Recent research highlights a concerning trend: 84 percent of Americans are afraid to exercise their freedom of speech, according to a New York Times Opinion/Siena College Poll. While this statistic alone is alarming, it only scratches the surface of a broader issue—the gradual erosion of personal liberties. This decline extends beyond speech into the domains of thought, cognition, and economic autonomy. As this erosion continues, new technologies threaten to accelerate it. Among these is the development of Central Bank Digital Currencies (CBDCs), which have been at the forefront of recent policy discussions. Though marketed as innovations to improve financial inclusion and efficiency, CBDCs raise legitimate concerns about freedom, privacy, and government overreach.

State Monopolization and the Market

To understand the potential dangers of CBDC adoption, it is critical to revisit Max Weber’s definition of state power. In Politics as a Vocation, Weber describes the state as the institution that successfully claims a monopoly on the legitimate use of physical force within a given territory. This definition is particularly relevant in the context of financial systems. Historically, markets have thrived on competition, innovation, and the decentralized nature of monetary policy. CBDCs, however, represent an attempt by the state to monopolize and centralize financial transactions under one digital umbrella.

Senator Kirsten Gillibrand has articulated that a CBDC could enhance financial inclusion, lower transaction costs, and improve monetary policy. While such benefits may appeal to those unfamiliar with economics, they conceal significant risks. As Friedrich Hayek warned, government control over economic systems is a dangerous path, inevitably leading to greater centralization and reduced personal freedom. The “invisible hand” of the market has proven far more reliable than the visible hand of state intervention. The question is whether we are willing to trade efficiency for liberty.