Economist visits Eastern

Steve Horowitz, PhD. talks to EMU students Monday.

Steve Horwitz, PhD. hosted a presentation on Monday in the Halle library. The presentation centered on one key question: “Do we really need central banks?”.

Horwitz is a professor of economics and department chair at St. Lawrence University. He began his analysis of central banking by acknowledging the popular criticisms that tend to be less than rational, such as elaborate schemes by secret organizations to monopolize the economy and dismiss them.

“Many problems can be found without indulging in conspiracy theories,” Horwitz said.

Before diving into these problems, Horwitz gave a brief history of banking in America. He corrected the common misconception that central banking was a result of the failure of laissez faire economics by stating that there was never such a time in America where banking was not controlled by the government, either on a state or federal level. He said before the integration of central banking, the industry was regulated on the state level.

He went on to explain how the best process for banking was a system called “Free Banking Era” which was in effect from 1836 to ’63, where the number of banks grew and the quality of banking improved.
Bringing his presentation to the present, Dr. Horwitz points out what he believes to be the problems of a central banking system.

“Central banks suffer from structural issues,” Horwitz said. “[Central banks are] structurally ignorant and often incapable of reacting quickly to the problems of the economy.”

Horwitz reiterated his position that the best system for the country would be a free banking system, citing that a similar system has benefited Canada much more than central banking has done for America.

EMU student Gannon LeBlanc, who organized Horwitz’s presentation, spoke on his intentions and reasons for having this event.

“I just want people to get perspective,” LeBlanc said. “If they want to take it, great, but I at least want them to know and have a fresh new perspective.

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