Honest money is a widely-accepted medium of exchange that arises solely from voluntary market exchanges and maintains its value solely from voluntary market exchanges. People once settled on gold and silver coins as their preferred money, but we have long since been prohibited from using them. An employer who pays his employees by mutual consent in gold or silver coins is subject to prosecution from the guilty-until-proven-innocent IRS.
It would take a powerful criminal organization to prevent a nation of 320 million people from exercising their freedom to choose their own money, but that’s what has happened. Ironically, most people don’t consider this organization as criminal at all, but rather as necessary for the preservation and growth of civilization.
How the devil did this come about?
Two ways: government chicanery and their subjects’ ignorance and complicity.
Honest money imposes limits on government, but governments don’t like limits. They are always looking for ways to bamboozle their subjects into acquiring more power. One way is to take charge of the money their people use — for their own good, of course. This means monopolizing the supply while jailing others caught competing with them.
The purpose of controlling the supply is to increase it as much and as easily as possible. Paper and digital money make this a breeze when honest money is outlawed. Gold, as Guido Hülsmann wrote in his masterpiece, has a built-in insurance policy against political inflation.
The population that goes along with this scheme has been groomed to accept it. The people’s government teachers repeat what they’re told, and they’re told the gold standard brought the world economy to its knees in the 1930s until gold was outlawed domestically as money.
With money thereafter easily inflatable, government had the resources to employ economists who would rebut skeptics, confuse the public, and support government spending policies. The population has become attached to its policies through social programs and rah-rah foreign adventures where American troops save American families from whoever lives over there.
The government-created central bank has, as expected, proven invaluable in building a virtually opaque wall around its policies, providing a quid pro quo with its mother. If Keynes said one thing that was true, it was his comment about inflation disrupting capitalism so much that “the process of wealth-getting degenerates into a gamble and a lottery,” a process that is incomprehensible to most people.
Today we are so far from the idea of honest money that it’s difficult to discuss the term publicly. “What’s dishonest about the US dollar?” one might ask, forgetting or not knowing that inflation is a technique of defrauding dollar holders by reducing its buying power, and that before being saddled with a monopoly counterfeiter in 1913, the US economy somehow managed to pull through from 1870-1900 while experiencing dollar deflation. Unlike today, people got richer simply by hanging on to their cash.
Government has countless dependents, both foreign and domestic. No one’s going to rock the boat and pass judgment on its monetary piracy. No one, that is, except a few radicals who publish something like this.
