Landsburg and Counterfeiting

My colleague Eli Dourado has blogged about our interaction with Steve Landsburg regarding the morality of counterfeiting. Here's a snippet:

In case it is not obvious, Landsburg’s standard of morality is economic (Kaldor-Hicks) efficiency. “Certainly not” is a strong statement, and Will, who has done some interesting work on the subject of counterfeiting, asked some insightful probing questions. I asked a follow-up question: “Is it okay to counterfeit if the central bank is not being sufficiently expansionary?”

Landsburg looked at me skeptically. “Are you going to keep the seigniorage?” he asked. “Sure. That’s just a distributional question,” I replied. Landsburg thought for a second, smiled, and very graciously admitted he did not have an answer.

In addition to being an incredible (and incredibly clear) writer, Landsburg is one of the nicest academics I've met. (Academic economists admittedly establish a low bar. Landsburg is a nice guy by much higher standards.) In conversation after the talk, we agreed that the morality (his word) of counterfeiting depends on whether one believes price adjustments are costly.