Quote from: danielW on September 14, 2015, 05:18:07 AM

Quote from: yefi on September 14, 2015, 04:26:23 AM

In any case, I would like to hear which 16th century mind argued for inflation, especially as currency was specie.

Economists now are still in the Alchemist stage. Its mostly just pseudo-science.

As I wrote already, I was referring to Gresham's Law (aka Copernicus's Law). It is stated in terms of face value vs intrinsic value, but the phenomenon applies to bitcoin vs national money: if a currency is [ perceived as being ] more solid than another, people will hoard one and spend the other.

Alchemists were desperately trying to make sense out of the data that they got out of experimental chemistry. There were crackpots and scammers, and some who intentionally obfuscated their writing to preserve their trade secrets. But there were also many who simply inventing their own names for substances and processes, and trying to make general theories out of experiments. They rightly sensed that there must be *some* laws, but they did not imagine how complicated they would turn out to be. They were like biologists before biochemistry, or astronomers before gravitation...

Only a few years ago I learned that the real father of chemistry was a guy called Jabir ibn Hayyan (westernized as Geber) who lived around 800 CE. He perfected the still and discovered the sulphuric, hydrochloric, and nitric acids by distilling vitriol, alone and with salt and saltpeter. Aqua regia, a mix of HCl and HNO₃, was found to dissolve gold.

But, besides his genuine experimental contributions, he also "perfected" the four-element theory of Aristotle by "explaining" the differences into various metals as "rearrangements" of two basic qualities that all metals had. Five centuries later, when his works were translated to Latin and spread in Europe, that discovery and that theory spawned an epidemic of stereotypical alchemists, obsessed with turning lead into gold.

Around 1600, Emperor Rudolf II of Bohemia (today's Czech Republic) thought that alchemy could be the solution to his financial difficulties, and built a "research center" -- an alley in the Prague Castle, lined with labs for alchemical "startups" attracted from all Europe. Many of them were scammers, and of course it did not work.

You see, those scammers had to work with gold, because bitcoin had not been invented yet. Grin