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ASC Day 2: Monetary Policy, Entrepreneurship, Security, and Constitutional Order

I don’t have the time to write a whole bunch because I need to prepare for my talk tomorrow. So, here are some of my notes from my favorite lectures of the day and a video wrap up as well:

  • Walter Block and William Barnett – Time Deposits: Fraud and the ABCT
    • Debate that fractional reserve banking is illegal
    • Other side says that FRB notes can be considered contracts
      • Problem: not all contracts can be legitimate
      • Example: I contract with Walter for Walter to murder someone
    • More proper position is property rights
      • Can’t have two people owning 100% of the same thing
    • ABCT: mises originated, Hayek expanded “Monetary Theory of the Business Cycle”
      • Mises called it the circulating credit theory of the trade cycle
    • What we assume when we say that monetary inflation causes the business cycle is that the money is entering the market via credit markets.
      • Government could instead just use printed money to pay off receipts (like salaries)
      • According to Barnett, this would not constitute the conditions that create BC
    • What’s the problem with a demand deposit?
      • Banks are borrowing short and lending long
      • Intertemporal misallocation
      • Lenders want to be more liquid than they want to be as borrowers
      • Dealers work in between
    • Credit has two dimensions: Dollar value, and Time
    • Banks don’t have the right to lend money for longer than which they have the property right for.
      • i.e. I lend $100 for 1 year, bank cannot, praxeologically, turn around and lend the $100 for 5 years
      • This is a credit inflation
    • Time mismatching of borrowers and lenders
      • In example above, no monetary inflation, but credit inflation is happening.
  • Anthony Gregory – Habeas Corpus, Centralism, and Decentralism
    • Most people go back to the Magna Carta
      • But it was 100 years later before we see habeas corpus writs
      • Authoritarian method of law
    • Habeas corpus evolved over time
      • Impetus was to protect high up officials
    • Some moral principle involved, people should be held just for the hell of it.
    • An admirable bottom-up tradition in American colonies
    • By the time of the revolution, all the colonies had
    • Here’s the interesting thing, constitution had habeas corpus but it was a step backwards because the states were already practicing it.
      • Who was it who issued habeas writs in antebellum America?
      • States had the right to issue writs of habeas corpus as a check AGAINST the federal government.
    • Once the FG used writs of habeas corpus against the states, downhill
      • Even some of our more admirable founding fathers suspended habeas
    • Some southern states used habeas to get slaves back.
    • Northern states passed liberty laws about slaves
    • After civil war, interesting reconstruction dynamic
      • On one hand, wanted slaves to have their rights protected
      • But in the next year, it was used to protect a guy who criticized reconstruction. Oops, they didn’t like this.
    • Last straw, 1871
      • Used to be a state check on Federal power.
      • Now a Federal check on state power.
    • What’s unfortunate is that we have moved away from the original design completely.

And here’s footage of what happened today with some summary thoughts from me…

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