Hayek Trumps Rothbard: Free Market in Money, not Fiat Gold

ALL VALUE is a “mutually shared illusion” in the marketplace.

What we need is not for a socialist government to force us to all use Fiat Gold, which is what Rothbardian faux-Austrians claim, but instead to have a free market in currency, like Hayek and the real Austrians have long said.

Money is an accounting tool, it has its own intrinsic worth as a means of facilitating and measuring trade and value. If you saddle it with some secondary function and valuation, like forming jewelry and USB connectors, then you end up with an even more unstable economy, as the value of the money becomes less predictable, changing with the supply and demand of that secondary commodity.

This is why we had bigger, worse economic downturns from 1873-1934, on the gold standard, and our best overall period of growth from 1973-2001, when we left Breton Woods and had not yet encountered the massive, Hoover-like growth of government under Bush.

About kazvorpal
Polyamorous, libertarian heinleiner. ENTP, student of traditional Shaolin kung fu, writer, cunning linguist.

3 Responses to Hayek Trumps Rothbard: Free Market in Money, not Fiat Gold

  1. CW says:

    I think you’re confused… Rothbard advocated *no government*, so why and how could “Rothbardian faux-Austrians” claim that a socialist government should force us all to use a particular money? Rothbard advocated, as do I, for a free market in money — let the market decide what should be money.

    In light of that, and on a bit of an aside, I am a huge fan of the Bitcoin, but also see a place for gold and silver as, not necessarily competing but complementary, monies. I can envision a world in which something like Bitcoin is used for small, day-to-day transactions, and gold/silver are used for larger transactions and/or longer-term contracts.

    • kazvorpal says:

      In http://mises.org/rothbard/genuine.asp (The Case for a Genuine Gold Dollar), Rothbard specifically advocates for a GOVERNMENT imposition of gold as a currency.

      He claimed to WISH we had anarchy, although I don’t trust him on this in the light of such advocacy as above, but certainly in the real world he wanted this government monopoly, fiat gold, imposed on us.

      • CW says:

        It’s been a while since I’ve read this (Case for a Genuine Gold Dollar), and I’m not feeling like digging into it right now. I suspect that Rothbard was just arguing in the context of the world we live in – under the assumption of a State. But, I can’t know what Rothbard was actually thinking/feeling or what he would of done were it his decision; no point in arguing that.

        In any case, I am in favor of the market deciding on money – and we seem to agree on that!

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