Money, money, money

I get questions from time to time. If they are polite, I always respond, even if briefly, because I have lots of e mail messages to deal with. On occasion, I receive queries that I think worthwhile to share on this blog, such as the one below. Be warned: if you ask me an important question , I will feel free to post it on LRC along with my response, but on an anonymous basis.

From: Eric
Sent: Wednesday, March 09, 2016 1:50 PM
To: [email protected]
Subject: The Authoritative Gold Standard
Thanks for being a beast in all things liberty.
All I hear and read from libertarians is that we need sound money, and specifically our money to be based on gold.
To me, the gold standard is totally overrated. It would expressly require force that violates the NAP. Somebody, either some government or some ruler, is telling its people that money must be tied to gold (or silver, or whatever.) The gold standard is not a product of the free market, but of the government. Why do libertarians hold the gold standard so closely?
That is not a private, free market approach to money, right? Money should be whatever people deem as money, whether it is tied to gold or rice patties or nothing.
The way I am imagining a completely unfettered money market is that banks could each issue their own currency. Then, it would be in their best interest to keep the value of their currency high, in order to attract more customers and keep their current ones happy. Problems could arise if other banks don’t accept another’s currency, but that would hurt them financially if ever sustained. The competition that would ensue for the “best currency” would be fantastic, and a boon to the common man.
I’ve been told I am crazy by many people who are in fact crazy (those that believe in government) but I needed to ask a non-crazy, like you, if this idea is, in fact, crazy.
If you get the chance, let me know your thoughts.

Dear Eric:

I suggest you read this material:

Rothbard, Murray N. 1963, 1985, 1990 What Has Government Done to Our Money? Auburn, AL.: Mises Institute;

Rothbard, Murray N. 1994. The Case Against the Fed. Auburn, AL: The Ludwig von Mises Institute;

Rothbard, Murray N. 1962. “The Case For a 100 Percent Gold Dollar.” Leland Yeager (ed.), In Search of a Monetary Constitution. Cambridge, MA: Harvard University Press, pp. 94 136. Reprinted as The Case For a 100 Percent Gold Dollar, Washington, DC: Libertarian Review Press, 1974.

Best regards,



4:39 pm on April 30, 2016