Implementing genuine Austrian policy would require abolishing fractional reserve banking

Evidence

Second, if the only policy on offer is to get the government out of economic affairs completely, then its not clear how one does it short of engaging in a kind of “year zero” purge of the modern economy and polity. Similarly, the notion of relying on “real savings” rather than “artificial credit” would require the abolition of fractional reserve banking—where the bank lends out multiples of its reserves—and therefore an end to, for example, securitization, car loans, education loans, mortgages, and so on. It’s hard to see this as either welfare improving or politically sustainable in any meaningful sense. — Mark Blyth, Austerity, 400

Categorization

• XREF: Provides the logical endpoint of the anti-credit stance that Blyth elsewhere links to modern monetary theory debates and to Mattei’s account of policy implementation difficulty. — connects to: Early Chicago liberal Simons advocated abolishing fractional-reserve banking and heavy wealth redistribution — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 722; Samir Amin proposed abolishing the operations accounts and creating national central banks — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 172; The Great Moderation consensus collapsed in 2008 exactly as Austrian theory predicted — Mark Blyth, Austerity: The History of a Dangerous…, 387

Broader Connections

• Early Chicago liberal Simons advocated abolishing fractional-reserve banking and heavy wealth redistribution #expands (0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 722
• Samir Amin proposed abolishing the operations accounts and creating national central banks #expands (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 172