Sound Money Isn’t Enough
Today we recognize a distressing possibility: Sound money does not ensure sound government.
That is, sound money – in our fallen world of sin and vice – cannot constrain sinful and viceful men hostile to sound government.
Nor can constitutions and bills of rights. Is it proof you need? We merely refer you to the innumerable rascalities of the United States government.
The Daily Reckoning has for years beat its tom-toms for private, decentralized money. That is because we believe private, decentralized money is the money of freedom.
And we are heart and soul for freedom – our freedom, your freedom, the fellow’s freedom three miles down the street… the fellow’s freedom 3,000 miles across the country.
That is one reason we embrace gold. It is independent of the state. Government cannot fabricate it into existence at a stroke. Human labor must haul it out of the ground.
Gold exists in adequate – yet limited – quantities. The fiat dollar exists in potentially unlimited quantities.
A Dangerous Servant and a Fearful Master
The paper dollar — or today’s digital dollar — is also the great bogey of the boom/bust cycle. It inflates bubbles of every model, of every make.
Meantime, paper money fuels big government in the manner oxygen fuels fire. And as Washington long ago warned:
“Like fire [government] is a dangerous servant and a fearful master.”
Unlike the fiat dollar, gold is a sound money. It is therefore an honest money.
And as we have argued before: Anything honest in this world of sin and vice is worth a huzzah, worth a defense.
So little honesty remains.
Unlike fiat money, sound money encourages the virtues of saving… thrift… deferred gratification. It sets the mind to the future.
And an honest, sound money is a disciplined money. It chains government down in thick, impossible fetters.
A state in charge of money is a fox in charge of a henhouse.
“Gold Embodies the Public Spirit of an Alley Cat”
As we have also written before, gold resists social improvement. The greater good is beyond its care. It lacks all human compassion.
Gold embodies the public spirit of an alley cat. We like that about gold. It suits our frosty and aloof disposition.
And it turns from the sound of trumpets. “You go over there,” gold tells its paper counterpart. “I’ll stay here.”
Paper money, fiat money, debased money, this is the money for public service.
That is because fiat money is civic-minded. It has a heart. And unlike gold, it follows orders.
Whatever war, whatever boondoggle, whatever swindle it is ordered to throw in with… it will throw in with.
Fiat money willingly sacrifices its value for the greater good. Gold, meantime, fiercely and jealously guards its own.
The Evils of Government Money
“Austrian” school economist Ryan McMaken:
Today many cryptocurrency drummers believe these digital currencies are 21st-century gold. They are private creations of the free market. Governments cannot monkey them.
Utopianists even believe cryptocurrencies can banish the state altogether, consigning it forevermore to history’s hell box.
Sound Money Won’t Fix the World
Yet does private, decentralized money necessarily equal freedom from state clutches? McMaken:
Gold – after all – predated the state. Yet gold did not box in the state, the ambitious, avaricious and mischievous state.
The state grew and grew under gold… as the tick grows and grows under intake of blood. Again, McMaken:
Here is McMaken’s frowning and spirit-stealing conclusion:
Alas… all experience does point to yes.
The state does not require a monopoly on money to conduct its business, this fellow notes. What does it require?
It merely requires a monopoly on coercive power – the coercive power of taxation in particular.
Taxation is the bloodstream of the state, the living and vital bloodstream of the state. So long as taxes flow in, the heart is busy… and the blood flows freely.
Do you believe cryptocurrencies deliver you from the tax collector’s iron clasp? Have another guess…
No Escaping the Tax Man
And if you refuse?
Sound Money: Only One Piece of a Much Larger Puzzle
One piece of a much larger puzzle… indeed.
As we argued near the onset: Sound money – in our fallen world of sin and vice – cannot constrain sinful and viceful men hostile to sound government.
Alas, the ability to constrain sinful and viceful men is the puzzle piece that forever eludes us…
Send this article to a friend: