Peter -

Exactly so. I'd even point out, as one further example, that the bulk of
bank regulation in the US came after the banking collapse that followed the
stock market crash in '29. Although there was already substantial (compared
to a "free" market) regulation at the time, there was a complete overhaul
of the entire system, substantial infusion of PUBLIC capital, and the
introduction of new regulation and restrictions to a previously unheard of
level.

- Don

----------
> From: Peter Stone <[log in to unmask]>
> To: [log in to unmask]
> Subject: Re: Banking, Economics, and Equity
> Date: Wednesday, May 07, 1997 9:57 AM
>
> 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
> [log in to unmask]