On George Selgin, Fractional Reserve Banking, and the Curious Sport of Insulting Austrian Economists

August 12, 2013
Don't make cats sad.

Don’t make cats sad.

Insulting Austrian economists is a popular sport among non-Austrian economists. Paul Krugman reigns as champion, with his latest feat of derogatory dexterity appearing in his column of July 16th, entitled The Paradox of Flexibility:

Well, Hazlitt has been wrong about everything for more than 80 years, and is still regarded as a guru. Bad ideas, it appears, are extremely robust in the face of contrary evidence.

Nice jab, Paul. Good one!

I was nonplussed this morning to witness George Selgin get in on the fun. Selgin is a self-styled former Austrian economist whom I understood as well regarded among the Austrian marketeers that I’ve heard speak. His lecture for the Austrians at the Ludwig von Mises Institute entitled The Private Supply of Money is one of my all time favorites from that outfit, so imagine my perverse interest when I happened upon a post of his entitled A Theory of Banking Made Out of Thin Air, which began thus:

Instances of self-styled Austrian economists bungling their banking theory seem almost as common these days as instances of theologians bungling their cosmology were six centuries ago.

Ouch, George! I didn’t know you could dish ’em out like that!  Read the rest of this entry »