Liberty, Ethics, and 100% Reserve Banking. Michael S. Rozeff

An excerpt:

The most widely publicized view in opposition to fractional-reserve banking is that of the Rothbard-Hülsmann-Hoppe-de Soto school, identified with the Mises Institute, but not at all with von Mises! It holds to the illegality and/or immorality of fractional-reserve banking. Its view is that a bank deposit is property owned by the depositor, and there cannot be two property titles to "the same thing." A bank is therefore, in this view, not entitled to issue claims against such a deposit. It is true that there cannot be two titles to the same property. But it is not necessarily true that a free market bank deposit is going to be property owned by a depositor, or that it must be property of a nearly safe kind such as a warehoused and audited asset. A bank depositor, like any creditor, may turn assets over to the bank and, in return, receive a new property title that defines his interests in ways far different from the warehouse receipt that this school of thought envisages as the only legal and moral possibility. The bank may pool all sorts of assets and issue all sorts of claims against them. The Rothbard school of thought fails to understand that people can slice and dice property in many subtle ways and create sophisticated obligations and conditions that are agreed upon, contingent on various states-of-the-world occurring. Their thinking ignores the fact that property and property rights are a malleable thing. Claims to cash flows can be rearranged financially at the will and with the willingness of all parties concerned. With this blind spot, the Rothbardians can see nothing else but two claims to the same property. They do not realize that they are precluding the rearrangements of property interests by voluntary means. The "property" they imagine has two claims on it can be subdivided and reworked, with new contingent interests created, so that it can have multiple claims on each part. The possibilities are endless. In short, the Rothbardians are begging the question of what the property is, ignoring that it is created by people in liberty, and imposing their own assumptions on what the property rights in a deposit account must look like.

http://www.butterbach.net/

I agree... (although Nemo made me do it)

;)

Liberty, Ethics, and 100% Reserve Banking. Michael S. Rozeff

Liberty, Ethics, and 100% Reserve Banking. Michael S. Rozeff

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