Folks might enjoy this wide ranging interview with Mark Skousen. Here Skousen shores up his Austrian geek bonafides:
My father, Leroy Skousen, was like his brother Cleon, involved in the conservative anti-communist movement in the 1950s and 1960s, and he had copies of books such as Human Action, by Ludwig von Mises on his shelf in our home in Portland, Oregon. I also read regularly National Review and The Freeman that referred to the writings of Austrian economists such as Mises and Friedrich Hayek. I read Milton Friedman’s Capitalism and Freedom, which whetted my appetite for more. But it wasn’t until I discovered the writings of Murray Rothbard that I became enamored with Austrian economics, especially his books America’s Great Depression and What Has the Government Done to Our Money? By the early 1970s, I was hooked, and even took Rothbard’s magnum opus, Man, Economy, and State on my honeymoon. Admittedly, I didn’t get much reading done.
Skousen also opens up on his brief tenure as head of FEE, among other matters.
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There there’s this:
Daily Bell: Should the Federal Reserve be abolished?
Mark Skousen: The Fed has done a lousy job of maintaining a stable monetary policy, either in terms of the natural rate of interest and the money supply. But it’s easier to be a critic than to be a creator of an alternative monetary system. I did my Ph.D. dissertation on the classical gold standard, under the influence of Murray Rothbard, and I think the price of gold should play a very strong role in Fed decision making. (The fact that it has doubled in price since Bernanke became Fed chairman is not a good sign.) I think it’s still possible to have a set of “rules, not authority” in central banking – a monetarist rule and allowing interest rates to rise and fall naturally in the market place rather than being manipulated by the Fed. But the key indicator of stability is the price of gold. A stable gold price means the Fed is doing the right thing, a sharply higher price suggests otherwise.
Daily Bell: Are you in favor of nationalizing banking as Ellen Brown is?
Mark Skousen: I certainly think we could learn a lot by examining the national banking policies in Canada, Australia, New Zealand, and other countries known for their sound systems. You know, the financial crisis was largely caused by the US, not by foreign banking systems.
Hemming and hawwing like this with a serious issue like whether or not there should be a violent monopoly on the issuance of money do not impress me. Neither does finding Franklin’s position that the state owns the money “interesting.”
Because of his reading of Rothbard, Skousen is much better than he would otherwise be.
Skousan’s love for himself blinds him to all else. The bright light in Murray’s work caused a glare in the mirror and so Skousan had to turn his back towards the light to make his image clean and crisp again. Ahhh, look at me! Look at me!!
new zealand, australia – sound banking systems??
yeah, right.
this is not the sort of analysis that’ll make money downunder. the private sector debt bubble has yet to burst here, and the real estate valuations are richer than in america prior to the bust. public sector debt is low in australia, but we all know what happens in social democracies when the public balance sheet is good and the private bad. switcheroo!
Skousen’s “Structure of Production” is fantastic. I highly recommend it. An important point he makes in it is how practical disciplines often employ Austrian methodology without knowing any Austrian economics. They just pick up the knowledge by honestly watching what markets do.
I was a little surprised that he didn’t see the crash coming from his knowledge of the ABCT. I think it is great for long run timing of markets.
It’s not ideologically pure, but I think Skousen is right that we could achieve 90% of what we want from the fed if it would simply target the price of gold as Greenspan did in his first term. It’s total speculation, but I don’t think free banking would produce better results, and free banking is such a remote possibility right now.
But managing the money supply for the good of the entire nation is not good for the political and bureaucratic class. That is why Greenspan’s policies were not continued. The existence of the Fed as a government monopoly guarantees that its owners and managers will ultimately use the monopoly for their own benefit and not for the benefit of others. Normal human behavior means that any opportunity to benefit oneself will be taken. A monopoly maintained at gunpoint presents the opportunity to make untold fortunes through theft. But when a human does not have the advantage of overwhelming force over others, they can only benefit themselves by serving others.
It is therefore impossible for non-free banking to benefit humanity. Free banking may still have its rogues and thieves, but the freedom to choose means that there is an automatic self-correcting mechanism built in. Banking monopolies on the other hand are designed for plunder.
Of course you’re right, Ohhh Henry. But we tried free banking and it didn’t last, either, for pretty much the same reasons. Freedom never lasts unless the majority of people value it. However, pragmatically it would be easier and more likely to get another fed chair who would target the price of gold than it would be to get free banking back. Lew’s article today is a good reason.
Last I checked someone ghost wrote the better part of Structure of Production.
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