[ExI] Monopolies in banking/was Re: Bank of England

Rafal Smigrodzki rafal.smigrodzki at gmail.com
Tue Jun 23 05:56:42 UTC 2009

On Mon, Jun 22, 2009 at 2:01 PM, <dan_ust at yahoo.com> wrote:

> The problem would be: how to do that in a way that mostly (since nothing is perfect) works.  I think there is no clear measure here that would work.  GDP would mean that most inflation and heavy government spending would look like great performance.  So, if the central banker merely inflated and lent lots of the government (e.g., bought up government debt), she or he might look like she's improving the economy and be rewarded accordingly.

### If he doesn't mind being rewarded in funny money, yes, but anybody
with a long-term outlook who wanted true wealth (goods, services)
rather than maximum number of arbitrary units of currency, would
maximize economic growth, not measures of money supply. The accent
here is on "long-term".

  I doubt any mechanism to discipline the monopolist here would work
-- certainly not as good as not having a monopoly by allowing free
entry into the money and banking market.
### Sure, I have no quarrel with this reasoning and the rest of your
response.  My post was only meant to point out some of the problems
with knee-jerk support of "democracy", and not to provide the best
solution I could think of.


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