| Free Banking | |
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Timberlake speaks in memory of his teacher, Milton Friedman |
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| Born | June 24, 1922 Steubenville, Ohio |
| Nationality | United States |
| Institution | University of Georgia (1964–1990) |
| Field | Economics |
| Alma mater | University of Chicago (Ph.D.), 1957 |
| Opposed | John Maynard Keynes, Murray Rothbard |
| Influences | Friedrich Hayek, Milton Friedman |
| Influenced | David D. Friedman |
| Contributions | Real bills doctrine as the origin of the Great Depression, free banking |
Richard Timberlake, born 1922, is an economist who was Professor Emeritus of Economics at the University of Georgia for much of his career. He also has become a leading advocate of free banking, the belief that money should be issued by private companies, not by a government monopoly.
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Born in Steubenville, Ohio, Timberlake was in the US military in World War II. He became a Pilot in the U.S. Air Forces and flew 26 missions as a co-pilot in the 8th Air Force. He was awarded three Purple Hearts. He obtained a Bachelor of Arts at Kenyon College in 1946, a Master's at Columbia University in 1950, and a Ph.D in 1959 from the University of Chicago where he studied under [Milton Friedman] and Earl J. Hamilton. He then taught economics at Muhlenberg College, Norwich University, Renssalear Polytechnic, Florida State University, and the University of Georgia from 1963–1990, when he retired.
He is married, with five children.
Timberlake's research has been on the history of money, central banking and monetary policy.
Timberlake's research on the development of private moneys occurred at the time of Friedrich Hayek's idea of The Denationalization of Money, extending and expanding upon it in coordination with the free banking movement. He believes that, instead of a government-imposed central bank, there should be a free market in the production of money, with banks choosing how to issue their own, competing currencies. While followers of Murray Rothbard advocate that the government supervise a gold dollar, in effect mandating that everyone use gold, and also want government prohibition on fractional-reserve banks, the Free Banking advocates consider this too much government intervention, distorting the economy. They prefer to let free markets regulate how money is issued and banks are managed. If a bank behaves in a way that is unprofitable, it will go out of business.
Timberlake also examined the causes of the Great Depression, and emphasized the switch of the Federal Reserve, starting in 1929, to the Real bills doctrine of money management, and an anti-speculation policy that severely reduced bank reserves and the amount of deposit money that the banks could create. The money supply contracted by 30% in four years, something that no market economy could tolerate. Along with Hayek of the Austrian school, Milton Friedman of the Chicago school, and even the Keynesians, Timberlake sees this Fed policy as the primary cause of the Great Depression [7].
However, Timberlake does not reject the gold standard. While many economists blame the gold standard for the monetary collapse, Timberlake cites data that refutes the validity of their complaints. He shows that the Fed Banks and U.S. Treasury had plenty of gold in the 1929-1933 period. Timberlake concludes that government interference with gold standard adjustments caused most of the trouble in the past, producing cycles of money growth and deflation, panic and depression.
Timberlake has been active in politics. He was involved in the Harry Browne presidential campaign, and written/signed open letters advocating various positions, such as school choice and rejection of policies that would have raised taxes.
Articles in:
What is most important to understand is that the contraction [of the money supply] and Depression were not economic events, but the fruits of political decisions made by agencies of the federal government. -- Richard H. Timberlake Jr. in the Objectivist Center's Navigator (January 2001)