Theory of Money and Fiduciary Media by Jörg Guido Hülsmann

Author:Jörg Guido Hülsmann
Language: eng
Format: epub
ISBN: 978-1-61016-581-5
Publisher: Ludwig von Mises Institute
Published: 2013-01-21T16:00:00+00:00

Advancing the Currency Theory

It is well known that the Currency School erred greatly in ascribing to bank notes and checking deposits different economic functions, and thus Peel’s Act regulated only the issue of bank notes while leaving deposit banking alone altogether. This error was the target of much Banking School writing, but while Mises does not hesitate to acknowledge the Banking School’s prescience in grouping notes and deposits together ([1924] 1953, p. 389), this difference of opinion with the Currency School does nothing to lessen Mises’s appreciation of its arguments. In Mises’s view, the Currency-Banking debate was diverted from theoretical questions to matters of policy by this error:

The criticism of isolated dogmatic and economico-political errors of the Currency Principle that constituted the essence of most nineteenth-century investigation into the theory of banking and credit led to an emphasis being placed on all the factors that could be used to demonstrate the essential similarity of notes and other media of bank credit, and to the oversight of the important differences that exist between the two groups of credit characterized above [that is, between commodity credit and circulating credit], the discovery of which constitutes one of the permanent contributions of the Classical School and its successors, the Currency Theorists. ([1924] 1953, pp. 265–66)

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.