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Free Banking, Recommended Reading

Other free banking blogs: results

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Here a list of other blogs that sometimes discuss free banking usefully, in my experience or in that of readers whose comments I requested in my previous post.

English

[email protected], http://www.cato.org/blog (Cato Institute, wide variety of topics, free banking pops up once in a while)

The Circle Bastiat, http://bastiat.mises.org (Mises Institute, multiple contributors)

Coordination Problem, http://www.coordinationproblem.org/ (multiple contributors of the Austrian School)

Free Market Money, http://www.monetary-freedom.net/blog (perhaps Thomas Greco, Jr.–no author seems to be explicitly listed)

The Market Monetarist, http://marketmonetarist.com/ (Lars Christensen)

Meng Hu’s Blog http://menghusblog.wordpress.com/tag/free-banking/

Moneyness, http://jpkoning.blogspot.com/ (John Paul Koning)

Monetary Freedom, http://monetaryfreedom-billwoolsey.blogspot.com/ (Bill Woolsey)

The Monetary Future, http://themonetaryfuture.blogspot.com/ (Jon Matonis)

Free Radical, http://realfreeradical.com/ (Mike Freimuth)

Uneasy Money, http://uneasymoney.com/ (David Glasner)

Gold and Silver and Money and Creidt, http://keithweiner.posterous.com/ (Keith Weiner, gold-focued)

Other languages: German

Remember that for the foreign-language blogs listed below, you can use Google Translate or similar services to get a rough idea of the contents.

These are the suggestions of a German commenter, which I have not examined in any depth:

Forum Ordnungspolitik, http://www.forum-ordnungspolitik.de

Ludwig von Mises Institute Deutschland, http://www.misesde.org

Friedrich August von Hayek Gesellschaft http://www.hayek.de/

Freiheitswerk, http://freiheitswerk.org/about/

Freitum http://www.freitum.de/,

Liberales Institut, http://www.libinst.ch/ (material in multiple languages, including English)

Spanish

Punto de Vista Económico, http://puntodevistaeconomico.wordpress.com/ (multiple contributors who are Argentine members of the Austrian School)

More

Some other pages you may find interesting:

Economics of Bitcoin blog, http://www.economicsofbitcoin.com/ (Peter Šurda and Iain Stewart)

Electronic money page by Roy Davies, http://projects.exeter.ac.uk/RDavies/arian/emoney.html)

Free Banking FAQ by Daniel Ust, http://mars.superlink.net/~neptune/BankFAQ.html

Free Banking Bibliography by John Zube, http://www.panarchy.org/zube/freebanking.index.html

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11 comments

  2. Great list. I think the address for Coordination Problem should be updated to "coordinationproblem.org" as it's shorter and easier to remember.

  3. I think Jon Catalan's "Economic Thought" blog also deserves to make the cut. He just wrote a long, thoughtful post on monetary disequilibrium theory (which included a link to "Theory of Free Banking"). He's also had several other posts which discuss free banking.

    http://www.economicthought.net/blog/

  4. Kurt, I have a Facebook group "Common Wealth Tax" that advocates a form of free banking, but only after depositors have made a formal legal demand for current U.S. coin-based or coin-only bank accounts, and for only for depositors that use the Federal Reserve exclusively in its capacity as Congress's fiscal agent: http://www.facebook.com/groups/CommonWealthTax/

    I base the depositor's right to demand current coin at any U.S.-incorporated bank on the 1819 McCulloch v. Maryland decision, which precludes privately owned banking corporations from obstructing Congress's exclusive right "to coin money" under Article 1, Section 8, Clause 5. I also suggest that getting away from precious metals coinage was a positive thing for the U.S. monetary system, even though most people regard it as "debased."

    However, the depositor also has a right to object to the use of Federal Reserve notes on the likelihood that the 1963 series Federal Reserve would be deemed unconstitutional if the Supreme Court ever accepted a case that required such a ruling.

    Congress and the Treasury Department did have a right to temporarily suspend convertibility of the Greenback during Civil War era under the Legal Tender Cases (1869-1884), but it does not follow from the Legal Tender Cases that Congress had the right to delegate power to issue a permanently inconvertible note to the Fed, nor is it likely that Congress had power to grant legal tender status to a permanently inconvertible note.

  8. I just looked up the Wiki definition of “free banking” and I’m baffled. Free banking advocates need make some alterations to the Wiki article, I think.

    Wiki says that under free banking “market forces control the supply of total quantity of banknotes and deposits that can be supported by any given stock of cash reserves..”. Well that’s already the case in several countries: those that impose no reserve requirements on banks. And even where reserve requirements ARE IMPOSED, it’s debatable as to whether that has any effect. That is, if banks feel like lending more money into existence, central banks are forced to produce extra reserves, else CBs lose control of interest rates. As Steve Keen put it, the private bank tail wags the central bank dog.

    As to the idea that under free banking, private banks would be able to issue their own notes, that is a very minor point beause a good 95% of money is in book –keeping form, not in the form of physical cash (notes or coin). Of course the “book-keeping” is done digitally nowadays (on computers) but the principles are the same.

    Wiki also claims that, “The free banking movement got its modern start in 1977 with The Denationalization of Money, by Friedrich Hayek, who advocated that national governments stop claiming a monopoly on the issuing of currency, and allow private issuers like banks to voluntarily compete to do so.” Whaaat? “National governments” don’t claim that monopoly: the VAST MAJORITY of money in circulation (that’s digital money) originates or was created by private banks, not central banks or govenments.

    And finally, the whole free banking idea strikes me as politically naïve. The political reality is that the population is just not going to stand for ordinary people losing their money when a bank goes bust. FDIC insurance and other forms of bank regulation are here to stay, like it or not.

    What the population probably would stand for, with a bit of persuasion, is full reserve banking: that’s a system under which it is made abundantly clear to depositors that if they want their bank to lend on or invest their money, the depositor takes a hit if the loans / investments go wrong. Alternatively, if depositors want 100% safety, they can have it, but their money is not loaned on or invested in any way. As Mervy King put it, “If there is a need for genuinely safe deposits the only way they can be provided, while ensuring costs and benefits are fully aligned, is to insist such deposits do not coexist with risky assets.”

    I.e. full reserve banking sort of incorporates one characteristic of free banking.

  9. Briefly, (1) on many topics Wikipedia is not a good source of information; it's at best a rough cut. For example, Hayek's Denationalisation of Money was first published under the title Choice in Currency in 1976, not 1977. (2) What you call bank "money" is in fact bank credit; it is not money in the strictest sense, meaning the monetary base. Notes are a considerable share of the monetary base. (3) To say that free banking is politically naïve implies you think that people in the 60+ countries where free banking once existed were suckers. Not likely, given that the monetary performance of free banking system was in many respects superior to that of the central banking systems that replaced them. (4) Finally, a free banking system can in principle have government-provided deposit insurance. The cost to taxpayers would be explicit rather than hidden.

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