I have met James before and knew he had many sympathies and agreement with the Libertarian Party monetary policy, specifically Free Banking.
James kicked the event off by providing the setting and then the case for Free Banking because Central Banks have not and will not be capable of properly forecasting and responding to the market, but only distorts it, even putting aside political expediency. UPDATE: Text here.
Next up was Dr Rebecca Driver. Her stance was "keep doing what we do, but get better at it". A sticky wicket and one must respect her for coming to such a place at a time as this and stand up and put that view.
Following Rebecca was Dr Andrew Lilico who railed (@19/12) against the flaws in the system that Rebecca had just defended, arguing that price trends across years need to be factored in. I did speak to him at the drinks afterwards to the effect that measuring prices is a moving target and not an exact science. We did agree that a key is the promise - the Pound - the BoE role surely is to honour that contract, i.e. manage the value of that pound. I understood that Andrew believes that this can be done via better monitoring of short, medium and long term price trends and thinks Free Banking will mean the BoE has little or no control over that aspect of contracts.
Michael Saunders was up next and to be frank, maybe because I am no Economist, I did not really grasp the core of his point. Nor did I get the gist of what Bernard Connolly was putting forward, though he did come up with a term new to my ears in regards to the damage caused by distorting the markets - "Inter-Temporal Misallocation".
What was worrying was that, James aside, the status quo got pretty much an endorsement or a by, though to be fair I think that Bernard Connolly was not happy with the status quo but did not appear to my cloth ears to present a concrete alternative.
Free banking does present me with a problem. If organisations decide to print their own money, you just end up with more money in the system, for even if they buy assets to back the new money, the Sterling is still "out there". Vaulting it is just doing what happens in Hong Kong, where Standard Chartered, HSBC and Bank of China have massive vaults of USD to back up all the HKD issued or on balance.
Good money, they say, will drive out bad. The problem I see is how to "retire" Sterling so it maintains value? Maybe I am being over-cautious and this will happen naturally as people offer new loans in the new currencies instead of loans in Sterling, thereby, one would surmise, reducing the Sterling balances in circulation as Sterling loans are paid off faster than they are issued (always remembering that the principal of a loan is "destroyed" until a new loan is issued).
I am currently exercised by this conundrum - how will the economy react and what will happen to Sterling if we had free banking? The State would still keep Sterling as the currency issued by the BoE, require its contracts and taxes settled in it and the last thing we would want is a run/panic from Sterling while the system was settling in, for that would hurt the less informed, the little people, more than the informed and powerful. Free Banking would be a self-regulating watchdog on the behaviour of the State and banks in general. It will, however, highlight the woeful state of education in this country, namely the diseducation of our people and a culture fostered by some to breed sheeple who abdicated responsibility for their own lives and, via Tyranny of the Majority, have put many of the resultant chains on us all.