N.J. Hoffer sent in this incredibly fascinating story of a Fed crackdown on a group called NORFED that markets the Liberty Dollar. Now, I’ve never been much for these attempts to create an alternative money. They seem to falter on the problem highlighted by Mises, namely, that the money used in a society emerges from exchange of commodities, and remain money even if the government has robbed it of its commodity backing. So absent sustained hyperinflation, there will be no getting rid of the dollar. Instead it must be reformed and denationalized.
At least that’s what I get from Rothbard’s piece on this issue.
Still, that doesn’t mean it should be illegal to try. A free society should permit every manner of private coinage and any kind of monetary competition. If it really could happen that a private money could replace government money, that would be great and every libertarian should celebrate the attempt (provided the producers are not using force and fraud).
Thus does this story turn out to be very revealing.
“The United States Mint is the only entity that can produce coins,” said the spokesman for the Mint.
In fact, the feds are prosecuting some guy who tried to buy a beer with the Norfed coin!
Here is the press release.