By Michael Rozeff
Monday, July 18, 2011
Currency is the blood of human exchange. From currency arise prices, and prices are the air that peaceful exchange breathes, an air that communicates living information. Currency is the division of labor’s partner. Currency is our means to transfer labor and energy through time and space, to bring future goods into commerce today. It is that vital means by which we convey the benefits of our labor to others and they to us.
Mankind needs currency. It is absolutely essential to our welfare in any modern economy.
Do we want freedom and free markets? Then currency must be produced in freedom. Do we want to be controlled and directed by government in totalitarian style? Then currency will be in the hands of government as it is now.
What sort of order do we now have and what sort of order do we want to have? We now have an order of force. It is a corrupt and harmful order that destroys lives. It is an order of unjust laws written by unjust government to pay off privileged and select groups in society. It is an order of excessive and overbearing government that destroys healthy social relations. This is not a free market order. If we want a peaceful free market order built upon private property and recognizable and well-defined rights, we need to change direction. The order of force in all respects leads away from the free market order.
If we want freedom and free markets, we cannot and should not depend on one supplier of currency. That supplier, government through its central bank, playing dictator, has abused, will abuse and cannot help but abuse the power of issue. Its hidden and unstated goal, its raison d’être, is favoritism and privilege for itself and its friends.
The monopoly supply of currency is obviously not a free market institution, since rivalry and free entry are hallmarks of free markets. Yet their controllers sell themselves on the deception that the free market cannot produce its own currencies and that government control preserves the free market order. Any notion that monopoly control saves this or any free market or perfects the free market or overcomes its supposed negatives is the biggest sort of lie, imposed only to gain advantage and privilege for its proponents. Monopoly currency corrupts and poisons the free market order, transforming it into the order of force.
We neither need nor want a monopoly supplier of currency: We – as entrepreneurs, in companies, in associations, in banks, in localities – as free persons. Currency is a spectrum of media of exchange that includes credit and money. It is many, not one. At one end, we can create currency out of nothing, out of thin air, whenever and wherever we want to. It will be credit, and the trust that exists between us is its backing. In the middle range of currency, we can create credit using assets of many kinds as backing (including money). At the other end, we can use money, which is not credit, not a liability, not a promise, but an asset free and clear.
Money has its uses and its place, but we are not restricted to it. Centuries ago in a great step forward, mankind added credit to its techniques of trade; but modern man has taken a great wrong turn. In our fear and ignorance of the free market, we have centralized credit in the hands of a few central bankers, where they have changed it from an instrument based on commerce and trust into an instrument of force and privilege. In our ignorance, in our fear, in our misplaced awe of government, and in our manipulation by overlords, we have allowed a few to take control over credit. We have even allowed them to banish real money and replace it with forced credit.
We are so indoctrinated in government control that the most popular mass works of imagination in science fiction are wedded to this totalitarian conception. In 24th century Star Trek, the currency is mainly "credits" – origin presumably the United Federation of Planets. In Star Wars, currency is more varied but includes galactic credit standards and there is even an InterGalactic Banking Clan. Any science fiction work without freedom of money and credit creation leaves mankind in its present chains.
We need monetary freedom. That is only a start to ending democratic totalitarianism, but it is the essential start.
We need currency issuers that uphold clear property rights transparently in the light of day. Only competition can secure quality and advance. We need customers in markets to drive out of business those companies that undermine the value of their currencies by investing in the wrong assets or by not living up to their charters. We do not need legislators who clumsily and criminally claim and misuse the power to control financial institutions. We do not need legislators accepting money and favors from financial lobbyists and writing laws in their favor.
We do not need central banks with powers to create credit that bail out failing banks, failing insurance companies, failing foreign central banks, and failing governments. We do not need misbegotten attempts to control entire economies by controlling credit. We need to scourge government-sanctioned credit and central banks from the marketplace. We need to separate currency and finance from government power.
Good media of exchange based on our compassion will drive out the bad in a free market. Sound liabilities and sound moneys from creative hearts will drive out the bad media of exchange, but only if we divorce government from financial control and embrace the free market. It's so simple.
We are being held back. We are being robbed of wealth and opportunity. We are being prevented from choosing. The market will automatically create a range of liabilities that can be media of exchange if it is given a chance to be free. We in the market will choose our currencies. To stand in our way is to destroy us.
If we are the ones who build our cities, if we grow our food, if we clothe ourselves, if we care for our children and our weak and aged, if we do all this – and we do and not our government – then so can credit be ours, of us, by us, and for us. Then so can we devise our own moneys. Then so can we create our own currencies freely, without obstruction, without instruction, without regulation, without monopoly, and without government guns pointed at our heads.
Stop running our currency, and doing such a pitifully poor job of it anyway. Let us create our own currencies.
Get out of our way. Move aside. Begone.
The entire financial system nearly collapsed in 2008. The order of force in currency nearly fell. It remains vulnerable with stagnant economies, inflationary economies, immense deficits, insolvent banks that are too big to fail, and sovereign debts nearing default. The order of force in currency risks disintegration before our eyes.
If there is a collapse of the financial system, there is every likelihood that government, to save this unjust and unworkable system, will transform it and itself into something even more beastly and oppressive. The near collapse prodded government into adopting measures that prolong the system but impoverish us.
Collapse will bring disorder. If we do not have working currencies in place, our economy will fragment as it reduces to guns and barter. Disruption will rule. Living standards will decline sharply. The unprepared, the weaker and disadvantaged in society will scramble to survive. Chaos and disorder will bring about calls and demands for order in the form of more and stronger government. Working currency alternatives are a necessity to avoid this outcome.
Perpetuation of the order of force with its accompanying stagnation is simply a slower motion collapse. It too will provide many excuses for further resort to the order of force. Government in much the same and worse form will be maintained or restored. No crisis in American history has yet done anything but enhance the order of force.
The free market order is always vulnerable to demands for more government force and especially so when there are highly publicized problems exacerbated by media that agitate, distort and sensationalize. Attempts to alter or end government that transform it radically and produce excessive disorder become counterproductive.
We who are the public have to support change and it has to be the right sort of change or else it fails. Without a much deeper understanding among us that produces the consciously different goal of a free market in currency and free markets in general, we will remain slaves to the order of force.
We must certainly not let the government use smoke and mirrors to replace the existing monetary system and currency with another government system of the same kind. We must not exchange one system of tyranny for another.
The need for alternative currencies now is urgent. With alternative currencies in place, Austin continues to touch Boston and Tacoma without interruption when the old currency dies. It continues to touch Hong Kong and Ankara and Manila. Economic life goes on without being severed when new currencies smoothly take over from the old.
We resolve to terminate the order of force in currency. We declare ourselves free to create our own currencies of money and credit based on institutions of trust and property rights. We declare ourselves ready to transform our monetary system and laws. We will employ ourselves, pay ourselves, transport and distribute our product using whatever currencies we deem fit. We will manage currency in freedom, not by multiplying bad credit, but by bearing the losses for which we are responsible and winnowing out the bad and ineffective currencies.
In order to rid ourselves of the currency monopoly, we need alternative currencies up and running. But before that we need the will and commitment to open free markets in currency, in both money and credit. We need to know the goal and to know that it is right and to know that what we now have is wrong. We need a Free Market Currency movement.
For further reading:
"The English Individualists as They Appear in Liberty", Carl Watner, 1982
"Institute for Monetary Freedom: Statement of Purpose", Jon Matonis, July 16, 1982
"Free Currency Propaganda", Henry Seymour, Liberty, May 5, 1894