Deposit banking rests on the bank honoring property rights. Loan banking rests on making good loans that will pay off. But when loan banking and deposit banking merged, the temptation to loan out much more than was actually in the bank arose.
First published in the December 1958 issue of The Freeman, "I, Pencil: My Family Tree as Told to Leonard E. Read" is written from the point of view of an Eberhard Faber pencil.
The soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud from any source is a 100 percent gold standard.
A free market is just people making voluntary exchanges. Woods makes an example out of the creation of a ham sandwich. Welfare and warfare undermine the natural economic harmony of large scale social cooperation - the free market.
When government assigns positive rights to others, some of us will be forced to pay for it. No right to healthcare is a legitimate right.
Sound money even sounds heavier than unsound money. Gold and silver originated on the market and reigned as the preferred money because the metals were easily portable, homogeneous, highly divisible, highly durable, and naturally scarce. Paper has none of those attributes.
Austrian economists do have a realistic way of looking at human action. A policy of getting further into debt when you are already deeply in debt just doesn't make sense to them.
