I’ve just left the Liberty Forum in New Hampshire, a three-day gathering of hundreds of people who are trying to find ways of living freer lives in times of despotic control. Among many things, this might be the world center for exhibiting monies of the future.
I leave as the proud owner of three types of nonpaper, nongovernmental monies. They operate in competition with the government’s dollar. Yes, these include Bitcoin, the mind-blowing digital currency that has techno-geeks, edgy global traders, and even the World Bank buzzing about its potential to finally separate money from the state.
Why are people working on alternative forms of money? It’s all about escaping a 100-year-old trend. Back in the day, the dollar was a name for gold, not just a paper ticket manufactured by a government-chartered central bank.
Depression, war, and deliberate debasement have left us with a dollar that is a mere shadow of its former self. It keeps losing value, of course, rather than gaining value as it would in a free market.
Just as critically, the dollar today serves as the enabler of all regulatory control over our economic lives. Using the dollar means dragging a gigantic and burdensome machinery along with you. It means tens of thousands of regulatory controls, government spying, confiscatory taxation, and endless burdens that are bad for businesses and individuals.
Ideally, the dollar would be totally reformed, made good as gold, and restored to its former integrity. How likely is that to happen? The whole idea depends on the wisdom, good will, and public beneficence of the political and elite class of banking moguls.
Is there any wonder that there is a clamor for the private sector to come up with something new? It’s been going on for several decades now, this discovery process we might call “monetary entrepreneurship.”
People in ancient days had to discover the best commodities to get progress beyond mere barter. What would best serve as money: something to acquire not to consume, but to trade for other things to consume? Is it salt? Shells? Silver and gold? Many options are available, and only the best money can win the market competition over time.
Something like this is taking place again today. Government money is risky, carries too much cost, and has an uncertain future to it. People put up with it for convenience and because nothing better seems to present itself.
There is a real opportunity here for monetary entrepreneurs to get to work coming up with something new and letting the markets try it out. Over the last 10 years, governments have shot down a number of experiments in private money that used digital networks to monetize gold and silver. It’s been a brutal job to retain the government’s money monopoly.
Entrepreneurs have learned. New monetary instruments have to protect themselves against government attempts to shoot them down in obvious ways. There are three general ways to do this: back to the basics with precious metals, onward to the future with purely digital money, and some combination of both of these.
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