Murray Rothbard Quotes
Never have the world's moneys been so long cut off from their metallic roots.
Rothbard, Murray N. What Has Government Done to Our Money?. Pine Tree Press, 1963.
When the Muslims dominated most of Spain, under Sharia (Koranic Law), Christians and Jews had to pay a special tax. Also, for many years the Christian areas had to provide 100 virgins a year for the Moorish harems. When the Christians occupied most of Spain in the “reconquest,” they required the few Muslim enclaves left to pay an annual tribute to avoid major war. In 1476 Granada ceased paying the tribute. War followed and in 1492 the Christians reconquered Grenada.
Later, William Jennings Bryan and the Populists turned this point into a major political issue. See Bryan’s Cross of Gold Speech.
The same argument can be made against the modern paper money supply. What Jefferson and most of the founding fathers, with the exception of Alexander Hamilton. did not realize was that the major stability of any kind of money was not only the silver or gold that backed it but the political and legal stability of the nation and the size of its productive economy. Where Jefferson was right however is that all these banknotes at the time were issued by local private banks. The Government had no responsibility for paper money and had no knowledge of how much paper money any bank issues and whether or not they had any silver to back it up. Banks didn’t trust other bank’s notes and would only redeem them at a discount. A $10 note from a South Carolina bank might only be worth $7 in New York and $6 in Boston. The early American monetary system was a mess.
At the time, a bank note—paper money issued be a private bank—was not backed by any gold or silver and was not insured bym the government. A bank could print as much as they wanted, so it was always worth less as the further you were from the particular issuing bank, the less you could get your bank note, because no one knew whether or not the issuing bank would redeem the note or even be in existence. So every private bank note had diminished value for the public. However, carrying gold and silver around and making change for precious metals was difficult and often impractical. So people used banknotes. The same thing happens with credit cards today. The merchant has to pay a fee to the credit card company and the bank and therefore charges us more for whatever we buy. But most consumers and merchants are willing to pay the difference to obtain the convenience of the credit card,
This is a remarkable quotation in that it proposed exactly what the United States did in the Nixon administration. We went off the gold standard and backed American money with the wealth and “full faith and credit” of the nation and all its assets. It has been the strongest and most sought after currency in the world despite the fact that it is not backed by gold or silver as earlier American currency was.
This was a very astute prediction. At the time, the United States gold mining production was second only to South Africa and American currency was based on the gold standard which seemed to all to be permanent. Half a century later, the U. S went off the gold standard.
Murray Newton Rothbard was an American heterodox economist of the Austrian School, economic historian and political theorist. Rothbard was the founder and leading theoretician of anarcho-capitalism, a staunch advocate of historical revisionism and a central figure in the 20th-century American libertarian movement. He wrote over twenty books on political theory, revisionist history, economics, and other subjects.
