Liberty Maven

As Ron Paul correctly points out, our currency is relatively worthless compared to the days before the Federal Reserve was created and before we moved away from the Gold Standard.  ($1 in today is about 4 cents in the currency of 1913).  As such, he recommends that the United States legalize “competing currencies” with the idea that the market (you and I) would decide which is better.  Today’s article by the Ludwig von Mises Institute is an except from a book by Murray N. Rothbard (1926-1955) on this subject.

The idea of private coinage seems so strange today that it is worth examining carefully. We are used to thinking of coinage as a “necessity of sovereignty.” Yet, after all, we are not wedded to a “royal prerogative,” and it is the American concept that sovereignty rests, not in government, but in the people.

How would private coinage work? In the same way, we have said, as any other business. Each minter would produce whatever size or shape of coin is most pleasing to his customers. The price would be set by the free competition of the market.

The standard objection is that it would be too much trouble to weigh or assay bits of gold at every transaction. But what is there to prevent private minters from stamping the coin and guaranteeing its weight and fineness? Private minters can guarantee a coin at least as well as a government mint. Abraded bits of metal would not be accepted as coin. People would use the coins of those minters with the best reputation for good quality of product. We have seen that this is precisely how the “dollar” became prominent — as a competitive silver coin.

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