Presidential candidate Ron Paul spoke to a crowd of more than 5,000 at UCLA on Wednesday, presenting economic views he claimed you won’t often find in the classroom.
While it is impossible to fully outline economic theories such as Paul’s in one column, students must realize there are valid competing models to our banking systems and the printing of our currency.
I am no economist, but it concerns me as a student when alternative ideas are ignored, especially in an academic setting.
I am further baffled that general education requirements at UCLA do not require some schooling in the theory of money, its value, and when or why it is printed.
By understanding the value of our dollar, or lack thereof, students can be more engaged and effective in how they invest their time and work ““ differentiating between a financial asset and what may be a meaningless piece of paper.
Paul’s unique intellectual perspective has gained serious footing. Alternative views such as his and others surely deserve a place in the classroom.
Specifically, Paul spoke to students about promoting a free market, Austrian economic philosophy as opposed to the Keynesian economic philosophy that has dominated intellectual thought and economic policy since the 1930s.
Current economic theory taught in our classrooms and textbooks is wrought with the Quantity Theory of Money, which states a change in the money supply will cause an equal change in prices. Our currency is described as fiat, which means our dollar is not convertible to a commodity like gold or silver and thus has no intrinsic value.
You’ll also read about Keynesian monetary theory, which essentially encourages government influence through a monetary policy in which central banks can effectively respond to economic fluctuation by increasing or decreasing the money supply ““ very much reflected in the active U.S. policy by President Franklin Roosevelt during the Great Depression and thereafter. Many see this philosophy as stable and successful.
Much less often, if at all, will you be educated in the Austrian philosophy ““ a gold standard and the danger of a fiat currency where a central bank like the federal reserve can relentlessly print money untied to any precious metal. Without a standard there is potentially an infinite amount of money that can be printed and thus the threat of hyperinflation.
Even less often will you hear of the theories of UCLA economics professor Mike Sproul and his real bills doctrine that states there exists no fiat currency as long as money is backed by assets, regardless of its convertibility to a precious metal such as silver or gold.
Although Paul’s and Sproul’s doctrines differ substantially, both describe a currency backed by precious metals, or in Sproul’s doctrine, assets tied to an unchanging commodity.
But the gold standard gets a bad rap in textbooks as an archaic theory.
It seems as things are changing that a different approach to government has gained serious steam ““ one that may fundamentally change the way economics is taught in our higher education systems.
“You would have never dreamed of getting an applause for bringing up Austrian economics,” Paul said in an interview after his speech.
Students have a desire for the truth, and economics students have perhaps only been getting half of the picture so far. If we are truly being educated to address and heal this ailing economy, an honest and far-reaching understanding and history of our dollar and the varying theories behind it would be nice, and probably helpful.
Email Ugarte at rugarte@media.ucla.edu. Send general comments to opinion@media.ucla.edu or tweet us @DBOpinion.