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