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Legalize Competing Currencies – Article by Ron Paul

Legalize Competing Currencies – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 16, 2012
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I recently held a hearing in my congressional subcommittee on the subject of competing currencies.  This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America.

This monopoly is maintained using federal counterfeiting laws, which is a bit rich.  If any organization is guilty of counterfeiting dollars, it is our own Treasury.  But those who dare to challenge federal legal tender laws by circulating competing currencies – at least physical currencies – risk going to prison.

Like all federally created monopolies, the federal monopoly on money results in substandard product in the form of our ever-depreciating dollars.

Yet governments have always sought to monopolize the issuance of money, either directly or through the creation of central banks. The expanding role of the Federal Reserve in the 20th century enabled our federal government to grow wildly larger than would have been possible otherwise.  Our Fed, like all central banks, encourages deficits by effectively monetizing Treasury debt.  But the price we pay is the terrible and ongoing debasement of our money.

Allowing individuals and business to use alternate currencies, especially currencies backed by gold and silver, would expose the whole rotten system because the marketplace would prefer such alternate currencies unless and until the Fed suddenly imposed radical discipline on its dollar inflation.

Sadly, Americans are far less free than many others around the world when it comes to protecting themselves against the rapidly depreciating US dollar.  Mexican workers can set up accounts denominated in ounces of silver and take tax-free delivery of that silver whenever they want.  In Singapore and other Asian countries, individuals can set up bank accounts denominated in gold and silver.  Debit cards can be linked to gold and silver accounts so that customers can use gold and silver to make point of sale transactions, a service which is only available to non-Americans.

The obvious solution is to legalize monetary freedom and allow the circulation of parallel and competing currencies.  There is no reason why Americans should not be able to transact, save, and invest using the currency of their choosing.  They should be free to use gold, silver, or other currencies with no legal restrictions or punitive taxation standing in the way.  Restoring the monetary system envisioned by the Constitution is the only way to ensure the economic security of the American people.

After all, if our monetary system is fundamentally sound– and the Federal Reserve indeed stabilizes the dollar as its apologists claim–then why fear competition?  Why do we accept that centralized, monopoly control over our money is compatible with a supposedly free-market economy?  In a free market, the government’s fiat dollar should compete with alternate currencies for the benefit of American consumers, savers, and investors.

As Austrian economist Ludwig von Mises explained, sound money is an instrument that protects our civil liberties against despotic government. Our current monetary system is indeed despotic, and the surest way to correct things simply is to legalize competing currencies.

Representative Ron Paul (R – TX), MD, is a Republican candidate for U. S. President. See his Congressional webpage and his official campaign website

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.

What People Mean When They Talk About Freedom – Article by Bradley Doucet

What People Mean When They Talk About Freedom – Article by Bradley Doucet

The New Renaissance Hat
Bradley Doucet
April 11, 2012
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Most people I talk to believe that freedom is important. They generally want to be free, and they want others to be free as well. The disagreements only begin when we start discussing what, exactly, we mean by “free.” These disagreements over the meaning of liberty underlie a good part of the much-hyped polarization of politics in the western world.

One meaning, or set of meanings, is reflected in Freedom House’s annual Freedom in the World survey, whose findings for 2009 are available here. Freedom, according to this survey, is “the opportunity to act spontaneously in a variety of fields outside the control of the government and other centers of potential domination.” If that seems a little vague, the organization’s website gets more specific, breaking freedom down into two broad categories: political rights and civil liberties. Political rights allow people to “vote freely for distinct alternatives in legitimate elections, compete for public office, join political parties and organizations, and elect representatives who have a decisive impact on public policies and are accountable to the electorate.” Civil liberties include “freedoms of expression and belief, associational and organizational rights, rule of law, and personal autonomy without interference from the state.”

In the latest survey, fully 47 countries, ranging from Canada to Barbados, from the United States to Uruguay, get a perfect score of 1 for political rights and a perfect score of 1 for civil liberties. Only nine countries, including North Korea, Somalia, and Sudan, get the worst possible score of 7 on both counts. To get a sense of the spread, Argentina gets a pair of 2s, Turkey gets 3s, Kenya gets 4s, Ethiopia 5s, and Iran and Zimbabwe 6s.

Setting the Bar Too Low

This survey, however well-intentioned, suffers from two glaring deficiencies. First, it sets the bar way too low. By no stretch of the imagination are there 47 countries in the world that deserve perfect scores for freedom, even if we accept Freedom House’s criteria. Are civil liberties really perfectly safe in England, with surveillance cameras on every other street corner? Should the American Civil Liberties Union close up shop in an age of warrantless wiretaps, enhanced interrogation techniques, and jail time for smoking a joint? And here at home, how many Canadians really imagine that our proroguing Prime Minister is fully accountable to the public? I’m not saying I’d rather live in Zimbabwe—or Argentina, for that matter—but even in these relatively free countries of the Anglosphere, there remains plenty of room for improvement.

The other glaring defect in Freedom House’s survey is that it completely ignores economic freedom. There is no mention, for instance, of red tape, which costs small- to medium-sized Canadian businesses over $30 billion a year. No mention, either, of the eminent domain abuse that is rampant in the United States, robbing small property owners of their homes and shops in order to help some developer with deep pockets.

The Economic Freedom Network—with members in over 70 nations around the globe, including Canada’s own Fraser Institute—provides a picture of economic freedom in the world with its annual report. By its definition, economic freedom exists when property acquired “without the use of force, fraud, or theft is protected from physical invasions by others” and when individuals “are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.” More specifically, according to its latest report, to have high economic freedom, a country has to protect private property, enforce contracts, and have a stable monetary environment. “It also must keep taxes low, refrain from creating barriers to both domestic and international trade, and rely more fully on markets rather than the political process to allocate goods and resources.”

Compare and Contrast

Many of the countries that score highest in economic freedom are also at the top of the list in Freedom House’s survey of political rights and civil liberties, and conversely, most of the least free score dismally on both surveys. In fact, a graph in the Economic Freedom Network’s report shows this strong positive correlation. But there are some notable exceptions. Hong Kong and Singapore, first and second respectively for economic freedom with scores of 8.97 and 8.66 out of a possible 10, are only middling according to the Freedom House survey; and the United Arab Emirates (7.58) and Bahrain (7.56), 19th and 20th for economic freedom, are quite repressive on other counts, both scoring 5.5 according to Freedom House (with 7 being the worst possible combined average score).

Would I rather live in Singapore than in Canada, which placed 8th for economic freedom with a respectable score of 7.91? The trade-off in terms of civil liberties would probably be too high. But I would gain something in exchange for my loss. According to the Economic Freedom Network’s report, countries with higher economic freedom have substantially higher per capita incomes, higher growth rates, longer life expectancies, better environmental performance, and less corruption. The poor are also better off in absolute terms in countries with higher economic freedom, and no worse off in relative terms.

As a libertarian, I value both civil and economic liberty. I fault the authoritarian segment of the political right for running roughshod over the former, but I also fault an equally authoritarian segment of the political left for trampling the latter. But beyond this, I fault both sides of the spectrum for fetishizing political rights. Democracy is a tool, and it can be a useful one, but what good are elections if our representatives are not checked by a strict constitution from taking away our civil and economic freedoms? What good is accountability if the people don’t know or appreciate what is being taken away from them? Looking at it from the opposite perspective, if we cared enough and were wise enough to guard our civil and economic freedoms properly, would it matter very much anymore who administered the machinery of government? Yet without constitutional limits and the will to enforce them, political rights amount to the “freedom” to force others to do what we want—a power that interest groups will fight tooth and nail to wield.

As I am regularly reminded when I discuss libertarianism with my fellow Canadians, this is a pretty good place to live. Canada scores better than or as good as most places on the planet in terms of political rights, civil liberties, and economic freedom. This is a fact, and I am grateful for it. But does that mean we shouldn’t try to make life even better? Why are we so complacent, so ready to accept “pretty good” as good enough? Why are so many intelligent, educated people uninterested in even exploring what history’s great thinkers have had to say about liberty? Few Canadians, I wager, have even heard of Benjamin Constant, for instance. A champion of individual freedom two centuries ago, he viewed political rights as a collective kind of freedom, present in the ancient world, which was “compatible with… the complete subjection of the individual to the authority of the community.” Yes, Canada is a pretty good place to live, all things considered. When individuals are no longer subjected to the dictates of their fellows, free to live as they see fit and responsible for the consequences of their own actions, it will be a great place to live.

Bradley Doucet is Le Quebecois Libré‘s English Editor. A writer living in Montreal, he has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness. He also writes for The New Individualist, an Objectivist magazine published by The Atlas Society, and sings.