Why Libertarians Oppose Government-Issued Money: Exploring the Core Ideologies and Economic Implications
Libertarianism, as an ideological framework, is built on the principles of individual freedom, minimal government intervention, and the protection of property and contracts. The opposition to government-issued money among libertarians is multifaceted, rooted in their core ideologies and critical of the economic implications of such a system.
Libertarianism and Government Control Over Currency
One of the primary reasons libertarians oppose government-issued money is their skepticism towards any form of government-imposed monopoly. Libertarians generally believe that monopolies, whether natural or artificially created, are inherently inefficient and can lead to market distortions. When the government monopolizes the issuance of currency, it can lead to a concentration of power and control over the economy, which is anathema to libertarian principles.
The Non-Aggression Principle and Government Money
Central to libertarian thinking is the Non-Aggression Principle (NAP), which states that individuals should not initiate or threaten harm to others. From this perspective, any action by the government that violates the NAP, such as coercing individuals to use government money, is seen as oppressive and unjust.
Historical Context and Unhistorical Consequences
The United States government has been issuing currency since its formation, but only established a permanent, coercive monopoly on money issuance in the 20th century. Before this, there were instances where government-issued currencies were problematic. For example, during the American Revolutionary War, the Continental Congress printed money not-backed by gold or silver, leading to significant devaluation. The phrase "not worth a Continental" reflects the widespread belief that such government-issued money was practically worthless.
Economic Implications of Government-Controlled Money
The influence of government on the money supply can lead to various economic issues:
Inflation and Wealth Redistribution
When the government issues money out of thin air, it can lead to inflation. Historically, governments have often debased their currencies by mixing precious metals with less valuable ones, leading to hyperinflation and economic collapse. Inflation disproportionately impacts the poor, as the value of their savings and wages erode over time, while the rich can often access the newly printed money first.
Economic Crisis and Business Cycles
Manipulation of the money supply by governments can cause business cycles, leading to repeated economic crises and job losses. This operational model is often blamed on central banks and fiscal policies, but the underlying issue is the arbitrary inflationary policies that benefit certain economic sectors.
Risk of Warfare Funding
Another reason libertarians oppose government-issued money is the increased risk of warfare funding. Governments often use their control over the money supply to finance military engagements, which can have severe geopolitical consequences. The First World War, for instance, occurred shortly after many nations established central banks, including the Federal Reserve in the United States.
Conclusion
The opposition to government-issued money among libertarians is rooted in deep-seated ideological beliefs and a holistic view of the economic consequences. While the United States has had a government monopoly on money issuance since the 20th century, libertarians remain critical of the numerous ways in which such a system can harm individuals and the broader economy.
Further Reading
Libertarian Views on Monetary Systems
Government and Money: Two Views
Can the Gold Standard Work Again?