U.S. History

True political liberty demands many and severe restraints; it requires protection against itself, and is no longer safe when it refuses to submit to its own self-imposed discipline.

Recorded at The Mises Circle in Phoenix, Arizona, on April 10th, 2010. Sponsored by James M. Rodney.

Although he writes with confidence, David Frum's rejection of the gold standard is based on faulty history, bad economics, and a belief in the power of Washington to manage the economy.

"A theory that identifies liberty with a single right, the right of doing all that you have the actual power to do, and a theory which secures liberty by certain unalterable rights, and founds it on truths which men did not invent and may not abjure, cannot both be formative principles in the same Constitution."

In the America of Thomas Jefferson's Declaration these categories and institutions were to have the opportunity which they were never fully to achieve in their constricted English home.

Rival explanations — for example ones that claim government deficit spending doesn't help an economy — fit the evidence far better.

There is, however, no denying that the banks have tremendous vested interest in influencing the policies of the Fed, nor that the power being so narrowly vested in the president makes him a special target for influence. Still, the power to control the Fed is not in the hands of its "owners" but firmly in the hands of the federal government and the president of the United States.

The motive was empire on one side and self-government on the other.

"The powers of the federal government were actually enumerated, and thus the states and the union were a check on each other. That principle of division was the most efficacious restraint on democracy that has been devised."

The powers of the federal government are enumerated; it can only operate in certain cases; it has legislative powers on defined and limited objects, beyond which it cannot extend its jurisdiction.