Wednesday, July 1, 2009

Why Fractional Reserve Banking Is More Libertarian than the Gold Standard

The Foundation for Economic Education has made this insightful and provocative audio available from Jeffrey Rogers Hummel, "Why Fractional Reserve Banking Is More Libertarian than the Gold Standard" (July 15, 2008). The debate has a colorful history within the Austrian School tradition as evidenced by the papers below for further reading. I agree with economists White, Selgin, and Hummel that the existence and practice of fractional reserve banking is neither anti-Libertarian nor anti-Austrian.

Dr. Jeffrey Rogers Hummel is an economic historian with expertise in the American Revolution and the Civil War. A dedicated teacher and gifted scholar, Dr. Hummel is the author of Emancipating Slaves, Enslaving Free Men: A History of the American Civil War (1996). Dr. Hummel has also been published in many academic journals, including the Journal of Economic History, Texas Law Review, and Journal of Austrian Economics. In 2001-2002 he was honored as the William C. Bark National Fellow at the Hoover Institution at Stanford University.

After receiving his B.A. in history from Grove City College, Dr. Hummel went on to become a tank platoon leader in the U.S. Army in the 1970s. He later received a Ph.D. in history with a minor in economics from University of Texas at Austin. Today Dr. Hummel is a faculty member in the Department of Economics at San Jose State University, where he lectures on both economics and history.

For further reading:
"The Case Against the Fed Book Review", Randy Radic, May 19, 2009
"100 Percent Reserve Money: The Small Change Challenge", George Selgin, March 2009
"Hayek's Plan for Private Money", Robert P. Murphy, July 18, 2005
"Legal Tender Laws and Fractional-Reserve Banking", Jorg Guido Hulsmann, Summer 2004
"Should We Let Banks Create Money?", George Selgin, Summer, 2000
"Banks Cannot Create Money", Jorg Guido Hulsmann, Summer 2000
"Why Private Banks and Not Central Banks Should Issue Currency, Especially in Less Developed Countries", Lawrence H. White and George Selgin, April 19, 2000
"In Defense of Fiduciary Media-or, We are Not Devo(lutionists), We are Misesians!", George Selgin and Lawrence H. White, 1996
"Free Banking and the Free Bankers", Jorg Guido Hulsmann, 1996
"A Critical Analysis of Central Banks and Fractional-Reserve Free Banking from the Austrian School Perspective", Jesus Huerta de Soto, 1995
"Fractional versus 100% Reserve Banking", Morris J. Markovitz, June 1988
"The Case for a Genuine Gold Dollar", Murray N. Rothbard, 1985
"Gold and Free Market Banking" (video), Lawrence H. White, "The Gold Standard: An Austrian Perspective" Conference held in Washington, DC, November 16-17, 1983
"Gold versus Fractional Reserves", Henry Hazlitt, May 1979
"The Gold Standard and Fractional-Reserve Banking", Joe Cobb, September 1975

1 comment:

  1. Do you think it's possible that as/if we move to crypto-currencies that it can eliminate a lot of this disagreement?

    As I see it, periodic "proof of reserves procedures" (http://www.coindesk.com/bitstamp-passes-audit-overseen-bitcoin-developer-mike-hearn/) which can digitally confirm reserve ratio levels, might actually eliminate a lot of the fractional reserve vs full reserve debates because it will solve earlier problems with fractional reserve banking such as fraud and bank runs.

    Would be interested in your thoughts.

    ReplyDelete