sc94597 said:
How is it any different from the spontaneous order found in other "free-markets" upon which "economic laws" are based on? Here's an interesting article on the topic. http://www.forbes.com/sites/peterferrara/2013/03/01/rethinking-money-the-rise-of-hayeks-private-competing-currencies/ Yes, a Federal Reserve system acts as a barrier that isn't found with a national bank, but it still nevertheless enables the government to grow with very few limitations (you said it yourself in the bolded), putting the burden on the constituent individuals which fall under such an authority/government and leading to more drastic bursts. One can argue that it can be tamed or controlled, but the issue is that it isn't being tamed and controlled, and that is because that same "populous" group is enabling it as the hypermajority that they are in the U.S government. This includes the moderate Republicans/Democrats and the far left. The manipulation of the economy to supporting a welfare-warfare state substantiates this. I would also like to re-emphasize that the limitations on the exchange of information between banks was again per (state) government regulation, and not inherent in their nature (should be even less so with futher advancements made in technology.) The only argument for a national central banking system is the greater elasticity, but the decentralized systems had greater inelasticity due to restrictions placed on their expansion and structure, anyway. If a central banking system is the most efficient, then economics tell us that in a free-market, that will be the end-results, as it's the most efficient. There is no need for government to come in and centralize the system, that is, if it is indeed the most efficient way to go about things. If we are to refute classical/neo-classical economics and go with the marxist or keynesian vew that government has legitimate efficient functions in the economy other than reducing cartels through ant-trust legislation (which in itself is an argument in liberal economics), then that is a whole different matter. |
You seem to have misread "Makes lots of money."
They make lots of money off the interset of the loans.
"The experience of the last fifty years has taught most people the importance of a stable monetary system. Compared with the preceding century, this period has been one of great monetary disturbances. Governments have assumed a much more active part in controlling money, and this has been as much a cause as a consequence of instability. It is only natural, therefore, that some people should feel it would be better if governments were deprived of their control over monetary policy. Why, it is sometimes asked, should we not rely on the spontaneous forces of the market to supply whatever is needed for a satisfactory medium of exchange as we do in most other respects?
Additionally.... no. Neo-classical economics supports a central bank.
So did Hayek.
"
The experience of the last fifty years has taught most people the importance of a stable monetary system. Compared with the preceding century, this period has been one of great monetary disturbances. Governments have assumed a much more active part in controlling money, and this has been as much a cause as a consequence of instability. It is only natural, therefore, that some people should feel it would be better if governments were deprived of their control over monetary policy. Why, it is sometimes asked, should we not rely on the spontaneous forces of the market to supply whatever is needed for a satisfactory medium of exchange as we do in most other respects?
It is important to be clear at the outset that this is not only politically impracticable today but would probably be undesirable if it were possible. Perhaps, if governments had never interfered, a kind of monetary arrangement might have evolved which would not have required deliberate control; in particular, if men had not come extensively to use credit instruments as money or close substitutes for money, we might have been able to rely on a self-regulating mechanism. This choice, however, is now closed to us. We know of no substantially different alternatives to the credit institutions on which the organization of modern business has come largely to rely; and historical developments have created conditions in which the existence of these institut9ions makes necessary some degree of deliberate control of the interacting money and credit systems (my emphasis). Moreover, other circumstances which we certainly could not hope to change by merely altering our monetary arrangements make it, for the time being, inevitable that this control should be largely exercised by governments. "
