The Left Gets Its Own Charlottesville
Pro-Hamas Activists March on NYPD HQ After Police Dismantled NYU's Pro-Hamas Camp
A Girl Went to Wendy's and Ended Up With Permanent Brain Damage
Patriots Owner to Columbia University: Say Goodbye to My Money
Democrats Are Going to Get Someone Killed and They’re Perfectly Fine With It
Postcards From the Edge of Cannibalism
Why Small Businesses Hate Bidenomics
The Empire Begins to Strike Back
The Empires Begin to Strike Back
With Cigarette Sales Declining, More Evidence Supports the Role of Flavored Vapes in...
To Defend Free Speech, the Senate Should Reject the TikTok Ban
Congress Should Not Pass DJI Drone Ban Legislation
Republican Jewish Coalition Endorses Bob Good's Primary Opponent Due to Vote Against Aid...
Here's What Kathy Hochul, Chuck Schumer Are Saying About Columbia University's Pro-Hamas P...
Minnesota State Sen. Arrested for Burglary, Raising 'Big Implications' Over Razor-Thin Maj...
OPINION

Can We Envision a World without a Central Bank?

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement

I’ve expressed concern about QE3 and other decisions by the Federal Reserve about monetary policy, but I have also admitted that it’s difficult to know the right monetary policy because it requires having a good idea about both the demand for money and the supply of money.

Advertisement

But this raises a bigger issue. The only reason we expect the Fed to “know the right monetary policy” is because it’s been assigned a monopoly role in the economy. But not just a monopoly role, we also expect the Fed to be some sort of omniscient central planner, knowing when to step on the gas and when to hit the brakes.

And we also are asked to suspend reality and assume that the folks at the Fed will be good central planners and never be influenced by their political masters. Yeah, good luck with that.

With so many difficult – or perhaps impossible – demands placed upon them, no wonder the Fed has a lousy track record (as documented in this powerful George Selgin video).

So let’s ask a fundamental question. Is the Fed necessary? Are we stuck with a central-planning monopoly because there’s no alternative? Professor Larry White says no in this new video from Learn Liberty.

This is one of the best videos I’ve ever seen, so I strongly encourage everyone to share this post widely.

Professor White effectively demonstrates how private markets can replace the five different roles of the Fed. But his arguments are not just based on theory. He shows that the private sector used to handle those roles in the past.

Advertisement

And I especially like his point about how a decentralized market system would operate. Indeed, I would have stressed even more how such a system overcomes the knowledge problem that exists with a monopoly central planner.

Here’s my video on the Fed. I focus more on how central banks developed, but you’ll see some common themes in the two videos.

P.S. Here’s a video with 10 reasons to dislike the Fed.

P.P.S. If you want some Fed humor, we have a Who-is-Ben-Bernanke t-shirt, this Fed song parody, some special Federal Reserve toilet paperBen Bernanke’s hacked Facebook page, and the famous “Ben Bernank” video.

P.P.P.S. Professor White’s video shows how we can improve monetary policy, but let’s also be aware that there are proposals that would lead to even worse monetary policy.

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos