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Source link: http://archive.mises.org/9876/posner-says-that-the-fed-is-part-of-the-capitalist-system/

Posner says that the Fed is part of the capitalist system

April 30, 2009 by

The ever-fashionable and reliably unprincipled Richard Posner seizes the moment to write and sell a new book, a work which Caronline Baum enjoys crushing.

{ 12 comments }

Inquisitor April 30, 2009 at 9:26 am

I say Posner is part of the statist leeches.

Matt April 30, 2009 at 9:39 am

that’s great. essentially an “off blance sheet” arm of the federal government, the FED, is a central planning price fixer and Posner considers it a failure of capitalism. the madness continues.

AC April 30, 2009 at 10:19 am

Mr. Posner doesn’t seem to understand that the failure of the FED, a gov’t created and imposed monopoly institution, doesn’t qualify as a failure of free market capitalism. You could say, however, it is a failure of fascism (gov’t “partnership” with “private” institutions).

Greg Ransom April 30, 2009 at 10:54 am

Once again, Richard Posner talks to some friends and writes a book with the help of his staff reporting on what he’s heard his friends say.

Did I get the story just about right?

William Rader April 30, 2009 at 11:06 am

I still can’t understand how people with no knowlege of US economic history consider themselves worthy of making pronouncements in areas in which they have no qualifications to do so. I have to agree with Matt, above, that this is just more of the same insanity we seem to be hit with on a daily basis. Yesterday Hartmann, today Posner, who will it be tomorrow?

sean April 30, 2009 at 11:54 am

“To the extent that the Fed mismanaged the money supply (or interest rates) and failed to assure “a reasonable degree of economic stability,” it has to be regarded as a failure of capitalism.”

I’m not sure i understand. Posner’s blaming the mismanagement of a centrall planning agency as a failure in capitalism. What about a centrally controlled money supply and interest rates is free-market? What’s sad is this guy is a professor, preaching the same garbage to students. I am reminded of having to endure a Macro class centered around the Keynesian multiplier, with an additional book written by the teacher about why deficits are a good thing. Education means little if you are being educated in ignorance.

ChanceH April 30, 2009 at 12:55 pm

At what point do we engage in a semantic retreat, and just say “yep, that one part of capitalism sure messed up. Lets regulate the crap out of the Federal Reserve”. Then proceed to regulate it to the point where we have effectively abolished it.

Vince April 30, 2009 at 12:57 pm

Without Posner you wouldn’t have deregulation in the first place, from the Bench. It seems his pique isn’t so much the market, but the Federal Reserve. Additionally, he didn’t say property rights or the judicial system was a failure of capitalism, or even capitalism failed OUTRIGHT. He makes the concession the Federal Reserve is part of our contemporary system. And I can’t say anymore without reading his book.

And how are you going to base “crushing” him even when you didn’t even read the book? Posner, like Holmes, always believe in a free market exchange of ideas. Law schools offer law and economics classes, like GMU, based on the reasoning and influence of people like Posner and Holmes. Additionally, in those classes, they contain tinges of Austrian theory in addition to standard transaction cost analysis.

Posner is unprincipled because of this? I guess it’s guilt by association.

J.R. April 30, 2009 at 2:42 pm

Vince

“And how are you going to base “crushing” him even when you didn’t even read the book? ”

Posner thinks “capitalism” = the FED controlling the money supply. He thinks our current system = capitalism.

===========

From the article:

I asked Posner why the Fed’s errors constitute a failure of capitalism. He said the central bank was part of the “capitalist structure,” along with property rights and a judicial system to enforce them. To the extent that the Fed mismanaged the money supply (or interest rates) and failed to assure “a reasonable degree of economic stability,” it has to be regarded as a failure of capitalism.

“I make clear in my book that I am not advocating the replacement of capitalism by any other economic system!” Posner wrote in an e-mail exchange.

=====

How can we replace what we don’t have?

Posner *claims* to be for deregulation, but is obviously not. Hence he is unprincipled.

Alex May 1, 2009 at 12:33 am

Hard money standard/free banking = free market.

Fiat money/Federal Reserve cartel = state capitalism.

Gilligan May 2, 2009 at 6:01 am

A free market and a central bank are opposite ideas. If you have one, the other doesn’t exist.

2nd Amendment May 3, 2009 at 3:09 pm

If the fed is part of the capitalist system, then leeches are part of the blood system, LOL !

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