Wednesday, April 21, 2010

Selgin on Free Banking

The Daily Bell interviews George Selgin.
The fundamental reason why central banks, which are essentially mercantilist institutions, survive today is because they have managed to secure economists' blessing. This blessing in turn reflects economists' tendency to treat monetary instability as a problem inherent to free markets, which only central banking can address, instead of seeing central banks themselves as a principle source of monetary instability, as they might were they to study monetary history more carefully than most do. Consequently economists have come to apologize for government currency monopolies, despite having long condemned such monopolies in other realms, and for good reasons.

1 comment:

Adam Gurri said...

I think he overestimates the value of economists' blessing. I think the only reason central banking has economists' blessing is because it has managed to entrench itself in so many countries for longer than the vast majority of economists have been alive.

But it wouldn't hurt to turn economists against it, if we could!