Jonathan Finegold also declares that anti-fractional reserve banking Austrians are “increasingly in the minority.” He even groups Roger Garrison amongst the pro-fractional reserve group. I have yet to see other Austrian responses.
All I can say is: this is good news. The anti-fractional reserve banking Austrians are easily the worst and most ignorant subgroup of the whole Austrian school. They take their views from the work of Murray Rothbard, Hans-Hermann Hoppe, and Jesús Huerta de Soto.
But the next question the pro-fractional reserve banking Austrians must answer is this: if fractional reserve banking is acceptable, then why doesn’t its creation of credit money/fiduciary media not artificially lower interest rates and cause endless Austrian trade cycles? If they admit that Austrian trade cycles would result, then they have admitted (on the logic of their own theories) that capitalism is inherently unstable and leads to endogenous business cycles.
If they choose to deny that Austrian trade cycles would result, then all I can say is that they have some explaining to do.
This also seems to be the perfect time to update a set of links to my own posts on fractional reserve banking below. Without exaggeration, I think I can say that the most comprehensive debunking of the anti-fractional reserve banking Austrians can be found on my blog in the following posts:
“Bibliography on the Irregular Deposit (depositum irregulare) in Roman Law,” September 6, 2012.
“Huerta de Soto on Banking in Ancient Rome: A Critique,” September 2, 2012.
“Huerta de Soto on Justinian’s Digest 16.3.25.1,” September 1, 2012.
“Chapter 1 of Huerta de Soto’s Money, Bank Credit and Economic Cycles: A Critique, August 31,” 2012.
“A Simple Question for Opponents of Fractional Reserve Banking,” August 17, 2012
“More on Goldsmiths’ Notes and the Act of 1704,” May 13, 2012.
“Funny Money: A Loaded Phrase,” May 12, 2012.
“Hayek’s Original View of Fractional Reserve Banking,” February 29, 2012.
“Fractional Reserve Banking, Option Clauses, and Government,” January 31, 2012.
“Are the Public Ignorant of the Nature of Fractional Reserve Banking?,” December 17, 2011.
“Why is the Fractional Reserve Account a Mutuum, not a Bailment?,” December 17, 2011.
“Callable Option Loans and Fractional Reserve Accounts,” December 16, 2011.
“Future Goods and Fractional Reserve Banking,” December 15, 2011.
“Rothbard on the Bill of Exchange,” December 11, 2011.
“Hoppe on Fractional Reserve Banking: A Critique,” December 11, 2011.
“The Monetary Production Economy and Fiduciary Media,” December 11, 2011
“Fractional Reserve Banking: An Evil?,” June 26, 2010.
“The Romans and Fractional Reserve Banking,” February 23, 2011.
“Gene Callahan on Fractional Reserve Banking,” February 18, 2011.
“Lawrence H. White refutes Huerta de Soto on Fractional Reserve Banking,” February 22, 2011.
“Selgin on Fractional Reserve Banking,” June 1, 2011.
“Schumpeter on Fractional Reserve Banking,” June 12, 2011.
“If Fractional Reserve Banking is Fraudulent, Why isn’t the Insurance Industry Fraud?,” September 29, 2011.
“The Mutuum Contract in Anglo-American Law,” September 30, 2011.
“Rothbard Mangles the Legal History of Fractional Reserve Banking,” October 1, 2011.
“More Historical Evidence on the Mutuum Contract,” October 1, 2011.
“What British Law Says about the Mutuum Contract,” October 2, 2011.
“If Fractional Reserve Banking is Voluntary, Where is the Fraud?,” October 3, 2011.
