Empirically. Certainly not by comparison to some ideological ideal, but by analyzing the net results. If something "shouldn't" work, but appears to produce the correct result, I change my theory to match the new evidence.
For instance, empirically, lots of governments "hide the cost of health care" by setting up universal health care programs, and in every country that's economically, technologically, and culturally similar to the US, the result is improved health care metrics and lower costs per capita.
I could wave my hands around and say that's the wrong way to go, based on some crackpot ideology cooked up by a Russian novelist on speed. Believe me, I've tried that. But it's easier and saner to just use normal empiricism instead.
The problem with monetary policy is that it's nigh-impossible to do proper empiricism on it. What we can say is that we certainly aren't experiencing any major catastrophes that we didn't encounter with the gold standard, and in fact a lot of the problems we faced then are no longer possible.
For instance, empirically, lots of governments "hide the cost of health care" by setting up universal health care programs, and in every country that's economically, technologically, and culturally similar to the US, the result is improved health care metrics and lower costs per capita.
I could wave my hands around and say that's the wrong way to go, based on some crackpot ideology cooked up by a Russian novelist on speed. Believe me, I've tried that. But it's easier and saner to just use normal empiricism instead.
The problem with monetary policy is that it's nigh-impossible to do proper empiricism on it. What we can say is that we certainly aren't experiencing any major catastrophes that we didn't encounter with the gold standard, and in fact a lot of the problems we faced then are no longer possible.