Saying that a gold standard leads inevitably to an inadequate money supply is not the same as saying "history was terrible before fiat money." That is just a silly misrepresentation of my view.
Hamilton was no one's front man. He was one of the most insightful, original thinkers who ever lived and his financial program was brilliantly conceived and executed much to the benefit of the new nation. There were no "monied interests" behind the 1st National Bank. The fact there was very little money here made the Bank a necessity for developement.
The market recognized its genius since American debt immediately became as good as any nation including far more powerful ones. I have never indicated my "conceptions" of a fiat banking system only attempted to clarify misstatements and distortions of reality spread by the goldbuggers.
Rothbard couldn't sharpen Smith, Ricardo or Mills quills and I have never seen anything indicating that he is more than a economic hack. Von Mises I have a great respect for though not agreement with but I doubt if you have ever read The Theory of Money and Credit.
Smith refers several times to the ability of banks to increase the wealth of a nation in the WoN. He is principally refering to the improvement in circulation of the MS that banks allow and the increase in efficency caused by not relying on gold/silver. Page #s supplied on request. Operations and history of the Bank of England or the Bank of Scotland were hardly "foreign concepts" to him.
Ricardo was a speculator and broker and also well understood the necessity and operation of the BoE after all he was a member of parliament. Are you really unaware of these facts or just attempting to be mendacious?
You are correct England was not forced to charter the BoE it could have just allowed the lack of specie to collapse the economy and produce enormous distress and misery. Smith called the BoE "a great engine of state" because it allowed state policy to be carried out so much more easily than without it. Including the policy of increasing the wealth of the nation.
Well lets examine the opposition to the Bank. Jefferson was an economic illiterate and was totally confused about finances and economics. This was a man who believed this should be an agricultural nation without a navy. But even he shut up about the Bank when elected president.(He claimed Hamilton "duped" him wrt the Bank. Madison could not prevent the radicals in his party from refusing recharter of the Bank even though it caused the government incredible difficulties and brought ruin on the nation. He didn't push for non-recharter. Monroe saw what had happened and even the fire-eaters had to allow recharter so he had little to say in opposition after reality set in. Jackson was a true fanatic and destroyed the Bank resulting in a tremendous depression throughout the nation. As a result of the lack of a money supply thousands of wildcat banks sprang up foisting millions of worthless currency on the nation. Fraud was rampant so much so that bank notes were not valid in different states and the notes of the defunct Bank were still considered the most valuable money.
Most of the opposition to the Bank was ideological and not based upon any understanding of Banking, money, finance or economics. Those presidents opposed were lawyers/farmers and ignorant of such matters.
As is the case with most amateur experts you ignore one of the most crucial aspects of monetary systems and that is the velocity of circulation of money. Business activity itself affects the amount of money available. When it is rapid the MS grows when it slows down it shrinks. Where is the determination of the appropriate degree of scarcity made? How is it determined that a region has too much or too little when gold is used and always gravitates to the large cities and wealthy countries? You really believe a government is going to stand aside and watch its people die because there is no gold to carry business? Of course, it won't and this is why there never was a true gold standard. When it caused difficulties it was ditched in practice if not in theory. Isn't it interesting that the most wealthy nations are precisely those which have money supplies from central banks.
Only to those who know little of history are we moving backwards, accurate analysis without ideological bias demonstrates that non-metal money never worked and never can in a world economy. It was just another fable.
I’ll summarize our respective positions on minor points and then go on to address the important aspect of our dialogue:
1. You think gold is an inadequate standard, I think it is better than the fiat non-standard;
2. You think Hamilton was more knowledgeable in financial matters than Jefferson. So do I. I assume we can also agree that Milken, Boesky, and Ebbers are also more financially savvy than Jefferson. Does that mean we should adopt their ideas without question?
3. You think the First Bank of the U.S. was a necessity for development. I don’t. It’s 20 year charter was not even renewed in 1811.
4. You believe Rothbard couldn't sharpen Smith, Ricardo or Mills quills. I am acquainted with all of these gentlemen, having, myself, been a product (flunkie, dupe?) of the establishment. Rothbard opened my eyes to the reality of the system.
5. You believe Smith, Mills, and Ricardo would favor the currently constituted fiat monetary system. I don’t.
6. You believe the BoE fractional reserve model was an advancement; I think it was an unholy alliance between monied interests and the crown for narrow interests and counter to the general interest.
7. You have bad words for Jefferson, Adams, Madison, Monroe, Taney, Jackson and van Buren and object to my questioning Hamilton’s motives and contribution. I feel just the opposite.
8. You think my problem is that I ignore the velocity of money. I wonder what leads you to such an absurd conclusion. Nonetheless, you go on to make the following, demonstrably incorrect statement with regard to this very area you believe me to be mis-informed about: When [velocity] is rapid the MS grows when it slows down it shrinks.
9. You observe that most wealthy nations have central banks and take that as proof that central banks are good.
Upon my return from work, I will attempt to get you to focus on the issue of what constitutes a good money. That was the one area you did not address in your response (other than to denigrate my choice of words for capturing the essence of any good money system: scarcity integrity.