October 12, 2016 Print

Sound money is crucial to a healthy, thriving economy, but it’s notoriously difficult to prevent governments from debasing currency that they control. During Atlas Network’s 2016 Liberty Forum in Miami, economist Lawrence White delved into the history of sound money and currency manipulation, with a whirlwind tour of both the intellectual history of money and real-world examples of how money has been abused as a tool of political and financial exploitation by governments throughout the world. White delivered his remarks, titled “The Classical Liberal Tradition of Sound Money,” during Atlas Network's 2016 Liberty Forum as the 4th annual Liggio Lecture, named after Atlas Network’s late executive vice president of academics, Leonard Liggio, who was one of White’s mentors for four decades.

“As the commonly accepted medium of exchange, money is the good on one side of every transaction,” White said. “State disruptions to the supply of money, or to the demand for money, boggle not just one market but the entire economy. Historically, one of the oldest abridgements of economic freedom is the state’s monopoly over the mint. It goes back to ancient times, because as soon as merchants developed the technology of coinage, mint monopoly could provide a major source of revenue. Because state abuse of coinage is so ancient, it was a leading-edge issue on which the ideas of economic liberalism began to form.”

White continued, “The scope for private institutions to supply money grew during the middle ages as commercial banks provided a better money than the royal mints. But today it is heavily circumscribed by laws and regulations. You and I are restricted in how we can spend and transfer the money we own. The little freedom that remains is under attack.”

White’s lecture surveys the economic thought about sound money from the Scholastics in medieval Europe like Nicole Oresme, Gabriel Biel, and Juan de Mariana, to the Scottish enlightenment thinkers like David Hume and Adam Smith, to 19th century classical liberals like David Ricardo and Thomas Paine, through to 20th century titans of free-market thought like Friedrich A. Hayek, Ludwig von Mises, and Milton Friedman. Figuring out how to prevent governments from debasing currency and defrauding the people is an age-old problem, with conflicting and often contentious strategies from these renowned thinkers.