1. THE NATURAL ORDER OF MONEY PRODUCTION

The first two parts of this book were devoted to a discussion of the two basic modes of money production: the natural production of money on the free market, and inflation. We studied their general characteristics, but also went into a more detailed study of the subcategories that come into play. Money and money certificates, credit money, paper money, counterfeiting, legal tender, monopoly, and suspension of payments are such subcategories of the production of money.

1. TOWARD NATIONAL PAPER-MONEY PRODUCERS: EUROPEAN EXPERIENCES

The paper-money systems that presently dominate the scene in all countries of the world have developed out of European fractional-reserve banking starting in the seventeenth century. The driving force behind this development was government finance which found in the new institutions a ready source for ever-increasing loans.1

1. THE EMERGENCE OF PAPER-MONEY STANDARDS

The Fed’s suspension of payments in August 1971 created in one mighty stroke a great number of paper monies. Before that date, all national currencies were basically fractional-reserve certificates for gold (via the U.S. dollar). The suspension “transubstantiated” these certificates into paper monies, with all the concomitant effects we have discussed above.

1. TWO CONCEPTS OF CAPITALISM

The ancient philosophers generally took a negative attitude toward labor, commerce, and money. The outlook of medieval Christian scholastics was decidedly different. Their more favorable perspective on commerce, entrepreneurship, and market forces made for fertile intellectual soil for the growth of economic science and the application of ethics to economics. It was the scholastic tradition that first saw the grave problems associated with the legal monopolization of money production.

BOOKS AND ARTICLES

Anderson, Benjamin. The Value of Money. Reprint. Grove City, Penn.: Libertarian Press, 1917.

Aquinas, Saint Thomas. Summa Theologica. 5 vols. New York: Benziger, 1948.

———. Commentary on the Nicomachean Ethics. 2 vols. Chicago: Regnery, 1964.

———. On Kingship, To the King of Cyprus. Toronto: Pontifical Institute of Mediaeval Studies, 1949.

Aristotle. Politics.

———. Nicomachean Ethics.

Preface

Introduction

The public institutions themselves, of peoples... ought to make all human society conform to the needs of the common good; that is, to the norm of social justice. If this is done, that most important division of social life, namely, economic activity, cannot fail likewise to return to right and sound order. (§110)

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Africa in Chaos (Ayittey), 221n16

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American colonies, 203–06

American Constitution, 204–06, 242