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Rowman & Littlefield and
Cato Institute, 1988, 180 pgs., extensive bibliography, notes, graphs - It is
available by free Internet down load from the Liberty Fund
And
the link to the PDF is adjacent.
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Reviewer Comments:
The book is a development of the author's PhD dissertation. It is indeed
'theory'. In this he attempts to defend the theory and practice of free
banking. That is a banking system formed by private banks that are all able to
compete in issuing money certificates (bank notes). This is perhaps the
opposite of a system controlled by a centralized monopoly (central bank) that
alone can issue currency. This discussion is one of many that propose different
concepts of what 'money' actually is, who creates it, what are its uses, and
what form a banking system should take. In many general histories of the
development (evolution) of 'money' throughout history one reads that when it
comes to modern times the content changes into more of a discussion of banking.
Dr. Selgin is a prolific writer advocating the libertarian view on all sorts of
economic issues, especially money and banking in a highly polemic style.
The book was published in 1988, and since then there have been significant
monetary events and changes to banking regulation - indeed to the financial
industry itself. There is no universally accepted theory of what actually is
'money'. And there is contention over many aspects of banking - especially the
role of Central Banks. Recently the development of massive computer power and
effective transmission of data (Internet) has enabled the creation of a new
form of 'money' called cryptocurrency with such examples as 'Bitcoin' and
'Ethereum'. All of this is evidence of the general dissatisfaction of many with
the current banking system.
"Free banking' is a theory and proposal generaly advocated by libertarians
- thus it is held as a support for political policy and action. The theory
supports the advocacy for very limited government.
See its relation to the broad subject - History of Money - for instance as
described in the Wikipedia entry.
and at
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Preface:
The author contends that the general economic theory about 'money' is that it
'will not manage itself'. Here he sets out to show that this is not so. The
central issue evolves around the question about the creation of 'money';
whether this would be better controlled exclusively by a government central
bank (that means in the name of government itself) or would it be better if
created by a 'free banking' system of private, competing banks (in other words
by private individuals denying greater role for governments). He contends and
here sets out to show that a 'free banking' system would be superior for many
reasons.
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Forward: by Professor Lawrence
H. White
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PART ONE: Setting the Stage
1: Overview
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2: Evolution of Free Banking
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PART TWO: Free Banking and
Monetary Equilibrium
3: Credit Expansion with Constant Money Demand
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4: Monetary Equilibrium
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5: Changes with Demand for
Inside Money
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6: Economic Reserve Requirements
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PART THREE: Free Banking Versus
Central Banking
7: The Dilemma of Central Banking
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8: The Supply of Currency
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9: Stability and Efficiency
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10: Miscellaneous Criticisms of
Free Banking
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11: Free Banking and Money
Reform
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Conclusion
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Some References
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Salerno, Joseph - Fractional
Reserves and the Fed
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Polleit, Thorsten - Central
Banks Are Messing with Your Head
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Shostak, Frank - Why the
Boom-Bust Cycle Keeps Repeating
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Calomiris, Charles & Stephen
Haber - Fragile by Design
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Rothbard, Murray The Mystery
of Banking
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Selgin, George - "The Myth
Of The Myth Of Barter "
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Selgin,
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Admati, Anat & Martin
Hellwig - The Bankers' New Clothes
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