Denationalisation of Money: The Argument Refined

It is just 13 months after I commenced writing this study and only a little more than six months since its first publication. It is therefore perhaps not very surprising that the additions I found desirable to make in this Second Edition are due more to further thinking about the questions raised than to any criticisms I have so far received. The comments so far, indeed, have expressed incredulous surprise more often than any objections to my argument.

Most of the additions therefore concern rather obvious points which perhaps I ought to have made more clearly in the First Edition. Only one of them, that on page 127 (page 98 of the First Edition) concerns a point on which further thought has led me to expect a somewhat different development from what I had suggested if the reform I propose were adopted. Indeed the clear distinction between two different kinds of competition, the first of which is likely to lead to the general acceptance of one widely used standard (or perhaps a very few such standards), while the second refers to the competition for the confidence of the public in the currency of a particular denomination, seems to me of ever greater importance. I have now sketched, in a somewhat longer insertion to Section XXIV (pp. 127-129), one of the most significant probable consequences, not originally foreseen by me.

I have made only minor stylistic changes to bring out more clearly what I meant to say. I have even let stand the difference between the more tentative tone at the beginning which, as will not have escaped the reader, gradually changes to a more confident tone as the argument proceeds. Further thought has so far only still more increased my confidence both in the desirability and the practicability of the fundamental change suggested.

Some important contributions to the problems considered here which were made at a Mont Pelerin Society conference held after the material for this Second Edition was prepared could not be used since I had immediately after to start on prolonged travels. I hope that particularly the papers presented then by W. Engels, D. L. Kemmerer, W. Stützel and R. Vaubel will soon be available in print. I have, however, inserted at a late stage a reply to a comment by Milton Friedman which seemed to me to demand a prompt response.

I should perhaps have added above to my reference to my preoccupation with other problems which have prevented me from giving the present argument all the attention which it deserves, that in fact my despair of ever again getting a tolerable money system under the present institutional structure is as much a result of the many years of study I have now devoted to the prevailing political order, and especially to the effects of government by a democratic assembly with unlimited powers, as to my earlier work when monetary theory was still one of my central interests.

I ought, perhaps, also to add, what I have often had occasion to explain but may never have stated in writing, that I strongly feel that the chief task of the economic theorist or political philosopher should be to operate on public opinion to make politically possible what today may be politically impossible, and that in consequence the objection that my proposals are at present impracticable does not in the least deter me from developing them.

Finally, after reading over once more the text of this Second Edition I feel I ought to tell the reader at the outset that in the field of money I do not want to prohibit government from doing anything except preventing others from doing things they might do better.