailed article last week with this title: Nine Reasons Why Putin Is Not Planning to Adopt a Gold Standard.
In it, I argued the following:
First, central bankers run the world. Forget about all the talk about somebody else running the world; central bankers run the world.There may be outposts where they do not run a nation. Communist China is one of them. There, Communist apparatchiks who are secure in their positions, and who care nothing about economics, but who care everything about power, have pressured the central bank to follow expansionary policies. But these policies are essentially Keynesian, although we might call them Keynesianism on steroids. I have no doubt that they tell the central bankers what to do, but what they tell the central bankers to do is to keep the economy growing. The central bankers have received their advanced educations in Western universities, where they were taught by Keynesians. So, they are Keynesians. They are also mercantilists, but then so is Keynesianism.
I then went on to this:
Fifth, Russia is run by Putin, and Putin is an ex-Communist who made his way up the chain of command inside the KGB. He knows nothing about economics. He is not an advocate of the free market. He is an advocate of central economic planning. He is, in short, a mercantilist who runs a gigantic bureaucracy. That is all that Russia has ever been, and he is part of the Russian tradition.Sixth, a gold coin standard, or any gold standard, places limits on centralized planning. It places limits on central banking. It reduces the influence of the central government over the economy. It is, in short, a move in the direction of the free market. It restrains government. There is no indication anywhere in the history of Russia of any movement at the top of the Russian government in favor of restraining the power of the Russian government. It is one long history of empire and centralization. This is why it was so easy for Lenin to set up a Community tyranny. He simply took over the existing one and extended it. There is no judicial tradition of liberty in Russian history.
I added this:
Eighth, when a nation has pursued an expansionist monetary policy, as virtually every nation on earth has done for 80 years, to stop the expansion of the money supply is going to create a recession of monumental proportions. If this policy is allowed to continue, it is going to create a depression. This is the teaching of the Austrian theory of the business cycle. What government, or what special interest group, is going to maintain an economic policy that throws the nation into a depression? That's what the gold standard means. It will create a depression. There will be an expensive transition from the Keynesian monetary policies that have prevailed to a true gold standard economy, where the money supply is fixed on a permanent basis. This is the price of going cold turkey. This is the price of reestablishing liberty. No political party is willing to pay this price. We have learned that since 1933.
I concluded:
Pay no attention to anybody who says that Putin's Russia or Communist China is going to return to a gold standard of any kind, let alone a gold coin standard, where anyone can walk in a bank, hand over a certain amount of the nation's domestic currency or a check, and get a gold coin. That person does not understand the history of money, the history of Communism, or the history of central banking since 1914.
From all of this, what conclusion would you draw?
1. I am talking about Putin.
2. I am talking about Communist China.
3. I am talking about politics today.
4. I am talking about central banking.
5. All of the above.
If you said "five," go to the head of the class.
A READER RESPONDS
This article had been up for about four hours, when I received this email.
I'm tempted to complain that your "latent keynesianism" is showing up! In the sense that instituting a gold standard would be an official act of some government and that there should be an official pegged rate. How about an unofficial adoption of a gold standard such as might arise after the collapse of the paper economy and as the result of the resort to barter? People, businesses, etc., simply start trading off the record, under the table, in gold? Might that happen under potential dire circumstances?It kinda reminds me of the debate over free banking. Do we want totally free banking, or having the government regulating the banking system with a 100% reserve requirement? I think Mises wanted free banking, not the "latent keynesianism" of regulated banking even with a 100% reserve. ["latent keynesianism" is my term, not Mises's!]
Just a thought. Fire at will.
I responded as follows.
I wrote an article about Russia's not officially adopting a gold standard. You respond by arguing this:How about an unofficial adoption of a gold standard such as might arise after the collapse of the paper economy and as the result of the resort to barter? People, businesses, etc., simply start trading off the record, under the table, in gold? Might that happen under potential dire circumstances?I will not pursue this in my usual rhetorical style.
He responded as follows:
"I will not pursue this in my usual rhetorical style."What does that mean? That you will not answer my question at all? Or that you will elaborate in a future essay? Or that it is not worth pursuing under any circumstance? Or that you only meant to speak to the Russian problem, not to the more general theoretical problem?
And, besides, what is your "usual rhetorical style"?
So, let me demonstrate what my usual rhetorical style is.
Dear Sir:
Basic to the advancement of any cause is the ability to read critically. This requires an essential skill: the ability to follow an argument.
I set forth nine propositions relating to the present world monetary system, Russia's political structure, the need for special interest groups to produce political changes, the economics guild, and the enormous economic costs that a return to an official gold standard would produce in any nation today: recession, followed by depression. I then drew a conclusion:
Anyone who thinks Putin plans to restore a gold standard thinks Putin is Ron Paul. But Putin is not another Ron Paul. Trust me. He isn't.The next time you read an article saying that Russia is going to adopt a gold standard, think this: "This author thinks Putin is another Ron Paul."
Note: this final argument was essentially rhetorical: asking people to mentally compare Putin and Ron Paul. I thought this would "seal the deal."
In your case, it did not.
You argued, in response to my article on the prospect of Putin's Russia to adopt a gold standard, the following: in a complete economic breakdown, which goes to barter, people may possibly resort to gold coins. You call this "an unofficial adoption of a gold standard."
My article dealt with an official adoption of a gold standard by today's political structures, including Russia's.
So, in response to my argument, you changed the topic from an official adoption of a gold standard to an unofficial adoption of a gold standard.
Having done this, you added a little rhetoric:
I'm tempted to complain that your "latent keynesianism" is showing up!
In my email reply to you, I thought that would be clear to you. It was not. I will now do my best to clarify my point.
A scenario that involves the collapse of the monetary order is plausible. There would be a breakdown of the division of labor. In urban areas, people would die. But, in the aftermath, there could be a gold coin standard, although a silver coin standard seems more likely, with gold coins as a parallel standard for large transactions. But this is sure: there would also not be a central bank.
You might have introduced this scenario: the nations all pass a law abolishing their central banks. That has been my suggestion for five decades. Here are two recent examples of my arguments:
http://www.lewrockwell.com/2011/03/gary-north/how-the-fed-can-be-abolished
But will Putin do this? I say no, for the nine reasons I have offered. The same reasons apply to all the other nations with central banks. There is no special interest group with any influence that favors shrinking state power by adopting a gold standard.
But you succumbed to a temptation I have described in the past. You issued a challenge to me. "I'm calling you out, North!"
I described such challenges back in 2001.
One of the problems with writing ideological, controversial, or religious material, such as everything on LewRockwell.com, is this: the marginal cost of sending e-mail is zero, except for the time involved. A published writer with a strong opinion, such as everyone who writes for LewRockwell.com, is going to get e-mail from people who want to express another opinion.Most of these letters are civil. Some are hostile. A few are incoherent. But some are of the "you did not prove your case" variety. These are the dangerous ones.
If you respond, you are taking a big risk. The letter-writer almost certainly has never published anything. If he has published something, no one has read it. He wants a response from you because no one has ever paid much attention to him. And e-mail is free.
If you ignore the letter, you have become the latest in the person's long line of people who have ignored him. He really does not expect you to respond. But if you do respond, you have just punched your fist into a tar baby. You have acknowledged his existence. Now, he expects you to refute him. No, he demands that you refute him. Can you refute him to his satisfaction? It would have been easier for the Pope to have persuaded Luther that he had it all wrong.
The problem with tar babies is that their time is of no value to them. They think that your time is of no value to you. And e-mail is free.
"You haven't answered my argument!" The tar baby expects an answer, once you have responded. But what the payoff if you persuade him that he is wrong is never said. You will get credit for . . . what?
He is like the kid with the new Colt revolver in the old West. He can make a name for himself if he shoots the old gunfighter. "I'm calling you out, Ringo!" The trouble with tar babies is that the bullets are blanks. "You missed me, Ringo! You weren't fast enough." This can go on -- will surely go on -- indefinitely.
In your case, I have decided to use this approach. I am mailing this to 100,000 Tea Party Economist subscribers. I want to warn them about a fundamental debate principle:
When you argue that a person has used faulty logic, don't substitute the topic you have an opinion on for the topic he dealt with.
It will save them a lot of time and trouble.
But, in order to adopt this strategy, a person must be able to follow an argument.
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