The State’s Best-Kept Secret
Money is never an object when you have a legal counterfeiting racket at the center of the economy, yet counterfeiting, provided it has monopoly power and conducted by the “best and the brightest,” is virtually unchallenged as necessary for economic growth.
How did this fraud come about? First, some basics:
1. We are all under State rule, meaning under the rule of a monopoly of force that most people cherish in principle as a necessary precondition for civilization, however that might be defined. Monopoly, meaning “single seller,” meaning no competition allowed, is regarded as wrong by most people. Yet it is saluted worldwide when it arrives in the form of a State.
What is it that the State alleges to sell? Protection. As the story goes, the Constitution protects us from our protector.
2. States extract their funding by force, called taxation. Since WWII the US has put personal income taxes on a periodic payment plan called withholding. It’s easier, and less subject to revolt, to pay taxes when the money you earn never reaches your hands and instead goes directly into government coffers.
3. State rulers, being relatively small in number, need allies, and it acquires these by dispensing favors or issuing often tacit threats. Both kinds lock in the recipient’s obedience, and the State in effect grows. Corporate media becomes the primary disseminator of State propaganda.
4. As they expand, States need more funding than they dare collect with taxes, so they legalize a counterfeiting operation and call it a central bank. The American public was told a central bank was needed to eliminate those embarrassing Panics of the 19th century and the one in 1907. So we got one. Today it’s usually called the Fed.
Payoff was almost immediate as it helped finance US entry into Europe’s Great War, on the grounds that there was nothing like massive slaughter of all life forms to ensure lasting peace. Civilian and military casualties were driven to astronomical levels by central bank funding of governments. It takes lots of “money” to kill at that level, “money” no longer being gold but fiat bills that can be produced virtually without limit.
“Panic” was also abandoned as a word to make way for all the calamities the Fed has created since its inception, though only a small band of economists lay the blame on Fed counterfeiting. Incredibly, for the Great Depression, the Fed accepts blame for not counterfeiting enough.
Fed allies called court economists justify the counterfeiting as necessary for a growing economy. How the economy grew in the days before the counterfeiting is not a question they’re eager to address. Nor do they call it counterfeiting, of course; the preferred phrase is “monetary policy.”
The counterfeiter is engaged in the exchange of nothing for something. But how did this come to be a highly-profitable policy for government and done so in a manner that not “one man in a million” knows or even cares about? Murray Rothbard provides a compelling narrative in What Has Govern
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.