[ExI] How slow is capitalism?

[Jones Murphy]

You can find websites which tell you that the planet is 6000 years
old(a belief held by the overwhelming majority of American
conservatives). That doesn't make it true. Try not to be so gullible
about the things you read on the internet. Let's say Mieses'
dishonest(if not outright insane) dismissal of the wild boom-and-bust
cycles which preceded central banking is true. If so, why aren't the
numerous countries with no central banks or ineffective central banks
constantly bleeding capital to the countries with central banks, for
the last few centuries and continuing today? Why is so much money
continuing to flee freedom and stability for instability and
megafraud? Why execute 80% plus of the world's transactions in a
fraudulent currency, and virtually 100% in some central bank-managed
currency or other? Why not more transactions in privately issued
currencies, gold and what not? Why has the reign of an Ayn Rand
disciple at the Fed, with the most Mieses-friendly policies since the
ones which helped precipitate the Great Depression, ended in the
greatest financial crisis since the Great Depression?

On Sat, Apr 30, 2011 at 5:13 AM, Rafal Smigrodzki
<rafal.smigrodzki at gmail.com> wrote:
> On Fri, Apr 29, 2011 at 4:42 AM, Jones Murphy <morphy at alumni.caltech.edu> wrote:
>> If you think banking stability and control of the money supply is bad
>> post-Fed, take a look at what happened pre-fed when random banks
>> issued their own currencies. And contrast the general level of
>> development in countries with central banks like the Fed, versus those
>> with no central banks or ineffective ones where there is no currency
>> and no regulation of financial institutions.
>
> ### I re-read http://mises.org/books/fed.pdf again today - you will
> find historical analysis there flatly contradicting your account.
> Banking stability and currency stability was better before the spread
> of fractional reserve banking  and centralization of money supply in
> the form of the Fed, and the same situation is invariably present in
> all other countries that switched from naturally produced money to
> fiat money. The alleged stabilizing and stimulating effects of the Fed
> are a complete myth. Sure, there were bank rush panics before the Fed,
> these are an invariable effect of fractional reserve, but as long as
> banks are not uniform in their lending practices and some of them have
> higher reserve rates, such panics are self-limited and they serve the
> useful purpose of periodically cleansing the system of inefficient
> lenders. It's only after the Fed was formed that large scale sustained
> inflation started, and the boom-bust cycle became more pervasive,
> involving larger fractions of the economy and with a longer time span.
>
> BTW, I do not share Rothbard's complete condemnation of fractional
> reserve - maybe immodestly I think my analysis goes deeper than his,
> and I do recognize both the dangers and the benefits of it - but I
> completely agree with him that centralization of banking and
> government counterfeiting of money added on top of a natural
> fractional reserve system is highly distortionary and largely
> responsible for the modern malady of the "business cycle".
>
> --------------------
>>
>> The Fed has done a lot that I disagree with. But those bad things are
>> very much a cumulative expression of the will of the American people
>> over the last half century or so, which has been to concentrate wealth
>> to an all time high degree, and crush upward mobility in response to
>> liberal social changes which threatened to erode America's historical
>> social hierarchy. This backlash is why an Ayn Rand disciple,
>> Greenspan, ascended to head the Fed and proceeded to sit back and
>> cheer as the US went from a typical Western wealth distribution to a
>> typical South American one, and upward mobility which was one the
>> greatest in the world is now worse than any in the West and dropping
>> fast.
>
> ### This is complete baloney.
> ----------------
>
> Still, the Fed does a lot of useful things, like its
>> counterparts in the strongest and stabilest economies on earth. And
>> you might want to ask yourself why even after what you perceive as 100
>> yrs of Fed incompetence, the US dollar remains by far and away the
>> currency of choice for well over 80% of international trade.
>
> ### The US is the last major power to succumb to the allure of money
> counterfeiting. It's not difficult to be a giant among dwarves.
>
> Rafal
>