The Scissors in Retrospect and Prospect: Real Bills, Real Money, and Reality

This Chapter lays out in detail the Real Bills Doctrine as understood in Glass’s and Warburg’s day, along with what was right and what was wrong about that understanding. It emphasizes the early Doctrine’s confounding of necessity with sufficiency, dubbing this the crude, ‘Strong-Form RBD.’ After explaining both what was right and what was wrong with that older rendition, the Chapter develops a more refined, ‘Weak-Form RBD,’ which I show both to retain what was right about the older form while dispensing with what was wrong in that earlier rendition. The Chapter then shows the Fed’s failures of the late 1920s and early 1930s as failures of that earlier, Strong RBD understanding itself, while setting the stage for reforms animated by my more refined ‘Weak RBD’—reforms that will restore fully functional, Productivist Central Banking Itself.