Abstract

The structure of the banking system has imposed significant costs on the public. In particular, the operations of central banks as regulators of the monetary system have increased long run inequality and underlying cyclical unemployment. Unlike the “Occupy” movement (which blamed individual bankers for problems), the issue is structural and much of the blame lies on the attempts of central banks to control inflation. A spontaneous plan coordinated cross-sector growth model under the alternative of productivity induced price deflation that will only work under a properly designed decentralised free banking system is introduced. This paper is foundational to an understanding of how the real economy would (actually) work (differently) under such a decentralised free banking system.

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