In a barter economy, Murray Rothbard observed, government officials can only expropriate resources in one way: by seizing goods in kind. In a monetary economy they will find it easier to seize monetary assets, and then use the money to acquire goods and services for government, or else pay the money as subsidies to favored groups. Such seizure is called taxation.
Taxation, however, is often unpopular, and, in less temperate days, frequently precipitated revolutions. The emergence of money, while a boon to the human race, also opened a more subtle route for governmental expropriation of resources. If government can find ways to engage in counterfeiting — the creation of new money out of thin air — it can quickly produce its own money without taking the trouble to sell services or mine gold. It can then appropriate resources slyly and almost unnoticed, without rousing the hostility touched off by taxation. In fact, counterfeiting can create in its very victims the blissful illusion of unparalleled prosperity.
In Part III of What Has Government Done to Our Money?: ‘Government Meddling With Money,’ Rothbard addresses:
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- The Revenue of Government
- The Economic Effects of Inflation
- Compulsory Monopoly of the Mint
- Debasement
- Gresham’s Law and Coinage
- Summary: Government and Coinage
- Permitting Banks to Refuse Payment
- Central Banking: Removing the Checks on Inflation
- Central Banking: Directing the Inflation
- Going Off the Gold Standard
- Fiat Money and the Gold Problem
- Fiat Money and Gresham’s Law
- Government and Money
Rothbard’s ‘Money in a Free Society’ is now available for podcast or free download, read by Jeff Riggenbach.
The latest print edition of the book — including a detailed reform proposal, ‘The Case for a 100 Percent Gold Dollar’ — is available in the Mises Store.
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