|About the Book|
The government monopoly of money must be abolished to stop the recurring bouts of acute inflation and deflation that have become accentuated during the last seventy years.Abolition is also the cure for the more deep-seated disease of the recurringMoreThe government monopoly of money must be abolished to stop the recurring bouts of acute inflation and deflation that have become accentuated during the last seventy years.Abolition is also the cure for the more deep-seated disease of the recurring waves of depression and unemployment attributed to capitalism. The monopoly of money by government has relieved it of the need to keep its expenditure within its revenue and has thus precipitated the spectacular increase in government expenditure over the last forty years. Abolition of the monopoly of money would make it increasingly impossible for government to restruct the international movement of men, money and capital that safeguard the ability of dissidents to escape oppression. These four defects - inflation, instability, undisciplined state expenditure, economic nationalism - have a common origin and a common cure: the replacement of the government monopoly of money by competition in currency supplied by private issuers who, to preserve public confidence, will limit the quantity of their paper issue and thus maintain its value. This is the denationalisation of money. Money does not have to be created legal tender by government: like law, language and morals it can emerge spontaneously. Such private money has often been preferred to government money, but government has usually soon suppressed it. So long as money is managed by government, a gold standard, despite its imperfections, is the only tolerable safe system: but it is better to take money completely out of the control of government. In a world governed by pressures of organised interests, we cannot count on benevolence, intelligence or understanding but only on sheer self-interest to give us the institutions we want. The insight and wisdom of Adam Smith stand today. The proposal is not a minor techicality of finance but a crucial reform that may decide the fate of free civilisation. The urgency of competition in currency requires to be demonstrated to the public by a Free Money Movement, comparable to the Free Trade Movement of the nineteenth century. In the third edition of his classic, Professor Hayek argues that the problem of recurrent inflation is due to government monopoly provision of money, competition being the solution.