Things you said in your original statement that I responded you did not source and have yet to be sourced in this thread despict your affirmations to the opposite effect:
You want me to source non-Austrian economists saying that the business cycle exists? Have you never opened up a mainstream economics textbook before? Bubbles are historical fact and entirely expected--often a consequence of manipulation. If you mean the specific bubble predictions, Bob Shiller called the dot com bubble and the housing bubble. He has a high profile, but lots of other mainstream economists called both of those bubbles before they blew up.
My assertion about which system produces a better result is my own opinion, backed with the statements following it. We discussed this chart previously:
http://www.ritholtz.com/blog/2010/10/historical-recessions-vs-sp-1870-2010/. If you want to know about the pre-1870 period, here's a list of dates derived from NBER: en.wikipedia.org/wiki/List_of_recessions_in_the_United_States. The American economy was in recession approximately 45% of the time in the pre-1870 period.
Don't forget the Federal Reserve is not our first Central Bank, I believe it's the third.
True but not as relevant as you imply. Neither of the original central banks had power comparable to that of the Fed; and in both cases the country remained on a solid precious metal standard. You'll find that my statement is still true even if you want to exclude the periods that featured previous central banks.
You used food prices in an attempt at proving this, then failed to understand how the silver dollar that was used then directly translates into evidence completely opposite of what you are asserting.
You fail to understand that you're applying a market price of silver as if all of our coins could still magically be made from it and we could enjoy the purchasing power afforded by those higher market prices. Obviously farcical.
When silver was contained in coins, that was the primary use of silver. The value of the silver in the coins had long been much less than the face value of the coins. No one had a clue that there would one day be vast industrial demands for silver that would consume the majority of the world's production. It makes no sense to pretend that the value of silver in coins back then should be compared to the value today, as if coins were still made with the same amount of silver.
See the economy is not philosophy. It's not full of if's and perhaps'.... Philosophers are leeches for the most part if that's all they do for a living. The economy literally is:
e·con·o·my
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[TD][COLOR=#878787 !important]Noun[/COLOR]
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[TD]The wealth and resources of a country or region, esp. in terms of the production and consumption of goods and services.[/TD]
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So honestly are you thinking your opinion is a wealth or resource? The philosophy comes in when you think you know better than everyone else at their expense.
I don't think that's true. People, governments, and central banks have been manipulating economies for thousands of years now (not concurrently, obviously). We actually know a lot about it, and learned a lot more with the advent of instant communications technologies.
I think you certainly can manipulate it to the benefit of everyone. The economy being in recession 45% of the time is not the modern era that central banking has afforded us. We have a gilded and very pleasant reality compared to our precious metal standard forbearers, even if we don't appreciate that.
