Our Money

Today, I came across a link to What Has Government Done to Our Money? by Murray N. Rothbard. I was browsing through /. and an article with a review for a book about the Federal Reserve caught my eye. Within that, a post by dada21 caused me to stop and e-mail myself the applicable link for further investigation. And I did.

And, since money is indirectly related to tempered pleasure, I decided to write about it. To date, I have read section 1 (the Introduction) and section 2 (Money in a Free Society). Section 2 walks the reader through the origin of money from barter, to common trading of metals, to minted gold and silver coins, and banks. Here are a few selected quotes.

When the supply of any other good increases, this increase confers a social benefit; it is a matter for general rejoicing. More consumer goods mean a higher standard of living for the public; more capital goods mean sustained and increased living standards in the future. The discovery of new, fertile land or natural resources also promises to add to living standards, present and future.

Conversely, when the supply of money increases then prices follow and while you may have $10 now instead of $5... your buying power is the same because the worth of goods also increased.

What makes us rich is an abundance of goods, and what limits that abundance is a scarcity of resources: namely land, labor and capital.

I read it also time ago and have repeated it on numerous occasions since, "The goal of the economy is to eliminate scarcity". This quip illustrates this fact. Combined with the previous quote, it implies that everybody would be a king if there was an available quantity of goods that exceeds our demands. How can this goal be achieved? Certainly, it would be very hedonistic to eliminate the scarcity of goods if it were a possibility.

Increased productivity tends to lower prices (and costs) and thereby distribute the fruits of free enterprise to all the public, raising the standard of living of all consumers.

Ahh... because more productive! With technology, one man can harvest a field of corn that once required a team of twelve. Brilliant! The world is 12 times richer!

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This quote doesn't fit with the progression of ideas established above, but it reminds me of a quote that I like from Thomas Paine's Common Sense, so I am including it.

It is usually assumed that the prevention or punishment of fraud, theft, or other crimes is the real justification for government.

For comparison, the Paine quote is:

Here then is the origin and rise of government; namely, a mode rendered necessary by the inability of moral virtue to govern the world; here too is the design and end of government, viz. Freedom and security.

Basically, each quip suggests that government is a necessity because we are incapable of treating each other respectfully and fairly. Individual human immortality empowers institutional immortality.

That is, what I expect from section 3 (Government Meddling With Money) and section 4 (The Monetary Breakdown of the West) is an explanation of why the institution that is supposed to protect us (the government) is actually harming us.