Mises Media

Around 1906, Jacob Schiff of Kuhn, Loeb and his relative Paul Warburg launch the explicit campaign for a US central bank, rallying the American Bankers Association and its leading commercial bankers behind banking reform.

The theory put into practice: imposing the gold-exchange standard on U.S. dependencies and client states—Puerto Rico, the Philippines, Mexico, and others—administered by a cadre of economists and academics and tying client currencies to the dollar.

Enter Charles A. Conant, theorist of “surplus capital.” Rothbard shows how Conant’s claim that mature economies must export capital abroad linked banking reform to economic imperialism—a theory that traveled from pro-imperialists to Wilshire, Hobson, and Lenin.

The reformers’ first victory—the Gold Standard Act of 1900—and the maneuvering that followed, as Treasury secretaries Lyman Gage and Leslie Shaw used government deposits to aid the banks and inch the country toward central banking.

The first organized big-business push for banking reform. Rothbard recounts how the 1896–97 Indianapolis Monetary Convention, backed by Morgan- and Rockefeller-tied elites, enlisted economists to press for the gold standard and a centralized, more “elastic” banking system.

Why the nation’s big banks grew dissatisfied with the post–Civil War National Banking System: an inflationary but rigid structure that lacked an “elastic currency” and pyramided credit on Wall Street, fueling the search for a central bank to coordinate inflation.

Rothbard frames the 1913 Federal Reserve Act as part of the Progressive drive from laissez-faire toward centralized statism. Having failed to cartelize through the free market, big business turned to government to do the job—with intellectuals supplying the ideological cover.

While the pundits are insisting that the late Alan Greenspan was a committed free market adherent, his actions throughout his career spoke differently. In today’s Friday Philosophy, Dr. David Gordon exposes Greenspan for what he was: an opportunist.

Original article: https://mises.org/friday-philosophy/greenspan-great-opportunist

Were stronger central government under the Articles of Confederation and a central bank really necessary to win the American Revolution, as conservative nationalists of the era claimed?

Original article: https://mises.org/mises-wire/myth-nationalist-victory-articles-confederation-and-bank-north-america

Kevin Warsh's hawkishness is theater. Every Fed chair comes in tough. The Fed's real mandate is financing government debt and protecting banks. Everything else is propaganda. And tariffs historically precede military escalation. Civil War. World War I. World War II. The same playbook is running now.

Mark Thornton joins Ilya Spivak on TastyLive.