Stossel: Let’s Give the Fed Some Competition
April 22nd, 2012
This is why I love this guy:
Pssst. Want to buy some Stossels? They’re my own currency with my face on them.
Why should you trust them?
Because I promise to redeem them for gold. And I’m reliable. I have money in the bank and a job that brings in more than I spend.
By contrast, the politicians who back American currency run an unsustainable deficit.
The Federal Reserve prints so much money that since it opened its doors in 1914, the dollar has lost more than 90 percent of its value.
OK, I won’t really sell Stossels. Americans get jailed for offering alternative currencies. The government insists on a monopoly. So even though I am unhappy about holding money whose value evaporates, there’s not much I can do about it. Printing my own dollars would be healthy competition, but the government calls it counterfeiting.
Why? Why must our government make currency competition illegal? If I did print my own money, no one would have to use it. But people could if they wanted to. Competition is generally good. Why not competition in currencies?
Most people I interviewed scoffed at the idea. They said private currency should be illegal.
But impressive thinkers disagree. In 1975, a year after he won the Nobel Prize in economics, F.A. Hayek published “Choice in Currency,” which has inspired a generation of “free banking” economists. Hayek taught us that competition not only respects individual liberty, it produces essential knowledge we cannot obtain any other way. Any central bank is limited in its access to such knowledge, and subject to political pressure, no matter how independent it’s supposed to be.
“This monopoly of government, like the postal monopoly, has its origin not in any benefit it secures for the people but solely in the desire to enhance the coercive powers of government,” Hayek wrote. “I doubt whether it has ever done any good except to the rulers and their favorites. All history contradicts the belief that governments have given us a safer money than we would have had without their claiming an exclusive right to issue it.”
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