I have really enjoyed the last couple of months as bionic
mosquito. I always enjoy my time on this
project, but during the last two months there has been much in the way of
wonderful comment and dialogue. I always
enjoy this aspect as it affords the opportunity for me both to learn and to
hone my arguments and views.
In this time, I have written about 35 posts. There have been well over 500 comments –
several of these were mine, of course, but still a sizeable number for this
blog in such a short period of time. The
topics most commented on (not in any particular order): libertarians and
culture, right-libertarians, left-libertarians, bankruptcy, abortion, free
banking / fractional reserve banking.
A very robust dialogue.
Thank you one and all.
There was a comment on my recent post regarding fractional
reserve banking; I was accused of being “dogmatic.”
I tell you, I sulked all day, working through
what was presumably intended to imply that I was closed minded.
I finally decided I liked the label; a nice
, something that helped me to clarify my own dogmatic thoughts.
I even have received 3 “likes” for the post!
I know at times my frustration on the topic of free banking
/ fractional reserve banking comes out in my comments (well, on other topics as
well). I would like to explain….
The story begins with my dogmatism, I guess. I listed several of my beliefs and views in
the above-referenced “dogmatic” post.
From these, I reach conclusions on various topics libertarian / Austrian
I enjoy being challenged on these – and the challenges come
on two levels. Certainly, conclusions
can be challenged. As an example, I have
absolutely zero doubt that Walter Block comes to his conclusion favoring
evictionism from what he views as an unadulterated view of libertarian
theory. I come to a different conclusion
regarding abortion – I also believe I come to it via an unadulterated view of
Now, one or the other of us might be applying the theory
incorrectly; or, maybe libertarian theory doesn’t offer a clear-cut
answer. But I do not question Walter’s intent
to stick to principle (call it dogmatic) when applying libertarian theory.
In other words, conclusions on real-world events grounded in
theory offer one level of being challenged.
But on a deeper, more fundamental level – the dogma. I feel quite settled on the six items listed
in the dogmatic mosquito post. If you want to challenge me on the basis of
any of these – like my belief is not well-placed – I say pack a lunch, because
you will be at it for some time.
But don’t pack dinner.
If you don’t hit me with your best shot within a couple of tries – something
that causes me to think “you know, free markets might actually be a bad idea”
or something like “I think saying hello with a punch in the nose and taking
your candy bar is a good way to order society,” well I will grow tired.
After two or three back-and-forths, I will be done with the
conversation – I won’t pay much attention to the next time you say the same
thing, or something even smells like the same thing, or something that seems
like you don’t understand what I have written…more than once. You may not like the way it ends; this is of
little concern to me by this point.
It certainly happened on the
recent FRB post
: I have a firmly held view about the sanctity of contract,
and an equally firm view about how to resolve disputes between parties if there
is a disagreement regarding the interpretation of a contract.
I believe allowing for violations of either of these views
will lead a society to chaos – just open the door for people to say (and get
away with saying) “OH, I didn’t know that THAT
is what I signed up to do” and see how far your free-market libertarian world
will travel – a perfect door opener for government intervention, protecting the
little guy and all that. Alternatively, I
believe that when people understand that contracts cannot be ignored in such a
manner, they will quickly learn how to order their relationships accordingly.
On the topic of fractional reserve banking and free banking
(and banking generally), I have read Mises, Rothbard, Sennholz, Salerno,
Ballvé, de Soto, Sechrest, Selgin, North, White (and others). Some of these authors are for and some
against. I have read dozens of posts at
LvMI and elsewhere. I have commented and
gone back and forth on several threads at LvMI and The Daily Bell. I have asked a real expert on money and
banking for the best critique of FRB, for the most clear-cut argument that it
is fraud. I read this as well (it was
Rothbard – who I read, not who I asked!).
My earliest post on these topics was almost five years ago –
December 2010 (it’s still
, I think).
written almost 130 posts with one or the other label (I know several posts have
both labels, so perhaps 100 posts total).
In these posts, I have commented dozens of times to feedback.
Look, I am not saying that it isn’t worth trying to shake me
on my view; I am saying that I have already read and considered the views of the
best authors on this topic. I have responded
to the same criticisms more than once.
I have read clarity twice on this matter of fractional
reserve banking and the fraudulent (or lack thereof) nature of the practice.
The first time was more a moment of
enlightenment – a light-bulb moment – from an interview of Joe
Salerno, at The Daily Bell
– about painting a house both red and green at
the same time.
It can’t be done, it is
It took me a while to
properly understand and then internalize and contextualize his meaning; when I
did, it offered much clarity on the matter.
The second was the definition
provided by Mr. Engel
gets Joe Salerno’s meaning!
I agree with
Mr. Engel completely on the issue of FRB when
applying his definition
problem, however, remains – and is two-fold: his definition does not describe
today’s banking practice, and his definition is not consistent with the definition
offered by other sources.
patiently his promised clarification on this matter; it is now nine days and
Perhaps I have missed it.
I suspect if the commonly accepted and understood definition
was the one provided by Mr. Engel, all
proponents of FRB would be against it – as a matter of contract and potentially
fraud. I know I would be.
If you want to criticize my views on FRB, I am open to
it. Just know that you better come stronger than or with something different than some of
these aforementioned authors.
Stronger than Rothbard on fractional reserve banking? That’s a high hurdle.
Anyway, returning to where I began: thank you all for the