Sunday, April 1, 2012

Hülsman versus Krugman

Kyle Miller emails:

I couldn't help but notice as I read your article that Krugman must not pay much attention to Guido Hülsmann. In 2003, Hülsmann wrote an article for the Independent Review called "Has Fractional-Reserve Banking Really Passed the Free Market Test?" Hülsmann attacked the logic behind Krugman's proud claim that the market somehow chose our current predicament of fractional-reserve. He explains how Anglo-Saxon legal protection for bankers' whims eventually gave a de facto monopoly to fractional-reserve banking, undoing hundreds of years of Roman legal precedent protecting the depositor. Because government is allowed to break its own laws and suspend specie redemption, it presents a convenient escape for would-be market losers. Hülsmann: "This obfuscation [of terminology] has reached the point of outlawing genuine money titles and of corrupting the language of monetary economists and financial analysts, and it explains the longevity of fractional-reserve banking and its manifold and close ties to government."

Clearly Krugman is more interested in playground-quality zingers than rigorous discussion, or he would have noticed that worldwide fiat currencies enforced by territorial monopolies fall outside of Austrian analysis of an unhampered market.

1 comment:

  1. Krugman is not an economist; he is a delusional charlatan propagating the states ideas and concepts.