The Cultural and Political Consequences of Fiat Money

It may seem unusual that an economist would talk about culture. Usually, we talk about prices and production, quantities produced, employment, the structure of production, scarce resources, and entrepreneurship.
But there are certain things that economists can say about the culture, and more precisely, that economists can say about thetransformation of the culture. So what is culture? Well, to put it simply, it is the way we do things. This can include the way we eat – whether or not we dine with family members on a regular basis, for example – how we sleep, and how we use automobiles or other modes of transportation. And of course, the way we produce, consume, or accumulate capital are important aspects of the culture as well.
Limiting Budget Is the Key to Limiting Governments Now to understand the effects of fiat money on the culture, we must first look at the relationship between financial systems and the nature of government.
A number of economists have observed that fiat money is a prerequisite for tyrannical government, and the idea that monetary interventionism paves the way for tyrannical government is very old and goes back to Nicolas Oresme in the fourteenth century. It has not been emphasized in the twentieth century, but Ludwig von Mises is among the few who has stressed the importance of this relationship.

This post was published at Ludwig von Mises Institute on Jrg Guido Hlsmann.