My New Freeman Article

The January/February 2008 issue of The Freeman is now available online.  I have an article therein entitled "Free-Market Money:  A Key to Peace," (PDF) based on this blog post.  I argue that the classical liberal concern with keeping money production out of the hands of the state was, and is, a means by which its anti-imperialism could be effected.  Without recourse to the printing press, the State is that much less likely to be able to afford foreign aggression.  In fact, most central banks have grown out of the need for surreptitious forms of revenue, especially for war. The free bankers and the peaceniks need to get together and see their common ground:  if one believes in peace and opposes the warfare-imperialist state, one needs to consider seriously the arguments against central banking.  The beast needs to be starved.

One of the great things about having the time to blog this year (thank you SLU for your generous sabbatical/leave policy) is that it really can be a platform for first drafts of other things, or just a space to organize your thoughts in a less than fully formal way.  The transformation of a blog post into a Freeman piece is precisely why blogging is, or at least can be, really productive for a scholar.

Cross-posted at Liberty and Power.

Comments

[Kevin Hilferty]

I much enjoyed reading the article Prof. Horwitz. Have you ever looked into comparing the modern governments' behavior with older government spending behavior in England and France 300-400 hundred years ago, and how they financed war in with monetary constraints?

[Steven Horwitz]

Thanks Kevin.

I think there's a terrific book waiting to be written on the history of central banking across the world that uses the kind of framework I use in the Freeman piece. I'm not the guy to write it, but it would be a great project.

[Matt C.]

This is slightly off topic. I was reading this article: "Why Fed rate cuts may be spurring inflation"
http://www.msnbc.msn.com/id/23352078/

It wasn't until the 11th paragraph that it even mentions the Fed's easy money policy. Several paragraphs before it blamed higher prices on Oil demand and increasing cost of food due to government interference.

What I find even more interesting is the following statement: "A slowing economy is supposed to help keep inflation in check, as weaker demand takes some pressure off prices. Some economists note that, with the economic downturn still in its early innings, it may simply take awhile longer for the slowdown to begin easing inflation pressures."

WHAT? "A slowing economy is supposed to help keep inflation in check"?? Could this be more Keynesian? What happened to the Weimar Republic or what about the current problems in Zimbabwe? How about looking back at our own country's problem during the 1970s?

Correct me if I am wrong, but just because you have a downturn in the economy doesn't necessarily bring inflation under control if you keep PRINTING MONEY!

[Daniel Klein]

I just read K. Polanyi's The Great Transformation. I was struck by how central the gold standard is inthe liberal order, and the collapse of liberalism. He sees going off gold as one of the triggers of the great transformation away from liberalism (though he says that transformation was inevitable). He's a socialist, but he is totally affirming the key role played by the gold standard in constraining Big G.