When the Money and Politicians Were Honest ....
We do not pretend, that a National Bank can establish and maintain a sound and uniform state of currency in the country, in spite of the National Government; but we do say that it has established and maintained such a currency, and can do so again, by the aid of that Government; and we further say, that no duty is more imperative on that Government, than the duty it owes the people, of furnishing them a sound and uniform currency.
--Abraham Lincoln
Whatever a government does in the pursuit of aims to influence the height of purchasing power depends necessarily upon the ruler's personal value judgments. It always furthers the interests of some people at the expense of other groups. It never serves what is called the commonwealth or the public welfare.
--Ludwig von Mises, 20th-century economist
This framework role for government also was considered to include the establishment of a monetary standard, and in such fashion as to insure predictability in the value of the designated monetary unit. (It is in the monetary responsibility that almost all constitutions have failed, even those that were allegedly motivated originally by classical liberal precepts. Governments, throughout history, have almost always moved beyond constitutionally authorized limits of their monetary authority.)
--James Buchanan
History is largely a history of inflation, and usually of inflations engineered by governments and for the gain of governments.'' In recent times, the hyperinflations of Germany in the 1920s and of Bolivia, Argentina, and Brazil in the 1980s are all examples of governments debasing their currencies and engaging in a fraudulent attempt to cheat the public.'
--Nobel Prize winning economist Friedrich von Hayek
No complaint, however, is more common than that of a scarcity of money. Money, like wine, must always be scarce with those who have neither the wherewithal to buy it, nor credit to borrow it. It is not for its own sake that men desire money, but for the sake of what they can purchase with it.
--Adam Smith
Silver itself is of no certain permanent Value, being worth more or less according to its Scarcity or Plenty, therefore it seems requisite to fix upon something else, more proper to be made a Measure of Values.
--Benjamin Franklin
After experience had shown that pieces of paper, of no intrinsic value, by merely bearing upon them the written profession of being equivalent to a certain number of francs, dollars, or pounds ... governments began to think that it would be a happy device if they could appropriate to themselves this benefit.... The only question is, what determines the value of such a currency.... We have seen, however, that even in the case of metallic currency, the immediate agency in determining its value is its quantity.... The value, therefore, of such a currency is entirely arbitrary.
--John Stuart Mill and Alfred Marshall - late 19th century theorists
Bad money will always drive good money out of circulation.
--Gresham's law
Gresham's law will apply only to different kinds of money between which a fixed exchange rate is enforced by law. With variable exchange rates, the inferior-quality money would be valued at a lower rate and, particularly if it threatened to fall further in value, people would try to get rid of it as quickly as possible. The selection process would go on towards whatever they regarded as the best sort of money among those issued by the various agencies [or countries], and it would rapidly drive out money found inconvenient or worthless.
--Nobel Prize winning economist Friedrich von Hayek
There is, indeed, one evil which awakens me at times, because it jostles me at every turn. It is that we have now no measure of value. I am asked eighteen dollars for a yard of broadcloth, which, when we had dollars, I used to get for eighteen shillings; from this I can only understand that a dollar is now worth but two inches of broadcloth, but broadcloth is no standard of value. I do not know, therefore, whereabouts I stand in the scale of property, nor what to ask, or what to give for it.
--Thomas Jefferson (1819), confiding to a friend
Gold and Dollars are now competing moneys. While the Dollar and other national currencies are no longer redeemable into Gold, they are exchangeable for Gold in the marketplace twenty-four hours a day. Therefore, it would be correct to say that the Dollar is on a Gold-Market Standard.
-- James Turk |
