Sunday, February 16, 2014

My letter to Nat'l Review Magazine re: Mr. Beckworth's wrong prescription for monetary stability

Re: David Beckworth's review of Money, Gold, and History by Lewis E. Lehrman

Dear Sirs:
Austrian School economists recommend monetary freedom, not any specific state-supported money.  End legal tender laws and the most marketable commodities will be chosen as mediums of exchange.  Despite Mr. Beckworth's claims to the contrary, government imposed money is a cause of and not the solution to the business cycle.  Furthermore, Mr. Beckworth's idea that the supply of money should be manipulated to meet its demand, that the central bank should ensure total dollar spending, and that it should intervene to manipulate exchange rates is nothing more than the statists' failed attempt to benefit special interest groups, usually exporters and recipients of government welfare.

The gold standard brought unprecedented prosperity to the far corners of the world.  As usual, Ludwig von Mises said it best in his magnum opus Human Action:
"The gold standard was the world standard of the age of capitalism, increasing welfare, liberty, and democracy, both political and economic.  In the eyes of the free traders its main eminence was precisely the fact that it was an international standard as required by international trade and the transactions of the international money and capital market.  It was the medium of exchange by means of which Western industrialism and Western capital had borne Western civilization into the remotest parts of the earth’s surface, everywhere destroying the fetters of age-old prejudices an superstitions, sowing the seeds of new life and new well-being, freeing minds and souls, and creating unprecedented progress of Western liberalism ready to unite all nations into a community of free nations peacefully cooperating with one another."

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