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French miscellany

Recently I talked to the French economist Philippe Nataf, who has written about France’s era of partly free banking in the early 19th century (in The Experience of Free Banking, edited by Kevin Dowd and published in 1992).  He mentioned to me that Friedrich Hayek once told him that the work of the 19th-century French economist Charles Coquelin had been an important influence on Hayek’s business cycle theory. Hayek in fact said that he had kept Coquelin’s book at his desk during the period he was writing his business cycle work. Coquelin is almost unknown outside of France, but besides his work on business cycles, he was also the editor of a standard reference work of the period, the Dictionnaire de l'économie politique (at least partly translated into English) and an advocate of free banking. Nataf himself was so impressed with Coquelin that he called the small publishing firm he started Editions Charles Coquelin. Among its forthcoming publications is a French translation of Ludwig von Mises’s Theory of Money and Credit, commemorating the centenary this year of the original German-language edition.

For any readers who know French and are interested in the future as well as the past, I will take the opportunity here to mention Marcel Aucoin’s 1996 book Vers l'argent électronique: banques d'hier, d'aujourd'hui et de demain (Towards Electronic Money: Banks of Yesterday, Today, and Tomorrow) published by the Société Educative Financière Internationale in Canada. The book was by far the best thing on the subject when it appeared. I have not seen any more recent books on electronic money that I thought were appreciably better, though there are some that are more up to date in their discussion of technological developments.

One comment

  1. Yes the big names of the Austrian School (not just Hayek but Mises and Rothbard also) were very interested in French writers on money and banking – both the good things they said and the bad (for example the failure of free banking in Chile [i.e. the inflation and concentration of wealth which discredited the old Classical Liberal Chile and led to the coup of 1924 – the military coup the left like, as opposed to the military coup of 1973 which the left do not like] was not due to something being wrong with the basic idea of the state not being involved in banking, it was due to a particular interpretation of money and banking, given by a specific French thinker on these matters).

    As for new technology and so on – it may be very important in various ways, but as regarding the basic issue it has no importance at all.

    The basic issue being, whether money lenders (including banks) are lending out REAL SAVINGS (with people deciding to save, not consume, some of their income – and to give it up for lending, i.e. to NOT HAVE THE MONEY till when and IF it is paid back) or are engaged in credit-money expansion.

    That has been the issue ever since the time of Richard Cantillion and John Law.

    If banks and other money lenders are doing the former (lending out real savings) then free banking can work, if they are doing the later (engaging in credit money expansion) – then the demands for state support will get louder and louder over time.

    Of course this involves other matters – such as the legal definition of what the word "deposit" means (and so on).

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