The great trouble is that money wasn’t allowed to develop. After two or three hundred years of the use of coins, governments stopped any further developments. We were not allowed to experiment on it, so money hasn’t been improved, it has rather become worse in the course of time. Menger, and before him Hume and Mandeville, named law, language, and money as the three paradigms of spontaneously occurring institutions. Now fortunately, law and language have been allowed to develop. Money was frozen in its most primitive form. What we have had since was mostly government abuses of money.—F. A. Hayek1Friedrich A. Hayek. Interview by James U. Blanchard III, May 1, 1984. Cato Institute Policy Report May/June 1984. https://www.cato.org/policy-report/may/june-1984/exclusive-interview-fa-hayek#.
The economic sphere has lagged behind the cultural and political spheres in institutional evolution. In the cultural sphere, the Protestant Reformation promoted individual sovereignty, freeing personal belief and thought from the control of the church. Modern liberal democracies responded to demands for personal freedom and sovereignty in the political sphere. In the economic sphere, private property ownership has been established, but the institutions of money creation and banking have not promoted equal opportunity
The Federal Reserve in the U.S. and the European Central Bank are systems of economic feudalism in which money creators control its distribution. In the Dark Ages, feudal lords controlled land distribution. New money distribution is a form of economic injustice not widely understood and referred to as a secret or mystery.2Murray N. Rothbard, The Mystery of Banking, Second ed. (Auburn AL: Ludwig von Mises Institute, 1983). This economic injustice cannot exist in an integral society. Economic sovereignty needs to catch up with evolving cultural and political sovereignty.
Economic injustice is opposed by churches, Marxists, and movements like Occupy Wall Street. There are many slogans calling for the end of “capitalism” or “corporate greed” based on the effects of economic injustice. However, these are reactions to economic injustice without a functional vision of financial institutions that promote personal economic sovereignty. People calling for state-planned economies and taxing the rich appear oblivious to the injustices of government/bank intrigues that are the source of injustice.Continue reading →