We've got exciting news for the blog!

For several years before the start of, I had been frustrated by how difficult it was for people seriously interested in monetary policy and the Federal Reserve to find good information and debate. Part of the problem was that great scholars like George Selgin, Larry White and Kevin Dowd didn't have non-academic institutional backing to promote their work. Seeing the need for a clearinghouse for, well, "homeless" scholars, I created this blog and have been really happy with its success.

Prof. Selgin has since found a home at the Cato Institute as the director of their new Center for Monetary and Financial Alternatives. Rather than spending his time grading students' papers, he is spending more time writing his own and further promoting the ideas long discussed in this forum!

As a result, we are pleased to announce that the Center for Financial Privacy and Human Rights of the Liberty and Privacy Network will be teaming up with Cato’s Center to cosponsor a rebranded monetary alternatives blog Alt-M.

At, we plan to have the best of both worlds–the energy and talent from a diverse group of experts coupled with all of the institutional advantages Cato has to help us broaden our reach to get the word out. In the freshly redesigned, navigation-friendly layout with easy social media sharing options, all of the blog posts by the team will be archived over on our new site, don’t worry. We see this as a win-win for everyone.

I don't think there has been a time since the stagflation era that we've seen so much dissatisfaction with the Fed. Bernanke and Yellen don't have the same stature Volcker and (early) Greenspan did. Not only is the audit the Fed proposal gaining steam, but now fundamental Federal Reserve System restructuring is on the table. And I think few people look to the Euro now as they used to as a model. The time to bolster our efforts to promote alternatives to failed monetary regimes is now.

Thank you for all your support of over the years. We look forward to continuing to provide the unique content you’ve come to expect here over at So don’t forget to sign up for all the feeds there to get future updates. Shortly, this URL will automatically redirect to the new and improved blog, but keep bookmarked: we plan on resurrecting this site for another project in the works. Stay tuned!

  • Ray Lopez

    This site is incredible. I just finished reading a book edited by Kevin Dowd, and articles by George Selgin on free banking, and interesting papers by Tyler Cowen (1989) and Charles Calomiris (2014, a passage on Canadian free banks in his book Fragile by Nature) on what is free banking (BTW, an interesting philosophical discussion, as the definition depends on how closely the bank is allied to the state it seems), so this blog is welcome and will be bookmarked! If Sumner can promote NGDP targeting, if Selgin has Productivity Norm targeting, if Bitcoin and other cryptocurrencies are gaining traction, and if Iceland is contemplating 100% reserve ratios (in the news), then indeed an alt-money blog is overdue. Better late than never!

  • 789

    The Journal of Banking
    by William M. Gouge,
    Vol. I., No. 25,
    Philadelphia, Wednesday, June 8, 1842.

    "Free Banking."

    We are friendly to "free banking;" –that is to say, we are friendly to a system in which every man should be at liberty to receive money on deposit, discount notes, and deal in exchanges, subject to the same responsibilities, and enjoying the same rights as persons engaged in other branches of business.

    But we are not friendly to a system in which every man should be at liberty to issue notes to pass as money. Between lending money and making money — between free banking and free coining, there is no necessary connection. The private bankers of London, Liverpool, and Manchester, who do a business far exceeding in amount that done by the incorporated banks of New-York, Philadelphia, and Baltimore, issue no notes of their own as a circulating medium.

    There are, however, gentlemen who think that all the evils the paper money system produces, are owing to the restrictions imposed upon it, or to its being carried on by corporations instead of individuals; and that if every body were at liberty to manufacture money out of rags, free competition among the rag money manufacturers would produce the same beneficial effects as free competition in the making of cloth or the raising of corn.

    They forget that free competition in agriculture, the mechanic arts, and the legitimate branches of commerce, is a competition of labor and capital, while free competition in paper money banking would be little more than a competition of cunning.

    They forget, moreover, that free competition in most pursuits is advantageous, because it cheapens commodities; but that free competition in making money, can cheapen money in no other way than by deteriorating its quality.

    • George Selgin

      I am quite familiar with Mr. Gouge's arguments, a notorious hard-money critic of banks and of bank issued currency, and I find those arguments quite unimpressive. They reveal him to be unfamiliar with the many examples of banking systems in which open competition in note issuance led, not to the issuance of "rags" or to other forms of swindling, but the the provision of better currency than in most other arrangements. In referring to the cases of England and the antebellum U.S., he betrays an unfortunately quite common lack of understanding of the damage done to those banking arrangements by the six-partner rule in the one case and prohibition of branch banking in the other.

      As you are evidently keen on reading old literature on the topic, I encourage you to explore the far better informed works of Richard Hildreth and William Leggett (for the U.S.) and of the members of the British Free Banking School for England.

      • 789

        Nicholas Biddle to J.S. Barbour (Rep., Virginia),
        Philadelphia, July 11th 1833.

        "Mr. Gouge was an assistant Editor of a party newspaper devoted to the cause of Mr. Jackson & opposed to the Bank. He has retired from the paper and this book is among the fruits of his leisure. The work has attracted so little notice that I had never seen it, tho' I had observed the advertisement of it; nor have I ever heard it mentioned. In consequence of your letter, I have sent for a copy of it, and have run my eyes over it. Mr. Gouge has no knowledge or experience of his own on the subject of which he treats, nor do I observe any thing either strong or original in the book, which consists of an accumulation of common place extracts such as any body could get together who wished to support a system of any sort. I ought not to speak so disparagingly, since I observe that he is very civil and complimentary to me personally, but really there does not appear to be much merit of his compilation. It is a book made with the scissors, & what is worse, a dull pair."

        How not surprising that you share the opinion of Nicholas Biddle…..

        Your reply confirms that what ye promote is free printing-press money. You may not know this, but there is nothing new that can be invented about banking and money, (ante-bellum or post-bellum) the rule is the same ever since Adam and Eve first traded with the natives. Bad paper note always drives out a somewhat better paper note; experience have shown in practice that competition in currency-issuing is a competition for the most worthless note.
        How it was when paper notes of free banks competed:–

        • George Selgin

          Actually, I find "Mr. Biddle's" assessment of Gouge quite accurate, and appreciate your drawing attention to it. I do not know what you know about Biddle, but he was a very intelligent and astute man, whose misfortune it was to find himself responsible for managing a privileged bank of issue. I disapprove of the latter, but not of Biddle himself, who was a far better man than some of his opponents within Jackson's administration. Biddle managed his bank very well, by the way, until the Jacksonians went after him, when he proceeded to take some desperate and foolish steps. He knew enough about banking, but nothing of politics.

          As for what you say about the results of free currency competition, it is betrayed by the well-known cases of the Scottish and Canadian systems, among others. Your claim serves only to reveal that you aren't aware of these.