Money and Banks

Monetary theory is where Austrians diverge the most from mainstream. Mises built a new taxonomy of money. He said money included any checking account deposits. The marginal utility of gold on the last day of barter was determined by the uses of gold. People then demanded gold as money because there was preexisting value. A paper dollar must have such a connection to money. Government cannot create money. Money is not neutral. The natural trend of prices in a market economy is falling.

The Real Bills Doctrine (RBD) has a long and controversial history, writes Robert Blumen. Many of the key concepts originated with the monetary crank John Law.

Frank Shostak explains that China is not the cause of bad US monetary policy.  

Murray Rothbard, in this classic essay originally published in 1991, offers the most "pure" proposal of all: private mintage, 100 percent reserve banking, circulating coins, full convertibility.

Many commentators say that there is more than enough savings to support future growth. But Frank Shostak says there is a problem with this view.

The more you think about the incoherent Bush Social Security plan, writes Bob Murphy, the more you realize what a hoax it is.

The Austrian economists—Mises, Rothbard, and Hayek most prominently—were not alone in predicting the baneful effects of central banking and paper money.

I have always been puzzled by the exact mechanisms through which the government keeps us from using gold as money, and my recent inquiries on a pri

Presented as part of the Mises Institute’s Brown Bag Seminar series on April 21, 2005 in Auburn, Alabama.

The withholding tax, writes Laurence Vance, makes it possible for the government to silently steal the wealth from its citizens with little or no outrage about the loss.