Private monetary systems and no Bank of England

'The Bank of England should be abolished, private banks should be allowed to issue their own currency, and money should be backed by a basket of commodities - thus a typical consumer's weekly 'shopping basket' would make up the new pound sterling'

Kevin Dowd in a booklet entitled 'Private Money' (details below) suggests that the Bank of England should be abolished, that private banks should be allowed to issue their own currency, and that money should be backed by a basket of commodities - thus a typical consumer's weekly 'shopping basket' would make up the new pound sterling, chosen in such a way that the value of the pound would not alter as the new definition took effect. The historical evidence indicates that private monetary systems, as in Scotland from 1728 to 1844, have been stable and successful. Whereas the Bank of England, claims Dowd, 'has a record of losses which is comparable to those of the worst managed nationalised trading companies.' He concludes that:

'The lessons of history are very clear. We will never attain monetary stability while we maintain a heavily regulated banking system and entrust its safety and the value of the currency to a central bank. The record of government money is a record of disaster. We must entrust the safety of the banking system instead to those who have a self-interest in protecting it, and we must re-establish a commodity basis for the currency to ensure that prices remain stable'.

- 'Private Money' by Kevin Dowd, published by the Institute of Economic Affairs, 2 Lord North Street, Westminster, London SW1P 3LB (tel 071 799 3745), 1988, L4-50, 71 pages. Readers interested in this theme are also referred to the Libertarian Microfiche Publishing ideas archive maintained by John Zube in Australia. For a L5 cash note he will send a selection of microfiche books and papers on this and related topics - John Zube, 7 Oxley Street, Berrima, NSW 2577, Australia (tel 048 771 436).
- Kevin Dowd, Department of Economics, University of Nottingham, Nottingham NG7 2RD.

You can rate how well you like this idea. Click 0-10 below and press the Submit button.
Bad Idea <- 0 1 2 3 4 5 6 7 8 9 10 -> Great Idea
As of 05/28/96, 21 people have rated this page with the overall rating (0-100%) of: 67%

Previous / Next / Table of Contents