Congressman Ron Paul, in a rare head-to-head broadcast confrontation, went up against the Nobel laureate in economics Paul Krugman in an open debate over monetary policy. It was broadcast on the Bloomberg Television, moderated by Trish Regan. Not to put too fine a point on it, Ron Paul won the exchange, so much so that the cameras and moderators just drifted away from Mr. Krugman without so much as a fare-thee-well and left the field to the hero of the campaign for honest money.

The episode led Mr. Krugman to post on his Web log at the Times a complaint about the uselessness of face-to-face debates as a genre. He alleged that Dr. Paul got his facts wrong in respect of the post-World War II economy, but didnt detail any errors. Here is how the Nobel laureate put it: If Ron Paul got on TV and said Gah gah goo goo debasement! theft!  which is a rough summary of what he actually did say  his supporters would say that he won the debate hands down; I dont think my supporters are quite the same, but opinions may differ.

We, for one, certainly do. The debate exhibited a brilliant display of the fundamental difference in the view of money. At one point, Professor Krugman offered this formulation: We have an economy in which money is not just green pieces of paper with faces of dead presidents on them. Money is the result of the financial system. It includes a variety of assets. Were not even quite sure where the line between money and non-money is  its kind of a continuum.

What a slow pitch for the Congressman from Texas, the leading tribune of the idea of constitutional money defined in terms of gold and silver specie, and he made the most of it. The point at which Dr. Paul started leaving Mr. Krugman in the dust was when the Bloomberg interlocutor asked him what Dr. Paul would do. Dr. Paul said he wasnt pressing for ending the Federal Reserve in a fell swoop. He is, he said, for competition among currencies. At one point, Professor Krugman could be heard muttering I have no idea what thats about.

It seems that Professor Krugman hasnt been paying attention to Congress. What Dr. Paul was talking about is a bill called H.R. 1098, which he introduced in Congress in September. Its known as the Free Competition in Currencies Act. It is based on the work of Friedrich Hayek, himself a Nobel laureate. Hayek, in the latter part of the 20th century called for the denationalization of money and the free competition of privately issued currencies. The editor of The New York Sun wrote about the legislation in a column that ran under the headline Ron Paul, Upping the Ante in His Campaign for Liberty, Hoists the Flag of Hayek.

It would not be too much to say that what one saw unfolding on Bloomberg was the power of the assertion of the ideas of Friedrich Hayek against the ideas of John Maynard Keynes. However awkward Mr. Krugman felt about the encounter, wed say this for him  these kinds of debates are important. On a net basis, they are advancing the discussion. We would never gainsay the importance of fiscal and regulatory reform in igniting the growth our country is going to need to work itself out of debt. But neither of those strategies will suffice. They will have to be done in conjunction with a restoration of sound money. And the more debates we have like the one just aired on Bloomberg, the clearer it will become that no one in public life understands this issue as clearly as the congressman from Texas.