Monetary Theory S01E03 · Free Banking

Overview

In lecture three, we examine banks’ role in issuing money under a gold standard, explaining why people prefer banking services to direct gold transactions and what constrains banks without legal limits. We explore fractional-reserve banking as a voluntary system where banks provide payments and interest while lending a portion of deposits. The lecture concludes by showing how market forces—adverse clearings, reserve losses, and the price-specie flow mechanism—naturally limit money creation, allowing competitive banking systems to self-regulate without central bank oversight.

Torrents

Subtitles

Episodes

1. 1 1. Money: Private or Public?2026-03-03 · 56mIn our introductory lecture, Dr. White delves into monetary theory by examining the fundamental question of whether markets or governments should provide money, drawing on historic
2. 2 2. The Gold Standard2026-03-03 · 1h 9mIn lecture two, we learn about the mechanics of a gold standard, focusing on how supply and demand for monetary gold determine money’s quantity and purchasing power. Dr. White expl
3. 3 3. Free Banking2026-03-03 · 1h 6mIn lecture three, we examine banks’ role in issuing money under a gold standard, explaining why people prefer banking services to direct gold transactions and what constrains banks
4. 4 4. The Fiat Standard2026-03-03 · 1h 5mIn lecture four, we explore fiat money—currency created by government decree rather than commodity backing—tracing its rise after wartime suspensions of the gold standard and the s
5. 5 5. Government in Money2026-03-03 · 1h 5mIn lecture five, we consider whether government intervention in monetary services improves public welfare, using concepts like market failure and Pareto efficiency. We evaluate pub
6. 6 6. Bank Fragility2026-03-03 · 1h 6mIn lecture six, we analyze arguments for government involvement in banking, particularly the claim that unrestricted banking is inherently unstable and prone to runs. We explore th
7. 7 7. Money Making2026-03-03 · 1h 6mIn lecture seven, we study the underlying causes of money growth and inflation, examining why central banks issue more money than is consistent with stable purchasing power. We del
8. 8 8. How to Secure Better Money2026-03-03 · 1h 10mIn our eighth and final lecture, we discuss the challenges of maintaining sound money in a fiat monetary system and examine potential solutions to prevent fiscal problems from unde