Degenerating Currency and Degenerating Culture

8/7/2019 Degenerating Currency and Degenerating Culture

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The Link Between aThe Link Between a

Degenerating CurrencyDegenerating Currencyand a Degeneratingand a Degenerating

CultureCultureAustrian Scholars Conference 2009Austrian Scholars Conference 2009

Ludwig von Mises InstituteLudwig von Mises Institute

Auburn, ALAuburn, AL

March 14, 2009March 14, 2009

Paul T. Prentice, Ph.D.Paul T. Prentice, [email protected]@farmsector.com
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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AxiomAxiom : Man Acts: Man Acts

PostulatePostulate : Human action involves moral: Human action involves moralchoices. Man can act morally (voluntarily)choices. Man can act morally (voluntarily)or immorally (coercively).or immorally (coercively).

In a natural state of liberty, government isIn a natural state of liberty, government isby definition limited to securing mansby definition limited to securing mansnatural rights to life, liberty, and property.natural rights to life, liberty, and property.Free societies choose moral voluntaryFree societies choose moral voluntary

behavior.behavior.Immoral coercive behavior is by and largeImmoral coercive behavior is by and largeshunned.shunned.


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""The Principle of spending money to be paid The Principle of spending money to be paid by posterity, under the name of funding, isby posterity, under the name of funding, is

but swindling futurity on a large scalebut swindling futurity on a large scale .. Thomas JeffersonThomas JeffersonFrom Americas founding until WWI, totalFrom Americas founding until WWI, totalgovernment commandeered 5-10% of thegovernment commandeered 5-10% of theeconomy.economy.This means that 90-95% of humanThis means that 90-95% of humaneconomic action was voluntary (moral).economic action was voluntary (moral).

There was little net accumulation of There was little net accumulation of government debt. Deficits in one timegovernment debt. Deficits in one timeperiod were by and large offset byperiod were by and large offset bysurpluses in a later time period.surpluses in a later time period.


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The moral basis of AmericanThe moral basis of American

society started to change in 1913society started to change in 1913The 16The 16 thth Amendment was the beginning of theAmendment was the beginning of theend of formal property rights (the right to theend of formal property rights (the right to thefruit of ones labor).fruit of ones labor).The simultaneous founding of the Federal ReserveThe simultaneous founding of the Federal ReserveSystem was the beginning of the end to anotherSystem was the beginning of the end to anotherright the right to a hard currency.right the right to a hard currency."Sound money was devised as an instrument for "Sound money was devised as an instrument for the protection of civil liberties against despotic the protection of civil liberties against despotic inroads on the part of governments. Ideologically inroads on the part of governments. Ideologically it belongs in the same class with political it belongs in the same class with political constitutions and bills of rights." constitutions and bills of rights." -- Ludwig vonLudwig vonMisesMises


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TheoremTheorem : A degenerating: A degeneratingcurrency contributes to acurrency contributes to adegenerating society.degenerating society.


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With a fractional-reserve fiatWith a fractional-reserve fiatcurrency, government no longercurrency, government no longer

needed to tax or borrow in orderneeded to tax or borrow in orderto spend. Now it could just printto spend. Now it could just print

and spend.and spend.

The true tax rate is the percentage of The true tax rate is the percentage of resources commandeered by government.resources commandeered by government.Measured by calculating governmentMeasured by calculating government

spending as a percent of total spending.spending as a percent of total spending.Commandeering of resources could nowCommandeering of resources could nowbe accomplished through the printingbe accomplished through the printingpress. Even Keynes acknowledged this.press. Even Keynes acknowledged this.


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Within one generation of theWithin one generation of thecreation of the Fed, the Greatcreation of the Fed, the Great

Depression ensued and theDepression ensued and theWelfare State becameWelfare State became

institutionalized -- the New Deal.institutionalized -- the New Deal.

Constitutional restraints were gradually eroded.Constitutional restraints were gradually eroded.No longer restrained by the necessity to taxNo longer restrained by the necessity to taxbefore it can spend, government is set free tobefore it can spend, government is set free toengage in unlimited free lunch promises.engage in unlimited free lunch promises.These promises have misled a mal-educated bodyThese promises have misled a mal-educated bodypublic into substituting the philosophy of public into substituting the philosophy of individual responsibility with a philosophy of stateindividual responsibility with a philosophy of state

security. security.


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A cultural-political-economicA cultural-political-economic

death spiral beginsdeath spiral begins

Society then demands more freeSociety then demands more freelunches, leading to more fiatlunches, leading to more fiatcurrency, etc.currency, etc.The State crowds-out the moralThe State crowds-out the moralbehavior of the individual.behavior of the individual.


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The State becomes both TheThe State becomes both The

Parent and The SpouseParent and The Spouse

Eventually, young women and menEventually, young women and menbegin to have children without thebegin to have children without themeans to support them.means to support them.Out-of-wedlock births skyrocket.Out-of-wedlock births skyrocket.The family degenerates.The family degenerates.


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Behaviors are disconnectedBehaviors are disconnected

from consequencesfrom consequences

The social safety net grows along with theThe social safety net grows along with thegovernment printing presses.government printing presses.People are empowered to internalizePeople are empowered to internalizebenefits but externalize costs.benefits but externalize costs.Moral hazard becomes the norm forMoral hazard becomes the norm forsociety.society.


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A nation birthed in liberty slowlyA nation birthed in liberty slowlytransforms into a fascist state.transforms into a fascist state.

Generation after generation becomesGeneration after generation becomesincreasingly corrupted.increasingly corrupted.Business is not immune, as can be seen inBusiness is not immune, as can be seen in

the current financial meltdown and bailout.the current financial meltdown and bailout.Fiat currency allows profit to be privatizedFiat currency allows profit to be privatizedwhile losses are socialized.while losses are socialized.


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The spread of collectivist ideas inThe spread of collectivist ideas inthe business world the business world

MurrayMurray

RothbardRothbard ((Americas GreatAmericas GreatDepressionDep ression , Ch. 10), Ch. 10)

The Swope Plan to compulsively cartelizeThe Swope Plan to compulsively cartelizeAmerican business. (General Electric).American business. (General Electric).Endorsed by the U.S. Chamber of Commerce.Endorsed by the U.S. Chamber of Commerce.More and more businessmen become politicalMore and more businessmen become politicalentrepreneurs rather than marketentrepreneurs rather than marketentrepreneurs. (entrepreneurs. ( Thomas DiLorenzoThomas DiLorenzo ,, HowHowCapitalism Saved AmericaCap italism Saved America ))


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Liberty is lost, since politicalLiberty is lost, since political

liberty cannot be disconnectedliberty cannot be disconnectedfrom economic libertyfrom economic liberty

Power over a mans subsistence is power Power over a mans subsistence is power over his will. over his will. Alexander Hamilton Alexander Hamilton""To be controlled in our economic pursuitsTo be controlled in our economic pursuits

means to be controlled in everythingmeans to be controlled in everything ." ." F.A. HayekF.A. Hayek The ultimate sanction of a planned The ultimate sanction of a planned

economy is the hangmaneconomy is the hangman . . F.A. Hayek F.A. Hayek


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Even Atheists Can Be ProphetsEven Atheists Can Be Prophets

(Todays headlines written in 1957)(Todays headlines written in 1957)"When you see that trading is done, not by consent,"When you see that trading is done, not by consent,

but by compulsion - when you see that in orderbut by compulsion - when you see that in orderto produce, you need to obtain permission fromto produce, you need to obtain permission from

men who produce nothing - when you see thatmen who produce nothing - when you see thatmoney is flowing to those who deal, not in goods,money is flowing to those who deal, not in goods,but in favors - when you see that men get richerbut in favors - when you see that men get richerby graft and by pull than by work, and your lawsby graft and by pull than by work, and your lawsdon't protect you against them, but protect themdon't protect you against them, but protect themagainst you - when you see corruption beingagainst you - when you see corruption beingrewarded and honesty becoming a self-sacrifice -rewarded and honesty becoming a self-sacrifice -you may know that your society is doomed." -you may know that your society is doomed." -Ayn Rand.Ayn Rand. Source:Source: Atlas ShruggedAtlas Shrug ged , Francisco's, Francisco's"Money Speech""Money Speech"


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In God We TrustIn God We Trust

Becomes: In Gov We TrustBecomes: In Gov We TrustBut when it comes to money, it should be:But when it comes to money, it should be:In Gold We TrustIn Gold We Trust
http://upload.wikimedia.org/wikipedia/commons/1/1d/United_States_one_dollar_bill%2C_reverse.jpg


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TheoremTheorem : A degenerating currency: A degenerating currencycontributes to a degeneratingcontributes to a degenerating

society.society.

QEDQED


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Final ThoughtsFinal Thoughts""The American people will never knowingly adopt Socialism. But The American people will never knowingly adopt Socialism. But under the name of 'liberalism' they will adopt every fragment of under the name of 'liberalism' they will adopt every fragment of the Socialist program, until one day America will be a Socialist the Socialist program, until one day America will be a Socialist nation, without knowing how it happened nation, without knowing how it happened ." --." -- Norman Thomas.Norman Thomas.Six-time U.S. Presidential candidate for the Socialist Party of Six-time U.S. Presidential candidate for the Socialist Party of AmericaAmerica

Norman Thomas and Gus Hall, the U.S. Communist PartyNorman Thomas and Gus Hall, the U.S. Communist PartyCandidate, both quit American politics, agreeing that theCandidate, both quit American politics, agreeing that theRepublican and Democratic parties by 1970 had adopted everyRepublican and Democratic parties by 1970 had adopted everyplank of the Socialist Party and they no longer had an alternateplank of the Socialist Party and they no longer had an alternateparty platform on which to run.party platform on which to run.

""The state is the coldest of all cold monsters. Coldly it lies, too;The state is the coldest of all cold monsters. Coldly it lies, too;and this lie creeps from its mouth: `I, the state, am the people.'...and this lie creeps from its mouth: `I, the state, am the people.'...Everything about it is false; it bites with stolen teethEverything about it is false; it bites with stolen teeth . " --. " --Friedrich Nietzsche.Friedrich Nietzsche. Source:Source: Thus Spake ZarathustraThus Sp ake Zarathustra

Degenerating Currency and Degenerating Culture

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