Washington Metro Objectivism Discussion (WMOD) March 1996 Meeting Debate on Free Money & Banking The March 20 meeting of WMOD will revisit some of the more controversial issues that were brought up at our meeting last year when banking expert Bert Ely spoke on the misconceptions surrounding the power of the Federal Reserve. Bert will return to debate Mark Brady who will defend the Austrian economics positions on free money and banking. For those of you whose economics is a little rusty; don't worry, the moderator will insist on clear explanations of all positions, and both Bert and Mark can be guaranteed to produce some fireworks. We will have a vote at the end to see how the audience scores the debate. So far, the debate shapes up like this: Mark will defend the following propositions: Laissez-faire in money requires that the business of banking be free, i.e., unregulated. Specifically, any firm should be free to enter and leave banking and should be free to issue its own currency with the monetary base and reserve ratio of its choice. This implies that it would be presumptuous of us to anticipate the institutional details of what would emerge in a genuinely free market. However, economic analysis and economic history help us imagine the sort of banking system that would emerge under laissez-faire and provide the intellectual ammunition with which to evaluate proposals for state intervention. Specifically, the work of the Austrian school economists Ludwig von Mises and F. A. Hayek enables us to understand how bank-credit expansion under the aegis of the central bank generates the trade cycle. Bert will challenge Mark by contending that 1) it is more desirable for the U.S. Goverment than banks to capture, in a non-inflationary manner, the seignorage income that currency generates (i.e., only the government should be able to print money); 2) that a monetary base (however defined) and bank reserve ratios will not promote stable prices and sound banking; and 3) that there are sound libertarian reasons for the U.S. government to establish a framework (e.g., the "cross guarantee" concept) in which a highly competitive financial system comprised of banks and non-banks can operate in a laissez-faire manner that will promote free markets, financial stability, stable prices ("sound money"), and all other values that libertarians and Objectivists hold near and dear. More particularly, Bert will contend that a reliance on market forces to set nominal interest rates will produce non-inflationary credit growth in a manner that is both entirely consistent with the Austiran school and permits the elimination of central banking in any form. Mark Brady was born and raised near London. He graduated in Philosophy, Politics, & Economics from Oxford University, 1969, and studied economics at New York University where he participated in the Austrian economics colloquium, 1979-85. For nearly twelve years he taught economics, including money and banking, in Britain, Ireland, and California, and for two years worked in airline economics. Since 1992 he has been a staff member of the Institute for Humane Studies at George Mason University, Fairfax, Virginia, with responsibilities for seminars, fellowships, and student-mentoring. His wide-ranging interests include political philosophy, economics, history, law, and book-collecting. Bert Ely is a financial institutions consultant specializing in deposit insurance and banking structure issues. He is the principal in Ely & Company in Alexandria, Virginia. Mr. Ely was one of the first to publicly predict, in 1986, a taxpayer bailout of the FSLIC, the S&L industry's deposit insurance fund. In 1991, he accurately predicted the non-crisis in America's banks and in 1992 the forthcoming taxpayer bailout of the Japanese banking system. Mr. Ely developed, and has helped transform into comprehensive legislation, the "cross-guarantee" concept for privatizing banking regulation and its attendant deposit insurance and systemic risks. When and Where? Join us on Wednesday 3/20. You can either join us for dinner at 7 pm and/or for the discussion at 8:15 pm at the Fortune Chinese Restaurant at Baileys Xroads, VA on Route 7 between 7 Corners and Columbia Pike (5900 Leesburg Pike 703/998-8888). You can take METRO to the West Falls Church stop and then take METRO buses 29A or 29B East on Route 7 toward Baileys Xroads. The Fortune is on this route. After the meeting we can give you a ride back to a METRO station. WMOD has arranged for a $15 fixed price dinner (including tax and tip). Or you can order from the menu. Please RSVP to WMOD (703) 820-7696 before noon Wednesday 3/20 so that we can tell the restaurant how many tables to set up. CALENDAR Future of Freedom Foundation "Vienna Coffee Club Talks" at the Key Bridge Marriott in Arlington, VA. RSVP to 703/934-6101. * March 21: Ted Galen Carpenter, VP of defense and foreign policy studies at Cato, on "Foreign Policy for a Republic". * April 4: Robert L. Bradley, Jr., president of the Institute for Energy Research and adjunct scholar at Cato, on "Oil, Gas, and U.S. Government Intervention". * May 23: Jacob G. Hornberger and Richard M. Ebeling, pres. and vice president of FFF, on "The Failure of America's Foreign Wars". May 4 in NYC: "Objectivism Today 1996" The Institute for Objectivist Studies holds its annual spring event on Saturday May 4 at Lowes NYC Hotel. Talks include: * David Kelley of IOS on the Welfare State * Bob Bidinotto of "Readers Digest" on Reasons for Cultural Optimism * Ed Crane of the Cato Institute on a Progress Report on the Market Liberal Movement Contact IOS via http://ios.org, (914) 471-6100, or firstname.lastname@example.org. Spring and Summer Conferences IOS will hold its 1996 Summer Philosophy Seminar "Objectivism: Theory and Practice" on July 6-13 at the University of Colorado at Boulder. Contact http://ios.org, (914) 471-6100, email@example.com. Second Renaissance Conferences will hold its two-week-long conference "Ideas for the Rational Mind", June 29 - July 14, at Tysons Corner, VA. Call (203) 791-1755. +----------------------+-----------------------------+ |Dave Saum |Email : DSaum at infiltec.com | |WMOD |Tel : 703/820-7696 | |PO Box 8007 |Fax : 703/671-9350 | |Falls Church, VA 22041|"Sapere aude" (dare to know) | +----------------------+-----------------------------+
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