Taking Money Back

ForewordWe do not need a technocratic elite to manage the supply of money. In these three short articles, Murray N. Rothbard removes the Federal Reserve’s veil of scientific mystique to reveal a wholly unnecessary and malignant system. Rothbard contrasts the instability and unjust redistribution inherent in our current central banking system with the integrity of sound money and honest banking practices. Since the articles were published in 1995, the Fed has continued to generate boom-bust cycles and expropriate real wealth from the public for the benefit of the government, its cronies and their favored financial institutions. Since the financial crisis of 2007–8, the Fed has expanded to leviathan proportions in size and scope. The 2020 crisis was only the latest explosion in money printing, this one accompanied by record consumer price inflation. Rothbard, in his characteristically clear and engaging style, starts with the basics. Money began as the market-selected general medium of exchange and served as an indispensable tool for economic calculation. Banks emerged on the market as money warehouses, and investment banking channeled real savings to productive enterprise. Over time, however, the government monopolized both money and banking for its own purposes. Since taxes are unpopular, the government could not resist the temptation to become the “Grand Counterfeiter.” Like a run-of-the-mill counterfeiter, the government can surreptitiously spend newly printed money, driving up prices and victimizing those who do not have access to the new money to pay the higher prices. Maintaining this power required a step-by-step destruction of the gold standard and a complete cartelization of the banking system. Thus, money was not invented by the state but was co-opted by it.