ftcb21 on Nostr: HOW WOULD MONEY BE produced in a free society? Let us first observe that the fact ...

HOW WOULD MONEY BE produced in a free society? Let us
first observe that the fact that the quantity of money is
irrelevant for the wealth of a nation must not be con-
fused with the ideal of stabilizing the quantity of
money. The latter ideal is in fact a spurious ideal and
does not follow from the aforementioned fact. There is
nothing wrong with increases or decreases of the
quantity of money. The point is that such increases or
decreases should not be mistaken to benefit society as a whole. Right and wrong in monetary policy does not
concern the question: To which end should the quan-
tity of money be modified? Rather, it concerns the
question: Who has the right to modify the quantity of
money? And in a free society, the obvious answer is:
all producers of money have the right to produce more
money, and all owners of money have the right to use
their property as they see fit.

In a truly free society, the production of money is a
matter of private initiative. Money is produced and sold
just as any other commodity or service. And this means
in particular that in a free society the production of
money is competitive. It is a matter of mining precious
metals and of minting coins, and both mining and mint-
ing are subject to the competition emanating from all
other market participants. In selling his product, the
money producer competes with all other people who
own money and seek to buy the same goods that he
desires. And in buying factors of production, the
money producer competes with the producers of
chairs, theater performances, telephones, carpets, cars
and so on. In a word, in a free society the production
of money is constrained within fairly narrow limits,
limits that are determined by the willingness of other
members of society to cooperate with our money pro-
ducer rather than with someone else. What kind of money would prevail in a free soci-
ety? Theoretical considerations and historical experi-
ence all point to the same answer: A free society
would use precious metals as money. Payments would
be made in coins made out of gold, silver, platinum,
copper, or whatever other substance would combine
scarcity with the physical advantages of these metals.

By contrast, paper money has always been fiat money,
that is, it has always been imposed by the coercive
power of the state. It is not the money of the free mar-
ket, but the money of a partially enslaved society. #readthisverycarefully