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Herbert Spencer's Case for Free Banking

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  • Bragues, George
  • Assistant, JHET

Abstract

Though now almost entirely forgotten, Herbert Spencer was among the most widely read thinkers during the late 19th century. As part of his system of synthetic philosophy, Herbert Spencer addressed the topics of money and banking. This philosophic system articulates a concept of justice based on the principle of equal freedom. Invoking this principle, Spencer rejected a government superintended regime of money and banking as unjust. Instead, he morally favored a system of free banking. Spencer also defended this system on economic grounds. His argument is that banks could be self-regulating in their management of the money supply, on the condition that the government limit its activities in the financial sphere to the enforcement of contracts. While Spencer’s case is not beyond questioning on philosophic and political grounds, he offers a distinctive and forceful analysis.

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  • Bragues, George & Assistant, JHET, 2021. "Herbert Spencer's Case for Free Banking," OSF Preprints w2gqs, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:w2gqs
    DOI: 10.31219/osf.io/w2gqs
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    References listed on IDEAS

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    1. Shackle,G. L. S., 2010. "The Nature of Economic Thought," Cambridge Books, Cambridge University Press, number 9780521147590, November.
    2. Cornett, Marcia Millon & McNutt, Jamie John & Strahan, Philip E. & Tehranian, Hassan, 2011. "Liquidity risk management and credit supply in the financial crisis," Journal of Financial Economics, Elsevier, vol. 101(2), pages 297-312, August.
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