Rothbard provides a succinct account of the origins of money, showing how money must originate from a commodity. Banking originated from goldsmiths, who issued warehouse receipts for gold deposited with them. From this a fractional reserve system developed, inherently prone to monetary expansion and panic.
In the late nineteenth century, a movement toward bank centralization arose among both “progressives” and bankers, the latter eager to increase their profits. From these plans, the Federal Reserve System developed. Rothbard shows the dominate influence of the banking House of Morgan at the Fed’s inception. During the New Deal, Rockefeller interests took first place in influence, with the Morgan interests reduced to a subordinate though still potent role.
The book concludes with an account of the Fed’s role in causing inflation and the business cycle. Abolition of this nefarious agency must be part of any agenda for genuine financial reform.
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Murray N. Rothbard made major contributions to economics, history, political philosophy, and legal theory. He combined Austrian economics with a fervent commitment to individual liberty.
"The American Revolution, the European right realized, was a vital milestone in the advance and development of the western revolutionary tradition."
An opponent of gold describes the 100 percent standard better than its friends do.
Not a novelty but an inheritance: Jeffersonian, Jacksonian, and hard-money.
Mises Institute, 2008
