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The most commonly used medium of exchange
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  • Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.

    Notable Topics

    • Gold Standard - A monetary system in which currency values are defined in terms of gold


    Money and Banking, by Lawrence H. White, The Encyclopedia of Libertarianism, 15 Aug 2008
    Discusses some of the issues regarding money, whether state- or privately issued, and banking, including central banks, such as the Federal Reserve, fractional reserve banking and free (fully unregulated) banking
    Throughout history, the state has typically monopolized the issuance of money ... Classical economists like Adam Smith understood that money was originally not a creature of the state, but was rather a spontaneous institution that had emerged without explicit design. As Carl Menger concluded, "Money was not created by law; in its origin it is not a governmental but a social phenomenon." Markets in the ancient world converged on silver coins as the most commonly accepted medium of exchange. This silver coin standard prevailed across national borders without any global government.


    Money and Banking - Online Library of Liberty
    More than 40 titles, including works by Alexander Hamilton, Eugen von Böhm-Bawerk, Nassau William Senior, William Graham Sumner, Ludwig von Mises and Irving Fisher
    As modern economics began to emerge in the late 18th century the role of money and banks in the economy was quickly identified as a vital sector. It was especially important to establish what was the proper role of government in the issuing of coins and the regulation of interest rates and other banking activities.


    Albert Jay Nock, Forgotten Man of the Right, by Jeffrey Tucker, 22 Aug 2002
    Lengthy biographical essay, with a selection of quotes from Nock's Memoirs of a Superfluous Man (1943)
    [Nock] on fiscal policy:
    "Another strange notion pervading whole peoples is that the State has money of its own; and nowhere is this absurdity more firmly fixed than in America. The State has no money. It produces nothing ... 'Government money,' of which one hears so much nowadays, does not exist; there is no such thing ... In various schemes of pensioning, of insurance against sickness, accident, unemployment ... the government is supposed to pay so-much into the fund, the employer so-much, and the workman so-much. ... But the government pays nothing, for it has nothing to pay with ..."
    Anne Robert Jacques Turgot, Who First Put Laissez-Faire Principles into Action, by Jim Powell, The Freeman, Aug 1997
    Biographical essay, covering his life, works and involvement with the Physiocrats, as well as his accomplishments as an administrator
    [Turgot] affirmed the importance of sound money: "Thus, then, we come to the constitution of gold and silver as money ... without the intervention of any law ... They are not ... signs of values; they have themselves a value. If they are susceptible of being the measure and the pledge of other values, they have this property in common with all the other articles that have a value in Commerce. They differ only because being at once more divisible, more unalterable, and more easy to transport than the other commodities, it is more convenient to employ them to measure and represent the values."
    Aristotle Understood the Importance of Property, by Richard M. Ebeling, 27 Sep 2016
    Discusses Aristotle's views on private property and property rights (contrasting them with those of Plato), the "ends" of human life, economics ("household management"), wealth acquisition, prices, money and related topics
    [Aristotle] saw that money was a useful and desirable invention to overcome the difficulties that inhibit trade under conditions of barter ... Money ... was to serve as a medium of exchange. In itself, money was not "productive," but was merely a device for the transfer of commodities, and ... of values. The problem was, [he] argued, that the use of money was open to "unnatural" ... moneymaking–the accumulation of money for its own sake. Always looking for the "happy medium," in Aristotle's mind, this was one of those excessively "extreme" types of action to be condemned on moral grounds.
    A-Scalping We van Gogh, by Sheldon Richman, Freedom Daily, Feb 1999
    Explains the economics concepts of opportunity cost, money, prices and entrepreneurship, based on analysis of scalping of "free" tickets for a Van Gogh exhibit at the National Gallery of Art
    The real cost of a ticket for any person is the value of the highest-ranking alternative use of those hours. This is what economists call "opportunity cost." We all know the saying "time is money." But what is money? Money is time. Money, or wealth, is the result of production, and all production takes time ... If you were to lose a sum of money, you'd have to devote time to replacing the lost wealth rather than use that time for something else. Of course, money is also whatever you can buy with it. Both time and money ultimately are means to satisfaction from consumption.
    Austrian "Inflation," Austrian "Money," and Federal Reserve Policy, by Richard H. Timberlake, The Freeman, Sep 2000
    Response to Joseph Salerno's Oct 1999 The Freeman article which critiqued Timberlake's essays in the April, May and June 1999 issues; discusses the words "inflation" and "money" and Federal Reserve policies, in an Austrian economics context
    The question of which items economists should include in the definition of money has been debated for two centuries. Obviously, any item that is directly exchangeable for goods and services over the counter as a medium of exchange is money. Currency and demand deposits, subject to check, are clearly money. However, what about time and savings deposits, savings and loan share capital, and cash surrender values of life insurance policies—the items Salerno (and Rothbard) include in the accounted money stock? ... Money, being an item that appears in all markets, has no single market of its own ...
    "Bad Money Drives Out Good", by Charles Adams, Freedom Daily, Dec 2003
    Explains Gresham's Law, recounting how Queen Elizabeth I restored pure silver coinage, how the Romans debased the Greek silver drachma and how Swiss bankers bought gold from the U.S. Treasury in the early 1970s
    [Gresham's Law] was formulated by Sir Thomas Gresham to explain to Queen Elizabeth I what was happening to the English shilling. Her father, Henry VIII, had been adulterating the English shilling ... [T]his "bad money" drove out the pure silver shillings then in circulation. Astute English merchants and even ordinary subjects would save the good shillings and circulate the bad ones; hence, as Gresham observed, the bad money (Henry’s adulterated coinage) would be used whenever possible, and the good coinage would be saved and disappear from circulation.
    The Brilliance of Turgot, by Murray N. Rothbard, Apr 1986
    Biography and review of Turgot's major writings; introduction to The Turgot Collection (2011), edited by David Gordon
    Turgot points out that, depending on how the spending-saving proportions are affected, a rise in the quantity of money could raise interest rates. Suppose, he says, that all wealthy people decide to spend ... their capital on foolish expenditures ... Thus, Turgot is ... ahead of his time in working out the sophisticated Austrian relationship between what Mises would call the "money-relation"—the relation between the supply and demand for money, which determines prices or the price level—and the rates of time preference, which determine the spending-saving proportion and the rate of interest.
    The Case for the Barbarous Relic, by Llewellyn H. Rockwell, Jr., 26 Jul 2006
    Argues for a return to the gold stndard by reviewing U.S. political, economic and monetary history; from talk presented in New York City on 21 March 2006
    In the commercial republic of Jefferson, money was gold and silver. Government had no power to print currency. It was not even allowed to tax directly. What money it had came from tariff revenue ... Today, however, all the money government could ever want is easily available via a monetary policy that depends critically on the capacity of the Fed to create money out of thin air. The Fed's printing presses back every debt note issued by the Fed, and the new currency is sopped up by foreign central banks and private holdings around the world, particularly among Asian nations.
    Competing Money Supplies, by Lawrence H. White, The Concise Encyclopedia of Economics, 2002
    Discusses the arguments in favorand against free banking, with multiple private banks issuing their own notes, including historical precedents and proposals for the medium for note redemption
    Two sorts of monetary competition already exist today. First, private banks and financial firms compete in supplying different brands of checkable deposits and traveler's checks. They also compete in providing credit cards that are close substitutes for paying ready money. In a few corners of the world (Scotland, Northern Ireland, and Hong Kong), private banks still issue paper currency notes. Second, each national currency (such as the U.S. dollar) competes with others (such as euros and yen) to be the currency in which international contracts and portfolio assets are denominated.
    A Critique of Monetarist and Austrian Doctrines on the Utility and Value of Money, by Richard H. Timberlake, Jr., The Review of Austrian Economics, 1987
    Examines the differences and similarities between the writings of monetarists such as Irving Fisher and Austrian economists such as Ludwig von Mises on the topic of money, contrasting them with the meager explanations of John Maynard Keynes
    All these "problems" result from not recognizing money's utility as money, and from a confusion of utility and value. Money does not have utility "only" to buy other things. It has the utility of being the exclusive vehicle for allocating expenditures of income over time. This role should be analyzed as one factor contributing to [its value]. If fiat paper money were dumped into a primitive barter economy and forced into acceptance [as] legal tender, its price would be established in terms of other things because of the monetary function it fulfilled and because its quantity was limited.
    David Hume and the Theory of Money, by Murray N. Rothbard, Economic Thought Before Adam Smith, 1995
    Excerpted from section 15.4; brief overview and criticism of Hume's philosophical views followed by discussion of his monetary theory contrasting it with the thoughts of Cantillon, Turgot and Austrian school economists
    Hume's most important contribution is his elucidation of monetary theory, in particular his clear exposition of the price-specie-flow mechanism that equilibrates national balances of payments and international price levels ... Hume vivifies the Lockean quantity theory of money with a marvelous illustration, highlighting ... that it doesn't matter what the quantity of money may be in any given country: any quantity, smaller or larger, will suffice to do money's work of facilitating exchange ... The price-specie-flow mechanism is the quantity theory extrapolated into the case of many countries.
    Economics Ideas: David Hume on Self-Coordinating and Correcting Market Processes, by Richard M. Ebeling, 5 Dec 2016
    Explores Hume's contributions to the then young subject of "political economy", particularly on the mercantilist view of the need for a "positive" balance of trade
    Hume is also recognized as a significant eighteenth century contributor to monetary theory with his formulation of the quantity theory of money. In his essay, "Of Money," he said that money's role in a market system is to serve as a medium of exchange and a unit of account. Looked at from a "static" equilibrium perspective, the quantity of money in a society is of little or no importance. As long as prices in a society were sufficiently adjusted to reflect the available quantity of money to facilitate transactions, any quantity of money serves the purposes of exchange.
    Related Topics: Free trade, Government, David Hume
    The essence of liberty: What is it that really makes one a libertarian?, by David Nolan, Libertarian Party News, Mar 1995
    Discusses five points of "no compromise" that Nolan considered essential to libertarianism
    The fifth and final key test of anyone's claim to being a libertarian is their support for an honest money system; i.e. one where the currency is backed by something of true value (usually gold or silver). Fiat money—money with no backing, whose acceptance is mandated by the State—is simply legalized counterfeiting and is one of the keys to expanding government power.
    The Federal War on Gold, Part 1, by Jacob G. Hornberger, Freedom Daily, Aug 2006
    Discusses some of the clauses in the U.S. constitution regarding coinage and the issuance of paper money by the federal government
    The paper money of today still contains a hint of what it once represented—a promise to pay money, rather than money itself. Take a dollar bill out of your billfold. Notice that at the top it states, "Federal Reserve Note." Why is it called a "note"? Because it represents, somewhat perversely, what such a note once constituted for our American ancestors—a promise to pay something, namely gold. Today, such notes are what is termed "irredeemable"—that is, they cannot be redeemed in gold or silver coin. They are promises to pay nothing.
    The Federal War on Gold, Part 2, by Jacob G. Hornberger, Freedom Daily, Sep 2006
    Continues with the brief monetary history of the United States, discussing Abraham Lincoln's war loans and legal tender law, and the Supreme Court cases of Hepburn v. Griswold (1870) and Knox v. Lee (1871)
    The actions of [Lincoln and Roosevelt] provide a textbook example for understanding the animosity and antipathy that government officials historically have had toward precious metals (i.e., gold and silver coin) as a medium of exchange. Through the U.S. Constitution, the American people brought into existence one of the soundest monetary systems in history. It wasn't perfect in that it didn't provide for a free market in money, but, by establishing gold and silver coin as the official money for the United States, it did protect the American people from the inflationary ravages of paper money.
    The Federal War on Gold, Part 3, by Jacob G. Hornberger, Freedom Daily, Oct 2006
    Describes Franklin Roosevelt's 1933 executive order confiscating gold held by U.S. citizens and the congressional act nullifying gold clauses in contracts, its constitutional ramifications and subsequent related history
    The ultimate solution to this financial chaos, destruction, and morass lies in sound money. The ideal is a free market in money, as ... Friedrich A. Hayek observed. The second-best solution is the type of gold standard established by the Framers, where gold and silver coin are the official money and where the federal government is required to redeem all bills and notes in such money. Both solutions would necessarily entail the abolition of one of the most powerful engines of financial destruction in American history—the Federal Reserve System—as well as the repeal of all legal-tender laws.
    The Founding Fathers and the Economic Order, by Forrest McDonald, 19 Apr 2006
    Speech given at the Economic Club of Indianapolis; contrasts the economic system the Founding Fathers intended to create with the one that was actually created
    To transform the established order, to make society fluid and open to merit, to make industry both rewarding and necessary, what needed to be done was to monetize the whole. For money is oblivious to class, status, color, and inherited social position; money is the ultimate, neutral, impersonal arbiter. Infused into an agrarian society, money could be the leaven ... that would stimulate growth, change, prosperity, and national strength ... Hamilton perceived that–monetary theorists to the contrary notwithstanding–money is whatever people believe is money and will voluntarily accept as money.
    Francisco's Money Speech, by Ayn Rand, Atlas Shrugged, 1957
    Francisco d'Anconia's speech responding to the claim that "money is the root of all evil"; from part 2, chapter II, "The Aristocracy of Pull", pp. 387-391
    "So you think that money is the root of all evil?" said Francisco d'Anconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?"
    Francis Hutcheson: teacher of Adam Smith, by Murray N. Rothbard, Economic Thought Before Adam Smith, 1995
    Section 15.2: discusses Hutcheson's life, the main economic themes in his writings and his criticism of Mandeville
    Hutcheson set forth an analysis of which commodities are likely to be chosen as money ... Money, [he] pointed out, is a commodity generally accepted in a particular country, that becomes used as a general medium of exchange, and as a common standard of value and measure for economic calculation. Commodities which are chosen as money on the market are those with the most money-ish qualities: already generally desirable and acceptable in exchange; divisible into small quantities without losing their pro rata share of value; durable for long periods of time; and portable ...
    Frank A. Fetter: A Forgotten Giant, by Jeffrey Herbener, 16 Aug 2000
    Biographical and bibliographical essay
    Fetter saw money's value as part of the general problem of value. After distinguishing between "primary money," which was gold and silver coin, and "money substitutes," which were bank notes ("redeemable in gold on demand") and government money or "political money" (founded on "legal tender" laws and "political power"), Fetter argued that under a system of "free coinage" money presents "no special problem of value." ... Money "is a valuable good kept on hand as the best possible provision against emergency" whose "use is subject to the law of diminishing utility."
    Friedrich the Great, by Virginia Postrel, The Boston Globe, 11 Jan 2004
    Biographical essay, including Hayek's insights on cognitive science and his influence on postmodernism
    Economic decisions are not separate from individual values or purposes. They reflect those purposes. "We want money for many different things, and those things are not always, or even rarely, just to have money for its own sake," explains Jerry Z. Muller, a historian at Catholic University ... "We want money for our spouses or our children or to do something in terms of the transformation of ourselves—for everything from plastic surgery to reading intellectual history or building a church. These are all noneconomic goals that we express through the common means of money."
    From John Law to John Maynard Keynes, by Steve H. Hanke, GlobeAsia, 1 Feb 2009
    Compares the proposed "mega-Keynesian stimulus package" offered as solution to the 2008 financial crisis to John Law's actions in 18th century France
    In June 1716, [John] Law launched his first big project. It was then that the Banque Générale was established. It issued paper money which was not fully backed by specie (gold or silver). Instead, government bonds were used to back 50% of the paper money issued by the Banque Générale ... This represented a breakthrough for Law because one of his ideas was to replace specie-based banking systems with credit based systems ... Interestingly, the international monetary system today looks a great deal like the credit-based system envisioned by Law.
    Gold Policy in the 1930s, by Richard H. Timberlake, The Freeman, May 1999
    Discusses U.S. government monetary policies during the 1930s, in particular, the Gold Reserve Act (1934) which allowed FDR to devalue the dollar, the Banking Act (1935) which reformed the FRS and the misguided policies of Treasury Secretary Morgenthau
    When the FOMC buys the U.S. securities that the Treasury has previously sold to pay the government's bills, it does so by creating money. This ... is either commercial bank reserves or Federal Reserve note currency. Clearly, if a 12-person board is determining the quantity of money ..., the quantity of gold in the system has little or nothing to do with the money. Either a gold standard specifies the quantity of money in the economy, or a central bank does. A marriage of the two never lasts ... The Gold Reserve Act of 1934 was the final divorce decree between gold and the monetary system.
    Government Money Deserves a "Swift" Abolition, by Nicholas Curott, 5 Oct 2006
    Recounts Jonathan Swift's campaign against currency debasemen in 18th century Ireland and decries modern day inflation brought on by government-controlled money
    Alas! It all has come to pass, just as Swift had forewarned. Today we no longer have the comfort of laws preventing the government from forcing us to take whatever money it pleases. All the gold was stolen from the people against their will ... We must demand our right to use whatever money we wish to, whatever good or commodity individuals free from coercive interference would spontaneously adopt. Once we have a market supplied money, we can finally burn the paper trash that fuels government plunder and causes macroeconomic fluctuations. It will be our elegy to the tyranny of money theft.
    Related Topics: Inflation, Ireland
    How Gold Was Money—How Gold Could Be Money Again, by Richard Timberlake, The Freeman, Apr 1995
    Examines U.S. monetary history, as it relates to gold, from the Constitution to the late 20th century, suggesting that rather than lobbying for a return to a gold standard, sound money advocates should insist on Treasury gold being returned to taxpayers
    Not only is the paper money legal tender, meaning that it must be accepted as payment for any debt owed by any person to another person or to a government, but the gold and silver specified in the Constitution are nowhere to be seen. Gold and silver coins rarely appear ... It seems obvious from the history of the relationship between gold and the state that the more gold there is in the hands of governments the less surely the gold serves as money. Therefore, the only way to restore gold and silver as media of exchange is to get the metals out of the possession and control of governments.
    The Internet and the End of Monetary Sovereignty, by Bill Frezza, The Future of Money in the Information Age, 1997
    Considers how cyberspace promises of privacy and anonymity may lead to new monetary institutions and "a practical realization of laissez-faire capitalism" as advocated by Ayn Rand
    We know that wealth can be exchanged electronically, both in the form of new monetary instruments and, equally important, in the actual ... products and services ... delivered over the Internet. It is possible, then, that a referent to external physical commodities or existing fiat currencies may not always be necessary to establish the value of money within cyberspace. While a self-supporting cyberspace currency may be impractical today, the possibility of achieving independence from external referents will certainly increase as the portion of the world's wealth ... in cyberspace grows.
    Jean-Baptiste Say: Neglected Champion of Laissez-Faire, by Larry J. Sechrest, 15 Jul 2000
    Biographical and bibliographical essay, discussing Say's life, methodology and his writings on money, banking, the law of markets, entrepreneurship, capital, interest, value, utility, taxes and the state
    Say's discussion of money opens with what is now a standard argument about the "double coincidence of wants" problem and how a medium of exchange solves it ... Historically, money appears due to self-interest, not government decree, and its form should be left to the interaction of consumers preferences ... He then reviews the list of properties a medium of exchange should (ideally) possess: durability, portability, divisibility, high purchasing power per unit, and uniformity. From this ..., Say draws the familiar conclusion that the precious metals (gold and silver) are excellent choices ...
    The life and times of F.A. Hayek, who explained why political liberty is impossible without economic liberty, by Jim Powell, 2000
    Lengthy biographical essay, with extensive quotes; alternate version of "The Worst on Top" chapter of The Triumph of Liberty (2000)
    In 1976, Hayek produced The Denationalization of Money, ... which challenged what he called "the source and root of all monetary evil, the government monopoly of the issue and control of money." He referred to the scourge of inflation and deflation, the consequence of volatile central bank policies. He made a case that private institutions would do a better job than government at maintaining stable money. He cited historic precedents and explained why competition, the scrutiny of currency exchanges and the financial press would provide more discipline than there is in central banks ...
    The life and times of Murray N. Rothbard, by Jim Powell
    Full title: The life and times of Murray N. Rothbard, who showed why private individuals can do just about everything that needs to be done
    Lengthy biographical essay
    Rothbard affirmed the Austrian view that government causes inflation by printing paper money. He goes on to show how by lowering interest rates below what they would otherwise be, this encourages businesses to borrow money and expand productive capacity beyond what it would otherwise be. When government money-printing slows down or declines, the result is a crash. There's excess capacity, and factories close down ... Rothbard makes clear that a general rise of prices–and a subsequent general decline of prices–is invariably a consequence of government manipulation of money.
    Locke, John (1632-1704), by Eric Mack, The Encyclopedia of Libertarianism, 15 Aug 2008
    Biographical and bibliographical essay
    These initial provisos on individual acquisition are ... transcended through the invention of money. Once value attaches to bits of silver or gold, individuals are able to exchange what will otherwise spoil for coins that will not spoil. The ability to preserve value indefinitely gives individuals much more incentive to produce exchangeable objects and ... to discover new and better ways to produce such objects ... If we ask ... why everyone would agree to the introduction of money when substantial economic inequalities are likely to result, the answer is that this ... is beneficial to all.
    Ludwig von Mises, socialism's greatest enemy, by Jim Powell, 2000
    Lengthy biographical essay on Mises, including details on Menger and Böhm-Bawerk; alternate version of "Planned Chaos" chapter of The Triumph of Liberty (2000)
    "Karl Helfferich," [Mises] explained, "... asserted that the marginal utility theory of the Austrians had failed to solve the problem of money value. Therefore, I intended to investigate the validity of this charge ..." Other thinkers, including Menger and Bohm-Bawerk, considered money to be apart of economic theory, came to believe that subjective value and marginal utility analysis could help explain monetary phenomena, too. So Mises started his first book, ... [The Theory of Money and Credit]. He maintained that, on the contrary, markets determined the value of money.
    Lysander Spooner, Part 1, by Wendy McElroy, Freedom Daily, Oct 2005
    Lengthy biographical and bibliographical essay; from Spooner's birth to 1850-1860, examining his writings on economics, money, banking, mail delivery and slavery
    [Spooner] opposed government monopolies on all forms of business, especially with respect to the issuing of currency. Why was the right to issue private currency of primary importance to Spooner? Part[ly because] he believed private currency ... [was] necessary ... for working people to emerge from poverty ... Through the Legal Tender Acts, Congress required everyone to accept its bills as legal tender despite their declining value in the marketplace relative to gold ... He also believed that ... private individuals were prevented from issuing private money to those who wished to accept it.
    Making Money Disappear, by Richard W. Rahn, The Washington Times, 22 Nov 2011
    Defines money, discusses inflation and the gold standard and suggests that the problems will only go away if governments relinquish their monopolies on money issuance
    Economists define money as having the following characteristics:
    • A unit of account, meaning that we can define the value of goods and services in it.
    • A medium of exchange, meaning that others will accept your "money" ... for goods and services.
    • A store of value, meaning that it keeps its intrinsic worth.
    ... [A]lmost all government-produced money is a "fiat" currency ... The problem with fiat money is there is no limit to the amount of it the government can print. Accordingly, history demonstrates that fiat currencies eventually are debased through overprinting as the value is inflated away.
    Related Topics: Gold Standard, Inflation, Zimbabwe
    The man who financed the American Revolution, by Jim Powell
    Lengthy biographical essay of Robert Morris, a signer of the Declaration of Independence (and other founding documents) and financier of the Revolutionary War
    Since the Continental Congress didn't have much money of its own, it began issuing paper currency known as Continentals. Morris opposed paper currency since, as he reported, "I am compelled to inform Congress that the Continental currency keeps losing its credit. Many people refuse openly and avowedly to receive it." ... The American financial situation worsened. Since war costs far exceeded tax revenue, Congress issued millions of paper Continentals, and they rapidly lost value in terms of gold and goods. Legal tender laws were passed requiring sellers to accept the currency.
    Menger, Carl (1840-1921), by Lawrence H. White, The Encyclopedia of Libertarianism, 15 Aug 2008
    Biographical and bibliographical essay
    Menger provided ... the first satisfactory explanation of the origin of money. He demonstrated that the institution of money is a spontaneous outgrowth of market trading ... An alert trader will prefer to accept a commodity as a medium of exchange that a larger network of other traders will accept and, by accepting that commodity, will further enlarge the network. Therefore, traders will spontaneously converge on a single good as a commonly accepted medium or money ... Menger concluded: "Money was not created by law ... Government sanction is foreign to the general concept of money."
    Related Topics: Carl Menger, Labor
    Milton Friedman, 1912-2006, by Hans F. Sennholz, 7 Dec 2006
    Memorial essay, but critical of professor Friedman's advocacy of monetary policies which would leave money issuance in hands of the government
    It is strange that Professor Friedman and his fellow monetarists, who are such defenders of the market order, should call on politicians and bureaucrats to provide the most important economic good—money ... The Friedman proposal would merely simplify the technique of money issue; instead of the Federal Reserve creating and lending its funds to the U.S. Treasury, earning an interest thereon and then returning the interest ... as "miscellaneous receipts," Friedman would have the Treasury issue non-interest bearing U.S. notes. This would save the U.S. Treasury the interest it is now paying ...
    Monetary Central Planning and the State, Part 27: Milton Friedman's Second Thoughts on the Costs of Paper Money, by Richard M. Ebeling, Freedom Daily, Mar 1999
    Discusses how Friedman changed his mind about the advisability of a paper money standard
    The costs of a paper money standard to the society as a whole, Friedman argued, arose ... from the uncertainty of future monetary policy under government monetary discretion and the inflationary bias that always tended to persist under government control ... During inflationary times, people often tied up real resources that otherwise could have been applied for productive activities ... It also created incentives for the development of futures markets in commodities and currencies ... which might never have needed to come into existence if not for paper money mismanagement by governments.
    Monetary Central Planning and the State, Part 29: The Gold Standard in the 19th Century, by Richard M. Ebeling, Freedom Daily, May 1999
    Discusses the evolution of the gold standard, from the creation of the Bank of England (1694), the Bank Restriction Act (1797), arguments for its repeal by David Ricardo and John Stuart Mill, and its international development until the 1890s
    The history of paper money is an account of abuse, mismanagement, and financial disaster ... [T]he classical economists of the 19th century ... warned of the dangers of paper money. In France, the lesson had been learned during the French Revolution, when a flood of paper money ... resulted in economic catastrophe ... Ricardo reasoned that the close connection between the Bank of England and the British government, due to ... the former's large amount of lending irredeemable paper money to the government, had resulted in the Bank's losing any independence it had in its money-creation powers.
    Monetary Central Planning and the State, Part 30: The Gold Standard as Government-Managed Money, by Richard M. Ebeling, Freedom Daily, Jun 1999
    Describes how, by allowing central banks to manage gold-backed currencies, the road was paved for central planning in other areas
    While the goals for monetary policy may have been considered modest and limited in the eyes of the classical liberals of the 19th century, it remained a fact that the monetary system was a subject for national government policy. In an era of relatively unrestricted free-market capitalism, money and the monetary system were a "nationalized industry." And as such, even most of the advocates of economic liberty argued for monetary socialism and monetary central planning. They failed to call for and defend the privatization of the most important commodity in a market economy–the medium of exchange.
    Monetary Central Planning and the State, Part 31: Ludwig von Mises on the Case for Gold and a Free Banking System, by Richard M. Ebeling, Freedom Daily, Jul 1999
    Examines Mises' thinking on why the gold standard is needed, why it is necessary for it not be subject to political manipulation, why free banking is needed and the ideological environment required for its success
    The importance of a monetary system based on gold ... was that it limited the range of discretion open to governments to manipulate the quantity and value of money. The fundamental rule that the supply of money in the economy is anchored to the profitability of gold production as determined by market forces depoliticized the monetary system to a significant degree ... [A]ssuming that the political authority with responsibility over the country's monetary system does not interfere with these conditions and rules, then political influences on the value and quantity of money would be minimized.
    Monetary Central Planning and the State, Part 32: Friedrich A. Hayek and the Case for the Denationalization of Money, by Richard M. Ebeling, Freedom Daily, Aug 1999
    Shows the progression of Hayek's thinking on money from 1945 when he was agreeable to central monetary control to 1976 when he advocated a system of private competing currencies
    [Hayek] explained that ... governments were invariably guided by short-run goals in the service of various special-interest groups. The consequence was the constant abuse of the printing press and a resulting price inflation ... Hayek ... concluded that some method had to be found to free the ordinary citizen from the government's monopoly control of the medium of exchange. The answer, he suggested, was allowing individuals the freedom to use whatever money they chose, instead of their being captives of the increasingly depreciated monetary unit imposed on the market by the government ...
    Monetary Central Planning and the State, Part 33: Murray N. Rothbard and the Case for a 100 Percent Gold Dollar, by Richard M. Ebeling, Freedom Daily, Sep 1999
    Examines the arguments made by Rothbard in his 1962 essay "The Case for a 100 Percent Gold Dollar"
    Rothbard emphasized:
    We should keep in mind that money, in any market economy advanced beyond the stage of primitive barter, is the nerve center of the economic system. If, therefore, the state is able to gain unquestioned control over the unit of all accounts, the state will then be in a position to dominate the entire economic system, and the whole society.
    In the processes of private market exchange, money is acquired by supplying desired goods and services and by offering them for sale to others in the society who are willing to pay a money price for them.
    Monetary Central Planning and the State, Part XVIII: Say's Law of Markets and Keynesian Economics, by Richard M. Ebeling, Freedom Daily, Jun 1998
    Contrasts the views of John Maynard Keynes with "the commonsense foundations of economics" by explaining the basics of exchange and markets, and discussing Say's Law and John Stuart Mill's refinement
    The more complex the network of exchanges, the more difficult becomes the direct barter of goods one for another. Rather than be frustrated and disappointed in not being able to directly find trading partners who want the goods they have for sale, individuals start using some commodity as a medium of exchange. They first trade what they have produced for some particular commodity and then use that commodity to buy the things they desire from others. When that commodity becomes widely accepted and generally used by most, if not all, transactors in the market, it becomes the money-good.
    Monetary Central Planning and the State, Part XXIV: Milton Friedman's Framework for Economic Stability, by Richard M. Ebeling, Freedom Daily, Dec 1998
    Describes Friedman's criticisms of Keynesian policies and examines Friedman's own proposals for government intervention in the economy
    [I]n 1948, [Friedman] had published ... "A Monetary and Fiscal Framework for Economic Stability." ... [T]he monetary framework should be one like that advocated by Henry Simons: 100% reserve banking with a government-managed fiat money ... Friedman's arguments served to reinforce the fundamental [Keynesian] assumptions ... that government monopoly control over the supply of money was desirable and essential for government manipulation of private-sector activity in the market, regardless of whether the target was a stable price level, full employment, or a certain level of national income.
    Monetary Central Planning and the State, Part XXVI: Milton Friedman and the Monetary "Rule" for Economic Stability, by Richard M. Ebeling, Freedom Daily, Feb 1999
    Examines Friedman's arguments, in a 1967 speech to the American Economic Association, about what monetary policy could not accomplish and his defense of a paper money standard in the 1960 book A Program for Monetary Stability
    The first and most important lesson that history teaches about what monetary policy can do ... is that [it] can prevent money itself from being a major source of economic disturbance. A second thing [it] can do is provide a stable background for the economy ... Our economic system will work best when producers and consumers, employers and employees can proceed with full confidence that the average level of prices will behave in a known way in the future—preferably that it will be highly stable. Finally, [it] can contribute to offsetting major disturbances in the economic system ...
    Monetary Central Planning and the State, Part XXV: Milton Friedman and the Demand for Money, by Richard M. Ebeling, Freedom Daily, Jan 1999
    Describes the role of money according to Keynesians and contrasts it with Friedman's monetary theories in his 1956 essay "The Quantity Theory of Money–A Restatement"
    Friedman argued that holding money has both costs and benefits, just like holding any other asset in which an individual might invest his wealth ... The real value of holding any given quantity of money as a cash balance is based on the general purchasing power, or exchange value, of money as expressed in the average price level of goods in the market ... If prices are expected to rise by a certain percentage over a year, the benefit from holding that cash balance will be reduced, since with each passing day the real buying power of each unit of money will be falling as prices rise.
    Money in the 1920s and 1930s, by Richard Timberlake, The Freeman, Apr 1999
    Attempts to set the record straight on the economic and monetary events of the 1920s and early 1930s, arguing against both the Austrian view (as expressed by Murray Rothbard) and those who put the blame on stock market speculation
    One of the most enduring and troublesome mysteries in economics is money: how it is created, what sorts of institutions initiate the process, what kinds of mystique and priestcraft central bankers use in managing monetary systems, and what rules, laws, or customs limit their actions ... As long as cars, computers, and money behave themselves, can we perhaps ignore them? The answer is that we can for cars and computers, but we should not for money. For one thing, ignorance about money has side effects that are not comparable to ignorance about technical equipment.
    The Mystery of Banking, by Joseph Salerno, The Mystery of Banking, Jul 2008
    Foreword to the 25th anniversary edition of Murray Rothbard's The Mystery of Banking (1983), republished in 2008 by the Mises Institute
    [T]he building blocks to the [sound money] theoretical structure ... include: formulating the proper criteria for calculating the money supply in a fractional-reserve banking system; identifying the various components of the demand for money; refining and consistently applying the supply-and-demand apparatus to analyzing the value of money; drawing a categorical distinction between deposit banking and loan banking; providing the first logical and coherent explanation of how fiat money came into being and displaced commodity money as a result of a series of political interventions.
    One Hundred Years of the Federal Reserve, by Sheldon Richman, Future of Freedom, Dec 2013
    Examines the Federal Reserve's record since its inception, quoting the 2010 Cato Institute paper "Has the Fed Been a Failure?" by Selgin, Lastrapes and White, as well as Rothbard, Timberlake and Hummel
    The Fed can and does create money—$85 billion a month currently—without igniting price and interest-rate inflation. How? By effectively borrowing back the newly created money ... [T]he Fed currently pays the banks interest on their reserves ... Money was not invented by government. It was the spontaneous creation of people trying to ease exchange by overcoming the inconvenience of barter in the marketplace. Central banks ... only messed money up, robbing the people of their purchasing power while facilitating warfare and welfare spending through irresponsible large-scale government borrowing.
    The Organization of Debt into Currency: On the Monetary Thought of Charles Holt Carroll, by Robert Blumen, 27 Apr 2006
    Review of the fractional reserve banking and monetary arguments made by Charles Holt Carroll, a 19th century Massachusetts merchant, in a collection of 36 essays re-published in 1964 in Organization of Debt into Currency and Other Papers
    Carroll advanced several brilliant arguments against the system of "fictitious money": that it is based on a confusion in thinking; that it creates a state of permanent indebtedness; that it leads to national impoverishment rather than prosperity; that it results in price inflation; and that it inevitably leads to bank runs and then to systemic banking crises; and that it unjustly redistributes wealth from the honest and industrious to bankers and their accomplices ... Money is gold and silver, while a debt is the postponement of payment.
    The Origin of Economic Theory: A Portrait of Richard Cantillon (1680-1734), by Mark Thornton, 3 Aug 2007
    Examines the sections of Cantillon's Essai relating them to episodes in the author's life, then delving into several Austrian economics insights that can be found in the work
    Cantillon was a hard-money man who understood that the nature of money as a medium of exchange drove the evolution of money to precious metals, and that princes cannot introduce imaginary money or successfully debase money. Central to his Austrian-style analysis was his rejection of the aggregate approach of the naive quantity theory of money in favor of a microeconomic-process approach to the study of the money. He showed that the type of change in the money supply and where it entered the economy were crucial to determining what the effects would be.
    Our Secret Desires: Why we end up with trade barriers, by Frédéric Bastiat, 1848
    Originally "Abondance, Disette" (Abundance, Scarcity), an essay in Economic Sophisms, translated in 1964 by Arthur Goddard; published in Reason March 1989
    Suppose ... that [after a complete inventory in non-monetary terms] all barriers to the importation of foreign goods ... were removed ... But, you say, if foreigners flood us with their products, they will carry off our money! Well, what difference does that make? Men are not fed on cash, they do not clothe themselves with gold, nor do they heat their houses with silver. What difference does it make whether there is more or less money in the country, if there is more bread in the cupboard, more meat in the larder, more clothing in the wardrobe, and more wood in the woodshed?
    Related Topics: Free trade, Labor, Prices
    Paper Money and the Constitution, by Rick Lynch, Freedom Daily, Jan 2009
    Examines the historical period of the Articles of Confederation and how it led to controls on the issuance of paper money in the U.S. Constitution
    The paper-money crisis began when debtors, usually farmers struggling to make loan payments, would turn to their state legislatures and push for the creation of paper money ... [P]aper money had nowhere near the worth of the gold, silver, or other medium of payment specified in original loan documents ... Debtors also forced the creation of ... "stay laws," which postponed or even canceled debt collection. Then there were the awful "tender laws," and "ex post facto laws," which ... compelled unwilling creditors to accept ... paper money regardless of what the preexisting contract specified.
    Preface, by Murray N. Rothbard, Gold, Peace, and Prosperity: The Birth of a New Currency, 1981
    Preface to Ron Paul's Gold, Peace, and Prosperity
    In every society, people on the market voluntarily arrive at one or two commodities which are the most useful to use as money. For thousands of years, gold has been selected by countless societies as that money. The only alternative to a market commodity-money is what we unfortunately have now: paper tickets issued by the government and called "money." Since the paper tickets—dollars, francs, pounds sterling, or what have you—are issued by the government, the government can issue any amount it arbitrarily chooses. Counterfeiting is built into the system, and hence so is inflation ...
    Robert A. Heinlein's Soaring Spirit of Liberty, by Jim Powell, The Freeman, Jul 1997
    Biographical essay, including multiple quotes from fellow authors and significant excerpts from Heinlein's novels and stories
    In Job: A Comedy of Justice (1984), Heinlein ... talks about money. "I had figured out," the narrator says, "that while paper money was never any good after a world change, hard money, gold and silver, would somehow be negotiable, as bullion if not as coin. So, when I got a chance to lay hands on hard money, I was stingy with it and refused to take paper money in change for hard money." Later, he adds that "... I'm going to try to find a coin dealer—buy some silver cartwheels, maybe some gold coins. But my purpose is to get rid of most of this paper money."
    Robert Morris to the President of Congress, by Robert Morris, The Papers of Thomas Jefferson, 15 Jan 1782
    Report, as U.S. Superintendent of Finance, to the Congress (under the Articles of Confederation); examines weights, measures and money practices in various states and countries, particularly England and France, and recommends coinage of U.S. dollars
    As we are now shaking off the Inconveniencies of a depreciating Medium the present Moment seems to be that in which a general Currency can best be established so as that in a few Months the same Names of Money will mean the same Things in the several Parts of the United States ... Altho most Nations have coined Copper yet that Metal is so impure that it has never been considered as constituting the Money Standard. This is affixed to the two precious Metals because they alone will admit of having their intrinsic Value precisely ascertained.
    Related Topic: Gold Standard
    The Soviet-Style Attack on NORFED, by Jacob G. Hornberger, 21 Nov 2007
    Discusses the federal raid on the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code (NORFED) and the differences between a criminal search warrant (used to justify the raid) and an injuction used in civil proceedings
    When the FBI went to the magistrate ..., its affidavit alleged that NORFED was engaged in illegal activity, primarily violating the government's monopoly over the issuance of money. One problem, however, is that NORFED denies that it has broken the law in any respect. It contends that the issuance of its coins is not illegal, a position that is at least inferentially substantiated ... Moreover, even if the government is correct in its allegation ..., as an American business NORFED nonetheless has the right to argue and show that the government's money monopoly is unconstitutional.
    Related Topics: Law, Due Process of Law
    Teaching Basic Economics to Fifth Graders, by Arthur E. Foulkes, 21 Jun 2006
    Recounts the experience of teaching economics to fifth graders, one concept per week, for five weeks, focusing on trade, money, savings, competition and prices
    [A] long-ago egg farmer ... desired shoes ... [A] wheat farmer nearby ... wanted eggs and was willing to exchange wheat for eggs, which he did. This gave the egg farmer a supply of wheat ... to employ as a "medium of exchange" to allow him to obtain shoes. In other words, he used wheat as a form of money. We then talked about what makes some goods better suited as money than others. For instance, wheat is better than eggs or fish because it lasts longer and is more easily divisible into units of equal quality. We then discussed things even better suited as money, such as gold or silver.
    A Three-Pronged Blunder, or, What Money is, and What it Isn't, by George Selgin, 27 Oct 2021
    Examines the common, three-part textbook definition of money, offering counterarguments for the "store of value" and "unit of account" parts, reviewing what Jevons and Menger wrote about money's functions
    Money is a Generally Accepted Medium of Exchange
    So, can we please junk the stupid three-function definition of money? So what if textbook writers keep repeating it? It's incoherent ... [T]here's a perfectly sensible alternative definition—the one that heads this section. It's been endorsed by many of the greatest monetary economists of all time, including the one who is wrongly understood to have given us the silly three-part alternative ... Show me someone who doesn't find these arguments persuasive, and I'll show you someone who badly wants to call something "money," that isn't.
    Under the Shadow of Inflationomics, by Hans F. Sennholz, 1 Jun 2006
    Explains how inflation has its roots in central banking and fiat money, and describes the influence of Keynesian economics on the policies of U.S. presidents from Richard Nixon to George W. Bush
    Paper money first appeared some 300 years ago, but it was usually backed by gold or silver into which it was convertible on demand. Even during its early history, governments often made it inconvertible, i.e., they made it "fiat". Gold and silver were used as standard money and coined without any limit set by legislation. But the ratio between gold and silver was fixed by law without close relation to the market ... It always activated Gresham's Law according to which "bad money drives out good money." ... [P]eople used the artificially overvalued metal and hoarded the legally undervalued one.


    Economic Thought Before Adam Smith—An Austrian Perspective on the History of Economic Thought, Volume 1, by Gregory P. Pavlik, The Freeman, Oct 1995
    Review of Murray Rothbard's Economic Thought Before Adam Smith (1995) (note: despite the title, Adam Smith is included in this volume and the review)
    One of the most impressive examples of advanced theoretical contributions was the fourteenth-century French philosopher Jean Buridan de Bethune, who was responsible for "the virtual creation of the modern [Austrian] theory of money." ... In short, a sophisticated commodity theory of money. This served the additional function of beginning to sever monetary theory from the Aristotelian notion of money as a unique creation of the state, barren of intrinsic value, that plagued early economic considerations, and formed the basis of the early Christian prohibitions on interest.
    An Empire Built of Paper, by Llewellyn H. Rockwell, Jr., The American Conservative, 27 Mar 2006
    Review of Empire of Debt: The Rise of an Epic Financial Crisis (2006) by William Bonner and Addison Wiggin
    In the commercial republic of Jefferson, money was gold and silver. Government had no power to print currency ... If the wall of separation between money and the state was not as high as it might have been, there was still a barrier that put a curb on power-mongering. Today, however, all the money government could ever want is easily available via a monetary policy that depends critically on the capacity of the Fed to create currency out of thin air ... The dollar is, for now, the world reserve currency, which permits the U.S. to sustain a world empire without paying the price—again, for now.
    The Writings of F. A. Harper—A Review, by Paul L. Poirot, The Freeman, Aug 1979
    Slightly amended from the "Introduction" to The Writings of F. A. Harper, published in 1978 by the Institute for Humane Studies, and serving as a review of the "two-volume memorial edition"
    Where more than two or three [persons] are gathered together in a market place, each interested in selling one or many items and in buying one or many items, some one or more of those items of commerce will be put to use as money to get away from the limitations of barter—to facilitate exchange. How much money, of what size or shape or other condition? Leave such matters to the market—to the willing buyers and sellers in the market. Once traders have found a satisfactory medium of exchange, then market exchange rates will be expressed in money prices ...


    The Roots of the Great Depression, by Richard Timberlake, Navigator, Jan 2001
    Interview topics include the Federal Reserve policy during 1920-1939, the British attempt to return the pound to its World War I value and U.S. interventions during the Hoover and Roosevelt administrations
    Timberlake: ... [T]he Gold Reserve Act ... allowed the president to call in all domestic gold and pay for it at the legal mint price ($20.67 per ounce). The purpose ... was to promote a program that would swell the government's gold stock, and thereby allow an increase in the economy's stock of money. The official myth was that gold had become "scarce" ... Because the Fed banks were operating under a virtual prohibition to lend to their member banks under the fatally flawed real bills doctrine, the economy's stock of money had atrophied far more than during any other downturn ...
    Wendy McElroy on Sex, Rape and Libertarian Feminism, by Wendy McElroy, Anthony Wile, 11 Mar 2012
    Topics discussed include McElroy's early life, two of her notable books, individualist anarchism, voluntarism, conspiracy theories, religions, banks and money, feminism, capitalism, Austrian economics, Julian Assange and the future
    Daily Bell: ... Do you believe ... that it is the state's purview and responsibility to issue money?
    Wendy McElroy: No. Of course it is not the state's purview. Anyone should be able to issue money and use it freely with anyone else who is willing to accept it. This has made a dog's breakfast of money largely because it is so immensely profitable to inflate the currency and, so, steal an ever increasing portion of wealth out of everyone's wallet. As long a there is a government monopoly on the issuance of money, a free society is not possible.


    A Monetary History of the United States, 1867-1960
        by Milton Friedman, 1963
    Partial contents: The Greenback Period - Silver Politics and the Secular Decline in Prices, 1879-97 - Gold Inflation and Banking Reform, 1897-1914 - Early Years of the Federal Reserve System, 1914-21 - The High Tide of the Reserve System, 1921-29
    Money and the Nation State: The Financial Revolution, Government and the World Monetary System
        by Kevin Dowd (editor), Richard Timberlake (editor), 1997
    Partial contents: An Evolutionary Theory of the State Monopoly Over Money - National Sovereignty and International Monetary Regimes - From Gold to the ECU: The International Monetary System in Retrospect - The Gold-exchange Standard in the Interwar Years
    Selected Writings of Ludwig Von Mises: Volume 2, Between the Two World Wars: Monetary Disorder, Interventionism, Socialism, and the Great Depression
        by Richard Ebeling (editor), Ludwig von Mises, 2002
    Partial contents: The Quantity Theory - On the Currency Question - Remarks Concerning the Establishment of a Ukrainian Note-Issuing Bank - Foreign-Exchange Control Must Be Abolished - Direct Taxation in City and Country
    What Has Government Done to Our Money?, by Murray N. Rothbard, 1963
    Partial contents: Money in a Free Society - The Value of Exchange - Indirect Exchange - Benefits of Money - The Monetary Unit - The Shape of Money - The "Proper" Supply of Money - Government Meddling With Money - The Monetary Breakdown of the West


    Bitcoin the Cryptocurrency (Parody of Rudolph the Rednosed Reindeer), 15 Dec 2013
    You know dollars, and Euros and Yen and Pound Sterling, Reais, and Rubles, and Rupees, Renminbi, But do you recall? The most digital coin of them all ...

    "I Want My Bailout Money" - Mike Adams - Video Mashup, by Mike Adams, 6 Mar 2009
    Hip hop satire song about Federal Reserve and U.S. Treasury policies

    Money, Banking and the Federal Reserve, by Mises Institute, Ron Paul, Lew Rockwell, Murray N. Rothbard, Joseph Salerno, 1996
    Explains the origins of money and banking, how and why the Federal Reserve was created and the effects it has had on society. Dedicated to Murray Rothbard.
    Why Not Print More Money?, by Antony Davies, 4 Apr 2012
    Explains what the effects would be if the government were to print money and hand it out, why money was invented and what economics problems does it solve
    Money solves ... the incidence of wants problem ... Money is simply an I.O.U. that people can keep and exchange more easily than they can keep and exchange physical goods. With money, any caveman can trade with any other ..., regardless of what they produce, because now the first person has to want what the second ... has, but the second ... doesn't need to want what the first person has ... Money also solves the retention of value problem. Our caveman can raise and sell chickens and put his money under a rock. He can keep doing this as long as he likes because the money doesn't deteriorate.
    Related Topic: Inflation

    The introductory paragraph uses material from the Wikipedia article "Money" as of 9 Jul 2018, which is released under the Creative Commons Attribution-Share-Alike License 3.0.