What Has Government Done to Our Money?

Murray Rothbard’s book, What Has Government Done to Our Money?, is available as a free audiobook or a free download from the Mises Institute.  I’ve listened to most of it and want to recommend it as an easy to understand source that explains where money originated in history and how we have gotten to the point we are now with government controlled fiat currencies.  Part IV “The Monetary Breakdown of the West” goes through the history of gold standards in the United States from when there was gold backing the dollar to after Nixon took us totally off the gold standard.

Rothbard points out through multiple illustrations from history that governments have always sought to inflate the money supply to generate a new source of funding (in a democracy a 100% tax usually doesn’t work but deceptive taxes might not be noticed).  The colonies did this during the Revolutionary War and our government has continued to do it throughout its history – especially in times of war.  When the government does not have the money to pay its way, it has throughout its history printed more.  The consequence of this inflation for every government is always a devaluation of whatever the currency is at the time.  A second consequence is that the artificial booms this easy money creates in certain sectors of the economy will always eventually lead to a bust such as happened in the economic downturns of 1819, 1873, 1918, 1929, 1973, and what is happening now in 2008.

This entry was posted in blog and tagged , , , , , , . Bookmark the permalink.