The Mystery of Banking

By: Murray N. Rothbard

Narrated by: Jim Vann

Talk about great timing. Rothbard's extraordinary book unravels the mystery of banking: What is legitimate enterprise and what is a government-backed shell game that can't last? His explanation is clear enough for anyone to follow and yet precise and rigorous enough to be the best textbook for college classes on the topic. This is because its expository clarity - in its history and theory - is essentially unrivaled.

Most notably, he uses the T-account method of explaining the relationship between deposits and loans, showing the inherent instability of fractional reserve banking and how it sets the stage for centralization, inflation, and the boom-bust cycle.

But there is more here. It is an explanation of money's origins and its meaning in the free market. The abstract theory is here but always with real application in history and in modern banking practice. Never does a paragraph go by without an example drawn from his massive knowledge of the subject.

Even further, he explains the integration between microeconomics and the business cycle. As Douglas French writes in the introduction: "Although first published 25 years ago, Murray Rothbard's The Mystery of Banking continues to be the only book that clearly and concisely explains the modern fractional reserve banking system, its origins, and its devastating effects on the lives of every man, woman, and child. It is especially appropriate in a year that will see: a surge in bank failures, central banks around the globe bailing out failed commercial and investment banks, double-digit inflation rates in many parts of the world and hyperinflation completely destroying Zimbabwe's economy, that a new edition of Rothbard's classic work be published and made available through the efforts of Lew Rockwell and the staff at the Ludwig von Mises Institute. Priced affordably for students and laymen interested in the vagaries of banking and how inflation and business cycles are created."

©1983, 2008 Ludwig von Mises Institute (P)2016 Ludwig von Mises Instiutute

I Appreciate This Book

It is the concern of every responsible person to acquire a livelihood. The means of doing so are quite varied, and in my reflections; I have never been able to fully appreciate banking as a means to that end.

Thankfully, this volume on banking has been skillfully written so as too be accessible to a lay reader/listener. Though I still have some questions, The Mystery of Banking has answered many others, and this to my complete satisfaction.

Should be required reading/listening.

Excellent book that is still applicable 40 years later. Fascinating to hear the parallels between our current monetary system and those of the past that have failed.

Fantastic book

this book is excellent, it shows the biggest fraud in human history, that is, the industry of banking and its fractional reserve system, created by the state. With this book you can completely understand how the government and the banks rob you every day. After reading this book, you will finally understand that the government is the biggest enemy of humans and it s the main factor of the existence of poverty and undevelopement.

I don’t agree with the poor reviews of this book

I think this is a fantastic book for anyone entering into the economic field searching for an understanding of banking and how or why banks do things like open-market operations, keeping deposits at the Fed, fractional reserve banking and the English gold smiths, or other trivial knowledge that may be hard to process. I would recommend this book! I just completely disagree with the other reviews.

Takes a long time to say some simple things

This centers on the case for 100 percent gold-backed banking and currency. It is painstaking (and for me, somewhat pain-inflicting, due to ponderousness and length) in explaining the way today's fractional-reserve banking works. Yes ladies and gentlemen, banks have a permit to invent money from thin air. This does weird things to the stability of the currency (thus prices), especially when the money distributed through fanciful and imprudent loans is not paid back (as, at turns out, it inevitably will be). And this drags government and the printing press into the picture, to pump up the self-damaged patient as if with steroids. And the patient gets addicted and whines for more. And the savers who put their faith in that money are punished, and the sinners are helped, and enabled again on their road to perdition. I get it. And it is no laughing matter for people like me, who are thrifty (in my case, even puritanical) sacrificers and savers and have paid for this, lately, while the careless have been propped up. But it remains my view that this rickety, laughable, cronyist mess is not the worst of all possible worlds. There, I depart from Mr Rothbard. I respect him for laying the case out, though I think all this could have been said in a half-hour. Or less, as I have demonstrated above. This is a sad world for those with great rectitude. But I just can't don the sack-cloth and live like that, quite, railing at all the sinners walking by on the sidewalk. Best to share a little and live for another day, imperfect as it all is. Mr Rothbard will remain eternally popular for staking out the argument here, Let these be our epitaphs, respectively.

I learned this in my school economics

The first two chapters were very boring and not very informative. I would not recommend this to a person who has had an economics class.

Antiquated and one-sided view on Monetary policy and banking

Apparently the author thinks we should be on the gold standard. This may have been a not so stale view in 1983, but not really worth your time now. This book is advocacy, not a thoughtful study or explanation of the monetary system.

Completely incompetent narrator

Obviously the narrator never made it past third grade. I laughed at "m apostrophe" (instead of m-prime), tried to laugh at "m quotation marks" (instead of m-double prime) and almost threw my phone across the room at "8 slash 15' (instead of 8 out of 15).

Constantly hearing about "50,000 dollars slash 50,000 dollars", etc., made me stop my book multiple times out of frustration. I almost completely quit when I heard about all the Lacey fare.

My son assured me that even in these days of "new math" that they learn about m-prime in middle school, and that " / " means "out of" in second or third grade. He's a junior now and he can pronounce "laissez faire" properly.

The book itself is fascinating. Too bad the narrator is an illiterate dolt. I almost didn't make it through because of him. 😕