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What Has Government Done to Our Money?
What Has Government Done to Our Money? details the history of money, from early barter systems, to the gold standard, to present-day systems of paper money. Rothbard explains how money was originally developed, and why gold was chosen as the preferred commodity to use as money. The author also explains how the gold standard makes money a commodity, and how market forces create a stable economy. Rothbard shows that many European governments went bankrupt due to World War I and left the gold standard in order to try to solve their financial issues, which was not the right solution. He also argues that this strategy was partially responsible for World War II and led to economic problems throughout the world.
124 pages, Paperback
Published May 27, 2015
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About the author
Murray N. Rothbard
284 books1,128 followersMurray Newton Rothbard was an influential American historian, natural law theorist and economist of the Austrian School who helped define modern libertarianism. Rothbard took the Austrian School's emphasis on spontaneous order and condemnation of central planning to an individualist anarchist conclusion, which he termed "anarcho-capitalism".
In the 1970s, he assisted Charles Koch and Ed Crane to found the Cato Institute as libertarian think tank.
In the 1970s, he assisted Charles Koch and Ed Crane to found the Cato Institute as libertarian think tank.
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Displaying 1 - 30 of 76 reviews
February 14, 2012
What Has the Government Done to Our Money directly assaults the fraudulent monetary system of fiat currency and reaffirms the sustainability in economic growth of free market currency based on an commodity such as gold and silver. Murray Rothbard briefly confutes the delusional enchantment of the impregnable system of fiat currency by issuing inflation as the most devastating phenomenon in monetary economics.
Inflation is the debasing of a currency by creating money out of thin air, which means the purchasing power is decreased due to the increase in the money supply. Inflation generates illusory profits and distorts calculation of business, so free markets are unable to reward efficiency and penalize inefficiency. “The general atmosphere of a sellers’ market will lead to a decline in quality of goods and of service to consumers since consumers often resist price increases less when they occur in form of downgrading of quality.” Not only does inflation destroy business, but the compulsory monopoly of mint in the control of the money supply by central banks destroys free markets even in monetary terms. Central banks are responsible for inflation, for it removes all checks on inflation as well as direct inflation.
Overall, Rothbard is a true inspiration of brilliance in the field of economics where he can deliver a concise explanation of the government transgressions into the market and the incessant yet futile attempt to control economic activity through manipulating the currency. It is an absolute blast to read Rothbard every time.
Inflation is the debasing of a currency by creating money out of thin air, which means the purchasing power is decreased due to the increase in the money supply. Inflation generates illusory profits and distorts calculation of business, so free markets are unable to reward efficiency and penalize inefficiency. “The general atmosphere of a sellers’ market will lead to a decline in quality of goods and of service to consumers since consumers often resist price increases less when they occur in form of downgrading of quality.” Not only does inflation destroy business, but the compulsory monopoly of mint in the control of the money supply by central banks destroys free markets even in monetary terms. Central banks are responsible for inflation, for it removes all checks on inflation as well as direct inflation.
Overall, Rothbard is a true inspiration of brilliance in the field of economics where he can deliver a concise explanation of the government transgressions into the market and the incessant yet futile attempt to control economic activity through manipulating the currency. It is an absolute blast to read Rothbard every time.
June 28, 2010
Confused about how the Federal Reserve works, or why we need it? Can't figure out what causes inflation? Does the whole financial crisis have you baffled? This is a great place to start working through the muck. If you don't read anything else, read the section on money warehouses, though the whole book is worth a read.
August 23, 2020
Gostaria de ter lido este livro há mais tempo, uns três anos atrás. Certamente teria direcionado melhor minhas leituras, meus aprendizados e estudos em economia. Excelente livro, engana pelo número de páginas. Muito denso, muita coisa para entender. Muito bem escrito e organizado. Recomendo demais.
August 17, 2014
Dr. Rothbard left us in 1995, and wrote the first edition of "What Has Government Done to our Money" in 1964, but he is still the clearest voice on economic policy today -- more than David Stockman. In 2014, Jim Grant of "Grant's Interest Rate Observer" may be the only financial journalist that comes close to the pristine prose of Murray Rothbard. I originally read this book four years ago, and it is just as clear this time around. I wish I had his clarity.
This fourth edition, like his previous editions, de-bamboozles the public's understanding of central banking and banking on the free-market. Interestingly, with each passing addition some monetary period came and went. In 1964, The United States had yet to de-link the U.S. dollar from gold completely. But by this last edition, which is still pre-European Union and pre-Euro, the dollar had become a completely fiat currency. He also talked about our current state of fluctuating fiat currencies, which the author believes, like every other monetary fix, will not last; and, if central banks attempt to make it last it will only give us inflation in the long-run which will be of no benefit to anyone.
If you have never read a book on economics or monetary policy, make this your first one.
This fourth edition, like his previous editions, de-bamboozles the public's understanding of central banking and banking on the free-market. Interestingly, with each passing addition some monetary period came and went. In 1964, The United States had yet to de-link the U.S. dollar from gold completely. But by this last edition, which is still pre-European Union and pre-Euro, the dollar had become a completely fiat currency. He also talked about our current state of fluctuating fiat currencies, which the author believes, like every other monetary fix, will not last; and, if central banks attempt to make it last it will only give us inflation in the long-run which will be of no benefit to anyone.
If you have never read a book on economics or monetary policy, make this your first one.
May 24, 2015
Very disappointing. I had previously read End the Fed and found that to be a truly awful book. I expected that a book by an actual economic professor would be much better. And, yes this book is definitely better. Still, it wasn't a very good defense of the gold standard. The usual narrative by mainstream economists is that the rise of the quantity theory of money is what killed the gold standard. Not only is this not discussed at all in the book, one gets the distinct impression that either Rothbard has never heard of, or worse, dismisses the quantity theory of money. At one point he says, "[D]eflation can only take place after a previous inflation; only pseudo-receipts, not gold coins, can be retired and liquidated." This debunked idea is one of false ones that economist Allan Melzer in his iconic history of the Federal Reserve blames the Fed for following in their failure to deal properly with the Great Depression.
December 8, 2014
Um livro definitivo sobre como funciona o sistema monetário.
Nesta obra espetacular, o economista "austríaco" Murray Rothbard detalha de maneira extraordinariamente didática a história do dinheiro como meio de troca, desde os tempos do escambo até os anos 80.
Em um trabalho de pesquisa minucioso e repleto de referências históricas, o autor expõe como o intervencionismo estatal foi (e continua sendo) capaz de causar distúrbios seríssimos sobre o mercado financeiro.
O posfácio de Fernando Ulrich busca completar a obra de Rothbard com a análise das crises financeiras mais recentes, entre os anos 90 até os dias de hoje, e atinge o objetivo com um belo resumo sobre o momento atual do mercado financeiro mundial.
Nesta obra espetacular, o economista "austríaco" Murray Rothbard detalha de maneira extraordinariamente didática a história do dinheiro como meio de troca, desde os tempos do escambo até os anos 80.
Em um trabalho de pesquisa minucioso e repleto de referências históricas, o autor expõe como o intervencionismo estatal foi (e continua sendo) capaz de causar distúrbios seríssimos sobre o mercado financeiro.
O posfácio de Fernando Ulrich busca completar a obra de Rothbard com a análise das crises financeiras mais recentes, entre os anos 90 até os dias de hoje, e atinge o objetivo com um belo resumo sobre o momento atual do mercado financeiro mundial.
July 26, 2020
An exposition of the gold standard, and the history of banks in the United States. Just like in his A History of Money and Banking in the United States: The Colonial Era to World War II, Rothbard gives us a very detailed history, sometimes it feel synchronized to be life-paced, of how the world got off the gold-standard.
I honestly enjoyed the first half of the book much more, since it was loaded with economic theory. I will follow up with his The Case for a 100 Percent Gold Dollar.
I honestly enjoyed the first half of the book much more, since it was loaded with economic theory. I will follow up with his The Case for a 100 Percent Gold Dollar.
November 30, 2014
Livro sensacional. Ajuda a entender a natureza do dinheiro, funcionamento e história, além das intervenções do governo sobre ele. Definitivamente, é uma obra indispensável.
September 5, 2025
The first few chapters are super interesting and very easy to follow. I love how Austrian economics are always based on common sense and clear explanations.
The book gets harder to follow when he starts talking about central banks, and although he could have made it easier, the whole point is that the system is absurd.
Good book. Not particularly recommendable.
The book gets harder to follow when he starts talking about central banks, and although he could have made it easier, the whole point is that the system is absurd.
Good book. Not particularly recommendable.
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May 17, 2018
The answer to this question is somewhat obvious. What has government done to our money? Screw it up. And that is precisely the answer gives in this modest book of about 100 pages. As someone who has thought and even occasionally read about the problem of currencies [1], I do not find the author's arguments in favor of the gold standard particularly persuasive. That said, I do find the author's comments about the way that government has screwed up monetary policy as effectively as it has screwed up every other aspect of human life very persuasive. Indeed, one wonders if currency reform in general is just a fig leaf to cover the general libertarian ideal to gut government in general and keep it to very narrow boundaries. And while I am no libertarian myself, I certainly understand that governments have screwed up monetary policy any time they have gotten involved in it, largely because governments are run by people who do not know what they are doing while seeking short-term gains at the cost of long-term suffering and misery for the very people they express a desire to help.
This book makes for fairly grim and unpleasant reading, although I did read it mostly late at night, so I only have myself to blame for whatever nightmares it caused. At a bit more than 100 pages of large paper with fairly large text, this is not a particularly long book, thankfully. After a short introduction (1), the author talks about money in a free society, examining the value of exchange, barter, the question of money supply and hoarding and coexisting moneys like gold and silver (2). Then the author moves into his main argument about government meddling with money by looking at inflation, monopolistic behavior, debasement, coinage, and the removal of government checks on runaway inflation (3). After this the author gives a generally enlightening and grimly humorous discussion of the monetary breakdown of the west through nine phasis from the classical gold standard of the long post-Napoleonic peace (1815-1914) to various attempts at floating currency or using a bullion standard that limited forex trading in gold to institutional traders and governments to the current post-Bretton Woods period of fluctuating fiat currencies (4). The author appears to be of the belief that the gold standard itself would stabilize currencies, although this is perhaps a first step to a larger goal of libertarian behavior.
This book provides ample discussion of the fact that government cannot be trusted with a monopoly over monetary policy. Unfortunately, those of us whose low levels of trust are more pervasive than that of the writer will understand that government cannot be trusted in particular because people cannot be trusted in general. Whatever system exists of either finance or government or indeed anything else, there will be corrupt people who will want to rig that system in their favor and screw everyone else over. The reason we have governments and regulation at all is because people have shown themselves to be corrupt and exploitative, and the general decline of conscience in our society has, by the predictable operation of Colson's law, led to the increased proliferation of regulations and police in order to deal with the essential lack of goodness in human nature. If we cannot trust governments to avoid inflating currencies to worthlessness, then the reasons we cannot do so is because both people and governments as a whole have ruinous levels of debt and because it is easy to print money little by little than to deal with the harder and more beneficial aspects of fiscal restraint on either the micro or macro level.
[1] See, for example:
https://edgeinducedcohesion.blog/2012...
https://edgeinducedcohesion.blog/2017...
https://edgeinducedcohesion.blog/2017...
https://edgeinducedcohesion.blog/2018...
This book makes for fairly grim and unpleasant reading, although I did read it mostly late at night, so I only have myself to blame for whatever nightmares it caused. At a bit more than 100 pages of large paper with fairly large text, this is not a particularly long book, thankfully. After a short introduction (1), the author talks about money in a free society, examining the value of exchange, barter, the question of money supply and hoarding and coexisting moneys like gold and silver (2). Then the author moves into his main argument about government meddling with money by looking at inflation, monopolistic behavior, debasement, coinage, and the removal of government checks on runaway inflation (3). After this the author gives a generally enlightening and grimly humorous discussion of the monetary breakdown of the west through nine phasis from the classical gold standard of the long post-Napoleonic peace (1815-1914) to various attempts at floating currency or using a bullion standard that limited forex trading in gold to institutional traders and governments to the current post-Bretton Woods period of fluctuating fiat currencies (4). The author appears to be of the belief that the gold standard itself would stabilize currencies, although this is perhaps a first step to a larger goal of libertarian behavior.
This book provides ample discussion of the fact that government cannot be trusted with a monopoly over monetary policy. Unfortunately, those of us whose low levels of trust are more pervasive than that of the writer will understand that government cannot be trusted in particular because people cannot be trusted in general. Whatever system exists of either finance or government or indeed anything else, there will be corrupt people who will want to rig that system in their favor and screw everyone else over. The reason we have governments and regulation at all is because people have shown themselves to be corrupt and exploitative, and the general decline of conscience in our society has, by the predictable operation of Colson's law, led to the increased proliferation of regulations and police in order to deal with the essential lack of goodness in human nature. If we cannot trust governments to avoid inflating currencies to worthlessness, then the reasons we cannot do so is because both people and governments as a whole have ruinous levels of debt and because it is easy to print money little by little than to deal with the harder and more beneficial aspects of fiscal restraint on either the micro or macro level.
[1] See, for example:
https://edgeinducedcohesion.blog/2012...
https://edgeinducedcohesion.blog/2017...
https://edgeinducedcohesion.blog/2017...
https://edgeinducedcohesion.blog/2018...
July 11, 2024
ROTHBARD'S THOUGHTS ON THE MONETARY SYSTEM,
Murray Newton Rothbard (1926-1995) was an American economist, historian and political theorist. He was a prominent exponent of the Austrian School of economics in this country and a key figure in the American libertarian movement.
This paper was first published in 1964, and revised in 1973 for this edition. The questions which Rothbard addresses are, "CAN money be organized under the freedom principle? Can we have a free market in money as well as in other goods and services? ... And what are the effects of various governmental controls?" (Pg. vi)
He states the free market has found gold and silver to be the most efficient money, and that "Money cannot originate in any other way: neither by everyone suddenly deciding to create money out of useless material, nor by government calling ... paper, 'money.'" (Pg. 3) Thus, he concludes that government is "powerless to create money for the economy" (pg. 4), and "There is no need to tamper with the market in order to alter the money-supply that it determines."
He asserts that a fractional reserve bank is "at all times bankrupt"; but this is only REVEALED when customers "get suspicious, and precipitate 'bank runs.'" (Pg. 23) Since governments must "find some method of expropriating more goods without the owner's consent," they engage in "counterfeiting---the creation of new money out of thin air." That way, it can appropriate resources "without rousing the hostility touched off by taxation," and in fact gives its "victims" the "blissful illusion of unparalleled prosperity." (Pg. 27)
He says that inflation "bids prices up," thus diluting the effectiveness of the dollar---"But this dilution takes time." Inflation confers no general social benefit, and instead redistributes the wealth "in favor of the first-comers and at the expense of the laggards in the race." (Pg. 28) Inflation also penalizes thrift and encourages debt, since borrowed funds are repaid with dollars of lower purchasing power (pg. 29).
Rothbard asserts that governments impose price controls largely in order to "divert public attention from governmental inflation to the alleged evils of the free market." (Pg. 33) And since gold reserves flows into the Central Bank---but the Central Bank keeps only a fractional reserve of gold---the act of establishing a Central bank "greatly multiplies" the inflationary potential of the country. (Pg. 41)
He concludes by stating, "Until and unless we return to the classical gold standard... the international money system is fated to shift back and forth between fixed and fluctuating exchange rates... This prognosis can only be changed by ... the return to a free-market commodity money such as gold, and by removing government totally from the monetary scene." (Pg. 62)
This is one of Rothbard's most famous essays, and will be of great interest to anyone interested in Austrian economics, or his own works.
Murray Newton Rothbard (1926-1995) was an American economist, historian and political theorist. He was a prominent exponent of the Austrian School of economics in this country and a key figure in the American libertarian movement.
This paper was first published in 1964, and revised in 1973 for this edition. The questions which Rothbard addresses are, "CAN money be organized under the freedom principle? Can we have a free market in money as well as in other goods and services? ... And what are the effects of various governmental controls?" (Pg. vi)
He states the free market has found gold and silver to be the most efficient money, and that "Money cannot originate in any other way: neither by everyone suddenly deciding to create money out of useless material, nor by government calling ... paper, 'money.'" (Pg. 3) Thus, he concludes that government is "powerless to create money for the economy" (pg. 4), and "There is no need to tamper with the market in order to alter the money-supply that it determines."
He asserts that a fractional reserve bank is "at all times bankrupt"; but this is only REVEALED when customers "get suspicious, and precipitate 'bank runs.'" (Pg. 23) Since governments must "find some method of expropriating more goods without the owner's consent," they engage in "counterfeiting---the creation of new money out of thin air." That way, it can appropriate resources "without rousing the hostility touched off by taxation," and in fact gives its "victims" the "blissful illusion of unparalleled prosperity." (Pg. 27)
He says that inflation "bids prices up," thus diluting the effectiveness of the dollar---"But this dilution takes time." Inflation confers no general social benefit, and instead redistributes the wealth "in favor of the first-comers and at the expense of the laggards in the race." (Pg. 28) Inflation also penalizes thrift and encourages debt, since borrowed funds are repaid with dollars of lower purchasing power (pg. 29).
Rothbard asserts that governments impose price controls largely in order to "divert public attention from governmental inflation to the alleged evils of the free market." (Pg. 33) And since gold reserves flows into the Central Bank---but the Central Bank keeps only a fractional reserve of gold---the act of establishing a Central bank "greatly multiplies" the inflationary potential of the country. (Pg. 41)
He concludes by stating, "Until and unless we return to the classical gold standard... the international money system is fated to shift back and forth between fixed and fluctuating exchange rates... This prognosis can only be changed by ... the return to a free-market commodity money such as gold, and by removing government totally from the monetary scene." (Pg. 62)
This is one of Rothbard's most famous essays, and will be of great interest to anyone interested in Austrian economics, or his own works.
August 25, 2018
Rothbard inicia essa bela e breve obra rastreando a origem do dinheiro como resultante da evolução do escambo, que possuía problemas de indivisibilidade e dupla coincidência de desejos. O dinheiro é uma mercadoria. É por conta dele ser um meio de troca que deriva ser unidade de conta e reserva de valor.
Analogia interessante que Rothbard faz é que as pessoas tem medo de que haja Cunhagem privada de moedas com medo de fraude e por isso concedem ao governo esse monopólio. Ou seja, não há sequer a confiança de que um governo possa fiscalizar e impedir tais fraudes. Na prática você quer que o governo te roube para que você esperançosamente não seja roubado.
Explica sobre reservas fracionárias dos bancos, e como isso funcionaria em um regime de livre mercado bancário.
A inflação redistribui riquezas daquele que recebe o dinheiro adicional por último para aquele que recebe primeiro. Também distorce o cálculo econômico e contabilidade das empresas. Ainda contribui para o aumento do consumo no sentido de que "tenho que comprar alguma coisa agora com esse dinheiro antes que ele se desvalorize ainda mais".
Explica a função de um Banco Central e seu papel de salvador de bancos insolventes. Lembra da saída do padrão-ouro por parte dos governos, impedindo que bancos centrais pudessem falir em uma corrida bancária, culminando no completo calote dos bens da população que tinha depósitos em ouro. Critica rapidamente o FMI em relação à ajuda forçada que os indivíduos dão para socorrer países deficitários.
Rothbard diz que o fracasso do ouro não foi o padrão-ouro em si, mas sim o fato de confiar ao governo o ouro e acreditar que ele restituiria esse metal quando necessário, aliado à necessidade de financiar guerras. Cita as palavras do ex-secretario de estado americano à época da Segunda Guerra Mundial, de que os conflitos econômicos e monetários dos anos 30 foram a principal causa dessa guerra.
Critica os chicaguistas, com seu desejo de deixar o governo controlar as moedas fiduciarias livremente
Passa resumidamente pelos estágios de troca de padrões, Bretton woods, acordo smithsoniano, etc, até chegar no padrão de moeda fiduciária flutuantes entre si, totalmente sem lastro
Por fim, Fernando Ulrich (pré-bitcoin) faz uma análise monetária posterior à morte de Rothbard, focando na crise de 2008 e suas injeções de "liquidez" no falido sistema fiduciário internacional. Ulrich comenta sobre a necessidade de regressar ao padrão-ouro, que depois ele mesmo se virou para o bitcoin, como ele menciona no seu importantíssimo livro "Bitcoin - A moeda na era digital".
Este pequeno livro de Rothbard é leitura altamente recomendada.
Analogia interessante que Rothbard faz é que as pessoas tem medo de que haja Cunhagem privada de moedas com medo de fraude e por isso concedem ao governo esse monopólio. Ou seja, não há sequer a confiança de que um governo possa fiscalizar e impedir tais fraudes. Na prática você quer que o governo te roube para que você esperançosamente não seja roubado.
Explica sobre reservas fracionárias dos bancos, e como isso funcionaria em um regime de livre mercado bancário.
A inflação redistribui riquezas daquele que recebe o dinheiro adicional por último para aquele que recebe primeiro. Também distorce o cálculo econômico e contabilidade das empresas. Ainda contribui para o aumento do consumo no sentido de que "tenho que comprar alguma coisa agora com esse dinheiro antes que ele se desvalorize ainda mais".
Explica a função de um Banco Central e seu papel de salvador de bancos insolventes. Lembra da saída do padrão-ouro por parte dos governos, impedindo que bancos centrais pudessem falir em uma corrida bancária, culminando no completo calote dos bens da população que tinha depósitos em ouro. Critica rapidamente o FMI em relação à ajuda forçada que os indivíduos dão para socorrer países deficitários.
Rothbard diz que o fracasso do ouro não foi o padrão-ouro em si, mas sim o fato de confiar ao governo o ouro e acreditar que ele restituiria esse metal quando necessário, aliado à necessidade de financiar guerras. Cita as palavras do ex-secretario de estado americano à época da Segunda Guerra Mundial, de que os conflitos econômicos e monetários dos anos 30 foram a principal causa dessa guerra.
Critica os chicaguistas, com seu desejo de deixar o governo controlar as moedas fiduciarias livremente
Passa resumidamente pelos estágios de troca de padrões, Bretton woods, acordo smithsoniano, etc, até chegar no padrão de moeda fiduciária flutuantes entre si, totalmente sem lastro
Por fim, Fernando Ulrich (pré-bitcoin) faz uma análise monetária posterior à morte de Rothbard, focando na crise de 2008 e suas injeções de "liquidez" no falido sistema fiduciário internacional. Ulrich comenta sobre a necessidade de regressar ao padrão-ouro, que depois ele mesmo se virou para o bitcoin, como ele menciona no seu importantíssimo livro "Bitcoin - A moeda na era digital".
Este pequeno livro de Rothbard é leitura altamente recomendada.
September 30, 2014
I have been always puzzled by the mechanism by which the monetary system works, how it originated, who control it, and how it ended up so complicated. It all seemed a mysterious,and impenetrable realm, not after I, thankfully, went through this informative book.
Starting by explaining the primordial notion of money in primitive societies, when people used "barter" to interact with each other,up to the contemporary paper form of money or what is known as "fiat money". This book nearly covered every respect of the entangled topic of money and the role played, and is still being played, by governments to manipulate and control this essential system in our life, and what is the future of our global economy under these conditions.
In the upshot, I really do recommend everyone who don't, or superficially, understand the monetary system, specially those so immersed in making a living, to "Stop making money! until they first understand what is money"
Starting by explaining the primordial notion of money in primitive societies, when people used "barter" to interact with each other,up to the contemporary paper form of money or what is known as "fiat money". This book nearly covered every respect of the entangled topic of money and the role played, and is still being played, by governments to manipulate and control this essential system in our life, and what is the future of our global economy under these conditions.
In the upshot, I really do recommend everyone who don't, or superficially, understand the monetary system, specially those so immersed in making a living, to "Stop making money! until they first understand what is money"
July 16, 2019
The book describes how the banking system and fractional reserve system works. The author explains how the state moved away from the gold standard. He criticizes central banks and governments for destroying money, which is the lifeblood of the whole economy. I would recommend to anyone interested in libertarian economics.
//polish
Książka opisuje jak działa system bankowy oraz system rezerwy cząstkowej. Autor wyjaśnia jak państwa odeszły od standardu złota. Krytykuje banki centralne i rządy za niszczenie pieniądza, który jest krwiobiegiem całej gospodarki. Polecam każdemu zainteresowanemu wolnościową ekonomią.
//polish
Książka opisuje jak działa system bankowy oraz system rezerwy cząstkowej. Autor wyjaśnia jak państwa odeszły od standardu złota. Krytykuje banki centralne i rządy za niszczenie pieniądza, który jest krwiobiegiem całej gospodarki. Polecam każdemu zainteresowanemu wolnościową ekonomią.
August 22, 2020
Not an easy book. I think it is necessary to have previous basic knowledge about money and banking to enjoy this book. Here Rothbard explains why the world became to use the gold standard and how we left it, also why this has been a mistake. A lot of stuff has happened, in those years, including the end of free banking, two world wars, and several ways of monetary intervention, especially by the US government. I think that's what makes it complicated. But overall it is a good reminder that we are used to a monetary system that has been recently created by the government, for their own sake.
August 20, 2014
I liked this book a lot because it focused on an area of monetary history that I am truly intersted in which is the post gold standard era. I like how Rothbard lays out the monetary breakdown of the western government's in a phased approach.
May 26, 2021
Historical review of Money and how it has come to what it is, with a final plea to revert to the gold standard. I find it interesting to think about that in relation to the coming cryptocurrencies and how they might fulfill the role once performed by metals.
June 12, 2014
An excellent economical endeavor. A must read, by all.
July 9, 2014
A bit dry but very informative work on the influence government has made in the free-market as far as monetary policy is concerned. It is a great apologetic for the gold-standard.
July 20, 2018
Leitura atemporal e indispensável para a compreensão da realidade econômica mundial.
October 20, 2023
A LIBERTARIAN CRITIQUE OF GOVERNMENTAL MONETARY SYSTEMS
Economist Murray Rothbard wrote in the Introduction to this 1964 essay, “Of all the economic problems, money is possibly the most tangled, and perhaps where we most need perspective. Money, moreover, is the economic area most encrusted and entangled with centuries of government meddling. Many people… usually devoted to the free market, stop short at money. Money, they insist, is different---it must be supplied by government and regulated by government. They never think of state control of money as interference in the free market; a free market in money is to them unthinkable. Governments must mint coins, issue paper, define ‘legal tender,’ create central banks… ‘stabilize the price level,’ etc. Historically, money was one of the first things controlled by government, and the free market ‘revolution’ of the 18th and 19th centuries made very little dent in the monetary sphere… Let us first ask ourselves the question: CAN money be organized under the freedom principle? Can we have a free market in money as well as in other goods and services?... we have no more important task than exploring the ways and means of a free market in money.”
He observes, “Through the centuries, two commodities: gold and silver, have emerged as money in the free competition of the market, and have displaced the other commodities. Both are uniquely marketable… and excel in other necessary qualities. In recent times, silver … has been found more useful for smaller exchanges, while gold is more useful for larger transactions… the important thing is that … the free market has found gold and silver to be the most efficient moneys… Thus government is powerless to create money for the economy; it can only be developed by the processes of the free market.” (Pg. 3-4)
He argues, “Opponents of private coinage charge that fraud would run rampant… But if government cannot apprehend the criminal when private coinage is relied upon, what hope is there for a reliable coinage when the integrity of private market place operators is discarded in favor of a government monopoly of coinage? If government cannot be trusted to ferret out the occasional villain in a free market in coin, why can government be trusted when it finds itself in a position of total control over money and may abase coin, counterfeit coin, or otherwise will full legal sanction perform as the sole villains in the market place? It is surely folly to say that government must socialize all property in order to prevent anyone from stealing property” (Pg. 8-9)
He asserts, “the monetary planner might object: ‘All right, granting that it is pointless to increase the money supply, isn’t gold mining a waste of resources? Shouldn’t the government keep the money supply constant, and prohibit new mining?’ This argument might be plausible to those who hold no principled objections to government meddling, though it would not convince the determined advocate of liberty. But the objection overlooks an important point: that gold is not only money, but is also, inevitably, a COMMODITY. An increased supply of gold may not confer any MONETARY benefit, but it does confer a NON-MONETARY benefit---i.e., it does increase the supply of gold used in consumption (ornaments, dental work, and the like) and in … industrial work. Gold mining, therefore, is not a social waste at all.” (Pg. 13)
He explains, “when a businessman borrows or lends money… The loaned funds are SAVED funds… being transferred from saver to borrower. Bank issues, on the other hand, artificially increase the money supply since pseudo-receipts are injected into the market. A bank, then, is not taking the usual business risk… The bank creates new money out of thin air, and does not… have go acquire money by producing and selling its services. In short, the bank is ALREADY and at all times bankrupt; but its bankruptcy is only REVEALED when customers get suspicious, and precipitate ‘bank runs’… Here we conclude that, morally, such banking would have no more right to exist in a truly free market than any other form of implicit theft.” (Pg. 23)
He states, “if government can find ways to engage in COUNTERFEITING---the creation of new money out of thin air---it can quickly produce its own money without taking the trouble to sell services or mine gold. It can then appropriate resources slyly and almost unnoticed, without rousing the hostility touched off by taxation. In fact, counterfeiting can create in its very victims the blissful illusion of unparalleled prosperity. Counterfeiting is… but another name for inflation.” (Pg. 27)
When government injects ‘new’ money into the economy, “Local spending, indeed... DOES get a shot in the arm. The new money works its way … throughout the economic system. As the new money spreads, it bids prices up… new money can only dilute the effectiveness of each dollar. But this dilution… is therefore uneven… some people gain and others lose… people in remote areas of the economy, who have not yet received the new money, finding their buying prices rising before their incomes… The first receivers of the new money gain most, and at the expense of the latest receivers. Inflation, then, confers no general social benefit; instead, it redistributes the wealth in favor of the first-comers and at the expense of the laggards in the race.” (Pg. 28)
He continues, “Inflation also penalizes thrift and encourages debt; for any sum of money loaned will be repaid in dollars of lower purchasing-power than when originally received. The incentive, then, is to borrow and repay later rather than save and lend. Inflation, therefore, lowers the general standard of living in the very course of creating a tinsel atmosphere of ‘prosperity.’” (Pg. 29)
He contends, “Government imposes price controls largely in order to divert public attention from governmental inflation to the alleged evils of the free market.” (Pg. 33)
He asserts, “In addition to removing the checks on inflation, the act of establishing a Central Bank began, banks kept their reserves in gold; now gold flow into the Central Bank in exchange for deposits with the Bank, which are now reserves for the commercial banks. But the Bank itself keeps only a fractional reserve of gold to its own liabilities! Therefore, the act of establishing a Central Bank greatly multiplies the inflationary potential of the country.” (Pg. 41)
He concludes, ‘the prognosis for the dollar and for the international monetary system is grim indeed. Until and unless we return to the classical gold standard at a realistic gold price… the international money system is fated to shift back and forth between fixed and fluctuating exchange rates, with each system posing unsolved problems, working badly, and finally disintegrating… The prospect for the future is accelerating and eventually runaway inflation at home, accompanied by monetary breakdown and economic warfare abroad. This progress can only be changed by a drastic alteration of the American and world monetary system: by the return to a free-market commodity money such as gold, and by removing totally from the monetary scene.” (Pg. 62)
This essay will appeal to libertarians, many conservatives, and similar persons.
Economist Murray Rothbard wrote in the Introduction to this 1964 essay, “Of all the economic problems, money is possibly the most tangled, and perhaps where we most need perspective. Money, moreover, is the economic area most encrusted and entangled with centuries of government meddling. Many people… usually devoted to the free market, stop short at money. Money, they insist, is different---it must be supplied by government and regulated by government. They never think of state control of money as interference in the free market; a free market in money is to them unthinkable. Governments must mint coins, issue paper, define ‘legal tender,’ create central banks… ‘stabilize the price level,’ etc. Historically, money was one of the first things controlled by government, and the free market ‘revolution’ of the 18th and 19th centuries made very little dent in the monetary sphere… Let us first ask ourselves the question: CAN money be organized under the freedom principle? Can we have a free market in money as well as in other goods and services?... we have no more important task than exploring the ways and means of a free market in money.”
He observes, “Through the centuries, two commodities: gold and silver, have emerged as money in the free competition of the market, and have displaced the other commodities. Both are uniquely marketable… and excel in other necessary qualities. In recent times, silver … has been found more useful for smaller exchanges, while gold is more useful for larger transactions… the important thing is that … the free market has found gold and silver to be the most efficient moneys… Thus government is powerless to create money for the economy; it can only be developed by the processes of the free market.” (Pg. 3-4)
He argues, “Opponents of private coinage charge that fraud would run rampant… But if government cannot apprehend the criminal when private coinage is relied upon, what hope is there for a reliable coinage when the integrity of private market place operators is discarded in favor of a government monopoly of coinage? If government cannot be trusted to ferret out the occasional villain in a free market in coin, why can government be trusted when it finds itself in a position of total control over money and may abase coin, counterfeit coin, or otherwise will full legal sanction perform as the sole villains in the market place? It is surely folly to say that government must socialize all property in order to prevent anyone from stealing property” (Pg. 8-9)
He asserts, “the monetary planner might object: ‘All right, granting that it is pointless to increase the money supply, isn’t gold mining a waste of resources? Shouldn’t the government keep the money supply constant, and prohibit new mining?’ This argument might be plausible to those who hold no principled objections to government meddling, though it would not convince the determined advocate of liberty. But the objection overlooks an important point: that gold is not only money, but is also, inevitably, a COMMODITY. An increased supply of gold may not confer any MONETARY benefit, but it does confer a NON-MONETARY benefit---i.e., it does increase the supply of gold used in consumption (ornaments, dental work, and the like) and in … industrial work. Gold mining, therefore, is not a social waste at all.” (Pg. 13)
He explains, “when a businessman borrows or lends money… The loaned funds are SAVED funds… being transferred from saver to borrower. Bank issues, on the other hand, artificially increase the money supply since pseudo-receipts are injected into the market. A bank, then, is not taking the usual business risk… The bank creates new money out of thin air, and does not… have go acquire money by producing and selling its services. In short, the bank is ALREADY and at all times bankrupt; but its bankruptcy is only REVEALED when customers get suspicious, and precipitate ‘bank runs’… Here we conclude that, morally, such banking would have no more right to exist in a truly free market than any other form of implicit theft.” (Pg. 23)
He states, “if government can find ways to engage in COUNTERFEITING---the creation of new money out of thin air---it can quickly produce its own money without taking the trouble to sell services or mine gold. It can then appropriate resources slyly and almost unnoticed, without rousing the hostility touched off by taxation. In fact, counterfeiting can create in its very victims the blissful illusion of unparalleled prosperity. Counterfeiting is… but another name for inflation.” (Pg. 27)
When government injects ‘new’ money into the economy, “Local spending, indeed... DOES get a shot in the arm. The new money works its way … throughout the economic system. As the new money spreads, it bids prices up… new money can only dilute the effectiveness of each dollar. But this dilution… is therefore uneven… some people gain and others lose… people in remote areas of the economy, who have not yet received the new money, finding their buying prices rising before their incomes… The first receivers of the new money gain most, and at the expense of the latest receivers. Inflation, then, confers no general social benefit; instead, it redistributes the wealth in favor of the first-comers and at the expense of the laggards in the race.” (Pg. 28)
He continues, “Inflation also penalizes thrift and encourages debt; for any sum of money loaned will be repaid in dollars of lower purchasing-power than when originally received. The incentive, then, is to borrow and repay later rather than save and lend. Inflation, therefore, lowers the general standard of living in the very course of creating a tinsel atmosphere of ‘prosperity.’” (Pg. 29)
He contends, “Government imposes price controls largely in order to divert public attention from governmental inflation to the alleged evils of the free market.” (Pg. 33)
He asserts, “In addition to removing the checks on inflation, the act of establishing a Central Bank began, banks kept their reserves in gold; now gold flow into the Central Bank in exchange for deposits with the Bank, which are now reserves for the commercial banks. But the Bank itself keeps only a fractional reserve of gold to its own liabilities! Therefore, the act of establishing a Central Bank greatly multiplies the inflationary potential of the country.” (Pg. 41)
He concludes, ‘the prognosis for the dollar and for the international monetary system is grim indeed. Until and unless we return to the classical gold standard at a realistic gold price… the international money system is fated to shift back and forth between fixed and fluctuating exchange rates, with each system posing unsolved problems, working badly, and finally disintegrating… The prospect for the future is accelerating and eventually runaway inflation at home, accompanied by monetary breakdown and economic warfare abroad. This progress can only be changed by a drastic alteration of the American and world monetary system: by the return to a free-market commodity money such as gold, and by removing totally from the monetary scene.” (Pg. 62)
This essay will appeal to libertarians, many conservatives, and similar persons.
September 16, 2024
It may seem strange to think that a book written over 50 years ago could be crucial for understanding today's challenges. But sometimes old truths are forgotten. Want to make sense of inflation and interest rates? This short book is the perfect starting point.
Of all the books on money and monetary policy I've been reading recently, this is the one I would recommend to anyone starting out. It is concise, jargon-free, but comprehensive and insightful. The book begins with the origins of money and concludes by explaining how the gold standard was gradually abandoned in the 20th century. Writing with such clarity requires true mastery of the subject. Rothbard skillfully decides what to include and what to leave out, such as a detailed discussion of the business cycle, which was wisely omitted. In the book's final pages, Rothbard even predicts the emergence of the Euro.
Of all the books on money and monetary policy I've been reading recently, this is the one I would recommend to anyone starting out. It is concise, jargon-free, but comprehensive and insightful. The book begins with the origins of money and concludes by explaining how the gold standard was gradually abandoned in the 20th century. Writing with such clarity requires true mastery of the subject. Rothbard skillfully decides what to include and what to leave out, such as a detailed discussion of the business cycle, which was wisely omitted. In the book's final pages, Rothbard even predicts the emergence of the Euro.
December 17, 2024
I got “What Has Government Done To Our Money?” by Murray Rothbard (1963, chapters added 1973) at a book swap recently, a book that I’d been meaning to read for quite a while. It’s a very quick read at only 134 pages plus the index. It’s a great introduction to the relationship between money and currency and how government has a tendency to destroy the former and devalue the latter. This is a topic I’ve read quite a bit about, so there was little that was revelatory to me, but it’s probably ideal for someone new to economics. I got it for free, so I’ll pass it along to someone else who needs such an introduction.
November 18, 2024
This book is definitely worth reading if you're concerned about how inflation has become so rampant, starting in the 20th century and intensifying, if anything, here in the 2020s. For a book that was first published over six decades ago, it's eerie just how relevant it still is in modern times, perhaps more than ever. It lays out the perfect argument for why returning to the gold standard would be the preferred means to an end, and that fiat money should fade into history, yet never be forgotten so we don't repeat the same mistakes.
July 20, 2025
This is a very good book on how politicians fiddle with money at the expense of people. The history of money should be taught to everyone as this book does. The economy as we know it is not the flow of pieces of paper but the provision of goods and services. The paper is merely a common exchange for these. Rothbard teaches this well, however is marked down by his aggressive and extreme stance, a gold standard would be damaging and is unworkable.
January 23, 2026
A great and brutally eye opening book on the history of money. I knew that modern money is mostly just digits on our screens, but this book exposes the full picture. What’s truly shocking is realizing that the entire planet is trapped in one gigantic financial scam —an elaborate collective delusion everyone agrees not to question. Clear, engaging, explained step by step.
Highly recommend for those who are curious to see what’s behind the curtain.
Highly recommend for those who are curious to see what’s behind the curtain.
July 31, 2025
Rothbard gets the problem with our money system right, and it’s our entire system. Fractional reserve banking, fiat currencies, the widespread use of central banking, those are all conditions that will return to hurt us, without question.
Foundational reading for anyone interested in economics and understanding how we got to where we are in terms of inflation and price sensitivity.
Foundational reading for anyone interested in economics and understanding how we got to where we are in terms of inflation and price sensitivity.
October 8, 2025
It’s a great breakdown to the system of money, currency, and relationship with golds among government, bank; and people. I have a finance degree but still feel the foreign currency parts are a bit hard to understand and dry. Overall it is the book that makes me realized things, and what money means in deeper sense.
October 19, 2024
Everyone should read this book and you can get it for free from the Mises Institute website:
https://mises.org/library/book/what-h...
https://mises.org/library/book/what-h...
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