Deeds and Doctrines of the Central Bankers

Chapter 6 locates historically the doctrine and practice of central bank independence. It uses the illustrious career of Alan Greenspan, former Chair of the US Federal Reserve to introduce a history of central banking. Greenspan advocated ceaselessly for the deregulation of finance thanks to his faith in private decision makers keeping an eye on themselves and their debtors. That faith that was shattered by the crisis of 2007–8. A history of US banking shows how banking has swung between hard money and soft money. Finance serves the powerful but has always been contested ground, be it between competing elites such as agrarian and financial-industrial interests fighting over the first central banks of the United States, or between an elite and the dispossessed after the Great Crash of 1929. Brief histories of banking in several European countries are provided.