CHAPTER 6

Some Clarifications Concerning
Mises’s Monetary Theory

At this point I would like to clarify some more specific comments and critiques raised in Rallo’s book.

6.1 An Unquestionable Canon

Rallo (13) suggests that Mises’s (1912, 1953) book has become an “(almost) unquestionable canon” of Austrian monetary theory. This formulation seems to suggest that no critical thinking concerning Mises’s monetary system is allowed or has been made.

Conclusion

Although he himself is a supporter of the dead horse of fractional reserve banking, George Selgin in 1989 made the following forward-looking statement concerning the real bills doctrine: “It would be a mistake to think of the real‐bills doctrine as a ‘dead horse.’ The dead horses of economic theory have a habit of suddenly springing back to life again, which is why it is necessary to beat them even when they appear lifeless” (Selgin 1989, 489).

References

Ahamed, Liaquat. 2016. Die Herren des Geldes: Wie vier Bankiers die Weltwirtschaftskrise auslösten und die Welt in den Bankrott trieben. 3rd ed. Munich: FBV.

Akhtar, M. A. 1995. “Monetary Policy and Long-Term Interest Rates: A Survey of Empirical Literature.” Contemporary Economic Policy 13 (3): 110–30. https://doi.org/10.1111/j.1465-7287.1995.tb00727.x.

Index

Complied by Roger Bissell

100 percent reserve banking, 11n3, 14, 20n10, 74n40, 86, 101–102. See also credit expansion; entrepreneurial error; full-reserve banking; fractional-reserve banking; interest rate: and discount rate; maturity mismatching; uncertainty

aggregate demand, 19, 66n33, 135

Ahamed, Liaquat, 89

Anderson, Benjamin M., 62

arbitrage, 84, 111–12, 85n46

assets, 12, 30, 45–46, 62, 99, 124, 124n67, 130, 133

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Preface