By George Ford Smith
When it comes to calling out government economic intervention, it is easy to forget that the fundamental reason for the state’s stranglehold on the economy is the government’s monopoly on creating and maintaining money. It is time to end the monopoly.
Rothbard:
For government to use counterfeiting to add to its revenue, many lengthy steps must be travelled down the road away from the free market. Government could not simply invade a functioning free market and print its own paper tickets. Done so abruptly, few people would accept the government’s money. . ..
Until a few centuries ago, there were no banks, and therefore the government could not use the banking engine for massive inflation as it can today. What could it do when only gold and silver circulated?
The first step, taken firmly by every sizable government, was to seize an absolute monopoly of the minting business. That was the indispensable means of getting control of the coinage supply. . ..
Having acquired the mintage monopoly, governments fostered the use of the name of the monetary unit, doing their best to separate the name from its true base in the underlying weight of the coin. This, too, was a highly important step, for it liberated each government from the necessity of abiding by the common money of the world market. Instead of using grains or grams of gold or silver, each State fostered its own national name in the supposed interests of monetary patriotism: dollars, marks, francs, and the like [emphasis mine]. The shift made possible the preeminent means of governmental counterfeiting of coin: debasement. . ..
Sometimes, the government committed simple fraud, secretly diluting gold with a base alloy, making shortweight coins. More characteristically, the mint melted and recoined all the coins of the realm, giving the subjects back the same number of “pounds” or “marks,” but of a lighter weight. The leftover ounces of gold or silver were pocketed by the King and used to pay his expenses. . ..
And, also:
Once such a label replaces the recognized world units of weight, it becomes much easier for governments to manipulate the money unit and give it an apparent life of its own. . ..
With the name of the country’s currency now prominent in accounting instead of its actual weight, contracts began to pledge payment in certain amounts of “money.” Legal tender laws dictated what that “money” could be [e.g., dollars, francs].