Food for thought on central banking

Blog, Marco Navarro-Genie, Property Rights (historic), Regulation, Role of Government, Taxation, Uncategorized

While I do not condemn all war as evil and I have not developped strong feelings of condemnation against the centralisation of currency at the hands of states, I recommend reading this well-written and thought-provoking text by Llewellyn H. Rockwell Jr.: Twin Demons.

Here is a taste of this unconventional thinking about money and state monopoly:

But there is nothing about money — or anything else, for that matter — that should make us think its production must be carried out by the government or its designated monopoly grantee. Money constitutes one-half of every non-barter market transaction. People who believe in the market economy, and yet who are prepared to hand over to the state the custodianship of this most crucial good, ought to think again.

Interventionists sometimes claim that a particular good is just too important to be left to the market. The standard free-market reply turns this argument around: the more important a commodity is, the more essential it is for the government not to produce it, and to leave its production to the market instead.

Nowhere is this more true than in the case of money. As Ludwig von Mises once said, the history of money is the history of government efforts to destroy money. Government control of money has yielded monetary debasement, the impoverishment of society relative to the state, devastating business cycles, financial bubbles, capital consumption (because of falsified profit-and-loss accounting), moral hazard, and — most germane to my topic today — the expropriation of the public in ways they are unlikely to understand. It is this silent expropriation that has made possible some of the state’s greatest enormities, including its wars, and it is all of these offenses combined that constitute a compelling popular brief against the current system and in favor of a market substitute.

The full text at Mises.org is here.