The Review of Austrian Economics

, Volume 25, Issue 2, pp 131–148 | Cite as

Mere quibbles: Bagus and Howden’s critique of the theory of free banking



Despite its title, Philipp Bagus and David Howden’s critique of The Theory of Free Banking does more than merely “quibble” with that book’s arguments; their criticisms of those arguments are such as to suggest that the very foundation upon which my defense of free banking rests is deeply flawed. Here, I defend my work against Bagus and Howden’s criticisms, by showing that they rest upon careless or disingenuous readings of my arguments and a poor grasp of basic monetary economics.


Free banking Fractional reserves Austrian theory of the business cycle 

JEL Classification

E31 E32 E41 E42 G21 



I am grateful to Steve Baker, Toby Baxendale, Nicolas Cachanosky, Bill Lastrapes, Steve Horwitz, and Lawrence H. White for their comments. The usual disclaimer applies.


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© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Department of Economics, the Terry College of BusinessUniversity of GeorgiaAthensUSA

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