Wednesday, October 22, 2014

Mises' Interest in Free Banking Post Human Action



Bettina Bien-Greaves is an important, though, sadly, somewhat forgotten figure within the American Austrian School.  She was one of Mises’ most devoted disciples and attended nearly every one of Mises’ NYU seminars.[1]  During these seminars, Mises would often propose possible research questions in an effort to pique the minds of his students to various topics, which Bien-Greaves recorded on handwritten and typed notecards.[2]  Below is a list of some of the research questions that Mises proposed to his students on the topic of free banking, showing that he, at the very least, had an interest in it.[3]     
  • April 30, 1953
      • Book suggestion: History of the abolition of free banking.
  • April 30, 1953
      • Book suggestion: "There is no book that answers the question, 'What ideas were responsible for the fact that the 19th century liberals did not apply the liberal principles to banking?' This is one of the most important historical problems because this was in fact the problem that brought about the fall of the liberal policies, of capitalism, etc."
  • December 6, 1956
      • Book suggestion: What did the countries' governments do in order to make credit expansion technically possible? Legal tender legislation? The (illegible) to free the banks from the obligation of redeeming banknotes, etc.?
  • May, 1959
      • Mises' definition of inflation: "an increase in the money supply exceeding the demand for cash holding."[4]
  • December 7, 1961
      • Book suggestion: Historical book on the struggle for free banking.
  • October 7, 1965
      • Book suggestion: Free banking and its disappearance.
  • November 4, 1965
      • A history of the free banking movement. Research in this area would probably involve French and German sources. 
  • April 21, 1966
      • PhD thesis suggestion: Free banking.

[1] See here for a recording of her questioning Mises on an array of topics: www.youtube.com/watch?v=GZ_dSo1Es4Q
[2] See here for a typed list of these: https://mises.org/etexts/Mises_Research_Ideas.pdf And the typed/handwritten notecard scan: https://mises.org/pdf/misesideas.pdf
[3] Mises discusses free banking and fiduciary media at some length in Human Action, specifically in  the subchapter, "The Money-Substitutes", located in the chapter "Indirect Exchange" (pages 433 - 450 in the 3rd revised Regnery Press edition of the book published in 1966).
[4] The reason I've included this particular note on my list is that most so-called "Free Bankers" use this definition.  On a related note, the 100% reservists maintain that Mises eventually moved to a definition of inflation similar to Rothbard.  If this is the case, this must have occurred after 1959.

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