Against Fiduciary Media

From: S
To: Walter Block
Subject: Against Fiduciary Media

Walter: I read your, Hans’ and Guido’s excellent 1998 paper entitled “Against Fiduciary Media”. I appreciate that the issuance of fiduciary media constitutes a fraud, in that two people cannot both own the same property at the same time. However, my question to you, which I don’t think is addressed in this paper, is this: Who could legitimately bring an action for fraud? If the depositor knows that the bank will lend out his demand deposit and that the bank is keeping less than 100% reserves against this deposit, if the borrower from the bank also knows that the bank is doing this, if people to whom the depositor writes a check know that the bank is doing this, and if investors in the bank know that the bank is doing this, who can legitimately complain about or sue for fraud? S

Dear S: Thanks for your kind comments about this paper of mine: Hoppe, Hans-Hermann, with Guido Hulsmann and Walter E. Block. 1998. “Against Fiduciary Media,” Quarterly Journal of Austrian Economics, Vol. 1, No. 1, pp. 19-50,;; translated into Spanish and published as “Contra los medios fiduciaros,” Libertas, No. 30, May 1999, pp. 23-73; 2011 translation and reprint in Romanian Economic and Business Review

Since you liked that one, you might also be interested in this one, on much the same subject:

Davidson, Laura and Walter E. Block. 2011. “The Case Against Fiduciary Media: Ethics Is The Key,” The Journal of Business Ethics. Vol. 98, Issue 3, pp. 505-511;;

In my view, all those victimized for fraud may sue for it. That is, all of those people you mention.

Best regards,



9:21 pm on September 12, 2017