First, I want to thank you for replying and addressing the issues.
Second, I want to thank you for replying with a good argument.
Third, I want to clear up, that I am not in entire agreement with the Rothbardian stance on banking, I just didn’t like that you dismissed his essays without addressing a single point. That was my only reason for replying in the manner that I did.
If I said, “God loves circles and knows that corners are bad for them, therefore circles have no corners,” would you agree with me?
Point taken.
As if earning a profit for oneself was a bad thing!
I don’t think he thinks profits are bad, he is a laissez faire economist, but any thing we think, he thinks, is just pure speculation, so I won’t go any further on this point. I think profits are good, and that’s all I can really say.
So, if the depositors do not see what the bank does as a useful service, why do they voluntarily put their money into the bank? Is the bank owned by the Bilderbergers who control people’s minds by magic and make them do things they don’t want to–or what??
Actually it is illegal to hoard money in the US, and to withhold large sums of money you don’t intend to spend. I think the sum is 10,000 dollars. So technically, we don’t freely choose to put our money in banks. And as for free banking, my guess is that less people would participate in fractional reserve banking because the notes would be slightly less valuable then the actual amount of their face value on the free market. But I could be wrong, there is no telling how free willed individuals would value those notes.
Has Mr. Rothbard never been in a traffic jam? Or is he simply too anti-conceptual to admit that it’s the same kind of thing? Should private roads be banned from selling all-year tickets just because all the ticketholders might decide to use the road at the same time and clog up the road?
Although traffic jams would probably be less frequent under capitalism than they are today, chances are they would still occur more often than “bank runs.” Is that a reason to write a diatribe denouncing road operators for wanting to earn a profit for themselves?
Valid critique.
And “social usefulness” is a valid criterion since when?! And if I prefer to hire competent employees instead of incompetent ones and thereby “benefit one set of people at the expense of another,” is that an argument against my existence?
The social usefulness remark, I think was intended to show that given a free choice, rational actors/society as a whole would not participate in things that are of no benefit to the society as a whole. First, Rothbard is an economist, not a philosopher, and I don’t know a single economist who doesn’t use social usefulness as a criterion for determining whether a commodity or service will do well in markets or not. If they serve no purpose, or lead to unfair redistributions in wealth, most markets would not be able to sustain such activities.
Edit: Added a sentence to make a response make sense.