Conventional money-and-banking textbooks confront the hapless reader with a jumble of dumbed-down mainstream theories and models. Rothbard will have none of this shabby and disrespectful treatment of his reader and of his science. The time is finally ripe to publish this new edition of the book that asked the forbidden question about the Fed. FULL ARTICLE
Source link: http://archive.mises.org/8616/the-mystery-of-banking/
The Mystery of Banking
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How come fractional reserve banking, central banking is not up on the carpet considering what is going on?
How come no one is asking if there is something fundamentally wrong with the financial system – or at least someone who gets wide media play?
First of all, this is a great article. I’m reading that book.
“How come fractional reserve banking, central banking is not up on the carpet considering what is going on?”
A: That should be THE question for everyone ask, ponder, and debate. The intellectually honest approach would be to argue against the very existence of the Fed. Sadly, we may hear or read the tired old arguments in favor of it.
“How come no one is asking if there is something fundamentally wrong with the financial system – or at least someone who gets wide media play?”
A: As Rothbard would have it, naming names is one way to get the word out. The usual suspects will surface to defend the Fed: those who seek to prolong and expand its powers and have a vested interest. This article and other thinkers will get the word out while the topic is hot. I think we may see a movement to send that bright light on the role of the Fed.
As someone who owns a copy of 3 banking books by Rothbard (What has government done to our money, The case against the Fed, and Mystery of Banking), this one is the most comprehensive, although a bit more technical in it’s examples which include more charts and tables.
Of the 3, I still prefer The Case against the Fed. It’s a shorter version of the Mystery book and skips many of the charts which I don’t believe are really needed to demonstrate how fractional reserve banking simply doesn’t have in its vaults what it claims to have.
Much of what is found in each of these 3 books is actually the same writing. If you did like the shorter 2 books, and want somewhat more details, then this is the book for you.
Many on this site promote the idea of “sound money”
(frequently meaning a return to the Gold Standard), ususally coupled with abolition of the Federal Reserve.
Either or both of these might prove good moves but neither is a “magic bullet” that will drive a stake through the heart of the monster.
Would you like absolute, rock-solid, proof that what I say is true? OK..easy as falling off a log.
Look where we are now. We’ve had a Gold Standard.
We’ ve had a history without a Federal Reserve. Both of those—the Gold Standard and no Federal Reserve–
-are part of real history through which we have progressed to the present situation. If either or both of those situations were actually what’s needed now, then how to explain how we got here in the first place? The plain fact is that none, absolutely none–capitalize that–ABSOLUTELY NONE of the current proposals, including any on this or any other economic site has any chance of fixing the fundamental monetary problems on any but a temporary basis. The very best is that a longer interim period without crises might be achieved–maybe even a century or more before reinstitution of something like the Fed or the suspension of the Gold Standard. But the longer the interim period between crises, the larger shall be the next.
Fundamentals need critical examination. And, if you’d like a hint, try asking yourself by what necessity of (free) people the government has anything to do with what shall be money, what it shall look like or weigh, of what it shall be composed, and what value we must attach to it or offer of our own stuff for it in exchange.
Those are the lines along which thinking might be productive; thinking along any other is virtually a form of government mind-control. They didn’t plan it that way but it serves that very purpose. You’re not really very free if your very own mind can’t even imagine money apart from government and regulation.
When I was a graduate student studying at Auburn in 1985 I ran across ‘The Mystery of Banking’ and read it along with many other of the works of Mises and Rothbard. I had just begun my personal Austrian economics library so even though I loved the book, when I left Auburn it was not one of the books in my library.
Later when I couldn’t help but remember how incredible ‘The Mystery of Banking’ was I tried to find a copy for my library and to my chagrin it was out of print. At one point I did an interlibrary loan just so I could see it again and soak in its concepts and vision.
Can there be any doubt about the significance of the Mises Institute? We all owe a great debt to the Mises Institute for continually bringing to us economic and philosophic works that thrill the mind and build the basis of a classical liberalism civilization.
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