Fractional reserve banking

Walter Block has a post on the Mises Economics Blog about his exchange with economist Bryan Caplan regarding the Rothbardian view on “fractional reserve banking” (he termed it a “fraud”). There are three levels of linking if you follow the original blog post, and there is a broken link on Caplan’s econlib blog post which should actually point to this. A lecture by economist Jeffrey Hummel on “Why Fractional Reserve Banking Is more Libertarian than the Gold Standard” is also thrown in for good measure. Find. Read. Download. Decide.

I have only read the preface to Rothbard’s “Case for a 100% Gold Dollar” (this was about eight months back); Hummel’s lecture I am downloading at present; and I don’t think my views on the subject are going to change anytime soon.

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  • Abhishek  On November 2, 2008 at 7:30 am

    I think Bryan Caplan comes off somewhat poorly in that exchange. However, for whatever it is worth, my own views on monetary issues are much closer to Caplan’s than Block’s. While I respect Austrian economics, I do have issues with many of their arguments and methods.

    Needless to say, I am by no stretch an ‘expert’ in monetary economics so my views should be taken with no more seriousness than that of a (well-informed) commenter.

  • Aristotle The Geek  On November 2, 2008 at 6:32 pm

    Listened to Hummel’s lecture? I think there is a problem at the very root of the question (and Hummel knows about it) – what do you mean when you refer to the “gold standard” and what exactly is “fractional reserve banking”? Because if such a standard is “imposed” by someone, its not libertarian. I am not for imposition, but the terms need to be clarified.

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