The cause of business cycles are the fractional reserves. One of the purposes of Austrian Schools is abolish. But how? Forbidding the banks of lend demand deposits?
Abolish nothing apart from government monopoly privileges (legal tender, bank licences) and subsidies (central bank). In a free market, no one would have a special privilege to issue notes referring to non-existing commodities. Everyone (you, me, a firm, a “bank”) would be free to issue whatever notes/claims they want. The market would price each note accordingly. If said notes are issued (exchanged) under false pretenses, that would amount to fraud.
Savers of capital can easily meet with entrepreneurs and investors ready to employ it without issuing notes under false pretenses (fractional reserve banking).
Both theoretically (logically) and empirically FRB can only end in two possible outcomes: (1) collapse of the Ponzi scheme as the amounts of property claimed overshoot the amounts in store, or (2) a central bank.
There is absolutely no need to “outlaw” FRB in a free market. If it’s fully disclosed, then it will die off on its own. If it’s performed under false pretenses, then it will die off as fraud.
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What z said. Remove the monopoly on money and the market will decide what is best. The idea that you or anyone else (including some school of thought) knows better than the market is what Hayek called The Pretence of Knowledge and ultimately, The Fatal Conceit.