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 ios@ios.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, ios@ios.org.

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) |
 +----------------------+-----------------------------+

Return to the WMOD home page.