No more government monopoly on the production of money

The concept of private money is not new and is well founded in economic research. It has been long professed by great economists including proponents of Austrian Economics, such as 1974 Memorial Prize for economic science laureate Friedrich Hayek.

Hayek’s ideas about the benefits and advantages of denationalised money are based on sound, rich economic theory and research, which suggests that broader adoption would be advantageous to the world, as it can contribute to economic freedom.

Essentially, Hayek believed that no government is politically and intellectually capable of evaluating the amount of money needed for economic development. Thus, if a society concentrates economic power in the state, it risks losing its political and intellectual freedoms. Hayek was fully aware that governments, like all monopolies, would not relinquish control easily. A quote often attributed to him testifies: “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”

The issue with centralisation

The issue with government management of money is that it is predicated on the belief that one person, or a small group of people can know enough to make centralised decisions. Economies are extremely complex, and the collection of aggregated data in order to assign resources by centralised authority leads to sub optimum results. By having an absolute monopoly on money production through interest rates and deficits, governments and central banks control a means of central planning that greatly reduces economic freedom.

Hayek proposed that the market is wiser than us all. Free market pricing is therefore based on the principle that individuals, acting in their own interest, is an optimum way to manage resources, as opposed to central planning where no one entity is capable of absorbing enough knowledge to do so efficiently.

Economic Freedom

Economic freedom can be summarised as to how freely an economy is left to individual decentralised activity as opposed to centralised control of allocation of resources. The research on the benefits of economic freedom is vast – free market economies are more prosperous, more progressive, and grow faster and more sustainably. Quality of life in free market economies is also greater, with average incomes 7.1 times higher than in the least free quartile. Extreme poverty is also non-existent in the freest countries, which equates to better life expectancies and overall health.