Mises Wire

The Government Seeks Totalitarian Money

The Global Currency Plot: How the Deep State Will Betray Your Freedom, and How to Prevent It
by Thorsten Polleit
Ludwig von Mises Institute, 2023; 190 pp.

Thorsten Polleit’s outstanding new book is packed with insights about both the philosophy of economics and economic policy, and as he shows, his philosophical standpoint enables him to grasp the essence of the financial world, of which he is a master.

Polleit is a follower of Ludwig von Mises, Murray Rothbard, and Hans-Hermann Hoppe, and like them, he argues that economics offers us a priori truths about the world. “What is meant by the term a priori theory? The term a priori means that something is evident, that can be regarded as true and universal, independent of experience.” By “independent of experience,” Polleit of course doesn’t mean that a priori truths have no bearing on experience—the point of a priori truths is that they’re known to be true of experience just by thinking about them—but rather that their truth doesn’t depend on empirical testing. In economics, unlike the physical sciences, we don’t have adequate empirical grounds to establish laws: “there are “too many” variables and no quantitative constants.

In this connection, Polleit makes a brilliant observation. Because many socialists do not understand the relevant a priori laws, they fail to recognize that socialism is inherently tyrannical.

Even the worst experiences with socialism—think of Stalin, Hitler, Mao Zedong, Pol Pot—are not enough to discredit it once and for all. This is mainly due to the following reason: in the field of human action, of human history, experience can never provide the convincing and conclusive proof that something had to proceed as it did. . . . It is precisely this insight that the socialists make active use of. They explain that socialism, where and when it was put into practice, did not produce the hoped-for results, with the following: socialism has not been implemented consistently enough.

To refute this defense requires resort to the a priori in two ways, one of which will be well known to most readers of the Mises Wire. I refer of course to Mises’s calculation argument, which shows that in the absence of money prices, a socialist system cannot engage in economic calculation and is doomed to collapse.

But this argument by itself does not suffice to answer so-called democratic socialists, who do not call for full-scale central planning but want a “mixed” system that does not entirely dispense with the market. To close the gap, Mises makes effective use of a “slippery slope” argument against such people—interventionism can quickly lead to socialism. Polleit reinforces Mises’s logic by raising another point as well. It is an a priori truth that the state is an oppressive institution that by its nature violates rights; furthermore, over the course of its existence, it will become more oppressive:

From the point of view of the logic of action, the state—if it is a territorial compulsory monopolist to which the individual is subjected to, for better or worse—is contradictory and thus literally wrong. It de facto degrades the individual to a slave, and this is incompatible with the logic of human action—because property, self-ownership, is an indispensable category of human action. . . . The modern democratic state especially is continuing to expand. Attempts to tame and enclose it prove to be an illusion. Even a minimal state becomes a maximal state sooner or later. (emphasis original)

Here Polleit draws on the great German sociologist Franz Oppenheimer (who, Polleit tells us, was the doctoral supervisor of Ludwig Erhard, the man responsible for the German “economic miracle” after World War II) and Hans Hoppe. I’d advise readers to pay particular attention to the sentence Polleit has italicized, as the book’s central argument depends on taking the proposition it expresses to be an a priori truth.

What does the contemporary state have in store for us? In answering this question, Polleit relies on another of the most important of the a priori laws of human action: because human beings differ, they benefit from specialization and trade. Given this undeniable truth, we must next endeavor to determine the requirements of extensive trade, and here we soon come to money, the commonly accepted medium of exchange.

Because the advantages of trade increase the wider the market is, a free market world would ideally use the same money:

[The thoughts presented in this book] are based on a central insight: if there were a global system of free markets in which everyone could freely buy what they wanted to buy, and in which producers could freely produce what consumers wanted, there would be a free market for money, and—through a voluntary agreement of all parties—a single world currency would emerge. This is because that would be economically optimal. If everyone in the world uses the same money, the productive effect of money is exploited to the full: the economic calculation carried out with money—calculating with money prices—is thus optimized for everyone. (emphasis original)

Polleit now combines this insight with his earlier argument that the ever-expanding state seeks to bring more and more resources under its control. In order to accomplish this, the state must seize total control of the monetary system, not allowing any commodity currency to compete with its own fiat money. And—another crucial point—because national currencies can be traded against each other, it becomes imperative to establish a unique world fiat currency that allows no evasion or escape.

In other words, our current world monetary order parallels the free market tendency toward a single world currency:

If states monopolize money production, there is no free market for money on which a single world currency could develop through voluntary decisions by people. In that case, national fiat currencies exist for the time being. But this is not a stable equilibrium. Rather, here too, there is a tendency to create a single world currency, because, as I said, it is optimal if everyone trades and calculates with the same currency.

A fiat money of the sort imagined here would subject the world to a dictatorship of socialistically inclined global bankers. As Polleit explains, only free market money in a “private law society” offers lasting refuge from the “dystopian nightmare” the globalists have in mind for us. Polleit’s book will encourage resistance to their plans.

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