There are continuum problems in political economy. There are no objective non-debatable solutions to any of them. All answers to them are arbitrary. Responding to these challenges are, ideally, the responsibility of courts, juries, etc.

Barnett and Block establish that not only are fractional reserve demand deposits fraudulent and create an Austrian Business Cycle , but that a certain type of mismatching between time deposits and the period for which the depository institution relends the deposited funds are also contrary to libertarian law. The question we address in the present paper is whether or not this type of disconnect between the period for which the ultimate lender committed funds and the ultimate borrower gained possession thereof (...) also necessarily start an Austrian Business Cycle. Even though this does not constitute an increase in the stock of money, we answer in the affirmative. (shrink)

We attempt in this paper to tie together several basic insights of praxeology, and several that are not at all that basic. These include the following: that gains from exchange are subjective; that this applies to profits and interest; that credit transactions can occur under barter; that interest arises from time preference even under a pure time preference theory of interest; and that productivity can, under disequilibrium conditions, affect the various rates of interest.

In Barnett and Block (J Bus Ethics 88(4): 711-716, 2009a), the present authors claim that borrowing short and lending long is fraudulent, and thus ought to be prohibited on legal grounds. Bagus and Howden (J Bus Ethics 90(3): 399, 2009) take issue with our ethical analysis. The present paper is our response to these authors; it is an attempt to defend Barnett and Block (J Bus Ethics 88(4): 711-716, 2009a) against the very interesting and important, although we believe, erroneous, criticisms (...) of Bagus and Howden (J Bus Ethics 90(3) : 399, 2009). (shrink)