A Return to Gold?

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. . . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society. . . .The process engages all the hidden forces of economic law on the [...]

The New Fed

“Things are seldom what they seem.” —W. S. Gilbert, “H.M.S. Pinafore” Nowhere is this more true than in government, which means we have to watch it closely. Unfortunately preconceived notions can make us impervious to events right in front of us and lead us to colossal misperceptions. Take the Federal Reserve System. (All together now: [...]

Central Banking Beats Free Banking?

In “More Bits on Whether We Need a Fed,” a November 21 Marginal Revolution blog post, George Mason University economics professor Tyler Cowen questions “why free banking would offer an advantage over post-WWII central banking (combined with FDIC and paper money).” He adds, “That’s long been the weak spot of the anti-Fed case.” Free banking [...]

To the Opponents of Fractional Reserve Banking

There’s nothing wrong with fractional reserve banking that getting rid of central banking and its various interventions can’t cure.

The Great Chinese Inflation

Inflations have undermined the cultural and economic fabric of society, bringing social chaos and revolution. One example is the Great Chinese Inflation of the 1930s and 1940s. Indeed, the destruction of the Chinese monetary system during this period helped Mao Zedong’s communist movement triumph on the Chinese mainland in 1949. In the nineteenth and early [...]

Legends of the Fall: The Real and Imagined Sources of Our Bubble Economy

Preface The Foundation for Economic Education is pleased to announce that Richard W. Fulmer of Humble, Texas, is the winner of the second annual Eugene S. Thorpe writing competition. Mr. Fulmer holds a bachelor’s degree in mechanical engineering from New Mexico State University and for over 20 years has worked as a systems analyst in [...]

Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775–1821

Most people suppose, without having thought much about it, that money must be provided by government. That belief comes in for a sound thrashing in University of Georgia professor George Selgin’s book Good Money, which tells the story of Britain’s experience with private coinage during the Industrial Revolution. Selgin’s research shows that the government had [...]

A Crisis of Political Economy

The current state and the current banking sector require each other. They are so reciprocally intertwined that each is an extension of the other.

Remember this the next time somebody tells you, as New York Times columnist Bob Herbert did, that “free market madmen” caused the current financial crisis that is threatening to undermine the global economy. There is no free market. There is no “laissez-faire capitalism.” The government has been deeply involved in setting the parameters for market relations for eons; in fact, genuine “laissez-faire capitalism” has never existed. Yes, trade may have been less regulated in the nineteenth century, but not even the so-called Gilded Age featured “unfettered” markets.

Greenspan Should Be Shocked by Risky Lending?

Toward the end of his tenure as Fed chairman in early 2006, Alan Greenspan was the object of praise edging at times into adulation. It came from some unlikely sources. Milton Friedman penned an encomium for Greenspan in the pages of the Wall Street Journal titled, “The Greenspan Story: He Has Set a Standard.” After [...]