One day George Selgin is picking a friendly fight with the Market Monetarists, the next day he is picking a fight with the Rothbardian Austrians. You will have to respect George for always being 100% intellectually honest and behaving like a true gentleman – something you can not always say about his opponents. His latest fight is over the old story of fractional reserve banking versus 100% reserve banking.
Personally I never understood the 100%-crowd, but I am not going to go into that debate other than saying I agree 100% with George on this issue. However, I want to do a bit of PR for George’s posts and the response to his posts.
Here is George’s first post: 100-Percent Censorship?
And George’s response to Salerno: Reply to Salerno
When you read an exchange like this you will realise why Rothbardian style Austrianism is completely marginalised today and George is a well-respected monetary historian and theorist.
Larry White also has a good post on fractional reserve banking – and why it is the true free market outcome in an unregulated market economy.
If you are interested in this discussion then you should have a look at Larry and George’s classic article “In Defense of Fiduciary Media – or, We are Not Devo(lutionists), We are Misesians”.
Related post: I am blaming Murray Rothbard for my writer’s block
Update 1: The fist fight continues – here is a not too clever attacks on George from the comment section on Economic Policy Journal (which has nothing to do with a Journal) and here is George’s response: More Dumb Anti-Fractional Reserve Stuff