The power of the state to issue currency and control the monetary system is so entrenched, and the presumption among economists that money must be supplied monopolistically by a central authority is so widespread, that the notion that money could be supplied competitively has rarely been taken seriously. This book boldly challenges the conventional view that the state must play a dominant role in the monetary system. Part I explores the historical evidence and examines how a well-developed monetary system might have developed without any special role for the state. Part II offers a theory for a competitive supply of money and uses it to shed light on the development of monetary theory and the course of monetary history over the past two centuries. In Part III the author outlines new proposals for monetary reform that will protect the financial system against instability and will ensure macroeconomic stability.
Preface; Acknowledgments; Part I. A Theory of Monetary Institutions: 1. The evolution of money and banking; 2. Money and the state; Part II. The Uncertain Progress of Monetary Theory and Monetary Reform: 3. The classical theory of money; 4. The quantity theory of money; 5. The heyday of the gold standard, 1879–1914; 6. The Great War, the Great Depression, and the gold standard; 7. The Keynesian revolution and the monetarist counterrevolution; Part III. A Competitive Monetary Regime: 8. The competitive breakthrough; 9. Can competitive banking be safe and stable?; 10. Why we need a new monetary regime; 11. A proposal for monetary reform; References; Index.
'For nearly a century, monetary theorists have been searching for their Holy Grail: a way to figure just the right amount of money to keep the economy on an even keel. Now two more pilgrim-scholars, David Glasner, an economist at the Federal Trade Commission, and Earl Thompson, a professor at the University of California at Los Angeles, are hot on the trail. It is too early to say whether their clever variation on a long forgotten proposal of the great pre-Keynesian economist, Irving Fisher, will stand up to critical scrutiny. But the idea, described in...readable detail in Mr. Glasner's new book, Free Banking and Monetary Reform should intrigue anyone who thinks that even the Federal Reserve Board can make mistakes.' Peter Passell, The New York Times
'Glasner provides an excellent review of monetary history, insightful discussions of such monetary innovations as the development of the Eurocurrency market and money market mutual funds, and incisive analyses of recent monetary problems like the deregulation of savings and loan associations and the insurance of bank deposits. This timely and lucid book on such a controversial issue deserves a wide audience.' Choice
' … important new book …' Lawrence H. White, Journal of Monetary Economics