Home
Loading
  Contact Us    
Monopoly Money

Legal tender laws do not exist in a genuinely free market.

by James Leroy Wilson
April 30, 2009

Bookmark and Share
Monopoly Money

Imagine the Old West. Private detective agencies were formed to guard railroad trains and stagecoaches, and to track down suspected train robbers.

Except, I'm talking about an alternate-universe Old West. In this version, these detectives were extremely ruthless, often more so than the criminals they went after. They would shoot first, ask questions later. Instead of just hunting down train robbers, they would massacre the families of suspects.

The tactics did the trick. Robberies dropped dramatically. But civilized communities were still horrified by the behavior. Contrary to the people's will, U.S. Marshalls were told by superiors to leave the detective agencies alone. And state laws were passed protecting these agencies, so sheriffs could do nothing.

After one group of detectives did unspeakable things to an innocent woman and her children, however, one angry mob caught and summarily executed them. Word spread to other towns, and soon other mobs were turning against detectives in many places.

And this was just unacceptable to the largest detective agencies. They asserted they had the right to murder the people at will, but that the people had no right to get justice in return. Their arguments were based on "progress" and the "general welfare." After all, without the detective agencies, criminals would have their way and interstate commerce would shut down. They persuaded Congress to protect them.

Congress set up 12 regional branches of a Private Detective Reserve System. When any detective agency in the area feared mob revolts against detectives, the closest regional branch would dispatch as many detectives as necessary to pacify the mob. It didn't matter which private detective agency the regional branch would save; all area private detective agencies were part of the system, and all were entitled to be "bailed out" with reinforcements if necessary.

So local detective agencies continued to murder, rape, and steal in the name of fighting crime.

Question: did the fact that Congress intervened to set up the Private Detective Reserve System prove that the free market had failed?

Or would you say that the free market was not given a chance to work?

A free market pre-supposes the rule of law. That is, the prohibition of aggression, coercion, theft, and fraud. Therefore, the dystopian nightmare described above is not and could not have been the result of the free market. In a free market, the first detectives who committed a crime would have been prosecuted, not protected. And detective agencies who knew how to do their job without committing crimes would have replaced the criminally violent ones.

Unfortunately, our financial system developed much along the same lines as above. The bank was once considered a warehouse where people could keep their gold or other precious metal for a fee. The paper receipts they were given by the bank began to circulate in the economy as a paper substitute for the gold money itself. This tempted the bank to issue more receipts as loans than it actually had in its vaults. Sometimes, the people lost trust in the bank and a "bank run" would ensue where everyone would try to get their gold back, and only a few could.

The Federal Reserve System was set up to protect these fraudulent banks from bank runs. Even today, when the Federal Reserve paper dollar is money, banks have just one-tenth of their total deposits in paper and coin for people to withdraw.

Money is "created" by the Federal Reserve Board more by computer entries than by the printing press, and each additional dollar it creates makes each existing dollar slightly less valuable.

The Fed creates money to purchase government debt, and to give it to banks for people to borrow during a recession.

Moreover, the Federal Reserve dollar is legal tender - individuals are compelled by law to accept them as payment.

So the people are forced by the government to accept increasingly depreciating dollars - and the depreciation was itself caused by a government agency. (Anyone who thinks the Federal Reserve Board is not a government agency is mistaken.) When the government adds more money into circulation, and especially if and when it taxes the resulting price inflation, it is essentially stealing property from individuals.

Unfortunately, the vast majority of supposed advocates of the free market have taken the role of the Federal Reserve for granted. One would hope they may be able to see my alternate-universe example of the government protecting murderers as a violation of the free market. But they have a blind spot when it comes to government control of banking and the money supply. Such "free market" advocates would allow private banks to loan money they don't have, and then print more money to bail out the banks when need be. This is government-sanctioned theft just as surely as there was government-sanctioned murder in my alternate universe.

So the distortions and evils caused by government control and creation of money cannot be attributed to the free market. In a real free market, the government would prosecute murder, not protect and encourage murderers. And in a real free market, money would be defined by the market and valued by the market, not monopolized and depreciated by the government.

Any time the government makes legal tender laws and controls the money supply, there's no telling how the private sector may behave. But their irresponsible actions and mistakes cannot be blamed on the free market, because without a free market in money, there is no free market. A real free market might see several currencies in circulation at any time, with paper receipts representing gold, silver, gallons of gasoline. Or, mega-chain store coupons could circulate. The possibilities are endless, and a firm could individually weigh and accept in payment various forms of money according to its own needs. But when one form of money, the Federal Reserve dollar, is legal tender, and the Federal Reserve can create infinite amounts, there is no end to the demand for them. The acquisition of dollars is the only consideration, and this becomes synonymous with greed. There are no checks and balances in the system, which competing currencies would provide.

A free market in money might seem like a surreal world to you, but it's not that far removed from your experience. If you have more than one credit card and clip coupons from various stores, a free market in money would only take this one step further. And these competing currencies will see prices fall instead of rise. The more kinds of money are allowed, the more freedom and human flourishing there will be.

 

Comments (1)


Post a Comment

elm from 98801 writes:
April 30, 2009
A monopoly is a license to print money. Trillions plus out of thin air. Washington has to fix Federal Reserve System; demand system of appointing board members be changed, demand transparency and accountability. Privately owned banks are the wheels of the system, members of the federal system's board of governors. Do I think bank members on board call the shots? It's a given! Member banks do control the money supply in the United States and also are the recipients of hefty sums of that thin air money created.

Wearing two hats is known as "conflict of interest." And, frowned upon in better circles. In fact, perilessly close to fraud. There has been little ( if any ) overseeing of Federal Reserve System. "When the cat is away, the mice will play."


Send Us Your Opinion
(Comments are moderated.)
Your Name:*


Your E-Mail Address:*
(Confidential. Will not be published.)


Location:


Comments:*
Note: In order to control automated spam submissions, URLs are no longer permitted in this form.



Verification:
Please type the letters you see above.

  Printer-Friendly

Bookmark and Share

» jim102670@yahoo.com


PO BOOKS BY JAMES LEROY WILSON
Ron Paul Is a Nut (and So Am I)
Published September 10, 2008

Forget about red states and blue states. Wilson's unique take on political topics is refreshingly not politics as usual.

» Buy Now
» More Information
RSS FEED
RSS Feed for James Leroy Wilson: RSS Feed for James Leroy Wilson
EMAIL ALERTS
Sign up to receive an e-mail notice when new articles by this author are published. Your address remains confidential, and you may cancel at any time. A confirmation email will be sent.

Your e-mail address:
po Books
Now Available!

Teachings of a Three Year Old... Turned Tyke,
by Hal Evan Caplan.

A father learns from the wisdom of his toddler.

More Information.

More by James Leroy Wilson
47 for 46 for 45
My favorite movies since when I was born
by James Leroy Wilson, 3/15/16
Hired Gun Quarterbacks
They rarely win the Super Bowl.
by James Leroy Wilson, 2/9/16
Fixing Football's Overtime
Get rid of the coin toss!
by James Leroy Wilson, 1/19/16
Solving the NBA's Conference Imbalance
Get rid of them!
by James Leroy Wilson, 5/26/15
The Problem of School
We develop differently, but arbitrary age rules punish us.
by James Leroy Wilson, 5/19/15
Deflating and defaming Tom Brady
Punishing without evidence
by James Leroy Wilson, 5/12/15
Should Floyd Mayweather be allowed to fight?
The Nevada Athletic Commission is wrong, but not for the reason you think.
by James Leroy Wilson, 4/28/15
» Complete List (565)


RSS FEED
RSS Feed for James Leroy Wilson: RSS Feed for James Leroy Wilson

Recently Published
View Article The Missing Message in Dunkirk
What would make a good movie great
by Greg Asimakoupoulos, 9/22/17
Gone with the Wind
Praying for Irma's victims
by Greg Asimakoupoulos, 9/15/17
Remembering Mother Teresa
Republishing what I wrote twenty years ago
by Greg Asimakoupoulos, 9/8/17
Remembering the People's Princess
Celebrating the legacy of Lady Di twenty years later
by Greg Asimakoupoulos, 9/1/17
The Gospel According to Fast-Food
A tip of the hat to two fast-food giants
by Greg Asimakoupoulos, 8/25/17
A Solar Eclipse for the Ages
Look up! Your redemption draweth nigh!
by Greg Asimakoupoulos, 8/18/17
A Family Reunion Prayer
Contemplating the beauty of our family tree
by Greg Asimakoupoulos, 8/11/17

Get the Partial Observer's
'recently published' headlines via RSS.


RSS Feed for Recently Published PO Articles    What is RSS?
Reproduction of original material from The Partial Observer without written permission is strictly prohibited.
The opinions expressed by site contributors do not necessarily reflect those of the editors.
Copyright ©2000-2017 partialobserver.com. All rights reserved.
Home · Site Map · Top