By what power or authority an assembly undertakes to make paper money is difficult to say. It derives none from the constitution, for that is silent on the subject. It is one of those things which the people have not delegated, and which, were they at any time assembled together, they would not delegate. It is, therefore, an assumption of power which an assembly is not warranted in, and which may one day or other be the means of bringing some of them to punishment.
One of the evils of paper money is that it turns the whole country into stockjobbers. The precariousness of its value and the uncertainty of its fate continually operate night and day to produce this destructive effect. Having no real value in itself, it depends for support upon accident, caprice, and party, and as it is the interest of some to depreciate and of others to raise its value, there is a continual invention going on that destroys the morals of the country.
It was horrid to see, and hurtful to recollect, how loose the principles of justice were let, by means of the paper emissions during the war. The experience then had should be a warning to any assembly how they venture to open such a dangerous door again.
Do the laws of economics apply in the magical world of Harry Potter? Even though J.K Rowling placed her characters in a world of magic, wizards remain subject to the implications of scarcity. As a result, the series is abundant with examples of basic economic principles. Given the popularity of the series, its use in the classroom is likely to inspire students to adopt the economic way of thinking for life. We demonstrate the pedagogical potential of the series by providing illustrations of trade-offs and opportunity costs, marginal thinking, the power of incentives, and the benefits of trade and commerce.
Eric J. Gouvin, Western New England Law School, has published The Magic of Money and Banking, in Harry Potter and the Law (Jeffrey E. Thomas and Franklin D. Snyder eds.; Carolina Academic Press, 2010). Here is the abstract.
Creating money out of thin air is one of the few truly magical things Muggles are capable of, which makes it odd that J.K. Rowling did not include a more thoughtful discussion of banking in her Harry Potter books. Indeed, the banking system in the wizarding world seems quite rudimentary -- more like the safe deposit business than true banking. Nevertheless, Muggle bankers and magical bankers face similar problems relating to security and money laundering and they have developed regulatory strategies to deal with those problems.
The full text is not available from SSRN. Support the economy, magicians, and Muggles; buy the book!
A lot of magic references in this 2001 paper on free trade from Peter Dorman. An excerpt.
Brown-Deardoff-Stern’s buoyant predictions for free trade are like the rabbit pulled out of a hat: the trick works only because the rabbit was put into the hat to begin with. What follows is a visit backstage to see how the trick is put together step by step.
"It may seem like accounting magic, but it's completely legit," says CNN about GE's US tax bill of $0.00, and answers its magic-themed (and tax-themed) question, "How'd it pull off that trick?" this way. The company, listed in the iconic Fortune 500, managed this feat by making nearly $11 billions worth of profits overseas and deducting its U.S. losses of more than $400 million. And taxes on those eleven billions in profit? Well, they'll come due--eventually.
Laurence S. Moss, Professor of Law and Economics at Babson College, has died. He was 64. Dr. Moss was known for his use of magic to teach the principles of economics. Prior to his tenure at Babson, he taught at the University of Virginia and at the Tufts University Fletcher School of Law and Diplomacy. He held a PhD from Columbia and a JD from Suffolk Law School. He was admitted to the practice of law in Massachusetts in 1986. Babson College held a memorial service for him on May 7. Here is a link to his obituary and guest book in the Boston Globe.