DOCSLIB.ORG

Money and the Market

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Money and the Market Money and the market In this volume of essays Kevin Dowd presents a strong case that state inter­ vention into financial and monetary systems has manifestly failed, and that we would be better off if governments stopped interfering with financial markets and central banks were abolished. Instead, he argues that financial markets should be left to regulate themselves; market forces would then deliver an efficient and stable financial system, safe and strong banks and sound money. Money and the Market fall into three parts: • Part 1 deals with the theory of free banking and begins with a presentation of the case in its favour. This is followed by essays examining the arguments advanced for government deposit insurance, capital adequacy regulation, banking clubs, the role of the invisible hand in the evolution of the monetary system, and asks whether we can blame laissez-faire for the instability we observe in contemporary financial markets. • Part 2 explores the monetary regime under laissez-faire and examines how fully automatic monetary systems might operate to stabilize the price level. Further essays look at Irving Fisher's 'compensated dollar' and at currency boards to replace central banks. • Part 3 examines a variety of diverse policy issues from a free market standpoint - international capital controls, monetary policy in the twenty­ first century, the future of gold, the bailout of Long-Term Capital Management in 1998 and the Financial Services Act in the UK. This collection will be of considerable interest to students, researchers and policy-makers in the monetary and financial area. Kevin Dowd is Professor of Financial Risk Management at the University of Nottingham Business School and adjunct scholar at the CATO Institute in Washington. Foundations of the market economy Edited by Mario J. Rizzo, New York University and Lawrence H. White, University of Georgia A central theme in this series is the importance of understanding and assessing the market economy from a perspective broader than the static economics of per­ fect competition and Pareto optimality. Such a perspective sees markets as causal processes generated by the preferences, expectations and beliefs of economic agents. The creative acts of entrepreneurship that uncover new information about preferences, prices and technology are central to these processes with respect to their ability to promote the discovery and use of knowledge in society. The market economy consists of a set of institutions that facilitate voluntary co-operation and exchange among individuals. These institutions include the legal and ethical framework as well as more narrowly 'economic' patterns of social interaction. Thus the law, legal institutions and cultural and ethical norms, as well as ordinary business practices and monetary phenomena, fall within the analytical domain of the economist. Other titles in the series The Meaning of Market Process Essays in the development of modem Austrian economics Israel M. Kirzner Prices and Knowledge A market-process perspective Estaban F. Thomas Keynes' General Theory of Interest A reconsideration Fiona C. Maclachlan Laissez-Faire Banking Kevin Dowd Expectations and the Meaning of Institutions Essays in economics by Ludwig Lachmann Edited by Don Lavoie Perfect Competition and the Transformation of Economics Frank M. Machovec Entrepreneurship and the Market Process An enquiry into the growth of knowledge David Harper Economics of Time and Ignorance Gerald o 'Driscoll and Mario 1. Rizzo Dynamics of the Mixed Economy Towards a theory of intervention Sanford Ikeda Neoclassical Microeconomic Theory The founding of Austrian vision A. M. Endres The Cultural Foundations of Economic Development Urban female entrepreneurship in Ghana Emily Chamlee-Wright Risk and Business Cycle New and old Austrian perspectives Tyler Cowen Capital in Disequilibrium The role of capital in a changing world Peter Lewin The Driving Force of the Market Essays in Austrian economics Israel Kirzner An Entrepreneurial Theory of the Firm Frederic Sautet Time and Money The macroeconomics of capital structure Roger Garrison Microfoundations and Macroeconomics An Austrian perspective Steven Horwitz Money and the Market Essays on free banking Kevin Dowd This page intentionally left blank Money and the Market Essays on free banking Kevin Dowd ~ 1 Routledge ~ ~ Taylor & Francis Group LONDON AND NEW YORK First published 2001 by Routledge Published 2013 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OXI4 4RN Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY, 10017, USA Routled~e is an imprint of the Taylor & Francis Group, an informa business © 2001 Kevin Dowd Typeset in Times by Curran Publishing Services Ltd, Norwich All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. Library o/Congress Cataloging ill Publication Data Dowd, Kevin Money and the market: essays on free banking/Kevin Dowd p. cm. - (Foundations of the market economy series) A collection of 16 essays written between 1986 and 2000, with 14 previously published, they are a sequel to his LaissezJaire banking (1963). Includes bibliographical references and index. 1. Free banking. 2. Money. 3. Free enterprise. l. Dowd, Kevin. Laissez­ faire banking. II. Title. III. Series. HGI811.D6822000 332.1--dc21 00-032180 This book has been sponsored in part by the Austrian Economics Program at New York University. TSBN 13: 978-0-415-24212-7 (hbk) Contents List of tables ix Preface Xl Permissions acknowledgements Xlll 1 Introduction 1 PART! The theory of tinanciallaissez-Jaire 15 2 The case for financial laissez-faire 17 3 Bank capital adequacy versus deposit insurance 26 4 Does asymmetric information justify bank capital adequacy regulation? 34 5 Competitive banking, bankers' clubs, and bank regulation 40 6 The invisible hand and the evolution of the monetary system 57 7 Are free markets the cause of financial instability? 75 PART 2 The monetary regime 83 8 A proposal to end inflation 85 9 Reply to Hillier 98 lOUsing futures prices to control inflation: reply to Garrison and White 100 Vlll Contents 11 The 'compensated dollar' revisited 104 12 Money and the market: what role for government? 114 PART 3 Policy issues 129 13 Two arguments for the restriction of international capital flows 131 WITH K. ALEC CHRYSTAL 14 Monetary policy in the twenty-first century: an impossible task? 141 15 Reflections on the future of gold 145 16 Too big to fail? Long-Term Capital Management and the Federal Reserve 153 17 Paternalism fails again: the sorry story of the Financial Services Act 167 WITH JIMMY M. HINCHLIFFE Notes 183 References 213 Index 221 Tables 6.1 The stages of development of the monetary system under laissezjaire 71 8.1 Equilibration under the QFC rule 88 13.1 UK balance of payments 1975-85 (£ million) 132 13.2 UK capital flows by category (£ million) 133 This page intentionally left blank Preface This book is a collection of essays on financial laissez-faire (or free banking) and its opposite, state intervention in the financial services sector and the monetary system. These essays were written between 1986 and 2000, and are a sequel to my earlier book, Laissez-Faire Banking (1993). Of the sixteen essays included here, fourteen have been published before in various places and two are published here for the first time. Those that appeared before have been lightly edited, but are substantially the same as they were before - with dubious judgements, falsified predictions, and so on, mostly intact. I would like to thank the various publishers and copyright holders for permission to reprint my articles here: Blackwell publishers and the Royal Economic Society (chapters 2, 9 and 10), the Journal of Financial Services Research (chapter 3), the Cato Institute (chapters 4, 12, 14 and 16), the Ohio State University Press and the Journal of Money, Credit, and Banking (chapters 5 and 10), John Smithin and Routledge (chapter 6), Critical Review (chapter 7), Natwest Bank (chapter 13), and Sheffield Hallam University's Review of Policy Issues (chapter 15). It is a great pleasure to thank many friends and co-workers for all manner of contributions, both direct and indirect. To begin with, I thank Alan Jarvis, Heidi Baytazo, Robert Langham, and the rest of the team at Routledge for various inputs to the book, Susan Curran for editing, and Maureen Jackson for help with the typing. I thank Alec Chrystal and Jimmy Hinchliffe, who co-authored one chapter each, and contributed to the book in many other ways besides. Thanks also to Charles Goodhart and Mervyn Lewis for encouragement and good advice which often went over my head, and to Chris Tame, Jim Dorn and the Cato Insitute for their steadfast moral as well as other support over many years. I also thank many co-workers in the field: Jeff Friedman, George Selgin, John Smith, Larry White and the many other people acknowledged in indi­ vidual chapters throughout the book, as well as friends in the UK and Eire: Dave Cronin, Tony Courakis, David Goacher, Chris Humphrey, Ian Gow, Dave Owen, Denis Smith, and John Whittaker. I particularly thank Mark Billings, xu Preface Dave Campbell, Dave and Pat Chappell, David and Yabing Fisher, Barbara Hollman, Duncan Kitchin, Anneliese Osterspey, Alan and Ruth Rawling, Sheila Richardson, Stan and Dorothy Szynkaruk, and Basil and Maggie Zafiriou for their encouragement and friendship over many years. As ever, however, my biggest debts are to my family - to my parents, to my brothers Brian and Victor; and, most of all, to my wife Mahjabeen and my daughters, Raadhiyah and Safiah, for their love and support, and for all that they have had to put up with over the years.
Load more

Recommended publications
  • Virtual Currencies in the Eurosystem: Challenges Ahead
    STUDY Requested by the ECON committee Virtual currencies in the Eurosystem: challenges ahead Monetary Dialogue July 2018 Policy Department for Economic, Scientific and Quality of Life Policies Authors: Rosa María LASTRA, Jason Grant ALLEN Directorate-General for Internal Policies EN PE 619.020 – July 2018 Virtual currencies in the Eurosystem: challenges ahead Monetary Dialogue July 2018 Abstract Speculation on Bitcoin, the evolution of money in the digital age, and the underlying blockchain technology are attracting growing interest. In the context of the Eurosystem, this briefing paper analyses the legal nature of privately issued virtual currencies (VCs), the implications of VCs for central bank’s monetary policy and monopoly of note issue, and the risks for the financial system at large. The paper also considers some of the proposals concerning central bank issued virtual currencies. This document was provided by Policy Department A at the request of the Committee on Economic and Monetary Affairs. This document was requested by the European Parliament's Committee on Economic and Monetary Affairs. AUTHORS Rosa María LASTRA, Centre for Commercial Law Studies, Queen Mary University of London Jason Grant ALLEN, Humboldt-Universität zu Berlin Centre for British Studies, University of New South Wales Centre for Law Markets and Regulation ADMINISTRATOR RESPONSIBLE Dario PATERNOSTER EDITORIAL ASSISTANT Janetta CUJKOVA LINGUISTIC VERSIONS Original: EN ABOUT THE EDITOR Policy departments provide in-house and external expertise to support EP committees
    [Show full text]
  • The Cases of the Liberty Dollar and E-Gold Lawrence H
    The Troubling Suppression of Competition from Alternative Monies: The Cases of the Liberty Dollar and E-gold Lawrence H. White Proposals abound for reforming monetary policy by instituting a less-discretionary or nondiscretionary system (“rules”) for a fiat- money-issuing central bank to follow. The Federal Reserve’s Open Market Committee could be given a single mandate or more gener- ally an explicit loss function to minimize (e.g., the Taylor Rule). The FOMC could be replaced by a computer that prescribes the mone- tary base as a function of observed macroeconomic variables (e.g., the McCallum Rule). The role of determining the fiat monetary base could be stripped from the FOMC and moved to a prediction mar- ket (as proposed by Scott Sumner or Kevin Dowd). Alternative pro- posals call for commodity money regimes. The dollar could be redefined in terms of gold or a broader commodity bundle, with redeemability for Federal Reserve liabilities being reinstated. Or all Federal Reserve liabilities could actually be redeemed and retired, en route to a fully privatized gold or commodity-bundle standard (White 2012). All of these approaches assume that there will con- tinue to be a single monetary regime in the economy, so that the way to institute an alternative is to transform the dominant regime. Cato Journal, Vol. 34, No. 2 (Spring/Summer 2014). Copyright © Cato Institute. All rights reserved. Lawrence H. White is Professor of Economics at George Mason University, a member of the Mercatus Center Financial Markets Working Group, and a Senior Fellow at the Cato Institute. 281 Cato Journal A different approach to monetary reform is to think about ways that alternative monetary standards might arise in the marketplace to operate in parallel with the fiat dollar, perhaps gradually to displace it.
    [Show full text]
  • Parallel Journeys: Adam Smith and Milton Friedman on the Regulation of Banking
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Rockoff, Hugh Working Paper Parallel journeys: Adam Smith and Milton Friedman on the regulation of banking Working Paper, No. 2010-04 Provided in Cooperation with: Department of Economics, Rutgers University Suggested Citation: Rockoff, Hugh (2010) : Parallel journeys: Adam Smith and Milton Friedman on the regulation of banking, Working Paper, No. 2010-04, Rutgers University, Department of Economics, New Brunswick, NJ This Version is available at: http://hdl.handle.net/10419/59460 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu February, 2010 Parallel Journeys: Adam Smith and Milton Friedman on the Regulation of Banking Hugh Rockoff Rutgers University and NBER Department of Economics 75 Hamilton Street New Brunswick NJ 08901 [email protected] 1 Abstract Adam Smith and Milton Friedman are famous for championing Laissez Faire, yet both supported government regulation of the banking system.
    [Show full text]
  • Moral Hazard and the Financial Crisis
    Centre for Risk & Insurance Studies enhancing the understanding of risk and insurance Moral Hazard and the Financial Crisis Kevin Dowd CRIS Discussion Paper Series – 2008.VI MORAL HAZARD AND THE FINANCIAL CRISIS Kevin Dowd* “It’s like not being invited to a party and then being given the bill.” (Comment by a Wall Street passer-by on the bank bailout.) There is no denying that the current financial crisis – possibly the worst the world has ever seen and not over yet – has delivered a major seismic shock to the policy landscape. In country after country, we see governments panicked into knee-jerk responses and throwing their policy manuals overboard: bailouts and nationalizations on an unprecedented scale, fiscal prudence thrown to the winds and the return of no-holds-barred Keynesianism. Lurid stories of the excesses of ‘free’ competition – of greedy bankers walking away with hundreds of millions whilst taxpayers bail their institutions out, of competitive pressure to pay stratospheric bonuses and the like – are grist to the mill of those who tell us that ‘free markets have failed’ and that what we need now is bigger government. To quote just one writer out of many others saying much the same, “the pendulum will swing – and should swing – towards an enhanced role for government in saving the market system from its excesses and inadequacies” (Summers, 2008). Free markets have been tried and failed, so the argument goes,1 now we need more regulation and more active macroeconomic management. Associated with such arguments is the claim that the problem of moral hazard is overrated.
    [Show full text]
  • Cryptocurrency and the Problem of Intermediation
    SUBSCRIBE NOW AND RECEIVE CRISIS AND LEVIATHAN* FREE! “The Independent Review does not accept “The Independent Review is pronouncements of government officials nor the excellent.” conventional wisdom at face value.” —GARY BECKER, Noble Laureate —JOHN R. MACARTHUR, Publisher, Harper’s in Economic Sciences Subscribe to The Independent Review and receive a free book of your choice* such as the 25th Anniversary Edition of Crisis and Leviathan: Critical Episodes in the Growth of American Government, by Founding Editor Robert Higgs. This quarterly journal, guided by co-editors Christopher J. Coyne, and Michael C. Munger, and Robert M. Whaples offers leading-edge insights on today’s most critical issues in economics, healthcare, education, law, history, political science, philosophy, and sociology. Thought-provoking and educational, The Independent Review is blazing the way toward informed debate! Student? Educator? Journalist? Business or civic leader? Engaged citizen? This journal is for YOU! *Order today for more FREE book options Perfect for students or anyone on the go! The Independent Review is available on mobile devices or tablets: iOS devices, Amazon Kindle Fire, or Android through Magzter. INDEPENDENT INSTITUTE, 100 SWAN WAY, OAKLAND, CA 94621 • 800-927-8733 • [email protected] PROMO CODE IRA1703 Cryptocurrency and the Problem of Intermediation F CAMERON HARWICK he rise of cryptocurrency in the past decade is more than simply a techno- logical feat; it is a real-world incarnation of a monetary system with numer- T ous features that have existed to date only as thought experiments. As with any unprecedented innovation, bold claims are made for it. The boldest, perhaps, is the claim that cryptocurrency in general or Bitcoin in particular can or will supplant the current international regime of central-bank-issued monies.
    [Show full text]
  • Prosperity Unleashed: Smarter Financial Regulation the Heritage Foundation
    Prosperity Unleashed: Prosperity Smarter Financial Regulation Smarter The Heritage Foundation Prosperity Unleashed: Smarter Financial Regulation Edited by Norbert J. Michel, PhD Prosperity Unleashed: Smarter Financial Regulation Edited by Norbert J. Michel, PhD © 2017 by The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002 (202) 546-4400 | heritage.org All rights reserved. Cover Photo © istockphoto.com Printed in the United States of America. CONTENTS v Contributors 1 Introduction PART I Banking Regulation Reforms 15 Chapter 1 • Deposit Insurance, Bank Resolution, and Market Discipline Mark A. Calabria, PhD 29 Chapter 2 • A Simple Proposal to Recapitalize the U.S. Banking System Kevin Dowd, PhD 37 Chapter 3 • A Better Path for Mortgage Regulation Diane Katz 49 Chapter 4 • Money and Banking Provisions in the 2016 Financial CHOICE Act: A Major Step Toward Financial Security Norbert J. Michel, PhD PART II Securities Regulation Reforms 61 Chapter 5 • Securities Disclosure Reform David R. Burton 83 Chapter 6 • The Case for Federal Pre-Emption of State Blue Sky Laws Rutheford B. Campbell Jr. 95 Chapter 7 • How to Reform Equity Market Structure: Eliminate “Reg NMS” and Build Venture Exchanges Daniel M. Gallagher 105 Chapter 8 • Reforming FINRA David R. Burton PART III Regulatory Agency Structure Reforms 129 Chapter 9 • Reforming the Financial Regulators Mark A. Calabria, PhD, Norbert J. Michel, PhD, and Hester Peirce 155 Chapter 10 • The World After Chevron Paul J. Larkin, Jr. 167 Chapter 11 • Transparency and Accountability at the SEC and at FINRA Thaya Brook Knight PART IV Government-Preference Reforms 179 Chapter 12 • The Massive Federal Credit Racket Diane Katz 201 Chapter 13 • Reforming Last-Resort Lending: The Flexible Open- Market Alternative George Selgin, PhD 213 Chapter 14 • Simple, Sensible Reforms for Housing Finance Arnold Kling, PhD 219 Chapter 15 • A Pathway to Shutting Down the Federal Housing Finance Enterprises John L.
    [Show full text]
  • Recent Arguments Against the Gold Standard Lawrence H
    2012 Free Market Forum Recent Arguments Against the Gold Standard Lawrence H. White1 George Mason University The Republican presidential primary contests of 2011-2012 brought renewed attention to the idea of reinstituting a gold standard. At least four candidates spoke favorably about the gold standard. One suggested a “commission on gold to look at the whole concept of how do we get back to hard money.” The 2012 Republican Party Platform, adopted in Tampa, called for just such a commission, explicitly viewing it as a sequel to the U.S. Gold Commission of 1981: “Now, three decades later, … we propose a similar commission to investigate possible ways to set a fixed value for the dollar.”2 The favorable attention to the idea of reinstituting a gold standard has naturally attracted renewed criticism of the idea from a variety of sources. A writer for The Atlantic, Matthew O’Brien (2012), has expounded on “Why the Gold Standard Is the World's Worst Economic Idea.” Washington Post writer Ezra Klein (2012) has declared that “The problems with the gold standard are legion.” On the more scholarly side, Federal Reserve Chairman and former Princeton professor Ben Bernanke, guest-lecturing at George Washington University on the history of monetary policy in the United States, in the words of the New York Times’ account, “framed much of this history as a critique of the gold standard, which was dropped in the early 1930s in a decision that mainstream economists regard as obviously correct, hugely beneficial and essentially irreversible.” The well known UC-Berkeley economist Barry Eichengreen (2011) has offered “A Critique of Pure Gold.” In a “Briefing Paper” published by the Cato Institute (White 2008), I addressed a number of then-common theoretical and historical objections to a gold standard, sorting those that have some substance from those that merely betray a faulty grasp of the relevant theory or history.
    [Show full text]
  • New Private Monies a Bit-Part Player?
    New Private Monies A Bit-Part Player? New Private Monies A Bit-Part Player? KEVIN DOWD The Institute of Economic Affairs First published in Great Britain in 2014 by The Institute of Economic Affairs 2 Lord North Street Westminster London SW1P 3LB in association with the Cobden Centre www.cobdencentre.org and London Publishing Partnership Ltd www.londonpublishingpartnership.co.uk The mission of the Institute of Economic Affairs is to improve public under- standing of the fundamental institutions of a free society, with particular reference to the role of markets in solving economic and social problems. Copyright © The Institute of Economic Affairs 2014 The moral right of the author has been asserted. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (elec- tronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. A CIP catalogue record for this book is available from the British Library. ISBN 978-0-255-36694-6 Many IEA publications are translated into languages other than English or are reprinted. Permission to translate or to reprint should be sought from the Director General at the address above. Typeset in Kepler by T&T Productions Ltd www.tandtproductions.com Printed and bound in Great Britain by Page Bros CONTENTS The author vii Foreword viii Acknowledgements xii Summary
    [Show full text]
  • Free Banking: Theory, History, and a Laissez-Faire Model
    The Ludwig von Mises Institute Auburn, Alabama 2008 PREFACE TO NEW PRINTING After the first edition of this book appeared in 1993, I turned away from many of the banking issues explored herein. Anarchocapitalism, taxation, and public goods in maritime history occupied most of my professional attention, while at the same time there was an ongoing personal project, a 1300-page manuscript analyzing merchant sailing ship performances, on which I have been working for some 20 years. I continued to think and write about business cycles, but largely left free banking behind. This was because I thought that the case for fractional reserve free banking based on a commodity “outside” money had been persua- sively presented by myself and others such as Lawrence H. White, George Selgin, and Kevin Dowd. And I still do. However, one group of economists has continued to reject and attack laissez- faire banking, at least so long as such banks are based on the holding of less than 100 percent (primary) reserves. This group is principally composed of certain Rothbardians associated with the Ludwig von Mises Institute, some of whom, by the way, I am pleased to think of as friends. It includes, among others, Walter Block, Jörg Guido Hülsmann, Hans-Hermann Hoppe, William Barnett II, and especially Jesús Huerta de Soto. In what follows I will explain why I think their various condemnations of fractional reserve free banking (FRFB), despite their energetic efforts, remain unconvincing. Allow me to begin with the last, Huerta de Soto. His massive 876-page trea- tise, Money, Bank Credit, and Economic Cycles (2006), is intended to be the final and decisive proof that fractional reserves are incompatible with a) a proper defense of private property rights, b) morality, and c) a stable economy.
    [Show full text]
  • Bitcoin and the Rebirth of Free Banking Submission to Senate Inquiry on Digital Currency
    Bitcoin and the rebirth of free banking Submission to Senate inquiry on digital currency Dr Mikayla Novak Senior Research Fellow Institute of Public Aairs THE VOICE FOR FREEDOM November, 2014 ESTABLISHED− 1943 www.ipa.org.au About the IPA The Institute of Public Affairs is an independent, non-profit public policy think tank, dedicated to preserving and strengthening the foundations of economic and political freedom. Since 1943, the IPA has been at the forefront of the political and policy debate, defining the contemporary political landscape. The IPA is funded by individual memberships and subscriptions, as well as philanthropic and corporate donors. The IPA supports the free market of ideas, the free flow of capital, a limited and efficient government, evidence-based public policy, the rule of law, and representative democracy. Throughout human history, these ideas have proven themselves to be the most dynamic, liberating and exciting. Our researchers apply these ideas to the public policy questions which matter today. The IPA’s specific research areas include the environment, deregulation, workplace relations, energy, political governance, intellectual property, telecommunications, technology, housing, education, health and agriculture. The IPA publishes a wide variety of research papers and supporting opinion pieces, as well as host conferences and lectures across the country. The IPA also publishes the IPA Review, Australia’s longest running political magazine. In 2008, the IPA Review was awarded the Sir Antony Fisher Memorial Award for best magazine. About the author Mikayla Novak is a Senior Research Fellow with the Institute of Public Affairs. She has previously worked for Commonwealth and State public sector agencies, including the Commonwealth Treasury and Productivity Commission.
    [Show full text]
  • FINANCIAL STABILITY Without CENTRAL BANKS Financial Stability Without Central Banks This Publication Is Based on Research That Forms Part of the Paragon Initiative
    GEORGE SELGIN FINANCIAL STABILITY without CENTRAL BANKS Financial Stability without Central Banks This publication is based on research that forms part of the Paragon Initiative. This five-year project will provide a fundamental reassessment of what government should – and should not – do. It will put every area of government activity under the microscope and analyse the failure of current policies. The project will put forward clear and considered solutions to the UK’s problems. It will also identify the areas of government activity that can be put back into the hands of individuals, families, civil society, local government, charities and markets. The Paragon Initiative will create a blueprint for a better, freer Britain – and provide a clear vision of a new relationship between the state and society. FINANCIAL STABILITY WITHOUT CENTRAL BANKS GEORGE SELGIN with commentaries by MATHIEU BÉDARD KEVIN DOWD First published in Great Britain in 2017 by The Institute of Economic Affairs 2 Lord North Street Westminster London SW1P 3LB in association with London Publishing Partnership Ltd www.londonpublishingpartnership.co.uk The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. Copyright © The Institute of Economic Affairs 2017 The moral rights of the authors have been asserted. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (elec- tronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book.
    [Show full text]
  • Hilferding's Finance Capital and Free-Banking Theory Steven Horwitz
    Complementary Non-Quantity Theory Approaches to Money: Hilferding's Finance Capital and Free-Banking Theory Steven Horwitz It is not that unusual in the history of economic thought to find a the- orist whose work parallels the analysis of modern authors. However, it is somewhat noteworthy to find such a similarity between theorists from significantly different ideological perspectives. One example of this type of anticipation can be found in the work of the Austro-Marxist Rudolf Hilferding. Hilferding's Finance Capital ([I 9101 198 1) is one of the premiere works in Marxian literature. His analysis of money and the fi- nancial sector, and their relationship both to the increasing concentration of industry and to imperialism are considered to be landmark extensions of Marx's own thought. At the same time, however, his analyses of the emergence of money, competing currencies, and the American financial panic of 1907 are all strikingly similar to modern work within the broad approach known as free banking, which is normally associated with a political position diametrically opposed to Marxism. Recent work on the theory of free banking is frequently acknowledged as beginning with Hayek's The Denationalisation of Money (1978), though an earlier paper by Klein (1974) should be noted as well.' Re- Correspondence may be addressed to Professor Steven Horwitz, Department of Economics, St. Lawrence University, Canton NY 13617. The author would like to thank Peter Boettke, David Prychitko, and Jeff Young for their comments, and two helpful anonymous referees, including one extremely patient one, for their suggestions. The Institute for Humane Studies at George Mason University provided financial support for this project.
    [Show full text]