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 post followed, 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 / etc.
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 libertarian theory.
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 pretty good, I think). I have 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 an impossibility. 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. Mr. Engel gets Joe Salerno’s meaning! I agree with Mr. Engel completely on the issue of FRB when applying his definition. The 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. I await patiently his promised clarification on this matter; it is now nine days and counting. 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 dialogue!