Most interpretations of American free banking experiences in the nineteenth century focus on the failure of what is commonly believed to have been an experiment in unregulated banking. In this dissertation completed in 1988, economist Karen Y. Palasek advances the thesis that not only was free banking a strictly regulated system, but the reasons for its failure stem directly from the regulations themselves and from the regulatory ties between bond collateral requirements for competitively issued redeemable banknotes and a large volume of government debt which was essentially used as a reserve by free banks.
To illustrate the impediments presented by free banking laws, Palasek compares free banking experiences in New York to bank experiences in New England under the Suffolk System. She argues that the New England regional banking system that developed under the Suffolk was essentially a laissez-faire banking system, producing stability and safety for noteholders and depositors through market-driven behavioral constraints on the banks. New York, arguably the best example of American free banking, compares unfavorably on both stability and safety to the more laissez-faire system. The implications of this reexamination of free banking and the recent debates over the causes of instability in the free banking era have a bearing on modern reconsideration of deregulation and the self-regulating properties of a laissez-faire monetary system in the areas of stability, safety, and adequacy of banking facilities.
Biography of Hans Sennholz: Teacher and Theorist
Hans Sennholz (February 3, 1922 - 23 June 2007), professor at Grove City College, was one of a handful of men in intellectual history who were able
An American Classical Liberalism
Every four years, as the November presidential election draws near, I have the same daydream: that I don’t know or care who the president of
Biography of Fritz Machlup (1902-1983)
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Biography of A.R.J. Turgot (1727-1781): Brief, Lucid, and Brilliant
ANNE ROBERT JACQUES TURGOT'S career in economics was brief but brilliant, and in every way remarkable. In the first place, he died rather young, and second, the time and energy he devoted to economics was comparatively little. He was a busy man of affairs, born in Paris to a distinguished Norman family which had long served as important royal officials. Turgot's father, Michael-Etienne, was a Councillor of the Parliament of Paris, a master of requests, and top administrator of the city of Paris. His mother was the intellectual and aristocratic Dame Magdelaine-Francoise Martineau.
Biography of Wilhelm Röpke (1899-1966): Humane Economist
“I champion an economic order ruled by free prices and markets...the only economic order compatible with human freedom.”
Biography of Frederic Bastiat (1801-1850): Between the French and Marginalist Revolutions
Claude Frederic Bastiat was a French economist, legislator, and writer who championed private property, free markets, and limited government. Perhaps the main underlying theme of Bastiat's writings was that the free market was inherently a source of "economic harmony" among individuals, as long as government was restricted to the function of protecting the lives, liberties, and property of citizens from theft or aggression. To Bastiat, governmental coercion was only legitimate if it served "to guarantee security of person, liberty, and property rights, to cause justice to reign over all."
Biography of Richard von Strigl (1891-1942)
The 1920s and 1930s were a glorious era in the history of the Austrian School of economics.
Biography of Eugen von Böhm-Bawerk (1851-1914)
Eugen von Böhm-Bawerk (Born February 12, 1851; Died 1914) was in the right place at the right time to contribute importantly to the development of Austrian economics. Studying at the University of Vienna, he was twenty years old when Carl Menger's Principles of Economics appeared in print in 1871. His formal university training was in law (and thus he was not actually a student of Menger's), but after completing his doctorate in law in 1875, he began preparing himself both at home and abroad to teach economics in his native Austria.
Biography of Margit von Mises: 1890–1993
Margit and Ludwig von Mises were a magnificent team. Margit was unsurpassed in devotion to Mises the person in life and in perpetuating his memory and his ideas after his death.
Biography of Ludwig Lachmann (1906-1990): Life and Work
“The theory of capital lacks a simple dimension for the measurement of its subject matter.
Biography of Hans Sennholz: Teacher and Theorist
Hans Sennholz (February 3, 1922 - 23 June 2007), professor at Grove City College, was one of a handful of men in intellectual history who were able
An American Classical Liberalism
Every four years, as the November presidential election draws near, I have the same daydream: that I don’t know or care who the president of
Biography of Fritz Machlup (1902-1983)
Biography of Fritz Machlup (Dec. 15, 1902–Jan. 30, 1983), by Mark Thornton.
Biography of Ludwig von Mises (1881-1973)
One of the most notable economists and social philosophers of the twentieth century, Ludwig von Mises, in the course of a long and highly productiv
Biography of Juan de Mariana: The Influence of the Spanish Scholastics (1536-1624)
The prehistory the Austrian School of economics can be found in the works of the Spanish scholastics written in the "Spanish Golden Century."
Biography of Gottfried Haberler (1901-1995)
Gottfried Haberler was one of the first economists to make a case for the productivity of free trade in terms of the modern subjective theory of value.
Biography of Eugen von Böhm-Bawerk (1851-1914)
Eugen von Böhm-Bawerk (Born February 12, 1851; Died 1914) was in the right place at the right time to contribute importantly to the development of Austrian economics. Studying at the University of Vienna, he was twenty years old when Carl Menger's Principles of Economics appeared in print in 1871. His formal university training was in law (and thus he was not actually a student of Menger's), but after completing his doctorate in law in 1875, he began preparing himself both at home and abroad to teach economics in his native Austria.
Biography of A.R.J. Turgot (1727-1781): Brief, Lucid, and Brilliant
ANNE ROBERT JACQUES TURGOT'S career in economics was brief but brilliant, and in every way remarkable. In the first place, he died rather young, and second, the time and energy he devoted to economics was comparatively little. He was a busy man of affairs, born in Paris to a distinguished Norman family which had long served as important royal officials. Turgot's father, Michael-Etienne, was a Councillor of the Parliament of Paris, a master of requests, and top administrator of the city of Paris. His mother was the intellectual and aristocratic Dame Magdelaine-Francoise Martineau.
Dr. Palasek is Assistant Professor of Business at Barton College, and serves as the Director of Educational and Academic Programs at the John Locke Foundation.
The amazing fact is that the great majority of British people are not yet consciously aware that they are living in a very severe economic crisis.
