The Mystery of Banking

The Mystery of Banking

By:

Murray N. Rothbard

Narrated By:

Jim Vann

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Summary

Readers of The Mystery of Banking will find that money and banking are, contrary to what the book’s title might suggest, no longer a mystery to them. Textbooks on money and banking are often prolix, dull, and confusing, but Murray Rothbard explains the essential issues in a step-by-step fashion.

How does Rothbard proceed? The key to the book is that, following his mentor Ludwig von Mises, he integrates monetary theory with the basic principles of value theory that apply to all goods and services. He begins with a discussion of supply and demand. Once you understand how prices are determined in a free market, you are in a position to understand how the same principles apply to the demand and supply of money.

With his characteristic clarity and incisiveness, Rothbard explains the origins of money. Mises’s regression theorem shows that money had to originate as a commodity. Rothbard next shows how banking got started.  He shows the difference between loan banking and deposit banking. Fractional reserve banking allowed credit expansion, but so long as there was no central bank, inflation of the money supply was limited.

Rothbard was not only an outstanding contributor to Austrian monetary theory but a great economic historian as well. He offers a detailed account of how central banking developed in England and Scotland. Central banking made massive inflation possible.

In even greater detail, he discusses the banking history of the United States in the nineteenth and twentieth centuries. Readers who absorb his account will learn how the Federal Reserve System promotes monetary instability and the business cycle. Rothbard concludes by showing how we can return to a sound monetary system, based on the gold standard.

If you follow Rothbard’s step-by-step explanation of money and banking, you will learn the key principles that will enable you to understand the financial economy today.

Summary courtesy of the Ludwig von Mises Institute. The Mises Institute is the premier organization in support of the free market, peace and prosperity. They provide free educational material, books audio books, lectures and courses that free your mind. This site would not exist were it not for the generosity, hard work and dedication of the Mises Institute, its employees, fellows and its benefactors. Books of Liberty is eternally grateful to all of their work and efforts. Please consider supporting the Mises Institute in any way you can.

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A note from the curator: The State is thoroughly critiqued within Liberty Classroom and the Ron Paul Curriculum homeschool program. In full transparency, I have no direct experience in homeschooling but I have heavily researched Ron Paul’s program and found it to be an outstanding alternative to the public school system (a system where you would never hear a critique of the State).

I am a very satisfied Master Member of Liberty Classroom and have taken the Introduction to Government course that is available through the Ron Paul Curriculum. Between this course and others available through Liberty Classroom, you can’t get a better or more thought out exposition critiquing the State and all its failures or faulty premises (and in a way that is suitable for the younger ages too). I’ll disclose that Books of Liberty will get a small advertising fee for purchases made through our links.


The Law

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