I really hate wading into these libertarian (in the perjorative sense)
debates, but here goes.

I skip the question of this history of how paper currency emerged, and of
why the gold standard was left by the major industrial countries. I really
don't have time to spend investigating them, but from what little I know,
they are about as realisitic as the "social contract" accounts of how
government emerges.
>
> If you truly want to facilitate a democratic banking system,  first,
> eliminate all banking regulations.  Not an absurd notion if you have
> confidence in the civil courts (to arbitrate disputes over money and
> agreements) and in the criminal justice system (to define criminal acts
> and then to detect, investigate, adjudicate and incarcerate criminals).
> Second, promote (do not force) gold as the best choice for a global
> standard.

In practice, of course, even banks do not want this. They realize that it is
was a pretty nutty world out there when banks were unregulated. There were
enough bank panics in the wild and unregulated years of the 19th century to
convince banks, consumers, and the business community that regulation of
some sort was a necessity if bank difficulties were not to reverberate and
collapse the economy. The only question is what sort of regulation will it
be--would it benefit everyone, or just rich people.

The people in power who advocate deregulation actually want to eliminate the
controls on what banks can do without endangering the money of wealthy
investors. In other words, they want to be ableto do anything they want
without taking any risks. It's a great deal, if you can get the government
to cover your butt when you screw up.

If your response is that you would like to see "real" deregulation and a
"real" free market in banking--you might note "real" free markets almost
never exist, and that businesses, when they are strong enough, are the
first to try to get rid of them. In what strange fantasy world would this
not take place? Anarchists
and communists are constantly being berated for not being "realistic" but
libertarians yearn for a market that behaves like no other that has ever
existed anywhere--and there have been a hell of a lot of markets! Talk
about utopian!

This is a point Chomsky has made more times than I care to count.

Peter Stone
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