Every time I see talking heads question the positions of politicians on various issues, I have to laugh at their widespread blind belief that policy is based on principle. Citizens must be vigilant when it comes to judging their nominal representatives. The first question in evaluating a politician’s stance on an issue that must be asked is not, “What does the politician feel is the right thing to do?” but rather, “What constituents does the politician intend to appease or bribe with this piece of legislation?” This is the nature of politics. If a politician held views on principle averse to the interests of those he served, he likely would never have made it into office.
Thus, when the public and the media make a big deal about legislation being not only massive but mind-numbingly cryptic, they are missing the point that this is all intended to deceive the people from understanding the true nature of the bills. The sad fact is that most legislation is about political plunder, in which certain interests benefit at the expense of others. I have harped on this fact before, that government as it is currently constituted is merely an instrument for systematically carrying out the redistribution of wealth and/or power.
By believing that politicians care one way or another about policy (with certain limited exceptions), the public and the media delude themselves. They miss the fact that the question every politician asks before crafting or voting on a piece of legislation is, “Will this help me get re-elected?” To believe otherwise is incredibly naive, idealistic and dangerous in a democratic system. Cynicism is healthy. After all, politicians have no incentive to be long-term oriented or principled. Politicians meet the demands of consumers, their constituency, and the profit-and-loss mechanism with which they measure their performance is the ballot box. Unlike those who compete in a free marketplace, the means by which they achieve success is through stealing from some and giving to others at the point of a gun.
Until lovers of liberty can articulate to the American people that NO political largess should be extended to ANY particular group – that ALL will be made better off in a system in which people freely compete on a level playing field, we will continue to have a shrinking economic pie and devolving civilization.
Back in the olden days, people simply bartered products. One might trade a couple of loaves of bread for a fish. In order to ease this process so people didn’t have to bring their produce to market, over time people turned to gold, later paper money backed by gold and ultimately paper money backed by faith in government as currency in trade. Money itself should thus be considered as merely a commodity to be exchanged for other commodities. It only differs from other goods to the extent that it is not consumed like milk or sugar or a house. Its value is in serving as a medium of exchange of other goods and services.
As such, it makes no sense that governments should create money through “quasi-private” central banks, or at the very least impose legal tender laws that prevent others from doing so. If there is consumer demand for facilitating the exchange of goods and services, then there will arise through the spontaneous order of the free market a system of competing providers of currencies. Presumably, those who produce money that will retain its value will drive out of the market those incompetent or unscrupulous competitors producing depreciating money. This is because money that retains its value over time will make the exchange of products easier because businesses will be able to make better calculations in exchange, and because as with any product, a premium will be placed on maintenance of value over depreciation.
One could speak to a host of problems with government currency: that inflation of the money supply unfairly benefits debtors at the expense of creditors and serves as an outright tax on all; that a constantly debased currency allows the government to fund unjustifiable wars in addition to all sorts of social programs and other means of unjust and unconstitutional wealth redistribution; that government naturally will mismanage the money supply just as they do all programs from a purely economic standpoint; that it is absurd that the government should have the power to outlaw monopolies yet grant itself a monopoly on a commodity like money that serves a specific special interest of the banking sector; and finally that government’s record in management of the money supply has been horrendous, with central banks creating a perpetual boom-bust cycle and constantly devaluing the people’s money. Concentrating the monopoly power over the money supply in the hands of a select group of bureaucrats is an asinine, irrational and furthermore dangerous policy.
But without going into these sometimes arcane economic phenomena, the most important thing to understand is that at its core, money supply is just like the supply of any other good or service except to the extent that its value is derived from its use as a commodity in exchange, rather than from the utility we gain in consuming a traditional good or service. If the market can provide other goods and services in the proper quantities and qualities to meet the demands of society, then surely it too can provide the proper quantity and quality of money. To believe that somehow, government provision of money is any more sacred or preferable to government provision of any other good or service is pure folly.