The Bitcoin Standard

Chapter 7Sound Money and Individual Freedom

“[G]overnments believe that … when there is a choice between an unpopular tax and a very popular expenditure, there is a way out for them—the way toward inflation. This illustrates the problem of going away from the gold standard.”

—Ludwig von Mises¹

Under a sound monetary system, government had to function in a way that is unimaginable to generations reared on the twentieth‐century news cycle: they had to be fiscally responsible. Without a central bank capable of increasing the money supply to pay off the government debt, government budgets had to obey the regular rules of financial responsibility which apply to every healthy normal entity, and which monetary nationalism has attempted to repeal and state education attempted to obfuscate.

For those of us alive today, raised on the propaganda of the omnipotent governments of the twentieth century, it is often hard to imagine a world in which individual freedom and responsibility supersede government authority. Yet such was the state of the world during the periods of greatest human progress and freedom: government was restrained to the scope of protection of national borders, private property, and individual freedoms, while leaving to individuals a very large magnitude of freedom to make their own choices and reap the benefits or bear the costs. We start by critically examining the question of whether the money supply needs to be managed by the government in the first place, before ...