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Thursday, September 24, 2009

Financial bookshelf

In anticipation of future writings on the Fed and related subjects, I've acquired a growing collection of relevant books. Here's some recent, current and prospective reading:

Finished reading:

The Road Ahead for the Fed, multiple authors.

Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, by John B. Taylor.

The Case Against the Fed, by Murray Rothbard.

Partly read/in progress:

After the Fall: Saving Capitalism from Wall Street and Washington, by Nicole Gelinas.

Golden Fetters: The Gold Standard and the Great Depression, 1919-1939, by Barry Eichengreen.

Will read sometime soon:

In Fed We Trust: Ben Bernanke's War on the Great Panic, by David Wessel.

This Time is Different: Eight Centuries of Financial Folly, by Carmen N. Reinhart & Kenneth S. Rogoff.

A few thoughts: Eichengreen should be read by anyone who thinks we need the gold standard back, and has much to say on different types of gold standards. Rothbard presents much the same view as Ron Paul's End the Fed (about which readers may already know what I think) but, interestingly (and unlike Paul), ends with insistence on a gold-coin standard, seemingly in recognition that any kind of paper or electronic money merely backed by gold retains a credibility problem. Which leaves me to wonder how a modern economy could run on coins.

9 comments:

oiuyt said...

I'd like to recommend the following book for addition to your list of books to read soon.

Debt and Delusion: Central Bank Follies that Threaten Economic Disaster by Peter Warburton

http://www.amazon.com/Debt-Delusion-Threaten-Economic-Disaster/dp/0977079333/ref=sr_1_1?ie=UTF8&s=books&qid=1253801968&sr=8-1

Kenneth Silber said...

Thanks, oiuyt.

TAYLOR said...

Ken,

I mean this in all seriousness... you may want to get your eyes checked, at least when it comes to Austrian econ stuff. You misread/misinterpret so frequently a more cynical person might wonder whether you're trying to start a flame war or otherwise engage in intellectual belligerency. Luckily, I am a more disciplined man.

I got my copy of End the Fed and read it a few days ago. The best parts were the folksy conversations with Bernanke/Greenspan that had been written by Paul (much else seemed ghostwritten). It was chaotic and disorganized and in true Paul fashion rambled on and on quite a bit.

That being said, I remember reading multiple passages where Paul said the complete opposite of what you claimed he said in his book. It really made me want to question your motives in writing your disgusted review. But then, again, I remembered I am a more disciplined man than that.

Now you claim Rothbard supported a gold-COIN standard? Man, I frequent the Mises blogs, I've read many of Rothbard's other writings and books on money and banking (Check out What Has The Government Done To Our Money and The Case for the 100% Gold Dollar, both nearer to pamphlets than books) and I am currently knee-deep in his treatise, Man, Economy and State. I don't recall him trumpeting a gold-COIN standard and I don't remember any of his fans or scholars mentioning it.

I know he thought that there was no place for fractional reserve banking in a free banking system/free economy. Have you confused his anti-FRB position with an anti-fiduciary media position?

Seriously, bro, would it help you at all if I dug up the passages from End the Fed that you were blatantly wrong on in accusing Paul of taking some position that he not only didn't hold but in fact said the opposite, or do you want to take my word for it that you might want to consider re-reading (and re-reviewing) the book?

Kenneth Silber said...

Rothbard specifically calls for a "gold coin standard" on p.149-150 of The Case Against the Fed. The text is online at
http://mises.org/books/fed.pdf

(See PDF p 153-154)

TAYLOR said...

Ken,

You are right, he does say gold-coin standard.

You say that you wonder how a modern economy could run on coins. I don't think Rothbard excluded the use of gold deposit certificates in that passage. In fact, he specifically says that FRB would not be outlawed right away. This means there would necessarily be some kind of fiduciary media circulating in addition to gold coins, otherwise how would you pull off FRB with gold-coins alone?

I think what he's saying is that gold-coins (a bullion currency with a fixed face value exchange rate, in his example, $1555/oz gold, stamped on the coin) would be the ultimate monetary base of the system, with fiduciary media such as gold-deposit certificates circulating as money as well.

I think that is how a gold-coin standard would work with a modern economy. The fiduciary media could take digital form, as well.

Do you contest that interpretation of Rothbard's passage?

Kenneth Silber said...

It's a good question, how to interpret it. It's clear Rothbard thought the gold coins would be sound money and (in this book at least) he didn't specify what other types of money might be sound.

TAYLOR said...

Ken,

Do you deny that the contextual clues, such as the fact that he calls for the dollar to be revalued in terms of an ounce of gold, and the fact that he permits FRB in this passage, imply that there would necessarily be forms of fiduciary media that would not be the gold coins themselves?

In other words, would you be willing to consider that Rothbard was NOT arguing for some anti-modern currency system that would force everyone to use gold coins alone?

Keep in mind he was a LIBERTARIAN and against the use of force and legal tender laws altogether. Does this passage stand out to you as an example of him trying to use the government to define an austere money supply?

Kenneth Silber said...

I'll make one last comment on this. The book ends with Rothbard saying the best solution would be to outlaw fractional reserve banking. I think that would be a very un-libertarian thing to do, using force to prevent me from putting my money into a bank with fractional reserves. So, no, I'm not too interested in his "contextual clues," nor do I think of him as someone whose ideas (private defense agencies, etc.) would lead to a genuinely free society. The last word is yours, if you so choose.

TAYLOR said...

Ken,

You're a master avoider. The discussion was about this gold-coin standard passage. You go to a different part of the book and discuss a different idea and try to pretend this discussion so far has been about whether or not these ideas support a 'genuinely free society.' The whole reason I commented in the first place was because you seemed to think (from your original post) that Rothbard was calling for a gold-coin standard that would not be congruent with a modern economy.

There is no way to have the 'last word' with someone who changes the topic of discussion at will and then pretends he is courteously offering his opponent a chance to respond, one last time, to an entirely new debate that would in fact be the opponent's first word on that subject.

You're too tricky for me, Ken. I'll leave you alone now to enjoy your fascism unquestioned, as I know you would prefer. So long, and thanks for all the fish!