Key Monetary Writings

Currency Board

Central banks issue currency and exercise wide discretion over the conduct of monetary policy. Although widespread today, central banks are relatively new institutional arrangements. In 1900, there were only 18 central banks in the world. By 1940, 40 countries had them, and today there are 174. Of those, 6 are bound by currency board rules that do not permit discretionary monetary policies. In addition, there are seven monetary authorities that operate as stand-alone currency boards. … Read more

Why Private Banks and Not Central Banks Should Issue Currency, Especially in Less Developed Countries

In all but a few areas of the world today (Northern Ireland, Scotland, and for the time being Hong Kong), currency is a nationalized industry. Treasury departments issue coins; the state-owned enterprises known as central banks issue paper notes. It was not always so. Private banks were the main issuers of paper currency in the United States and Canada a century ago, and were the sole issuers in virtually every country two centuries ago. Nationalization of currency is largely taken for granted today, but it shouldn't be. Adam Smith praised private currency for the benefits it had brought to …Read more

Greenspan: Still Going for the Gold

If patience is a virtue, Alan Greenspan is a saint. For more than three decades he has endeavored to guide the nation toward sound money -- first as a radical intellectual, then as an business economist and presidential adviser, and currently as chairman of Board of Governors of the Federal Reserve System. His critics on the left seem unable to comprehend the destructive consequences of irresponsible fiscal policy and accommodative monetary policy. His critics on the right simply cannot appreciate the long-term perspective of Greenspan, a man who argued powerfully in the 1960s that "gold and …Read more

In Defense of Fiduciary Media - or, We are Not Devo(lutionists), We are Misesians!

The Murray Rothbard both of us knew was committed to a frank and vigorous contest of ideas. He understood that an expression of disagreement was not an expression of disrespect—quite the contrary. … Read more

Monetary Nationalism Reconsidered

The rational choice would seem to lie between either a system of “free banking,” which not only gives all banks the right of note issue and at the same time makes it necessary for them to rely on their own reserves, but also leaves them free to choose their field of operation and their correspondents without regard to national boundaries, and on the other hand, an international central bank.
—F. A. Hayek (1937, 77) Two basic types of international monetary regimes are possible: those based on various independent national base moneys, and those based on a unified international base money. …Read more

The Rueffian Synthesis

The Rueffian SynthesisIn which LBMC’s approach receives a name, Wanniski is refuted, and the setbacks of the supply-side movement are explained. In his Life of D. Johnson, James Boswell describes Samuel Johnson’s reaction to the theory of George Berkeley, Bishop of Coyne. Berkeley’s theory claimed to disprove the existence of the physical universe, on the grounds that it exists only as an idea in the mind. “I observed,” Boswell recalls telling Johnson, “that though we are satisfied his doctrine is not true, it is impossible to refute it. I never shall forget the alacrity with which John answered, striking his foot …Read more

Statement by Alan Greenspan Before the Federal Gold Commission

Thirty years ago, our Editor, Ralph Benko, was one of only 23 who testified before the U.S. Gold Commission at its invitation. While recently in his archives we came across the never before published testimony of Alan Greenspan, then president of Townsend-Greenspan, before the United States Gold Commission. With the permission of Greenspan Associates publishes Dr. Greenspan's Statement for the first time. This piece represents an extraordinary additional meditation on the gold standard by a man who would go on to become long-serving chairman of the Federal Reserve Board. …Read more

The Lessons of Bretton Woods

One of my neighbors in the country, an old peasant, recently explained that he had found a very good horse – there are still a few horses in Normandy – that worked extremely well. There was only one trouble with it: it had died. That is exactly what happened to the Bretton Woods regime. It provided the world with the benefit of stable parities and a very decent rate of growth – about 3.7 per cent per year in constant dollars in the U.S. But after 27 years of good service, it collapsed: de facto, on August 15, 1971; de jure, on December 18, 1971. The essence of the Bretton Woods system is …Read more

The Fallacies of Lord Keynes' General Theory

... "[I]f the spectre of "under-employment" appears again in the world tomorrow, as is probable, (the Keynesian philosophy) will be the universal recourse of peoples and governments.  If it is true, it will be the salvation of the world; if it is false, it may lead to catastrophe by turning the world to ineffective remedies which may make the evil much worse.  ... Whom Jupiter wishes to destroy, he first makes mad." … Read more

Kathleen M. Packard, Publisher
Ralph J. Benko, Editor

In Memoriam
Professor Jacques Rueff

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