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Source link: http://archive.mises.org/5618/rothbards-money-podcast-introduction/

Rothbard’s Money Podcast, Introduction

September 15, 2006 by

[This introduction to What Has Government Done to Our Money? is also available for podcast or download, read by Jeff Riggenbach.]

Murray Rothbard wrote:

Few economic subjects are more tangled, more confused than money.
Wrangles abound over “tight money” vs. “easy
money,” over the roles of the Federal Reserve System and the
Treasury, over various versions of the gold standard, etc. Should
the government pump money into the economy or siphon it out?
Which branch of the government? Should it encourage credit or
restrain it? Should it return to the gold standard? If so, at
what rate? These and countless other questions multiply,
seemingly without end.


Perhaps the Babel of views on the money question stems from man’s
propensity to be “realistic,” i.e., to study only
immediate political and economic problems. If we immerse
ourselves wholly in day-to-day affairs, we cease making
fundamental distinctions, or asking the really basic questions.
Soon, basic issues are forgotten, and aimless drift is
substituted for firm adherence to principle. Often we need to
gain perspective, to stand aside from our everyday affairs in
order to understand them more fully. This is particularly true in
our economy, where interrelations are so intricate that we must
isolate a few important factors, analyze them, and then trace
their operations in the complex world. This was the point of
“Crusoe economics,” a favorite device of classical
economic theory. Analysis of Crusoe and Friday on a desert
island, much abused by critics as irrelevant to today’s world,
actually performed the very useful function of spotlighting the
basic axioms of human action.

$17

Of all the economic problems, money is possibly the most tangled,
and perhaps where we most need perspective. Money, moreover, is
the economic area most encrusted and entangled with centuries of
government meddling. Many people—many economists—usually
devoted to the free market stop short at money. Money, they
insist, is different; it must be supplied by government and
regulated by government. They never think of state control of
money as interference in the free market; a free market in money
is unthinkable to them. Governments must mint coins, issue paper,
define “legal tender,” create central banks, pump money
in and out, “stabilize the price level,” etc.

Historically, money was one of the first things controlled by
government, and the free market “revolution” of the
eighteenth and nineteenth centuries made very little dent in the
monetary sphere. So it is high time that we turn fundamental
attention to the life-blood of our economy—money.

Let us first ask ourselves the question: Can money be
organized under the freedom principle? Can we have a free market
in money as well as in other goods and services? What would be
the shape of such a market? And what are the effects of various
governmental controls? If we favor the free market in other
directions, if we wish to eliminate government invasion of person
and property, we have no more important task than to explore the
ways and means of a free market in money.

This introduction is also available for podcast or download, read by Jeff Riggenbach.

The latest print edition of the book — including a detailed reform proposal, ‘The Case for a 100 Percent Gold Dollar’ — is available in the Mises Store.

{ 4 comments }

Mark Brabson September 15, 2006 at 12:35 pm

The answer to all of those questions that Rothbard raised and, of course, answered so well.

Divorce government from money, and from the economy for that matter. Allow money to naturally arise on the market as the “market’s” preferred medium of exchange. Recognize that “medium’s of exchange” are antecedent to banks and banking. Restrict only fraudulent banking practices, (i.e. issuing demand notes in excess of commodities actually on hand in the bank). Require a strict division between loan banking and deposit banking. No “blanket” deposit insurance. If an individual depositer wishes to purchase a policy to cover his individual deposit, of course he would be free to do so.

The choice of a medium of exchange belongs to the market. Let’s mercilessly kill the demon of central banking and fiat money.

Mark Brabson September 15, 2006 at 12:44 pm

I neglected to mention that the question of credit will answer itself in the free market. In a non-inflationary money supply, savings would determine the availability of credit as the people would determine whether they wished to consume or defer consuming(save). The market determined savings rate would properly signal producers how they should allocate their capital. The market interest rate would be determined accordingly.

All this time, no need for government whatsoever.

gene berman September 18, 2006 at 10:02 am

Mr. Brabson:

I have a short list of names to whom I’ve promised (almost a year ago) some original thought on a stable monetary system (though not a monetary system of stable purchasing power–an impossibility), which, at least theoretically, would be universally useful, quite impervious to manipulation of its quantity, and, possibly, even more resistant to counterfeit than any current.

I’m a “gold bug,” in a way. It was a dilletantish interest in precious metals which interested me in economics and brought me to Mises in the first place–in 1972. But thirty years of thinking about the problems has convinced me that the very idea of a “standard”–the heart of much of the “sound money” movement’s thinking on the subject–is itself at the heart of the problem.

I’d like to include you on my list, if you’ll send me (gene.berman@verizon.net) your e-mail address; I still can’t promise just when this will be possible.

Mark Brabson September 18, 2006 at 12:01 pm

I will send that email to you.

Kind of interesting. I just happen to flip to C-Span 2. Howard Phillips, chairman of a group called the Conservative Caucus, was on there talking about fiat money versus commodity money. I didn’t hear all his remarks unfortunately. What I did hear of his remarks sounded more Libertarian than Conservative.

On a side note, I do agree with his idea to increase the House of Representatives from 435 to 676 members.

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