A farmer that owns a $1 million farm might earn 5% or $50'000 per annum while the banker who borrows $1 million will lend out $10 million and earn 5% on the original $1 million but will actually get $500'000 just or ten times what the farmer gets.

Banks also have costs. They don't get to keep that whole 5%. Banks have to publish their financial statements. Do they in actual fact make exorbitant profits like that? They are not making that kind of profits from fractional reserve lending. That's not an extremely good business at least with interest rates being as low as they are now.

Fractional reserve lending is older than fiat. Under the gold standard reserve money was gold-backed but loans did not have to be 100% backed by reserves just as they do not have to be now.

Another thing is that under the gold standard, a huge amount of value would be in the hands of gold producers. How's that not parasitism?