No sale though. Business cycles (in far greater extremes) predate central banking, as the first link alludes.
Never said that they didn't exist. No economy is always stable and perfectly fair. The point that von Mises initially asserted and that Hayek, Fertig, Hazlitt and Rothbard have since is that with a
private central bank the boom/bust cycle is much more violent and designed specifically to tip the balance towards the elite shareholders and thus transfer and consolidate wealth upward. Even Jefferson, Franklin and Washington recognized the problems with private central banks, seeing how the Bank of England had created economic havoc designed to crush us into subservience and it did, until we revolted.
That is why they wrote the Constitution the way they did. They didn't expect that we would never have a central bank, in fact we did have the Bank of North America while they were drafting the Constitution and then chartered Hamilton's Bank of the United States in 1790, signed into law by Washington. FWIW, when the 1st B of the US was dissolved in 1811 Jefferson was proved right, 75% of the investment in this private bank was foreign money that we'd tried to boot out in the 1770s. They worked their way back into influence through our money. It's also not a coincidence that the charter expired in 1811 and when Congress refused to renew the application the War of 1812 was started. Nathan Rothschild so much as told us that is exactly what would happen. He is quoted in 1811 as saying "Either the application for renewal of the charter is granted, or the United States will find itself involved in a most disastrous war." It's happened other times, Lincoln would not take the Rothschild's money for the Civil War and the Rothschild-backed Confederacy was a dickens to take on despite not having much infrastructure or industry at the start of the war. We were dragged into WWI because of European bankers wanting to bankrupt us.
I would also suggest that economic cycles have coincided with the rise and fall of the power of central banks. From 1790 through 1913, we had two defined depressions. One was in 1807 which lines up with the end of the first Bank of the United States charter (ran from 1791 to 1811). We had a recession in 1837 that coincides with the end of the 2nd Bank of the United States charter which ran from 1816 to 1836. We had a prolonged economic slowdown in the 1870s through the 1890s (probably depression in 1890 or so). This started probably due to feuding over reinstatement of a private central bank during the Civil War (Lincoln rejected the Bank of England money for the war and issued government Greenbacks to finance it). And lasted through the 1880s and 1890s. This was a painful economic time in our history. The Guilded Age was very, very good for the robber barons even though economically the people struggled. Garfield flatly rejected a central bank in 1880, but there was almost no regulation of the market by the government. The Rockefellers, Carnegies, Morgans and Rothschilds used that to consolidate their power such that by the turn of the century people wanted government to level the playing field. I agree that laissez-faire in that case probably played right into the hands of the elite. When we put the Fed in place in 1913 all we did was guarantee that they would never be threatened in that position.
Since 1913 and the control of our economy by the Fed we've had 8 definable recessions (7) or depressions (1) in 1918, 1929-1939, 1953, 1957, 1973, 1980, 1991, 2002. Add 2008 to that, which could be either at this point. So it seems to me that using the U.S. as an example that strong private central banking has done anything but stabilize the economy. Two of our earlier (pre-Fed) periods of recession/depression were under central banks and the the third was when government didn't do anything to stop rampant corruption and exploitation. A central bank in the Guilded Age probably wouldn't have changed anything for the workers, the national and state banks were
plenty strong during that time just the same despite not directly controlling the money.
The Founding Fathers did not want private banks charging interest for our money, which was the reason behind the Revolution. The colonies were forced in 1764 by Parliament to use borrowed British money instead of the money issued here by existing local state banks. The Bank of England had taken over money issuance from the King and they didn't want the productive colonies thriving without taking their cut. So they forced us to use British money, which at that time was gold. That drove us into a depression since we did not have any specie (this was before the U.S. had it's own gold and silver) and no way to pay the interest on the borrowed money. It was a move that showed the Founding Fathers that private banking cartels were dangerous, since they can artificially hold and control an economy separate from the will and common good of the people.
The danger is the interest charged on the money, not who's issuing the money. Interest charged on the money can never be paid back unless we run zero liability government (i.e. absolutely no government spending) and continue to collect taxes. Even then it would be decades before we become debt free. But the total sum of the economy's value is only the amount of money in circulation, so interest charged on that money can't be paid. It's above and beyond the amount you ever generate. The banks recognized this and so they structured it so that we never have to pay principle, just interest. That's fine up to a point but eventually the interest compounds to the point where growth in productivity is slower than the growth in the interest and we can't pay that back anymore, either. We're approaching that point very quickly.
My conclusion in all of this (and I'm still just starting to understand a little) is that we've almost never had the system stable like the Founding Fathers I think intended. I happen to believe very strongly that laissez-faire works just fine for the markets as long as access to money is not controlled by the market itself. How the capital gets distributed in the market must be free and fair. If the capital providers also are in the market to make money, then the whole game is stilted from the get-go. There are other advantages to the government solely issuing the money in that they can charge the interest and fund its operation without burdening taxes. It's the primary mechanism that I believe the Founding Fathers envisioned, for if the people felt the government became too burdensome they could chose not to fund it just by not taking loans from it. We now have a coerced system that you are not-so-gently persuaded to support the government no matter how you feel about it. The only way left to protest is by being thrown in jail or an uprising against the government. You can't silently or passively reject support of the system by cutting off it's finances.
"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -- Thomas Jefferson
). Far better than going with your gut:
).