Gold Standard, yea or nea?

[IdahoMauleMan]

@whorfin

To be clear–if you read my quote, I’m saying Rothbard is not generally accepted. Which is true. It’s not an ad hominem attack to note the fact that mainstream economists do not listen to Rothbard. One reason for this is his irrational attacks on fractional-reserve banking as fraudulent.

Perhaps it’s his argument that the solution to fractional-reserve banking is to go to “free banking,” where there are no regulations on what banks can do. Because no regulation at all will surely solve the problem of banks lending money, and only keeping a fraction of their deposits, rather than, say, regulating them so that they will keep 100% of their deposits.

Or, to use his own words, from the mystery of banking (as taken from his wiki page)

Can anyone see the inconsistency?

You’re the first one to mention Hayek. I make no attack on him. That being said, the austrian school is certainly not in the mainstream these days–although some, like hayek, are given more credence.

I agree with you that Rothbard’s ‘solution’ is a little unworkable. As I posted above, I am all for free banking, and even fractional reserve banking if those banks (and their customers) wish to give it a go.

Rothbard’s position is that the very nature of DDAs and fractional-reserve banking is illegal (because the government has ruled that it is illegal for other non-money commodities, like grain…an inconsistency he points out) and therefore should be outlawed.

My position is to let them go ahead, and if the bank fails, it and its depositors suffer the consequences.