The Government Seeks Totalitarian Money
Thorsten Polleit’s outstanding new book is packed with insights about both the philosophy of economics and economic policy, and as he shows, his philosophical standpoint enables him to grasp the essence of the financial world, of which he is a master.
Polleit is a follower of Ludwig von Mises, Murray Rothbard, and Hans-Hermann Hoppe, and like them, he argues that economics offers us a priori truths about the world. “What is meant by the term a priori theory? The term a priori means that something is evident, that can be regarded as true and universal, independent of experience.” By “independent of experience,” Polleit of course doesn’t mean that a priori truths have no bearing on experience—the point of a priori truths is that they’re known to be true of experience just by thinking about them—but rather that their truth doesn’t depend on empirical testing. In economics, unlike the physical sciences, we don’t have adequate empirical grounds to establish laws: “there are “too many” variables and no quantitative constants.
In this connection, Polleit makes a brilliant observation. Because many socialists do not understand the relevant a priori laws, they fail to recognize that socialism is inherently tyrannical.
To refute this defense requires resort to the a priori in two ways, one of which will be well known to most readers of the Mises Wire. I refer of course to Mises’s calculation argument, which shows that in the absence of money prices, a socialist system cannot engage in economic calculation and is doomed to collapse.
But this argument by itself does not suffice to answer so-called democratic socialists, who do not call for full-scale central planning but want a “mixed” system that does not entirely dispense with the market. To close the gap, Mises makes effective use of a “slippery slope” argument against such people—interventionism can quickly lead to socialism. Polleit reinforces Mises’s logic by raising another point as well. It is an a priori truth that the state is an oppressive institution that by its nature violates rights; furthermore, over the course of its existence, it will become more oppressive:
Here Polleit draws on the great German sociologist Franz Oppenheimer (who, Polleit tells us, was the doctoral supervisor of Ludwig Erhard, the man responsible for the German “economic miracle” after World War II) and Hans Hoppe. I’d advise readers to pay particular attention to the sentence Polleit has italicized, as the book’s central argument depends on taking the proposition it expresses to be an a priori truth.
What does the contemporary state have in store for us? In answering this question, Polleit relies on another of the most important of the a priori laws of human action: because human beings differ, they benefit from specialization and trade. Given this undeniable truth, we must next endeavor to determine the requirements of extensive trade, and here we soon come to money, the commonly accepted medium of exchange.
Because the advantages of trade increase the wider the market is, a free market world would ideally use the same money:
Polleit now combines this insight with his earlier argument that the ever-expanding state seeks to bring more and more resources under its control. In order to accomplish this, the state must seize total control of the monetary system, not allowing any commodity currency to compete with its own fiat money. And—another crucial point—because national currencies can be traded against each other, it becomes imperative to establish a unique world fiat currency that allows no evasion or escape.
In other words, our current world monetary order parallels the free market tendency toward a single world currency:
A fiat money of the sort imagined here would subject the world to a dictatorship of socialistically inclined global bankers. As Polleit explains, only free market money in a “private law society” offers lasting refuge from the “dystopian nightmare” the globalists have in mind for us. Polleit’s book will encourage resistance to their plans.
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