After reading this book, you will think very differently about money: what it is, what it means, what kind of ethical framework should surround it, and why inflating the money supply is one of civilization's great moral and ethical failings. The author asserts, convincingly, that money can and should be private, competitive, not centralized, and never under the monopoly control of the state. The temptation to inflate (and thereby steal) is too great.
Inflation is a feature, not a bug, of modern governments. It's one of the state's most powerful levers of power, both unseen and indirect--and therefore all the more effective. In the long run, inflation slowly but surely centralizes more and more wealth and power in the hands of the state by gradually extracting resources from the people, effectively handing them either directly to the government or to cantillon insiders within the government's power structure. It is an incredibly effective mechanism to centralize and consolidate power, and sadly, history is filled with examples where this mechanism leads directly to tyranny.
This book must be read by all who want to understand the economic--and political, and tyrannical--environment we're in.
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Notes:
1) Modern discussion of the morality of money production "typically revolves around the--vague--central bank objective of monetary stability." Church and religious thinkers "fatefully made their peace with pro-inflation doctrines."
2) The second part of the Introduction, "Remarks About Relevant Literature," is the most readable "survey of the outstanding literature" that I've ever read, in any subject domain. This author walks through exactly which works cover which topics, which works are foundational, what to read for further information, etc.
3) The author cites "regulatory capture" examples where proponents of government-managed currencies and government-controlled monetary policy: see for example professors at universities receiving grants from governments to conduct (favorable!) research on behalf of monetary authorities. "...championing government involvement in money and banking pays the bills; promoting the opposite agenda shuts the door to an academic career."
4) [Note that regulatory capture is a tremendously broad subject, and of course you'd be a fan of modern fiat currency mechanisms if you were "captured" in a wide range of ways, academics in #3 is just an obvious one. Think about all the people directly paid by the government (gov't employees, politicians, lobbyists and other "instruments" of soft political power, recipients of gov't transfer payments, companies with the government as a customer (e.g., defense contractors), regulators who regulate the fiat currency infrastructure (banking, accounting, tax prep, legal work, etc), and now we can even add the pharmaceutical industry to this long and growing list, thanks to paid-for mRNA novel biotherapies, paid-for antiviral meds at $3k a dose, bonus payments to hospitals for COVID positives, COVID deaths, venting of patients, etc.]
Part 1: The Natural Production of Money
5) The natural production of money; the division of labor without money: discussion of a barter world; indirect exchange using a medium of exchange; spontaneous adoption of a given medium of exchange.
6) Natural money versus forced money: "We may call any kind of money that comes into use by the voluntary cooperation of acting persons 'natural money.'"
7) Credit money: Using a silver certificate or an IOU as a medium of exchange; carries a risk of default unlike natural money.
8) Money certificates: note the monopoly by the state here, also use of implicit force by government legislation; see also the profit margin of coinage; a minter of coins benefits enormously from the fact that a "trusted coin" has more value than an equivalent amount of metal the coin is made of.
9) The author occasionally sings out with some quite beautiful phrases, beautiful in their innocence at times too: "The virtue of competition [in coinage] is that it offers the prospect of minimizing the scope of possible abuses. And its great charm is that it involves the entire community of money users, not just some appointed or self-appointed office holders. Down here on earth this seems to be all we can hope for."
10) Certificates physically disconnected from money ("money substitutes"): Certificates that signify legal title to a specific quantity of a given physical metal; advantages (over coins) of storage, transportation and certification, but the potential for abuse is far greater than in the case of coinage: "Fraudulent bankers can embezzle on the property of their customers far more easily than fraudulent minters." Only the reserves are real money, the certificates are basically just book entries/ledger entries, they are easily rehypothecated/lent out.
11) Money within the market process: applying the concept of marginal value and diminishing returns to the additional production of money; Basically money printing is literal dilution, thus a buyer of goods and services has to pay more money for these as more money is produced.
12) Scope and limits of money production; typically miners or minters will expand production (of gold or coins) if there is an expected monetary return of doing so; this natural constraint to money/gold production totally goes out the window with printed valueless currency.
13) The 20th century is unusual in that it didn't have multiple parallel money forms like nearly all other periods (e.g., gold, silver, copper, paper, etc.).
14) Note also distribution (cantillon) effects from money, based on how early or late you are to getting (and then using!) that money. "Money production therefore redistributes real income from later to earlier owners of the new money." [Usually the state is "earliest," followed by cantillon insiders... everyone else is "late"]
15) Other distribution effects of money creation: note that the distribution effects can be idiosyncratic: creditors are typically harmed, debtors benefit, but this also depends on who can "see" a coming decline in purchasing power and compensate for it best (for example, a borrower that paid an interest rate that included an implicit inflation premium that never materialized would not benefit like you'd expect a borrower to typically benefit).
16) Utilitarian considerations on the production of money: "At no time in history has paper money been produced in a competitive market setting. Whenever and wherever it came into being, existed only because the courts and the police suppressed the natural alternatives. In other words, to have paper money means to allow the government to significantly curtail the personal liberties of its citizens." [Paper money is forced money and is ipso facto a curtailment of freedom.]
17) The seven most widespread errors (or doctrines) used to justify state intervention in money:
1) economic growth requires a corresponding growth of the money supply: wrong because any quantity of goods and services can be exchanged with any money supply.
2) hoarding: again, the absolute money supply of an economy is irrelevant, it can function with any supply of money; hoarding of money just reduces prices [plug-in "hoarding of Bitcoin" here and think it through!!]
3) the "we need to fight deflation" argument: the author cites the usual arguments given by central bankers to argue against deflation, then debunks them one by one
4) the "sticky prices" argument: powerful unions can force wages higher through their power and a central bank can fool them by driving inflation, the fallacy here is that anyone in the system is not going to be fooled by this trick.
5) the "cheap money helps keep interest rates low and promotes economic growth" argument, when in reality it does neither.
6) the "we must have monetary stability" argument, when paper/Fiat absolutely does not provide stability at all, if anything it amplifies instability. Note also the different meanings of monetary stability, sort of a verbal sleight of hand here: we can think of the integrity of the money over time as a critical component of "stability" but a central banker would prefer using "the stability of that money's purchasing power" in the short run instead.
7) the "commodity money costs too much to produce and paper money is just as good at a much lower production cost" argument: The cost here is by design! The point is to make it costly to produce extra money, thus it becomes too costly to inflate away its value.
18) Interesting: also the author argues that the great finds of precious metals in the 16th and 17th century actually didn't increase Europe's money supply that significantly; the "inflation" over that period happened over 150 years (!) thus the inflation rate was somewhere between less than a percent and 3.3% per year, this is nothing compared to the monetary expansion we have in the modern "paper money" era.
19) Thomas Aquinas considered stable purchasing power of money an ethical postulate.
21) The 20th century is a "devastating empirical record" of the decline of the purchasing power of paper/fiat money.
22) On the weaknesses and structural flaws of price indexes/algorithms to calculate inflation. Different people buy different goods, inflation is a vector unique to the individual [also what matters isn't the rate as calculated but the coming inflation in the things you will want to buy!]; obviously also the same government doing the inflating is keeping score of the inflation rate, etc.
23) Returning to the (erroneous) "fiat/paper money is cheaper to produce than hard money" argument: this argument is exactly backwards: it is the cost itself of hard money that is the supreme reason why hard money is superior to fiat/paper money: because of the cost they cannot be multiplied at will, work must be done and costs must be borne, this is a natural built-in insurance against rampant inflation. Note also a secondary problem with this error: there actually are tremendous costs to a paper money system (they may be far greater!): the cost of inflation is way worse if you think about it.
Part 2: Inflation
24) On the nature of inflation: the author considers inflation a form of violation of property rights.
25) "Why do people inflate the money supply in the first place? As we have seen, each new money unit benefits the first recipients" (the cantillon insiders).
26) The author offers a moral definition of inflation: "Inflation is that part of the money supply that comes into being because of the invasion of private property rights." Inflation is a great evil, contrary to Christian morality.
27) Forms of inflation: "Now we turn to analyzing step by step the various ways by which property rights can be violated, and have been violated, in order to artificially increase the money supply to the benefit of the perpetrators or their allies."
Examples:
* "Private inflation": the counterfeiting money certificates
* Debasement, altering coins made out of precious metal, either the mentor offers a coin with less value than the stamp on the coin
* Fractional reserve certificates as a form of debasement
28) See the evolution of "money warehouses" into banks: initially they did not issue banknotes in excess of money holdings; Ssee Coinbase vs FTX for an example of "good" vs "bad" money warehouses in the cryptocurrency ecosystem; It is counterfeiting in the technical, literal sense if you are a money warehouse and you issue IOUs in excess of holdings; if you're an fractional reserve bank then everybody knows you'll issue excess IOUs to the minimum reserve ratio. See the Bank of Amsterdam as an example here, see also the London goldsmith bankers and the Bank of Stockholm, which had a bank run just eight years after its inception in 1656. Fractional reserve bank cannot accommodate all redemption demands at the same time like a warehouse bank can: if bank customers have the slightest suspicion they will "run" to the bank.
29) No also in Spain, bankers kept less stocks of money in their vaults compared to circulating IOU's because the state (the king) would often rob or seize their money in the vault; (!) see the case of the banks of 16th century Seville.
30) Indirect benefits of counterfeiting in a free society: knowing that counterfeiting is out there as a risk makes "citizens vigilant about their money."
31) Bishop Oresme was clear that any alteration of money through the government was injust in itself; it is literally stealing from the community.
32) More forms of inflation:
* Fiat inflation through legal privileges "Governments inflate the money supply because they gain revenue from inflation."
* Legalized falsifications like legalizing debasement: where the government requires the use or legalizes the use of debased coinage; initially this actually produces deflation, because people start to pay attention to the coins (they hoard the good ones and separate out the debased ones), also the government can't replace the entire existing stock of coins in one stroke, they're introduced gradually.
* Legal monetary monopolies: economic monopolies versus legal monopolies, economic monopolies are contestable (in the marketplace), while legal monopolies prevent such contesting because the state has courts, police forces, etc. Legal monopolies entail inflation by the very fact that they shield legally privileged money from (likely superior) competition.
33) Examples of monetary monopolies:
* A bullion monopoly: a legal monopoly in the minting of specific precious metals. See Germany and France after the 1870 Franco-Prussian War. Note also that the outlawing of silver paves the way to an inflation of fractional reserve certificates backed by gold, this happens in two ways: first, you get a justification of doing it because removing silver from circulation is deflationary, thus there will be tremendous pressure to issue notes as a monetary substitute; second, silver is no longer available as a competitor to gold and then there's less ability for people to protect themselves from inflation of gold-backed fractional reserve paper.
* Monopoly certificates: use of the additional privilege of legal tender laws, banknote monopolies granted to banks with close ties to the government.
34) A standard argument for a state-run monopoly on money is that "it is a prerogative of government" [Gross. I couldn't think of a more circular argument!]
35) See also re: legal tender laws: Fiat equivalence; Gresham's law; legal tender laws typically allow debtors to gain at the expense of creditors. Also, when you deem gold (or silver) to be legal tender (at the exclusion of the other) it causes disruption in the market price of the metals themselves, which therefore and disrupts pricing and buying and selling, it can also cause deflation (which of course as mentioned before is quickly "fixed" with increasing fractional reserves and printing of notes); Governments also can use legal tender laws to reduce debts contracted in other (outlawed) money, etc.
36) Bimetallism: establishing fixed fiat exchange ratios between coins made of different precious metals; usually implicit in systems with coins made out of different precious metals.
37) The case of debased coins in a non-fractional reserve system versus a typical fractional reserve system. If there's a debasement in coins, deflation usually will result because people will only transact in the non-debased coins, even if there's a legal tender law in place. But with banknotes or something not physically integrated with monetary metal you can avoid deflation when there's a debasement in the coinage because people can simply switch to certificates; and then finally, in a certificate-based system (where coins don't carry a lot of transaction volume) you can inflate the money through printing as your form of debasement without deflation as a second-order effect, because there's nothing to switch to! "The reason why governments have abandoned debasement and started cooperating with fractional reserve banks was the technical superiority of this type of fiat inflation."
38) Credit money or paper money in a fractional reserve system is way easier to inflate, and the government even has plausible deniability! It's the bank's fault! And because of legal tender laws the citizens are stuck using this crappy inflationary paper, they have no other choice. Kind of makes you shocked that we haven't had hyperinflations multiple times over the course of my own life.
39) "...fractional-reserve banking protected by
legal-tender laws is a race to the bottom. Every banker has an
incentive to reduce his reserves--to inflate the quantity of his
notes--as far as possible."
40) On the linking of fractional reserve banks to each other in the form of short term credit to create an incentive to support fellow bankers if there's every a redemption event/crisis.
41) The cartelization, centralization, and regulation of the banking industry are features not bugs to cope with fractional reserve banking problems under legal tender laws.
42) "The masters of the mint and the banking industry have a free way to enrich themselves--and of course the government, which provides legal coverage for the entire scheme--the expense of the citizenry."
43) See also Isaiah 1:22-25; it is simply wild to read this Bible verse literally talking about removing alloys from coins.
44) On the legalized suspension of payments; the social function of bankruptcy.
45) Three general sources of bankruptcy: fraud, solvency, illiquidity.
46) Paper money: origins and nature of paper money
"The foregoing discussion has prepared us to deal with the most important case of fiat inflation, namely, with a production of paper money. We have already mentioned that paper money never spontaneously emerged on the free market. It was always a pet child of the government and protected by special legal privileges."
47) Three steps: first the government establishes a monopoly specie system; second, it grants a monopoly legal tender status to the notes of a privileged fractional reserve bank; third, when the privileged notes have driven other means of exchange out of the market, the government allows its pet bank to decline the originally contractually agreed upon redemption of those notes for specie, this turns these banknotes into literal paper money.
48) The "I promise to pay the bearer on demand the sum of £20" as a "deferential bow before the British mind, which worships the preservation of forms that have long outlived their former content." Ouch!!
49) The "reverse transubstantiation" of money: you take money that actually had an intrinsic claim on an underlying specie, and then take away that underlying claim, leaving the money as it was before but without the miracle. They now are just legal tender paper slips. The reverse transubstantiation leaves all the physical appearances of the paper money intact, but it fundamentally changes the essence of the note and what underlies its worth. Even experts in this domain are confused by this matter.
50) On moral hazard: the mere possibility of inflating the money supply is a structural problem of paper money systems. The production of specie-based money does not require the goodwill and angelic behavior of central banks and minters.
51) "The West is still at the beginning of its great experiment with paper money--thirty years [post 1971] is not a long time for a monetary institution."
52) [I wonder if what's happening right now--where third-tier currencies are hyperinflating and people in these countries desperately want to hold dollars--is also a type of deflation like with bimetalism or with debasement, when people switch from the debased coins to the "good" coins and thus the aggregate money supply automatically goes down.]
53) On the cultural and spiritual legacy of fiat inflation; societal "inflation habits"
54) Inflation leads to more and more central planning and empowerment of the govt, thus it is a feature not a bug of the system, it automatically empowers central authorities.
55) Once inflation becomes perennial we have inflation-specific institutions and habits with characteristic cultural impacts on human society: hypercentralized government with the economic driving force of inflation, spurring the growth of central govts, financing extended wars, etc.
56) On inflation's impact on entrepreneurship: it fucks up true interest rates, true cost of capital is not known, favors debt vs equity finance, financing and managing working capital is way tougher, you get idiosyncrasies and distortions in asset/liability values over time, etc.
57) On inflation's impact on consumers: there are fewer true mechanisms for saving; people increasingly live under a debt yoke; heavy penalty on cash savings; if you think about it most people are not astute observers of financial capital markets, so they are the last to figure out the overall ruse.
58) More re saving: today it's totally pointless to hold dollar or euro notes for retirement: someone who wants to retire in 30 years will need to calculate with a depreciation factor of 3x, needing to save $3 today to have the purchasing power of one present day dollar when he retires, and this might even be too low!
59) "Through their monetary policy, Western governments have pushed their citizens into a state of financial dependency unknown to any previous generation." [Again, this sure looks like a feature not a bug of the system.]
60) On self-sovereignty/self-reliance and debt: "Towering debts are incompatible with financial self-reliance and thus they tend to weaken self-reliance also in all other spheres."
61) Inflation causes people to not focus on thrift (why save when you are going to get inflated away anyway); they also have to spend more mental time thinking about their money than they otherwise would in order to handle the risks of inflation; it financializes people's behavior; it causes people to put greater emphasis on monetary returns of their work, it makes society materialistic.
62) Inflation also deteriorates product quality, this is an interesting thing to think about, the author makes an intriguing set of points here: companies need to cut costs, nobody is focusing on the long term value of anything; thus get the sale at max profit and move on to the next customer...
63) The author believes that perennial inflation causes lying, misrepresentation, and also a general misperception and misrepresentation of reality, it makes lying easier and easier.
64) [Jeez, if you look at the last ten bullet points, #53 to #63, it's incredible to think through all these negative externalities of inflation: I guess I already was familiar with all these effects on some level, but to see them all listed in a row like this... I see why the author makes such a heartfelt argument about the immorality of inflation.] "It suffocates the earthly flame of morals."
65) At different points in the book the author will launch into various side discussions of what might bother left-leaning readers (an example would be a side discussion of how the welfare state causes the "outsourcing to the state" of various family-related responsibilities to state-run institutions). These are not directly relevant to the question of an inflation and they might be irritating to liberal leaning readers, however they are relevant indirectly because inflation funds these activities that further centralize and empower the state. I guess this is one of these cases where you have to just put up with the side discussion, smile and nod, then then wait till he gets back to the inflation topic more narrowly.
Part 3: Monetary Order and Monetary Systems
66) The natural order of money production: See the Florentine d' Oro as an example of a spontaneously created money among the merchant class in Europe to foster commerce and act as a store of value, it emerged naturally along with the cooperation of people.
67) Fiat monetary systems in the realm of the nation state: European experiences of national paper money production: they developed out of 17th century European fractional reserve banking, see the creation of the Bank of England, created to monetize an (at that time) immense loan of 1.2m pounds to the English crown.
68) The BoE as a standard example of the development of a national paper monetary system, 5 steps to control the whole game board!
Step 1: Dictate monopoly status for gold
Step 2: Create privileged fractional reserve banks in the service of government finance
Step 3: Dictate legal tender status for the notes of these banks
Step 4: This now "cartilizes" the entire banking industry
Step 5: Suspend note redemption for gold, thus creating a national paper money system.
69) The American experience of moving towards a paper system: note that there were champions of paper money in the United States who used a much more direct approach than in Europe of transitioning to paper; also another difference in the US: hard money advocates (opponents of paper money) held out a lot longer than in Europe!
70) Note also the framers of the Constitution did all they could to prevent legal tender paper issued by the colonies: striving to create a monetary order based on precious metals, this was so important it was dealt with in the First Article of the Constitution (Section 8, Article 1). "The Constitution proved to be a serious obstacle for the party of inflation, but it ultimately was breached."
71) Introduction of the two Banks of the United States for 20 year charters, but then opponents made sure the charters were not extended; see "the last great triumph of sound money" when President Jackson refused to extend the charter of the Second Bank of the United States in 1830. It was all downhill after that, and then things really fell apart during the Civil War with Abraham Lincoln and the issuance of "greenbacks," pure paper/unsound money backed by nothing (although note that by 1879 they were re-redeemable into gold again--gee you only had to wait 18 years!).
72) Also Lincoln effectively cartelized the banking industry by creating a system of privileged national banks authorized to issue notes, and then taxing all other Banks a 10% tax for issuing notes. [I had no idea about this shit at all!] This consolidated most banking around the reserve banks of New York City.
73) Finally the creation in 1913 of the US Federal Reserve [here's where a curious reader ought to read The Creature from Jekyll Island by Edward Griffin]; this created a European model-style central bank. Even "the written word [of the Constitution] was unable to stem the tide of concentrated financial interests and their pro-inflation public relations campaigns."
74) International banking systems 1871 to 1971: Key plot points:
* The classical gold standard: The German victory over France in the Franco-Prussion war 1870-71 "ushered in the era known as the classical gold standard."
* Post WWI gold exchange standard
* The Bretton Woods system: 1944-1971
* 1971 USA "closes the gold window"
75) The post WWI gold exchange standard "elevated the practice of coordinating inflation into a principle of international monetary relations," leaving the United States Fed and the Bank of England as the world's true central banks, and allowing most other countries to keep their reserves in the form of US dollar notes or British pound notes; this enabled much more inflation throughout the global system, inflation would be lower in the US and UK, but the trade here was that they would have much more political power and economic power. "Designed to facilitate inflation, it was not surprising that it lasted only six years" (leading to hyperinflations in Europe during the 20s obviously).
76) Creation of the Bretton Woods system (1944/post World War II): this left only one bank--the US Federal Reserve--that would redeem notes into gold; all other central banks would keep their reserves in dollars; this was another inflationary-based system.
77) Why would all the other countries consent to the system that so depended on US central bank policy? The trade here was other countries would get stable exchange rates; they'd have a safe haven for European gold in the USA (which made the USA one of the great gold pools, Bretton Woods simply acknowledged that the US had the largest gold pool ever); also the system gave rise to the IMF and the World Bank, whose purpose was to give other major governments some impact on the global allocation of inflation.
78) Bretton Woods more or less lasted until 1971 when Nixon closed the gold window. "The event concluded a period of one hundred years in
which three great cartels of central banks had flooded the
western world with their banknotes without nominally abandoning the gold standard."
79) Note also the IMF and the World Bank continued as bureaucracies after the demise of the system. Of course they did! "Large bureaucracies do not die a quick death, especially if they can manage to adopt a new mission." In this case it was the "support" of third world countries. "Both institutions are today, in actual fact, large machines for the mere redistribution of income from the taxpaying citizens of the developed countries to irresponsible governments of underdeveloped countries." Ouch, and yet true.
80) On being fooled by institutions in light of their declared intentions rather than in light of their true nature: One has to see this pattern of fooling entire civilizations into paper based/inflationary systems under the guise of "stability" etc., and see how well they have worked to fool people every single time. Thus we can also see that supranational institutions like the IMF and the World Bank are also good examples here where people are deluded about what they really do, considering it like some kind of collective charity or whatever, when the actual long term purpose is at best unclear and at worst malevolent.
81) International paper Money systems 1971-?; the emergence of paper money standards; the 1971 suspension of gold convertibility of the dollar, which instantly transubstantiated in reverse all world currencies into paper monies.
82) Interesting how the great multinational corporations can't really grow and become super profitable in a world of wildly fluctuating exchange rates, it's as if these mechanisms of inflationary monetary policy and dollar linkages all result in increasing globalization: "They operate profitably and grow to significant size only when the political framework has already stabilized the foreign exchanges. That is, by and large they come into play only once a monetary standard already exists." [Interesting way to think about the growth of US megacorporations since the 1970s...]
83) Note that other countries have many options, a spectrum of responses to the modern system, ranging from borrowing in dollars or euros, to total dollarization (and thus using the same paper money used by their creditors, like Ecuador, El Salvador, Costa Rica, etc.).
84) The Euro as a paper money "merger."
85) [The author doesn't talk about this but I remember the "rounding up" inflation that happened with the transition from local European currencies to the Euro; a step function of inflation that companies did because they could.]
86) Interesting to think through the various tradeoffs and game theory of the various benefits of monetary integration (less of a rake from FX traders/money exchangers, etc.) versus government wanting to control the money collectively. Note also that European governments could have just allowed citizens to choose the money they use, but there was never an intention to grant citizens this sovereignty, rather the governments wanted to maintain control over monetary affairs.
87) "European monetary integration had to be built on paper money, for the sole reason the paper money is the source of virtually unlimited government income, at the expense of the population. This is a point that cannot be emphasized enough. The Euro was not introduced out of any economic necessity. All true benefits that it conveys could have been conveyed much better through commodity monies such as gold and silver."
88) "The story of the euro is not a success story, unless the standard of success is to be seen in the expansion of government power. Yet the Euro story could be seen as a model for further monetary integration on a global scale." [Yep, it was a very large "beta test."]
89) In a period of multiple paper money standards, there is usually a hierarchy with certain major currencies and then multiple secondary and tertiary currencies. See for example the dollar, yen and euro as the true monies, and the secondary and tertiary are not really money, but really just fractional reserve certificates. Thus the secondary and tertiary layers have greater power than ever to inflate! [Now we can see why governments of developing countries want to play the game too, they can be the most extractive of all the players!]
90) The USA has created a system of shared segniorage, basically paying other governments for dollarizing their economies. Or, this system creates a general pressure for most small countries to hold some sort of liabilities in dollars or Euros or major currencies, and a long-term pressure for these countries' paper money producers to merge, consolidate and centralize.
91) "One way of avoiding a world of spiraling hyperinflations and currency wars is global monetary integration on a paper standard." In other words, there would be a major global paper money with any other remaining national paper currencies acting as basically indirect "money certificates" for the global money. It would obviously be a powerful engine of degradation on many levels, and "such a monetary regime would provide the economic foundation of a totalitarian nightmare."
Conclusion:
92) Two concepts of capitalism: capitalism in the true form versus capitalism with central banking/fractional reserve banking.
93) A major point of this book is that monetary institutions came into existence not out of any economic necessity, but because they allow an alliance of government politicians and bankers to enrich themselves at the expense of the rest of society. This alliance spontaneously emerged (in kind of a lucky or unlucky coincidence, depending on who you are!) in the 17th century, it wasn't some kind of conspiracy per se, but just something that worked very well for those guys in those days; and then the modern fiat system emerged in part because of the still greater technical superiority of banknotes and paper money, both as vehicles of commerce, but also as vehicles of the illicit extraction of a type of "revenue" in the form of inflation.
94) Any discussions of potential monetary reform "suffer from an amazing intellectual narrowness." People--even really smart people--don't have any idea about the very water they swim in.
95) "The point is to return to a universal respect for property rights."
To Read/Resources:
Nicholas Oresme: Treatise on the Alteration of Money
Henry Hazlitt: The Inflation Crisis and How to Resolve It
***Thomas Woods: The Church and the Market
***Gary North: Honest Money (free PDF here)
William Graham Sumner: History of Banking in the United States
John Wheatley: The Theory of Money and Principles of Commerce (1807)
Murray Rothbard: What Has Government Done to Our Money?
Murray Rothbard: America's Great Depression
Murray Rothbard: Man, Economy and State
George Selgin: Less Than Zero
Peter Bernholz: Monetary Regimes and Inflation
Ludwig von Mises: Theory of Money and Credit
John H. Clapham: The Bank of England: A History, 1694-1914
**Henry Hazlitt: The Inflation Crisis, and How to Resolve It
Benjamin Anderson: The Value of Money
Charles W. Baird: Liberating Labor
John E. Chown: A History of Money
Bernard Connolly: The Rotten Heart of Europe
Pope John Paul II: Veritatis Splendor (1993)
Pope John Paul II: Centesimus Annual (1991)
Pope John Paul II: Sollicitudo Rei Socialism (1988)