Hoppe quote

“You cannot first establish a territorial monopoly of law and order and then expect that this monopolist will not make use of this awesome privilege of legislating in its own favor. Likewise: You cannot establish a territorial monopoly of paper money production and expect the monopolist not to use its power of printing up ever more money.”

– Hans-Herman Hoppe

4 responses to “Hoppe quote

  1. It’s worth bearing in mind that modern governments don’t, usually, print money. They simply borrow money, in the knowledge that their borrowing generates bank reserves which the banks will then use to create new virtual currency (by the well known fractional reserve system). The interesting thing about this is that the result is that government are getting the bum end of the deal; they continually increase their debt. It’s the banks who get “free money”, not the State.

    The recent “Quantitaive Easing” was actually a fairly rare instance of the State overtly printing money, to make up for the collapse in the quantity of virtual bank money due to the collapse of trust within the bank cartel.

    It would actually be better for us citizens if the State did the money printing debt-and-interest-free, rather than the banks doing it. So far as I can tell, the only reason for the State borrowing rather than creating is an historical hangover from the days when money was (at least purportedly) gold certificates. Since you can’t print gold, the State had to borrow it. Now that currency is completely free of any commodity standard, there’s no need for any government to borrow another penny.

    • You are right in your analysis. However, there are limitations built into the present system that don’t exist when the State can simply print money. The main limitation is the willingness of the banks to buy bonds, and the interest rates demanded. It’s an elaborate dance that enriches a key part of the ruling class. You might even say that running deficits is a semi-deliberate policy to enrich the privileged financial interests. At the same time, it puts some limit on the issuing of money. I’ve been in countries without developed financial systems, and the direct printing of money has led to far greater monetary debasement than we have known.

  2. You might even say that running deficits is a semi-deliberate policy to enrich the privileged financial interests.

    I would say that it is entirely deliberate. Bear in mind that politicians generally come from the same class that profit directly from the financial cartel’s privileges.

    I’ve seen it argued that the current system acts as a kind of check’n’balance on money printing, and I think personally that that is a mirage. The Weimar inflation occurred in a developed western economy with a central bank etc. The only protection we have is that neither the government nor the banks want a rerun of Weimar, and thus curb their appetites just enough to prevent one.

    I am of course always and everywhere against monetary expansionism. But if it must be done, a government can be as trusted to avoid a Weimar as a banker can. There is simply no reason to borrow new money at interest, other than that the banking cartel benefit from the repayment of that interest by taxpayers. It is hard to think of any system more crazy, especially the recent moronic situation in which governments borrowed money from banks to bail out banks, who then used it to buy government bonds which have to be paid back, by us, at interest, causing us to borrow even more money from… banks.

    The simple answer of course would be a constitutional prohibition on the State spending more than it takes in taxes. The current national debt? I admit to being not-an-expert here, but there is a plausible argument that the government should smply turn all the bonds already sold into bills.

    • I’m not an expert here either. However, I agree that deficits should at least be made harder to run, and the financial arm of the ruling class should be put in its place. As for the existing debt, I do think a spot of selective defaulting would be a fine thing to try.