[fortheDeclaration]

A problem with that argument, though, is that money is an artificial construct. It’s easy to get carried away and think that money is like any other commodity. But it’s not. It’s the thing that greases the gears in the economic machinery. It’s not something God made. It’s something we invented to make our economic life easier. We could rely solely on barter, or private bank notes, like they used in the Colonial days, but an official currency is something that has very important advantages. It doesn’t make a lot of sense to go to the trouble of creating such an official currency, and then do nothing to define its value or manage the supply of it. That would be sort of like firing a gun randomly into the air in the hopes that you might hit some bird.

Actually, money is a product of the market.

Mises makes it clear that all money can be traced to some use value on the market.

Money also follows the same economic laws of supply and demand.

Money represents the highest order of the capitialist system, and if it is destroyed, as has happened often in the past, the economic system reverts back to barter.

The Free Market is a dynamic system, not a perfect one, but no man or group of men can duplicate it or substitute for it.

That is what the failures of all government interventionism has shown us.

[Brilliant]

“if it is destroyed”

How would you propose that it be protected? Shouldn’t there be some official control over its value to protect the value? What good is a standard that has no degree of uniformity over time? There is no market process which will ensure that the supply of money grows at a rate that will ensure uniformity over time. Since that is the case, the only thing you can do is go to the institution that created the money in the first place, and ask them to make sure that the supply of the money they created is growing at some particular rate. Otherwise, you’ll likely have spurts of inopportune growth, as well as inopportune contractions.

Now, I realize that classical economic theory will tell you that it doesn’t matter whether the supply of money goes up or down because prices will simply adjust to accommodate any level, but unfortunately, the price adjustment mechanism is not that perfect. It takes time, and in the meantime, you’ve got real economic dislocations. Otherwise, we would not be having this conversation because the supply of money would not be important.