Want to rail against Capitalism as actually practiced?

The Mises Institute has a piece out today, The Organization of Debt into Currency: On the Monetary Thought of Charles Holt Carroll, by Robert Blumen, explaining why fractional reserve banking is fraud. The whole world's monetary system[s] are based on it, and it has some major problems. [What are you talking about?! Everything's fine!]

It may help to keep in mind that there are [up to] three people in the two kinds of transactions: the depositor, the banker/creditor, and the debtor. The fraud comes in when the debtor is handed a depositor's money by the banker... Well, here:

Fractional reserve banking is a term describing the capital structure of a bank that has loaned funds that were placed there on deposit. This is problematic because deposit and loan transactions are fundamentally different. A deposit is a contract for the storage of currency in the bank to be held in safekeeping and returned immediately on demand. The deposited funds must be available at all times should the depositor wish. In contrast, a loan is a transfer of ownership and availability for a definite term. The creditor in a loan transaction has the right to invest the funds, and pays the depositor a rate of interest. These two types of contracts are mutually exclusive from a legal point of view. [2]

When funds placed on deposit are handled as if they were loans to the bank, then the bank will attempt to earn a return on the deposits by loaning them out or otherwise investing them, while at the same time maintaining the promise of immediate availability to the depositor. In such a case, the new debtors are issued on-demand claims for the principal value of their loan, indistinguishable from the claims of the depositor whose money they have borrowed. The bank has created multiple immediate-demand claims for the same gold coins. These new notes (at least for a time) circulate at parity with their face value in gold, and therefore function as currency.

[Charles Holt] Carroll advanced several brilliant arguments against the system of "fictitious money": that it is based on a confusion in thinking; that it creates a state of permanent indebtedness; that it leads to national impoverishment rather than prosperity; that it results in price inflation; and that it inevitably leads to bank runs and then to systemic banking crises; and that it unjustly redistributes wealth from the honest and industrious to bankers and their accomplices. We will examine what he had to say on each of these.

Emphasis mine. The point is that the depositor is not the same as an investor. An investor relinquishes his claim on the money for a time. That would be like buying a CD. A perfectly honest transaction.

When you buy stocks or bonds from a company, then sell it the next day, you're not getting a refund from the company, generally, you're selling it to somebody else. Nor can you expect to draw the monetary value of the stock from that same company while retaining ownership of the stock. A bank might accept it as collateral, of course... Well, I guess that's a bad example that just makes the matter more complicated. It certainly doesn't refute the point that someone who expects to be able to withdraw all his money within moments of depositing it is NOT an investor. And investing his money AND simultaneously giving it back to the depositor is fraud. It would be literally impossible with solid money.

In any case, the article is a clear explanation of, probably, the biggest difficulty Austrians have with other economics schools. It is the fundamental flaw in Capitalism today.