This paper traces the recent debate over the legitimacy of maturity mismatching and fractional reserve banking. It shows that there is common ground between Bagus and Howden :399–406, 2009, 106:295–300, 2012) on the one hand and Evans on the other regarding contractual arrangements that lead to fractional reserve banking, while both agree that fractional reserve banking that arises out of a bailment or storage contract constitutes fraud. Block and Barnett :711–716, 2009, (...) 100:229–238, 2011) stress the illegitimacy of fractional reserve banking for creating more money substitutes than there is actual money. While it is true that fractional reserve banks are capable of creating money, this activity still cannot be regarded as fraudulent using a common law definition of fraud for it can only take place with requisite client collaboration that makes it impossible to identify a victim. (shrink)

In a number of recent articles, the debate on the ethics of fractional reserve “free” banking has been extended to loan maturity mismatching, specifically the banking practice of borrowing short and lending long. Barnett and Block :711–716, 2009; 2010) claim the practice is illicit, because like fractional reserve banking it creates duplicate property titles. They argue there is a continuum in the time dimension between the two kinds of activities. Bagus and Howden :399–406, (...) 2009; 106:295–300, 2012a; Eur J Law Econ, 2012b; Bus Ethics 22:235–245, 2013) maintain that loan maturity mismatching does not create duplicate titles and is not illicit, and that from an economic and legal perspective there is no continuum with fractional reserve banking. Cachanosky and Evans enter the debate from the free-banking standpoint and view both practices as legitimate. In this paper, I agree with the conclusions of Bagus and Howden, but adopt a different approach to support this position. Using the title-transfer theory of contract, I demonstrate from first principles why loan maturity mismatching does not create duplicate property titles and is a legitimate practice. Employing this same theory, I then present a novel argument to show why the contractual arrangements found in fractional reserve banking are logically contradictory and illegitimate. (shrink)

In this article we reply to George Selgin’s counterarguments to our article “Fractional Reserve Free Banking: Some Quibbles”. Selgin regards holding cash as saving while we focus on the real savings necessary to maintain investment projects. Real savings are unconsumed real income. Variations in real savings are not [...].

The necessity for a government “lender of last resort” has been advanced as a justification for central banking. In this paper, I compare lending practices under central banking with those that would be likely to exist under a system of fractional-reserve free banking (FRFB). To do this I examine the underlying nature of banks as warehousing and credit-granting institutions and consider how redemption runs can arise as a consequence of fractional reserves in this system. (...) Following the work of Thornton and Bagehot, I describe principles of prudent lending that can be used to stem a redemption run when it arises. I examine the market incentives that apply under FRFB and how these incentives are perverted under a system of central banking. I find that a government central bank is not well-placed to lend according to prudent standards, and in fact is likely to use its power to pursue political goals that are at odds with prudent lending. I examine the US financial crisis and the actions of the Federal Reserve System to illustrate this view. (shrink)

In this article we consider an argument put forth by Selgin in support of the claim that there exists a mechanism for limiting coordinated expansions of fiduciary media under a system of fractional reserve free banking. Selgin argues that such banks hold risk-adjusted reserves against expected losses, and even if the expectation of reserve losses remains zero, the variance of such losses increases under an in-concert expansion . It is this increased variability that is claimed to (...) act as a brake on the expansion. We take issue with this argument on the basis of the fact that such a characterization of observed clearings would require that characteristics of the underlying data-generating process be obtainable from pathwise realizations of that process. In other words, there is an implicit assumption of stationarity in Selgin’s argument, and this assumption is at odds with well-known empirical facts of non-stationarity associated with most economic time series. We also point out ways in which techniques of risk management commonly found in the modern financial industry are unlikely to be effective in addressing this problem. (shrink)

The conventional view of banking crises sees them as an inherent problem of fractional?reserve banking systems. According to this view, government regulation in the form of an alert central bank (acting as a ?lender of last resort"), or deposit insurance, or both is needed to keep isolated bank failures from generating systemwide panic. But this view does not mesh with historical experience, which points to government regulation itself as the most likely cause of banking crises.

Cette réaction est suscitée par l’article de Laurent Le Maux, récemment publié dans ce Journal. Le Maux affirme que Ludwig von Mises était le défenseur d’un système de réserves fractionnaires et un précurseur des économistes contemporains partisans des réserves fractionnaires. Nous critiquons la manière dont Le Maux utilise la littérature ancienne dans ce domaine, et nous montrons qu’il n’est pas suffisamment au fait des travaux de Mises et des problèmes qui divisent les défenseurs et les opposants du système de réserves (...) fractionnaires. Les écrits de Ludwig von Mises fournissent la preuve accablante qu’il était, et il le disait lui-même, un économiste qui développait l’approche de la Currency School dans le domaine des problèmes bancaires.This paper takes issue with an article by Laurent Le Maux that recently appeared in this journal. Le Maux claims that Ludwig von Mises was an advocate of fractional-reserve banking and a precursor of presentday economists defending fractional reserves. We criticise Le Maux’s treatment of previous literature in the field, and show that he is insufficiently acquainted with Mises’ work and with the problems that divide advocates and opponents of fractional reserves. Ludwig von Mises’ writings provide overwhelming evidence that he was, and saw himself as, an economist who developed the approach of the Currency School toward problems of banking. (shrink)

Cette réaction est suscitée par l’article de Laurent Le Maux, récemment publié dans ce Journal. Le Maux affirme que Ludwig von Mises était le défenseur d’un système de réserves fractionnaires et un précurseur des économistes contemporains partisans des réserves fractionnaires. Nous critiquons la manière dont Le Maux utilise la littérature ancienne dans ce domaine, et nous montrons qu’il n’est pas suffisamment au fait des travaux de Mises et des problèmes qui divisent les défenseurs et les opposants du système de réserves (...) fractionnaires. Les écrits de Ludwig von Mises fournissent la preuve accablante qu’il était, et il le disait lui-même, un économiste qui développait l’approche de la Currency School dans le domaine des problèmes bancaires.This paper takes issue with an article by Laurent Le Maux that recently appeared in this journal. Le Maux claims that Ludwig von Mises was an advocate of fractional-reserve banking and a precursor of presentday economists defending fractional reserves. We criticise Le Maux’s treatment of previous literature in the field, and show that he is insufficiently acquainted with Mises’ work and with the problems that divide advocates and opponents of fractional reserves. Ludwig von Mises’ writings provide overwhelming evidence that he was, and saw himself as, an economist who developed the approach of the Currency School toward problems of banking. (shrink)

In this paper we extend an argument originally developed in Hülsmann to analyze changes to the structure of production that occur when the demand for money changes. In particular, we show that Hülsmann’s argument, which contrasted such changes under commodity and fiat systems, applies as well to the case of 100% reserve systems contrasted with fractional reserve free banking systems . Specifically, we argue that under a 100% reserve system, the structure of production will change (...) in response to a change in demand for money, and that it will not under FR/FB. In fact, such changes are beneficial. Since one of the central arguments in defense of FR/FB is precisely the fact that it avoids such changes to the structure of production , we conclude that this argument amounts to comparing different mechanisms for attaining different equilibrium states, and hence is invalid as a defense of that mechanism as such. (shrink)

In Time Deposits, Dimension, and Fraud (2009), William Barnett and Walter Block argue that by borrowing short and lending long there is an over issuance of property rights. Their article, however, does not fully extend the consequences of their contribution. Once this is done, it becomes clearer that their argument suits a great impediment to banking, becoming a possible reason to support rather than to oppose fractional reserve banking. Bagus and Howden (J Bus Ethics 90(3):399–406, 2009) (...) comment on Barnett and Block (J Bus Ethics 88(4):711–716, 2009), the authors claim that while maintaining the illegitimacy of fractional reserve deposits, borrowing short and lending long it is actually not illegitimate. An extension on Bagus and Howden (2009) will show that their line of argumentation can be applied as a defense of fractional reserve banking as well. (shrink)

Salerno asserts that in the debate between those who favor and oppose fractional reserve banking, the important issue is not whether or not this institution is inherently fraudulent, but, rather, does it or does it not cause the business cycle. We join this author in thinking both important; however, we reverse this order.

Pancreatitis is a complex, progressively destructive inflammatory disorder. Alcohol was long thought to be the primary causative agent, but genetic contributions have been of interest since the discovery that rare PRSS1, CFTR and SPINK1 variants were associated with pancreatitis risk. We now report two associations at genome-wide significance identified and replicated at PRSS1-PRSS2 and X-linked CLDN2 through a two-stage genome-wide study. The PRSS1 variant likely affects disease susceptibility by altering expression of the primary trypsinogen gene. The CLDN2 risk allele is (...) associated with atypical localization of claudin-2 in pancreatic acinar cells. The homozygous CLDN2 genotype confers the greatest risk, and its alleles interact with alcohol consumption to amplify risk. These results could partially explain the high frequency of alcohol-related pancreatitis in men. © 2012 Nature America, Inc. All rights reserved. (shrink)

We report the identification of a recurrent, 520-kb 16p12.1 microdeletion associated with childhood developmental delay. The microdeletion was detected in 20 of 11,873 cases compared with 2 of 8,540 controls and replicated in a second series of 22 of 9,254 cases compared with 6 of 6,299 controls. Most deletions were inherited, with carrier parents likely to manifest neuropsychiatric phenotypes compared to non-carrier parents. Probands were more likely to carry an additional large copy-number variant when compared to matched controls. The clinical (...) features of individuals with two mutations were distinct from and/or more severe than those of individuals carrying only the co-occurring mutation. Our data support a two-hit model in which the 16p12.1 microdeletion both predisposes to neuropsychiatric phenotypes as a single event and exacerbates neurodevelopmental phenotypes in association with other large deletions or duplications. Analysis of other microdeletions with variable expressivity indicates that this two-hit model might be more generally applicable to neuropsychiatric disease. © 2010 Nature America, Inc. All rights reserved. (shrink)

This article contributes to a recent debate between Barnett and Block : 711–716, 2009), Bagus and Howden : 399–406, 2009), Barnett and Block, Cachanosky and Bagus and Howden regarding the conceptual distinction between demand deposits and time deposits. It is argued that from an economic perspective there is nothing inherently fraudulent or illegitimate about deposit accounts that are available ‘on demand’, but that this relies on certain contractual provisions. Particular attention is drawn to option clauses and withdrawal clauses, which “solve” (...) the problems raised by Barnett and Block, and Bagus and Howden. Previous authors have also neglected the asset side of banks balance sheets, and this is shown to further justify the legitimacy of fractional reserve banking. (shrink)

Barnett and Block (Journal of Business Ethics, 2009 ) attack the heart of modern banking by claiming that the practice of borrowing short and lending long is illicit. While their claim of illegitimacy concerning fractional reserve banking can be defended, their justification lacks substance. Their claim is herein strengthened by a legal analysis of deposits and loans based on Huerta de Soto (Money, Bank Credit and Economic Cycles, 2006 ). A combined legal and economic analysis shows (...) that while lending deposits can be regarded as illicit, the maturity mismatching of loans is legitimate contrary to Barnett and Block’s claim. No over-issuance of property rights is involved with this practice once the distinction between present and future goods is taken into account. However, while the practice is not illicit per se , it is greatly assisted and developed through the presence of a fractional reserve banking system, and can sometimes breed detrimental effects. (shrink)

How ethical have recent banking practices been? We answer this question via an economic analysis. We assess the two dominant practices of the modern banking system – fractional reserves and maturity transformation – by gauging the respective rights of the relevant parties. By distinguishing the legal and economic differences between deposit and loan contracts, we determine that the practice of maturity transformation (in its various guises) is not only ethical but also serves a positive social function. The (...) foundation of the modern banking system – the holding of fractional reserves against deposits – is, however, problematic from economic, legal and ethical perspectives. Starting from a microanalysis of money's function, a reassessment of the current laws concerning the practice is encouraged, with the aim not only to rectify economic irregularities but also to realign depositors' rights with the obligations of the banking sector. (shrink)

How ethical have recent banking practices been? We answer this question via an economic analysis. We assess the two dominant practices of the modern banking system – fractional reserves and maturity transformation – by gauging the respective rights of the relevant parties. By distinguishing the legal and economic differences between deposit and loan contracts, we determine that the practice of maturity transformation (in its various guises) is not only ethical but also serves a positive social function. The (...) foundation of the modern banking system – the holding of fractional reserves against deposits – is, however, problematic from economic, legal and ethical perspectives. Starting from a microanalysis of money's function, a reassessment of the current laws concerning the practice is encouraged, with the aim not only to rectify economic irregularities but also to realign depositors' rights with the obligations of the banking sector. (shrink)

Barnett and Block (J Bus Ethics 18(2):179–194, 2011 ) argue that one cannot distinguish between deposits and loans due to the continuum problem of maturities and because future goods do not exist—both essential characteristics that distinguish deposit from loan contracts. In a similar way but leading to opposite conclusions (Cachanosky, forthcoming) maintains that both maturity mismatching and fractional reserve banking are ethically justified as these contracts are equivalent. We argue herein that the economic and legal differences between (...) genuine deposit and loan contracts are clear. This implies different legal obligations for these contracts, a necessary step in assessing the ethics of both fractional reserve banking and maturity mismatching. While the former is economically, legally, and perhaps most importantly ethically problematic, there are no such troubles with the latter. (shrink)

What role do demand deposits serve in the financial system? The answer to this simple question has great implications in keeping the legal terms of the contract consistent with the demands of the financial system. Demand deposits are a perfect monetary substitute. Since money is only held to hedge against perceived uncertainty in both the timing and magnitude of future expenditures, demand deposits are demanded for the same reason. From this we derive three main conclusions. First, a financial contract similar (...) to a demand deposit cannot substitute for money. Second, full agreement to a financial contract does not create a perfect substitute for money unless it provides money’s two key characteristics: on demand and par value redemption. Finally, the demand for fractional-reserve demand deposits is fostered by an exogenous source and that demand for a good or service is not a sufficient condition to justify its legality or ethicality. (shrink)

Full-reserve banking, which prohibits private money creation, has not been implemented since the 19th century. Thereafter, bank deposits became the dominant means of payment and have retained their position until today. The specific contribution of this paper is to provide a comprehensive outlook on the historical and contemporary proposals for full-reserve banking. The proposals for full-reserve banking have become particularly popular after serious financial crises....

This paper investigates ontological dimensions of the blockchain by asking what kind of socio-technical object bitcoin is. It discusses both blockchain's political qualities and the political forms enabled by its emergence. It first observes recent approaches to the ontology of money and the political qualities of the ledgers used by the current fractional reserve banking model. It then directs the same questions at blockchain technology. The paper discusses an ontology proposed by Ole Bjerg and argues in favour (...) of a mixed-ontology approach to blockchains. It then questions the political qualities of the distributed ledger as a digital object and highlights the apparent absence of authority figures in the model. Finally, it argues that the political ontology of the blockchain can be framed as the displacement of authority from institutional actors into instrumental control of trust, in a dynamically distributed environment. (shrink)

If fractional-reserve demand deposits are common, and illegitimate, an obvious flaw in the banking system is exposed. However, this article maintains that the only reason why demand deposits may be considered illegitimate is because of a way of defining them that renders them almost irrelevant. This article provides a response to Bagus et al., and identifies examples of how they misrepresent Evans. It also provides further considerations on the tradeoffs relating to the availability of a deposit; methodological (...) subjectivism; and the potential for hybrid contracts. Deposit and loan contracts may be hard to mix, but the actual results of doing so should not be ignored. (shrink)

In the present paper we argue that the theory of contracts embraced by many libertarian scholars and relied upon by them in sundry important debates (e.g. over morality of the fractional reserve banking or loan maturity mismatching etc.), that is, the title transfer theory of contracts (TTT) should be rejected as not being able to account for the binding force of future-oriented contracts, including contracts deemed enforceable by those scholars themselves. The TTT claims that the only contracts (...) that should be legally binding are these where the debtor’s failure to abide by them constitutes a violation of the creditor’s private property rights. However, as we argue, no default of the debtor in a future-oriented contract can in itself amount to such a violation. (shrink)

Depositors have perceived banks as acting unethically during the most recent recession. One area of consternation is the ambiguity of the legal obligations entailed by the deposit contract when it is backed with only fractional reserves. In this article, we apply an existing analysis of the legitimacy and ethicality of banking practices to a wider range of financial transactions, including insurance policies, securities lending, perpetual bonds, and callable loans. Securities lending in particular creates rights violations analogous to those (...) in fractional-reserve banking. Both callable loans and perpetual bonds have clear legal obligations which are not inherently problematic, though we herein clarify what these obligations are. Finally, we apply our ethical framework to demonstrate that insurance products are distinct from banking deposit contracts, and that perceived parallels between the two products underestimate these differences. (shrink)

The pioneering sociologist William Graham Sumner was a prolific and astute historian of the early American republic, whose work was informed by his classical liberalism and his understanding of economics. He authored seven major works including biographies and thematic studies concentrating on the vital subjects of currency, banking, business cycles, foreign trade, protectionism, and politics. Although his works are out of print, and hardly mentioned or referred to by historians or economists, they are quite valuable for understanding the politics (...) and major economic issues of the first century of the republic.1 They are: History of American Currency, Lectures on the History of Protection, Andrew Jackson, Alexander Hamilton, The Financier and Finances of the American Revolution, 2 vols., Robert Morris, History of Banking in the United States. As one can see, Sumner was most interested in the history of money and banking in America. He was a resolute opponent of inflation, inconvertible currencies, legal tender laws, bimetallic standards, and the American practice of fractional-reserve banking. His theory of the business cycle was built on the work of antebellum political economists such as Condy Raguet. Sumner’s understanding of it is sophisticated and proto- Austrian. (shrink)

In the pages of this journal, a fruitful debate has evolved on the ethical legitimacy of fractional-reserve banking. In this article, we respond to the new arguments raised by Evans as we clarify our position on the unethical and illegitimate nature of fractional-reserve banking. Fractional-reserve banking is not a recent financial innovation but represents a long-standing legal aberration. The co-mingling of two mutually exclusive financial contracts, deposit and loan, confounds the contracting (...) parties’ purposes, intents, rights, and obligations. As a result, it creates unsolvable legal difficulties and ethical dilemmas. While these problems are most evident in the case of a bank run, they also arise when trying to answer the simple question of “who owns a deposit?”. (shrink)

The 2004-5 essay competition set by the Federal Reserve Bank of Minneapolis asks, “Why are some countries rich and some countries poor?” It has information which strangely does not feature the name Amartya Sen. But I have conceived of a defence against the charge that this is bad practice, which resembles appealing to the descriptivist theory of names.

Barnett and Block claim that Bagus and Howden support indirectly the concept of market failure. In this paper, we show that maturity mismatching in an unhampered market may imply entrepreneurial error but cannot be considered a market failure. We demonstrate why fractional-reserve banking leads to business cycles even if there is no central bank and why maturity mismatching does not per se lead to clusters of errors in a free market. Finally, in contrast to the examples provided (...) by Barnett and Block, we assure that maturity mismatching does not imply the creation of two incompatible contracts due to the fungible nature of money. (shrink)

We address the most fundamental yet routinely ignored issue in economics today: that of distributive impact of the monetary system on the real economy. By re-examining the logical implications of token re-presentation of value and Irving Fisher’s theory of exchange, we argue that producers of value incur incidental expropriation of wealth associated with the deflationary effect that new value supply has on the purchasing power of money. In order to remedy the alleged inequity we propose a value-added negative tax (VANT) (...) based on net individual contribution to the economic output, which is structured as a negative tax function geared to profits derived from eligible productive activities in consideration of their estimated deflationary impact. We show that an adequately optimised VANT can be non-inflationary and have zero net cost to the public. Furthermore, economic output stands to improve due to direct incentivisation of value creation, making the proposed scheme not only politically feasible but economically desirable. The proposal advances the principle of ‘fair money’, where all forms of economic value are attributed to their rightful owners prior to any positive taxation. (shrink)

We stipulate, arguendo, that fractional-reserve-demand deposit banking is per se fraudulent. We ask whether or not time deposit banking can also be illicit, and answer in the positive, if there is a mismatch between the time dimensions of deposits and loans. To wit, if an intermediary borrows short and lends long.

We stipulate, arguendo, that fractional-reserve-demand deposit banking is per se fraudulent. We ask whether or not time deposit banking can also be illicit, and answer in the positive, if there is a mismatch between the time dimensions of deposits and loans. To wit, if an intermediary borrows short and lends long.

The necessity for a government “lender of last resort” has been advanced as a justification for central banking. In this paper, I compare lending practices under central banking with those that would be likely to exist under a system of fractional-reserve free banking (FRFB). To do this I examine the underlying […].

In Barnett and Block (J Bus Ethics 88(4):711–716, 2009a), the present authors claim that borrowing short and lending long is fraudulent, and thus ought to be prohibited on legal grounds. Bagus and Howden (J Bus Ethics 90(3):399, 2009) take issue with our ethical analysis. The present paper is our response to these authors; it is an attempt to defend Barnett and Block (J Bus Ethics 88(4):711–716, 2009a) against the very interesting and important, although we believe, erroneous, criticisms of Bagus and (...) Howden (J Bus Ethics 90(3):399, 2009). (shrink)

The dramatic events of the crisis have reignited debates on the independence of central banks and the scope of their mandates. In this article, I contribute to the normative understanding of these developments by discussing John Rawls’s position in debates of the 1950s and 1960s on the independence of the US Federal Reserve. Rawls’s account of the central bank in his property-owning democracy, Democratic Central Banking, assigns authority over monetary policy directly to the government and prioritizes low unemployment (...) over price stability. I contrast DCB with Central Bank Independence, which requires that the central bank is independent of the government and pursues low inflation. I evaluate DCB by asking whether justice as fairness requires democratic control of the central bank and argue that it does not. Instead, so I argue, the choice between DCB and CBI should be justified in terms of the difference principle. By reflecting on central banking in a property-owning democracy, I cast new light on the Rawlsian realistic utopia of a just capitalist society, while also investigating democratic objections to today’s independent central banks. (shrink)

When Muslims thought of establishing milk banks, religious reservations were raised. These reservations were based on the concept that women's milk creates ‘milk kinship’ believed to impede marriage in Islamic Law. This type of kinship is, however, a distinctive phenomenon of Arab tradition and relatively unknown in Western cultures. This article is a pioneer study which fathoms out the contemporary discussions of Muslim scholars on this issue. The main focus here is a religious guideline (fatwa) issued in 1983, referred to (...) in this article as ‘one text’, by the Egyptian scholar Yūsuf al-Qaradāwī who saw no religious problem in establishing or using these banks. After a number of introductory remarks on the ‘Western’ phenomenon of milk banks and the ‘Islamic’ phenomenon of ‘milk kinship’, this article analyses the fatwa of al-Qaradāwī‘one text’ and investigates the ‘two contexts’ in which this fatwa was discussed, namely, the context of the Muslim world and that of Muslim minorities living in the West. The first context led to rejecting the fatwa and refusing to introduce the milk banking system in the Muslim world. The second context led to accepting this system and thus allowing Muslims living in the West to donate and receive milk from these banks. Besides its relevance to specialists in the fields of Islamic studies, anthropology and medical ethics, this article will also be helpful to physicians and nurses who deal with patients of Islamic background. (shrink)

Digital business has marked an era of transformation, but also an unprecedented growth of cyber threats. While digital explosion witnessed by the banking sector since the COVID-19 pandemic has been significant, the level and frequency of cybercrimes have gone up as well. Cybercrime officials attribute it to remote working—people using home computers or laptops with vulnerable online security than office systems; malicious actors relentlessly developing their tactics to find new ways to break into enterprise networks and grasping defence evasion; (...) persons unemployed during the pandemic getting into hacking; cloud and data corruption; digital fatigue causing negligence; etc. This study adopts a case-based approach to explore the importance of business ethics, information sharing and transparency to build an information-driven society by scouting the case of Punjab and Maharashtra Co-operative (PMC) Bank, India. PMC defaulted on payments to its depositors and was placed under Reserve Bank of India’s directions due to financial irregularities and a massive fraud perpetrated by bank officials by orchestrating the bank’s IT systems. The crisis worsened when panic-stricken investors advanced their narrative through fake news peddled via social media channels, resulting in alarm that caused deaths of numerous depositors. It exposed several loopholes in information management in India’s deposit insurance system and steered the policy makers to restructure the same, thus driving the country consistent with its emerging market peers. The study further identifies best practices for aligning employees towards ethical behaviour in a virtual workplace and the pedagogical approaches for information management in the new normal. (shrink)

SECRETS OF THE TEMPLE : HOW THE FEDERAL RESERVE RUNS THE COUNTRY by William Greider New York: Simon and Schuster, 1987. 798 pp., $24.95 Greider pursues the theme that the Federal Reserve System promotes the interests of Wall Street?banks and bondholders?over those of Main Street?the rest of society. The wealth of fascinating observations he makes are, unfortunately, organized by a 1950s?style Keynesianism and a faith in unlimited, majoritarian democracy. Neither of these beliefs are at all adequate for remedying (...) the deficiencies of political control of the money supply, which is the real problem Greider has uncovered. (shrink)

We analyze the transition of central banks from lenders to market makers of last resort. The adoption of unconventional monetary policies characterizes this transition. In their new role as market makers, central banks engage in the latter by extending and reinforcing interventions in other markets than the traditional bank reserves market. We then explain that the difference between the two roles is one of degree rather than kind. In both cases, the prevention of liquidity shortages is a primary concern. As (...) conventional policies become inadequate, central banks resort to unconventional policies to escape a general liquidity shortage at the zero lower bound. However, these unconventional policies do not solve the structural problems in financial and real markets. Both conventional and unconventional monetary policies cause price distortions, in particular on asset markets. The policies of the market maker of last resort prevent necessary readjustments of cyclical divergences between real and financial markets. (shrink)

Central banks have accumulated unparalleled power over the conduct of macroeconomic policy. Key for this development was the articulation and differentiation of monetary policy as a distinct policy domain. While political economists emphasize the foundational institutional changes that enabled this development, recent performativity-studies focus on central bankers’ invention of expectation management techniques. In line with a few other works, this article aims to bring these two aspects together. The key argument is that, over the last few decades, central banks have (...) identified different strategies to assume authority over “expectational politics” and reinforced dominant institutional forces within them. I introduce a comparative scheme to distinguish two different expectational governance regimes. My own empirical investigation focuses on a monetarist regime that emerged from corporatist contexts, where central banks enjoyed “embedded autonomy” and where commercial banks maintained conservative reserve management routines. I further argue that innovations towards inflation targeting took place in countries with non-existent or disintegrating corporatist structures and where central banks turned to finance to establish a different version of expectation coordination. A widespread adoption of this “financialized” expectational governance has been made possible by broader processes of institutional convergence that were supported by central bankers themselves. (shrink)

Ethics in participatory research -- Partnership, collaboration and power -- Blurring the boundaries between researcher and researched, academic and activist -- Community rights, conflict and democratic representation -- Co-ownership, dissemination and impact -- Anonymity, privacy, and confidentiality -- Institutional ethical review processes -- Social action for social change.

Kit Fine’s arguments in Essence and Modality are widely accepted as being a decisive blow against modal essentialism. A selection of replies exist that have done little to counter the general view that modally construed essence is out of touch with what we really mean when we make essentialist claims. I argue that Fine’s arguments fail to strike a decisive blow, and I suggest a new interpretation of the debate that shows why Fine’s arguments fall short of achieving their goal.

Professionals in all fields, struggling to be both successful and ethical, will find the book challenging, provocative, yet reassuring.

McDowell offers an unusually frank discussion of the ethical principles that should govern decisions and analyzes the pressures that drive some professionals to sell unnecessary or excessive services.