jmherbenerThe state’s policies, both fiscal and monetary, generate unjust wealth transfers through trade. But not everyone is tainted by these policy sins. When my wife and I bought lunch at Hot Head Burritos today both we and HHB benefited. The value of the lunch to us relative to money exceeded the value of the lunch relative to money to others who did not buy it. The nature of our trade was not altered because we used fiat money.
I agree that fiat money and fractional reserve banking empower the state more than the power to tax. Ending the Fed and turning production of money over to private enterprise would restore more of our liberty than any other single reform. Even so, the power to issue fiat money is not the source of the other distortions. If we had a private monetary system, the state would still distort the economy by taxing and regulating our activity and running its own production facilities.
Economics helps us to discern the effects of each of the state’s activities.