What’s in a Name

Robert C.B.Miller

When the EBI was being formed, Robert Miller the brother of the founder and TCD graduate, with his friend Peter Clarke was invited by FA Hayek was invited to have lunch at the Reform Club in London. When the question of the name for the proposed institute was raised Hayek immediately asserted that it must be the Edmund Burke Institute, rather than the original proposal – the Irish Enterprise Institute modelled on the American Enterprise Institute. Following Hayek’s pronouncement the question was decided. Hayek had become a British citizen and used every summer to visit London to meet his friends Ralph Harris (Editorial Director) and Arthur Seldon (General Director) and the Institute of Economic Affairs in Pall Mall. He would stay at the Reform Club – hence in the invitation.

It was during this later part of his life that Hayek did some of his most interesting work. This included the publication of his two IEA paper ‘Choice in Currency’ (1975) and ‘The Denationalisation of Money’ (1976). In these booklets, he advocated eliminating the ‘lender of last resort’ role of central banks – forcing issuers of currency to be very conservative in issuing notes or accepting deposits not very largely backed by the medium of exchange.

He also advocated the abolition of legal tender laws so that buyers and sellers can chose which medium of exchange they preferred. He also pointed out that choice in currency would ensure freedom from inflation as the market would select currencies which delivered stable prices, rather than ones which depreciated. If a currency began to lose its stability people would move quickly to a better competitor. He also wondered what kind of price stability would people select for their preferred currency. In other words would the market select a currency which was stable in terms if Consumer Price Index or the Wholesale Price Index. Or indeed whether, given the choice, people would prefer price stability in terms of gold or a bundle of commodities.