No writer on money and banking is more lucid, compelling, and truth telling than Murray Rothbard. And no reform would do more long-term good for the country and the world than free-market reform.
For a limited time, get three classic Rothbard books for one low price. Even if you already own them, this is a great chance to get a student or colleague interested in totally rethinking this subject. Stock up and prepare!
What Has Government Done to Our Money?: Rothbard’s most famous monetary essay has appeared in multiple editions and influenced two generations of economists, investors, and businessmen.
Case for the 100 Percent Gold Dollar: Rothbard not only argues for the gold standard; he shows how it can be restored in a practical, step-by-step plan.
Case Against the Fed: The most powerful case against the American central bank ever written. People who want to abolish the Fed aren’t nuts; it’s the people who legally counterfeit our savings away who we should worry about.
{ 18 comments }
Dang! I recently puchased both CATF and WHGDTOM? thru Amazon and paid about $17 for both. This deal would be $10 cheaper, and includes CFTHPD!
Slightly off-topic…but what are considered the best (least irrational or rhetorical) books that defend the economic status quo – the federal reserve, money not tied to gold (or anything), etc? These Rothbard books look interesting and a good deal; I’d like to pick them up, but I’d also like to get the other side – the only way to know you understand the issues is if you can take apart the other’s argument. Are there any worthwhile books or articles that take into account Rothbard’s views and attempt to counter their claims? In other words, perhaps, what does Paul Krugman read, besides himself?
Thanks for the heads-up, I just might grab those.
Chris
http://amateureconblog.blogspot.com/
A somewhat related question…
A colleague of mine and I have been discussing the merits and pitfalls of converting to a 100% gold dollar. He is opposed while I favore it. His argument is that since there is a fixed amount of gold in the world, and new wealth is constantly being created, prices must continue to fall as new products are introduced since there is a finite supply of money chasing a theoretically infinite supply of wealth. This would eventually lead to deflation and virtually worthless goods which producers would have no incentive to produce. Does his argument hold water? How can I answer this argument?
the three best books written on the FED — and how the FED inflates
America’s Great Depression is also a must read —
Rothbard is excellent
TCA:
Your friend is right, although for the time being there’s still plenty of gold to be dug.
However, I have another question: how is it possible to impose a 100% reserve gold standard without a government? If we abolish government, as Rothbard advocated, who will make sure that banks keep 100% reserves backed by gold?
TCA,
Briefly, as Rothbard, Mises, and certain other Austrian economists have pointed out, it is not the selling price of the good or service that is of real concern to the producer, but the spread between the selling price and the cost of the inputs. In the scenario that you have outlined, factor prices along with the prices of the final goods would be declining, so there is every reason to beieve that the profitability of production would not be impaired. A general decline in prices (deflation) that is the result of productivity increases or an increase in the supply of goods and services relative to the supply of money is not a negative for production and business activity.
I hope this brief explanation helps.
Dennis,
Thanks. That does help. I’m currently reading Man, Economy, and State for the very first time, and I’m hoping Rothbard addresses this in detail at some point in the book.
Bruno,
If one bank has a reputation for maintaining 100% reserves, and another has a reputation for maintaining 80% reserves, where will you bank?
Probably, the 100% reserve bank will charge a higher fee to bank there than the 80% reserve bank. It’s up to you to determine whether or not you want to pay that insurance fee.
Bruno,
Without a government a 100% gold standard would in my view be enforced in the following way. I think we first need to realize the two services provided by the bank, the first one being a money-warehouse, the second being a savings intermediary*. No interest is paid on deposits instead people pay a fee for the storage of there money, and they still have money substitutes(or outside money), of course fully backed by money proper.
Now that we established that. We have to realize that going over to fractional reserve banking would be considered fraudulent or embezzlement, because the bank breaks a contract with a depositor by lending out his gold**. So banks will be sued by there customers for not being on a 100% standard. How would depositors know if the bank was not 100% gold backed, I think the bank will be audited by an independent audit firm. The banks that are frequently being audited will have the best reputation and will attract most customers. So here as with other businesses in the free market, reputation will play a major role. There are points to raise against this but I think this gives a good idea of how it will be enforced. I hope someone here can point me to some literature on this subject, because I still want to learn more about it.
* Perfectly described in Mystery of Banking by Rothbard
** Hoppe’s: How is fiat money possible? He raises some interesting points in this article about the subject.
A few comments regarding the economics (as opposed to the ethical/legal issue of fraud) of fractional reserve banking. Fractional reserve banks, in contrast to 100% reserve banks, are inherently unstable since the time structure of their assets does not match the time structure of their liabilities. Absent government protection, including legal tender laws, fractional reserve banks would be subject to runs, possibly orchestrated by professionals, and it is possible that the notes and demand deposits issued by fractional reserve banks would not trade at face value.
Good answers. One other: Bank Runs. Also, with no government, it would then not be against the law to point out to the public that a particular bank is insolvent, as presently is today if i am not mistaken.
Does it not seem likely that the return of the gold standard will be brought about not by legislation and changes in banking regulations but by the market repudiating non-PM monies? If modern national central banks and their various non-PM currencies were able to come into existence because of the precedent of the early commercial fractional-reserve banks, which were themselves able to come into existence because of the precedent of the wide acceptance of deposit receipts from 100 percent reserve banks as money, and these earliest banks themselves came into existence because of the inconvenience of carrying and storing real money (gold), then the entire modern banking and currency systems are built upon the physical inconvenience of keeping and transferring gold. But with computerized banking and payment systems, whither the inconvenience of holding and transferring any currency? Might it not be the case that e-gold, goldmoney, et al might eventually dethrone the national currencies?
Hi J.S.:
There’s a thread or two where we debated this before. I wish i knew how to quickly go back to blog threads of old articles. Anyways, my argument against the possibility of dethroning the dollar via private commodity money was a re-hash of Rothbard’s, which is a restatement of the implications of Mises’s money regression. If you know how to get to the thread that discussed this article, you’ll find it pretty interesting:
“Hayek’s Plan for Private Money”, by Robert P. Murphy [Posted on Monday, July 18, 2005].
Also, “The Case for a Genuine Gold Dollar” at
http://mises.org/rothbard/genuine.pdf
presents Rothbard’s argument.
Actually, Rothbard did not argue that fractional reserve banking should be contained by the threat of bank runs , that was more Mises’ view. Rothbard argued that it should be outlawed (He makes that quite clear in “The case for a 100% gold dollar”). In the abscence of a state, that would presumably be enforced by private security agencies.
BTW, all three books are really great. I wont be buying them however because I already have a copy of each and because they’re available online free anyway.
Well, I knew that What Has Government Done to our Money? has been available online, but I was unware that the other two are as well.
I did take advantage of the “book for a penny” deal (that was for Making Economic Sense, I think)… though by the time I ordered, the price was up to ten cents per book… And also, there was the shipping cost. That’s what I wanted to ask about, regarding this current offer – if I purchase these three books for seven dollars, what would the shipping cost be?
Many buyers are under the impression that shipping is something somehow tacked on by the seller as a sneaky way to bury the price, but I can tell you that from Mises.org’s point of view, we would love to have zero transaction costs; the shipping price is calculated not by us but by the shipper and the handling cost of one buck is similarly charged by the warehouse. Also, it varies from case to case.
I realize Mises.org doesn’t set the S&H prices, but I was actually considering buying this three pack until I saw UPS’s S&H of $6.34. That seems a little pricey to me. Then there is the additional $1 wharehouse charge. Instead of paying $7 plus a small S&H fee, which I would think such slender volumes would warrant, the total ends up coming out to something like $14.34. Perhaps a cheaper delivery service could be found?
Comments on this entry are closed.