May 17, 2005


Gresham's law (GRESH-ums law) noun (Wordsmith)

The theory that bad money drives good money out of circulation.

[Coined by economist Henry Dunning Macleod in 1858 after Sir Thomas
Gresham (1519-1579), financier and founder of the Royal Exchange in
London. Gresham, a financial adviser to Queen Elizabeth I, wrote to
her "good and bad coin cannot circulate together."]

Albert Jay Nock identified three laws that he thought tended to inevitably lead the masses toward self-inflicted misgovernment. The first two, Gresham's Law ("bad money drives out good", though Nock expanded it to mean that bad ideas, art, etc. drive out good) and the Law of Diminishing Returns (another economic law which in this case might be stated as : merely adding more and more voices to the political discourse, as democracy does, will not improve the quality of the ideas in circulation) are fairly well known. The third was of his own coinage, Epstean's Law, which he discovered in this manner :
I was at lunch in the Uptown Club of New York with an old friend, Edward Epstean, a retired man of affairs. I do not remember what subject was under discussion at the moment; but whatever it was, it led to Mr. Epstean's shaking a forefinger at me, and saying with great emphasis, 'I tell you, if self-preservation is the first law of human conduct, exploitation is the second.'

This remark instantly touched off a tremendous flashlight in my mind. I saw the generalization which had been staring me in the face for years without my having sense enough to recognize and identify it. Spencer and Henry George had familiarized me with the formula that man tends always to satisfy his needs and desires with the least possible exertion; but they had given me no idea of its immense scope, its almost illimitable range of action. If this formula were sound, as unquestionably it is, then certainly exploitation would be an inescapable corollary, because the easiest way to satisfy one's needs and desires is by exploitation. Indeed, if one wished to split hairs, one might say that exploitation is the first law of conduct, since even in self-preservation one tends always to take the easiest way; but the question of precedence is a small matter.

In an essay which I published some time ago, having occasion to refer to this formula, I gave it the name of Epstean's law, which by every precedent I think it should have. In their observations on the phenomena of gravitation, Huyghens and Kepler anticipated Newton closely. It was left for Newton to show the universal scope of an extremely simple formula, already well understood in limine, and hence this formula is known as Newton's law. As a phenomenon of finance, it has long been observed that 'bad money drives out good', but Sir Thomas Gresham reduced these observations to order under a formula as simple as Newton's, and this formula is known as Gresham's law. So for an analogous service, more important than Gresham's and, as far as this planet is concerned, as comprehensive as Newton's, I thought that the formula, Man tends always to satisfy his needs and desires with the least possible exertion, should bear the name of Epstean's law.

Taken together, these laws, particularly Epstean's, create a cultural climate of what Nock called "economism", but which would be familiar to us as something akin to materialism or consumerism. Under a regime of economism, the mass-men will structure society so as to satisfy their material desires with the least possible effort on their own part. The entire apparatus of government will be devoted to this task; the entire focus of society will be on this task; material "needs" become the be all and end all of man's existence.

Posted by Orrin Judd at May 17, 2005 9:10 AM

And thus the importance of a strong national ethos that rejects this sort of consumerism.

Posted by: David Cohen at May 17, 2005 9:18 AM

No, ethos is useless. Ethics are required, which means Judeo-Christianity.

Posted by: oj at May 17, 2005 9:55 AM

That's an odd distinction to draw. It is amusing that my nationalism is broad enough to include religious nonbelievers, so long as they are committed Americans, but your internationalism isn't.

Posted by: David Cohen at May 17, 2005 9:59 AM

Yes, nationalism has nothing to do with ethical beliefs. It renders all to Caesar.

Posted by: oj at May 17, 2005 10:06 AM

It's not statism, it's nationalism, and its content depends entirely on which nation is its object.

Posted by: David Cohen at May 17, 2005 11:04 AM

Thus the importance of remembering humans do not exist in vacuums.

Ethics is the sum of mutual exploitation, which has nothing to do with rendering all to Ceasar.

Posted by: Jeff Guinn at May 17, 2005 11:21 AM

Yet I think statistics prove that atheists are not different ethically from the religiously devout. Rates of divorce are the same for atheists as it is for "born again" evangelicals. Criminal activity is likewise unaffected: murder, theft all have the same frequency.

What measurable element distinguishes atheists from the religious ethically? The original post concerned politics, not ethics. So far I remain unconvinced of any assertion as to any ethical claim.

Posted by: Chris Durnell at May 17, 2005 11:39 AM

OK, I just have to ask:

This feuding between Orrin Judd and David Cohen seems to have really ramped up in the past couple of weeks. David, haven't you been a (front-page) poster here? And are you still? I would find it quite admirable and generous, on Orrin's part, if you have maintained that status in the face of your increasing attacks on his positions. I would also find it admirable that you have the intellectual honesty to vehemently disagree with your host. (Especially since your arguments are the ones I've usually been aligned with in these recent head-to-heads).

Either way, I guess I'm just wondering if I missed some development involving you two. Presumably, you'd originally been invited to post here because Orrin found you to be ideologically compatible. What shift, if any, did I miss? Or have I simply missed something from the get-go -- e.g., that you and Orrin have always debated in this manner?

Sorry to tread into what might be personal territory, or to sidetrack the thread with an off-topic administrative question.

Posted by: SP at May 17, 2005 11:44 AM


Then you're rendered the word you insist on defending, for some bizarre reason, a nullity. If your happy-face version of nationalism requires that the nation be America then why not just call it Americanism.

I admire your stubbornness, but you resemble one opf those kooky libertarians who insists that he has a right to the term liberal )of course, liberal is at least a word with some connotations worth preserving, unlike nationalism).

Posted by: oj at May 17, 2005 11:53 AM


that's the opposite of ethics.

Posted by: oj at May 17, 2005 11:54 AM


While it does have the scary quality of hearing your parents fight, don't fret, it's all amicable.

Posted by: oj at May 17, 2005 11:56 AM

OK, shew.

Posted by: SP at May 17, 2005 12:09 PM

The very last thing you remind us of is our parents. Trust us on this.

Posted by: joe shropshire at May 17, 2005 12:14 PM

Pretty entertaining, I think. OJ's a down and dirty street brawler (it's the Irish in him) and David's more of an elegant Marquis of Queensbury pugilist. Both give no quarter in a fight and expect none given. When I fist met Orrin, I remember thinking, "Christ, what a jerk!" until I realized that he takes as good as he gives and doesn't play the old Liberal game of "You have to tolerate my views while I crap all over yours!" Once I got past that, arguing with Orrin became the high point of my day and watching David do it is like watching Dr. Who fight The Master; both are masters of their crafts. A cracking good time!

Posted by: Governor Breck at May 17, 2005 12:17 PM

Okay now that the fretting about OJ and David's fragile relationship is settled, I'd like to point out something about Gresham's Law.

The meaing of Gresham's Law was that metallic coins in denominations that were worth less than the value of that metal melted down (good money) would not be circulated, but hoarded, melted down and resold for a profit. Thus, the only coins that would be circulated would be the ones that were overvalued (bad money).

Thus while the Law could conceivably be applied to art - with good art hoarded in private collections and bad art on display - it cannot be applied to ideas. In my opinion, Nock was only using clever analogies to rationalize the fact that ideas that he favored (ie, "good" ideas) were ignored by most people in favor of their own (ie, "bad" ideas).

Posted by: Brandon at May 17, 2005 12:20 PM


They always are.

Posted by: oj at May 17, 2005 12:25 PM

Bad news, Skywalker...

Posted by: oj at May 17, 2005 12:39 PM

SP: OJ makes only four types of posts: those meant to annoy Harry, Jeff Guinn, creeper and Brit; those meant to annoy soccer fans; those meant to annoy me; and recipes.

I don't get the recipe thing.

I refuse to acknowledge any distinction between Americanism and American nationalism. To the extent there is a distinction, you end up with Canada.

Posted by: David Cohen at May 17, 2005 2:27 PM

Ah, sweet day coming, when the refusal to acknowledge something makes it untrue...

Posted by: oj at May 17, 2005 3:02 PM

"To the extent there is a distinction, you end up with Canada."

Seeing as today seems to be the day for family feuding, what the heck does that mean?

Posted by: Peter B at May 17, 2005 3:09 PM

Peter: You end up with something that is almost exactly America, and yet entirely different. Perhaps I should have said that it's the difference between the living person and his dead body.

OJ: I always said I was a solipsist.

But speaking of dead bodies, I think we've beaten this dead horse one too many times. I think we've resolved this.

You believe in an "Americanism" that is necessarily subsumed into and subservient to universalist Christianity. I don't. I believe in an Americanism that is specific to the American nation. Don't worry, though. I do think that being Christian is compatible with being American.

Posted by: David Cohen at May 17, 2005 3:52 PM


I'll gracefully accept your wise retreat to Americanism.

Posted by: oj at May 17, 2005 3:55 PM

Americanism that is specific to the American nation. In other words, American nationalism.

Posted by: David Cohen at May 17, 2005 4:43 PM


"Dead Americans Walking", eh? OK, I'll try it out around town and get back to you.

Posted by: Peter B at May 17, 2005 4:54 PM

Nationalism. Americanism. Two perfectly good words of opposite meaning. Why so verbose?

Posted by: oj at May 17, 2005 5:35 PM

Americanism is a perfectly good word and I would accept it unhesitatingly, if their weren't those who apparently believe in Americanism seperate from the American nation.

Posted by: David Cohen at May 18, 2005 8:01 AM

Americanism is a perfectly good word and I would accept it unhesitatingly, if their weren't those who apparently believe in Americanism seperate from the American nation.

Well, yeah.
Just about everyone outside of Western Europe aspires to Americanism. They gobble it up, can't get enough, even though many of them dislike the actual nation of America, or at least the perceived motivations of her gov't.

Posted by: Michael Herdegen at May 18, 2005 8:08 AM

My point exactly.

Posted by: David Cohen at May 18, 2005 9:17 AM