"This book exposes important, often obscured truths about our money system and our economic past and future. Our money is not what we have been led to believe. The creation of money has been privatized -- taken over by a private money cartel. It is all done by sleight of hand, concealed by economic double-speak. "Web of Debt" unravels the deception and presents a crystal clear picture of the financial abyss towards which we are heading, pointing out all the signposts. Then it explores a workable alternative, one that was tested in colonial America and is grounded in the best of American economic thought, including the writings of Benjamin Franklin, Thomas Jefferson and Abraham Lincoln. If you care about financial security, your own or the nation's, you should read this book."Brown's theories of money and public banking are popular reading at politically progressive websites like The Huffington Post. She has also drawn some interest among libertarians, most notably at the website The Daily Bell, the editors of which sum up their opinion as follows:
"The bottom line with all of this has to do with whether people want free-market money or money issued out by the state. Given governments' recent track records, we wonder why anyone would want to set up yet a new bureaucracy."Brown attracts attention among politically diverse audiences because her monetary and banking theories are decidedly anti-establishment. She appeals to progressives because she opposes private banking conglomerates, whom she credits with creating money and debt for the sole benefit of themselves and their cronies. She recommends nationalizing the Federal Reserve and establishing publicly owned State banks. Money, she says, could then be created by a public entity and the money supply managed for the public good. Brown appeals to certain libertarians because they share her distrust (to put it mildly) of the Federal Reserve. Of course, libertarians consider the Federal Reserve only technically a private institution. Brown's populist theories also appeal to members of the Tea Party for reasons that are obvious.
What I find most interesting about Ellen Brown is that her monetary and banking theories are based not on economic theory but on monetary history and banking practice. She is apt to quote Ben Franklin, Abraham Lincoln, Henry Ford and various board members of the Federal Reserve instead of Murray Rothbard, Fredrich Hayek, Ludwig von Mises or even John Maynard Keynes. She uses the monetary history of ancient Sumeria to justify her recommendation for public banking rather than rational, theoretical argumentation. In fact, she seems to avoid economic theory like the plague.
Since economics is an analytical, not an historical science, why should we concern ourselves with her monetary writings? Because, as America sinks deeper and deeper into fiscal and monetary crisis, politicians will eventually find themselves caught between a rock and hard place, between a mountainous debt crisis on the one hand and runaway inflation on the other. Conventional fiscal and monetary policies will provide them no way out. In such a predicament, the political skunks are likely to turn to populist solutions in an attempt to save their skins. Ellen Brown's proposals fit the bill. Why? Because Brown claims her proposed policies can make the debt crisis disappear virtually overnight with no resulting inflation. What politician could resist such a easy and convenient panacea?
So now is the time to debunk Ellen Brown's fiscal and monetary policy proposals with dispassionate, rational economic argumentation. I will do so over the next few posts to this blog. I will, of course, also concentrate on the effect Brown's proposals would have on the classical liberal values of property, freedom and peace.