Parallel Journeys: Adam Smith and Milton Friedman on the Regulation of Banking
AbstractAdam Smith and Milton Friedman are famous for championing Laissez Faire, yet both supported government regulation of the banking system. In both cases their deviation from free market orthodoxy was based on a careful reading of financial history: especially Smith's reading of the Crisis of 1772 and Friedman's reading of the Crisis of 1929-33. In both cases they based their reading on a complex and nuanced account of human nature. This paper describes their parallel journeys to the conclusion that banking requires government regulation.
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Bibliographic InfoPaper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 201004.
Length: 20 pages
Date of creation: 19 Mar 2010
Date of revision:
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More information through EDIRC
banking; Adam Smith; Milton Friedman;
Find related papers by JEL classification:
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-17 (All new papers)
- NEP-BAN-2010-07-17 (Banking)
- NEP-HIS-2010-07-17 (Business, Economic & Financial History)
- NEP-HPE-2010-07-17 (History & Philosophy of Economics)
- NEP-REG-2010-07-17 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- White, Eugene Nelson, 1984. "A Reinterpretation of the Banking Crisis of 1930," The Journal of Economic History, Cambridge University Press, vol. 44(01), pages 119-138, March.
- Bodenhorn, Howard, 1993. "Small-Denomination Banknotes in Antebellum America," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(4), pages 812-27, November.
- David Laidler, 1981. "Adam Smith as a Monetary Economist," Canadian Journal of Economics, Canadian Economics Association, vol. 14(2), pages 185-200, May.
- Selgin, George, 2001. "In-Concert Overexpansion and the Precautionary Demand for Bank Reserves," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 294-300, May.
- Selgin, George & White, Lawrence H, 1997. "The Option Clause in Scottish Banking: A Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(2), pages 270-73, May.
- David Levy, 1987. "Adam Smith's Case for Usury Laws," History of Political Economy, Duke University Press, vol. 19(3), pages 387-400, Fall.
- Rockoff, Hugh, 1974. "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(2), pages 141-67, May.
- Redish,Angela, 2000.
Cambridge University Press, number 9780521570916.
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