Chapter 18 of 18 · The Ethics of Money Production by Jörg Guido Hülsmann
Index of Subjects
A | B | C | D | E
F | G | H | I | J
L | M | N | O | P
R | S | T | U | W
Y
A
American colonies, 203–06
American Constitution, 204–06, 242
American Federal Reserve. SeeFederal Reserve (Fed)
American War of 1812, 205
B
Banco d’Italia, 229
Bank for International Settlements (BIS), 231n6
Bank for Mutual Redemption, 145
Bank of England, 147–48, 156, 162, 199–200, 215–16
Bank of Hamburg, 40
Bank of Scotland, 95
Bank of Stockholm, 94
banking
deflation and, 67–68
fractional-reserve. Seefractional-reserve banking
government’s role in, 16
international systems. Seeinternational banking systems
as national producers of paper money, 203–06
regulations, 145, 171–72, 231n6
bankruptcy, 128, 142–43, 153–57, 169–70
Banks of the United States, 205
Banque de France, 228–29
Basel II Agreement, 231n6
Biblical references
Biblical commandments. SeeCommandments, Biblical
Deuteronomy 25:13–16, 99n11
Isaiah 10:1, 124
Isaiah 1:22–25, 150
Isaiah 5:20, 121
Isaiah 60:17, 241
Leviticus 19:35–36, 98n11
Luke 19:23, 92n5
Matthew 22:17–21, 123–24
Matthew 25:26–30, 52
Matthew 25:27, 92n5
Proverbs 20:23, 99n11
Romans 3:8, 100n14
bond dealers, 183–84
bonds, 225–26
Bretton Woods system
as gold-exchange system, 216–19
reform of, 17
world money and, 235
British currency reform of 1717, 130
bullion, 35–36, 50, 116–18, 133
business cycles, 139–42
C
capitalism, 237–40
cartels
as credit money producers, 197–98
fractional-reserve banking, 144–45, 206–07
as paper-money producers, 228–30
Catholic Church, teachings of. See alsoChristian doctrine
attitude toward capitalism, 237–40
comparison to Austrian economics, 14
concept of social justice, 6n8
ethical implications of social science, 4
hoarding, 64n12
inflation, 87
international banking systems, 221
private property, 25–26
usury compared to interest, 52–53
central banks
gold-exchange standard, 214–16
government’s role in, 16
international banking systems, 210–16
introduction of paper money and, 159–64
legal tender laws, 142–48
private debt and, 183–84
as producers of paper money, 199–206, 230–32
public debts and, 166–68
central planning of economy, 172
centralized governments, 176–77
certificates of deposit, 39
certificates of money. Seemoney certificates
certification of money, 89–91
checking accounts, 39
Christian doctrine. See alsoCatholic Church, teachings of; Jesus Christ, teachings of
Austrian School economics and, 14–16
desire for money, 2
money and banking and, 52
producing money, 49nn4–5
Civil War (United States), 205
Coinage Act of 1834, 209
coins. See alsoprecious metals
addressed in American Constitution, 204–06
debasement of, 133–36
legal monopolies and, 116–24
as medium of exchange, 23
monetary reform and, 241–42
money certificates and, 35–38
production of in ancient times, 3–4
use of in free market, 46
weights of, 50–51
Cold War, 225n2
colonial America, 203–06
Commandments, Biblical
Eighth, 122
Sixth, 25
commodity money. See alsonatural money
comparison to paper money, 23, 55
costs of, 79–81
definition, 29–32
monetary stability and, 72
Constitution of the United States, 204–06, 242
cost calculations, 141–42
counterfeiting
benefits of in free society, 97–98
debasement of money. Seedebasement of money
ethics of, 98–101
fractional-reserve banking and, 91–97
legalization of, 109–13
credit
for businesses, 179–82
effects of paper money on, 69
for governments, 177–78
for individuals, 182–85
credit cards, 39
credit money
cartels as producers, 197–98
comparison to natural money, 28–29, 128
comparison to paper money, 29
financing of wars and, 178
legal-tender laws and, 138–39
creditors
debasement of money and, 135
distribution effects of money and, 47
currency boards, 226, 227n3, 230–33
currency substitution, 127–28
D
debasement of money. See alsocounterfeiting
ethics of, 98–99
inflation and, 89–91
legal-tender laws and, 133–36, 146
legalization of, 109–13
debtors
debasement of money and, 135
distribution effects of money and, 47
governments as, 225–27
debts
deflation and, 67
private, 182–85
public, 166–68, 177–78, 188, 205, 242
deflation
debasement of money and, 135
gold standard and, 212
governments as beneficiaries, 107–08
legal-tender laws and, 127, 130
paper money and, 64–68
demand deposits, 137n12
division of labor
in barter world, 21–22
production of money and, 46
E
ECB (European Central Bank), 164, 229
economic growth, 60–62
electronic bank accounts, 39
electronic money, 33, 55–56. See alsopaper money
EMS (European Monetary System), 228–30
ESCB (European System of Central Banks), 229
ethics
of counterfeiting, 98–101
of euros, 229–30
of fractional-reserve banking, 98–101, 238–39
of legal monopolies, 119–24
of legal tender laws, 148–51
of legalized suspensions, 157
of money production, 49–51
of paper money, 172–73, 238–39
European Central Bank (ECB), 164, 229
European Economic Community, 228–30
European Monetary System (EMS), 228–30
European System of Central Banks (ESCB), 229, 234
euros, 226–30
exchange rates
under gold standard, 211–12
Gresham’s law, 126–27
international paper-money systems and, 226, 232–33
legal-tender laws and, 135–36
F
Federal Reserve (Fed)
banknotes of, 40n7
fractional-reserve banking and, 139n15
international banking systems and, 215–16
international paper-money systems and, 226, 232–33
legal-tender laws and, 141
paper money and, 164–65, 171n11
fiat inflation. See alsoinflation
consequences for businesses, 179–82
consequences for governments, 176–79
consequences for individuals and families, 182–91
governments as beneficiaries, 103–08
legal monopolies and, 115–24
legal tender laws and. Seelegal tender laws
legalization of debasement and fractional reserves, 109–13
fiat monetary systems, 199–207
fiat money
defined, 106–07
inflation of. Seefiat inflation
paper money and, 160–61n1
fiorino d’oro, 197
Fisherian stabilization movement, 76
Fort Knox, 218
fractional-reserve banking
bankruptcy and, 153–57
currency substitution and, 128
defined, 41
effects of deflation on, 68
as institutional usury, 53
international banking systems, 211–13
international paper-money standards and, 231n6
legal monopolies and, 117–18, 147–48
legal-tender laws and, 130–31, 136–45
legalization of, 109–13
national monetary systems and, 206
origins of, 93–97
francs, 228
fraud, 153–54
free economy, defined, 26
free market
gold standard and, 213
monetary orders and, 195–98
paper money and, 29–33
French francs, 228
G
German Bundesbank, 229
gold as money. Seecommodity money; natural money
gold coins. Seecoins
gold standard
deflation and, 212
fractional-reserve banking and, 143n17
international banking systems and, 209–16
legal monopolies and, 117
national monetary systems and, 205, 231
paper money and, 160
textbooks and, 2
governments
benefits of monetary system to, 238–39
false money certificates and, 99–101
inflation and. Seefiat inflation
international banking systems and, 209–13
international paper-money systems and, 224–27, 230
legalization of debasement and fractional reserves, 109–13
paper money and, 30–31
public debts, 166–68
Great Depression, 14
H
I
illiquidity, 154–55
IMF (International Monetary Fund), 218–22
indirect exchange, 22–23
inflation
addressed in American Constitution, 204–06
debasement of money as, 89–91
defined, 85–88
families, effects on, 185–91
fiat. Seefiat inflation
fractional-reserve banking and, 90–101, 180–82
gold standard and, 211–13
gold-exchange standard and, 215–16
governments as beneficiaries, 86–88, 103–08See alsofiat inflation
historical case against, 7–17
hyperinflation, 90n1, 165–72, 232–35
international paper-money systems and, 226
origin of, 85–88
paper money and, 159–62
stagflation, 69
insolvency, 154
interest
compared to usury, 52–53
distribution effects of money and, 47
effects of paper money on, 69–72
international banking systems
Bretton Woods system, 141, 207, 216–19, 228, 235
gold standard, 209–13
gold-exchange standard, 214–16
International Monetary Fund (IMF) and World Bank, 218–22
International Monetary Fund (IMF), 218–22
international paper-money systems
consequences of mergers, 235–36
emergence of standards, 223–27
mergers, 228–30
multiple standards of, 230–34
international trade agreements, 221
IOUs, 94–95
Italian lira, 228
J
Japanese yen, 226
Jesus Christ, teachings of
coins and government, 123–24
cost calculations, 141
stewardship of money, 51–52
justice
inflation and, 87
money production and, 1–7
L
labor market, 14
labor unions, 68–69
Latin Currency Union, 210
laws
of association, 21
of diminishing marginal value, 43
legal tender. Seelegal-tender laws
of production, 21
legal monopolies
coins and, 116–24
economic versus legal, 115–16
ethics of, 119–24
legal-tender laws and, 116–19, 145–47
social justice and, 6
legal tender, defined, 125
legal tender laws
bankruptcy and, 156
bimetallism, 129–31
business cycles and, 139–42
central banks and, 142–44, 147–48
credit money and, 138–39
ethics of, 148–51
fractional-reserve banking and, 130–31, 136–45
government coercion and, 31, 148–51
inflation and, 112–13
legal monopolies and, 116–19, 145–47
money certificates and, 131–37
overview, 125–29
social justice and, 6
lira, 228
London goldsmith bankers, 93–94
M
marginal value, 43
materialism, 187
medium of exchange, defined, 22
mergers of international paper-money systems, 226–30, 235–36
monetary orders, 195–98
monetary reform, 240–42
monetary stability, 72–79
monetary systems fiat, 199–207
international. Seeinternational banking systems; international paper-money systems
national, 203–06
money
certification of, 89–91
credit. Seecredit money
debasement of. Seedebasement of money
desire for and Christian doctrine, 2
electronic, 33, 55–56. See alsopaper money
fiat, 106–07, 160–61n1. See alsofiat inflation
natural. Seenatural money
origin of, 22–23
paper. Seepaper money
warehouses, 93–94
money certificates
coinage and, 35–38
debasement of money and, 89–91
fiat, 106–07. See alsofiat inflation
legal monopolies and, 118–19
legal tender laws and, 131–37
as money substitutes, 38–41
money production
central banks and, 163
commodity money, 79–81
distribution effects of, 46–49
ethics of, 49–51
justice and, 1–7
natural money, 5, 7–17, 195–98
prices and, 43–45
scope and limits of, 45–46
money supply, effects on economic growth, 60–62
monopolies, legal. Seelegal monopolies
moral hazard
defined, 144
hyperinflation and regulation, 168–72
international paper-money standards and, 226
international paper-money systems and, 231, 234
paper-money systems, 236
public debts and, 166–68
mortgage corporations, 183–84
N
national monetary systems, 203–06
nationalistic ideologies, 176
natural laws, 11
natural money. See alsocommodity money
arguments for, 55–59
comparison to paper money, 56–59, 160–61, 165
monetary reform and, 240–42
money supply and, 61
overview, 24–28
production of, 5, 7–17, 195–98
North American colonies, 203–06
O
Oresme, Nicholas, teachings of alteration of coins, 37, 50n6
distribution effects of money, 46–47
false money certificates, 99–101
first treatise on money, 4
Gresham’s law, 127n2
inflation and governments, 104, 179
legal tender laws, 129, 135–36, 142n16, 149–51
legalization of debasement and fractional-reserves, 111–13
money supply, 61
production of money, 56–59, 61
ways of gaining through money, 52n9
origin of money, 22–23
P
paper money. See alsoelectronic money
addressed in American Constitution, 204–06
comparison to commodity money, 80
comparison to credit money, 29
comparison to natural money, 56–59, 160–61, 165
deflation and, 64–68
economic growth and, 60–62
fractional-reserve certificates. Seefractional-reserve banking
free market and, 29–33
hoarding and, 62–64
interest rates and, 69–72
international systems. Seeinternational paper-money systems
legal tender laws and, 107, 163–64
limits of, 164–66
monetary stability and, 72–79
origins of, 159–62
public debts and, 166–68
purchasing power of the money unit (PPM) and, 168–72
reverse transubstantiations, 162–64
sticky prices and, 68–69
payments, suspension of, 6, 153–57
PPM (purchasing power of the money unit). Seepurchasing power of the money unit (PPM)
precious metals. See alsocoins
bimetallism, 129–31
counterfeiting and, 98–99
as medium of exchange, 23
stability of money and, 72–73
private inflation, 5
private property. See alsoproperty rights
as basis of capitalism, 238
international banking systems and, 220–21
natural monies and, 25–27
paper money and, 160
product quality, effects of inflation on, 187–88
production of money. Seemoney production
property rights
Austrian School as advocates of, ix
coinage and, 38
as mission of government, 16
natural monies and, 25–27, 241
paper money and, 30–31, 172–73
public debts, 166–68, 177–78, 188, 205, 242
purchasing power of the money unit (PPM)
commodity money and, 79–80
effects of paper money on, 70–73
hoarding and, 185
inflation and, 183
paper money, 168–72
stability of money and, 73–79
R
real-estate boom, 170–71
reform, monetary, 240–42
regulations, banking, 145, 171–72, 231n6
reserves, defined, 39–40
rights, property. Seeproperty rights
S
savings, 182–86
Scriptural references. SeeBiblical references
silver as money. Seecommodity money; natural money
silver coins. Seecoins
silver standard, 209–11
social assistance. Seewelfare state
stagflation, 69
standards of international paper-money, 223–27, 230–34
states. Seegovernments
stockbrokers, 183–84
stock-exchange, 170
T
Third World, 220–21, 225n2, 237–38
token coins, 39–41
U
U.S. Coin Act of 1834, 130–31
U.S. Constitution, 204–06, 242
U.S. dollars. See dollars
U.S. Federal Reserve. SeeFederal Reserve (Fed)
usury
Christian doctrine on, 2
compared to interest, 52–53
legal tender laws and, 149
W
wages, 68–69
War Between the States, 205
War of 1812, 205
warehouses, money, 93–94
wars, as consequence of inflation, 177–78
weights of coins, 35, 50–51, 118, 120–24
welfare state, 14, 188–91, 228
Western military bases, 221
World Bank, 218–22
Y
The Ethics of Money Production
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