Mere Quibbles: Bagus and Howden's Critique of The Theory of Free Banking

Abstract

Despite its title, Philipp Bagus and David Howden's critique of The Theory of Free Banking does more than merely "quibble" with that book's arguments: their criticisms of those arguments are such as to suggest that the very foundation upon which my defense of free banking rests is deeply flawed. Here I defend my work against Bagus and Howden's criticisms, by showing that they rest upon careless or disingenuous readings of my arguments and a poor grasp of basic monetary economics.

Keywords: free banking, fractional reserves, Austrian theory of the business cycle

JEL Classification: E31, E32, E41, E42, G21