The Gold-Plated Sting
WHAT IS THE SOLUTION?
In theory, there are two possible solutions, neither of which has any possibility of being implemented in my lifetime or yours.
One solution is free banking. This was Ludwig von Mises' suggestion. There would be no bank regulation, no central bank monopolies, no bank licensing, and no legal barriers to entry. Let the most efficient banks win! In other words, the solution is a free market in money.
Another solution is 100% reserve banking. Banks would not be allowed to issue more receipts for gold or silver than they have on deposit. Anything else is fraud. There would be regulation and supervision to make sure deposits matched loans. This was Murray Rothbard's solution. The question is: Regulation by whom? With what authority?
There would be no government-issued money. There would be no government mint. There would be no legal tender laws. There would be no barriers to entry into coin production.
There would also be no free services. There is no such thing as a free lunch.
Anything other than free banking or 100% reserve banking is a pseudo-gold standard or silver standard. It is just one more invitation to confiscation.
Egalitarianism as a Revolt Against Nature and Other Essays
THE SPOONER–TUCKER DOCTRINE: AN ECONOMIST’S VIEW
Actually, in contrast to collectivist anarchists and to many other types of radicals, Spooner and Tucker tried to use economics rather than scorn it as excessively rational. Some of their fallacies (for example, the “law of cost,” the labor theory of value) were embedded in much of classical economics; and it was their adoption of the labor theory of value that convinced them that rent, interest, and profit were payments exploitatively extracted from the worker. In contrast to the Marxists, however, Spooner and Tucker, understanding many of the virtues of the free market, did not wish to abolish that noble institution; instead, they believed that full freedom would lead, by the workings of economic law, to the peaceful disappearance of these three categories of income. The mechanism for this peaceful abolition Spooner and Tucker found—and here they unfortunately ignored the teachings of classical economics and substituted instead their own fallacies—in the sphere of money.
The two basic interrelated fallacies of Spoonerite theory (and the theory of all schools of writers who have unkindly been labelled by economists as “money-cranks”) are a failure to understand the nature of money and the nature of interest.
Principles of Economy
CHAPTER II. ECONOMY AND ECONOMIC GOODS
Here human self-interest finds an incentive to make itself felt, and where the available quantity does not suffice for all, every individual will attempt to secure his own requirements as completely as possible to the exclusion of others.
We saw that economic goods are goods whose available quantities are smaller than the requirements for them. Wealth can therefore also be defined as the entire sum of goods at an economizing individual’s command, the quantities of which are smaller than the requirements for them. Hence, if there were a society where all goods were available in amounts exceeding the requirements for them, there would be no economic goods nor any “wealth.”
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