Are Central Banks the Most Efficient State Enterprise?
By Bryan Caplan
Yesterday at the FEE seminar, I got to hear the excellent Jeff Hummel thoroughly debunk the crazy Rothbardian view that fractional reserve banking is “fraudulent.” It was a fun (and funny) lecture, but the target was too easy. So during the Q&A period, I decided to see whether Hummel would embrace a far greater heresy. My challenge for him:
Agree or disagree: In developed countries during the last 10-15 years, central banks have become (close to) the most efficient state enterprise.
To put the question a little differently, imagine comparing the performance of actual state enterprises to the performance libertarians believe the unregulated market would deliver. In Western countries, would the gap between the status quo and Libertopia be one of the smallest?
What do you think? I’ll give Jeff’s answer – and mine – next week.