The Federal Reserve is the federal entity charged with determining the quantity of money in the American economy. To boost the economy, it expands the money supply. If the economy gets too “overheated,” it slows the rate of increase.

In other words, the Fed is the government’s monetary central planner. It plans the monetary affairs of hundreds of millions of people through monetary manipulation.

Central planning is a core principle of socialism. Central planning rejects the concept of economic liberty and free markets, which rely on the absence of government interference. Instead, it relies on a board of government officials who make economic decisions for hundreds of thousands or millions of people in a top-down, command-and-control manner.

As anyone from Venezuela, Cuba, and North Korea can attest, socialist central planning always produces crises. That’s because the central planners can never attain the required knowledge to plan a complex market, especially one involving hundreds of millions of participants engaged in countless economic transactions. This is especially true given that people’s subjective valuations are constantly changing. There is no way that the planners can keep up with those changes in valuations.

That’s what produces the crises. Friedrich Hayek, the Nobel Prize winning libertarian economist, called it the “fatal conceit” of the planner, the mindset that convinces the planner that he has the requisite knowledge to plan a complex, ever-changing market.

For more than 100 years, the official money of the United States was gold coins and silver coins, as established by the Constitution. During most of that entire time, there was no Federal Reserve or central bank.

That gold-coin, silver-coin standard provided the soundest money in history. Along with a system based on no income taxation, no immigration controls, no welfare state, no warfare state, and very few economic regulations, America’s monetary system was a major factor in the tremendous increase in rise of the standard of living of the American people in the 19th and early 20th centuries.

In the early 1900s, Americans began giving serious consideration to socialist ideas. The enactment of the Federal Reserve in 1913 was part of that trend. So was the adoption of the federal income tax that same year.

In the 1920s, the Fed began experimenting with expanding the supply of U.S. debt instruments, which promised to pay gold coins and silver coins. When holders of such debt instruments began redeeming their debt instruments by demanding gold and silver, the Fed panicked because they didn’t have the money to honor all the debt instruments they had issued. They began contracting the money supply and ended up over-contracting. Their monetary central planning led to the 1929 stock market crash and then the Great Depression.

Americans were told that the crisis was caused by the failure of America’s free-enterprise system. It was a lie. The crisis was caused by the Federal Reserve, which was a socialist institution. But it was a lie that Americans believed because in their minds, the Federal Reserve had become a part of America’s free-enterprise system.

The Franklin Roosevelt administration used the crisis to destroy the monetary system on which America had been established — the gold-coin, silver-coin standard. Roosevelt replaced that system with a pure paper-money system, one in which federal debt instruments would no longer be redeemable. The money became promises to pay nothing.

Over time, the Fed began expanding the paper money to fund the ever-increasing expenditures for welfare and warfare. All that “bad money” would ultimately drive out of circulation the “good money” that the Constitution had established.

As the system became wash with paper money, the booms and busts that monetary manipulation caused would become a standard part of American life. The economic bubbles and deep recessions were said to be a part of America’s “free-enterprise system.”

Over the decades the Fed became a principal way for federal officials to plunder and loot people through monetary debasement and devaluation. Public officials would spend and borrow to finance their ever-burgeoning welfare-warfare programs, knowing that the Fed would cover their debts by essentially printing the money to pay for them. The losers would be the American people, whose money would be constantly devalued over the decades.

The best part of the Fed system, from the standpoint of public officials, was that many people would not realize that the Fed was behind the monetary debasement that was looting them. When prices would rise across society, people would blame it on rapacious businessmen, not realizing that the price rises were actually just the manifestation of Federal Reserve destruction of the value of money.

A necessary prerequisite to establishing a free and prosperous society is a free-market monetary system, one in which there is a total separation of money and the state. That necessarily means bringing the Fed and its system of socialist central planning to an end.