Check out my latest column over at the American Free News Network!
Ever wondered what a global fiat currency might result in? The Mises Institute’s Thorsten Polleit has some thoughts, and their take is that it would be, well, not ideal. Here’s a relevant tidbit:
The decisive factor is how this single world currency comes about, and who issues it. In a free market for money—in a natural process—a single world currency would emerge from the voluntary agreements of the market participants: the money demanders would decide which commodity they want to use as money. It is impossible to predict with certainty what the outcome of the free choice of currency would be; after all, it resembles a discovery procedure whose outcome is not known in advance. However, it can be assumed that a commodity currency would be created, that gold or possibly a cryptounit would be chosen as the money base.
OK, fair enough. But how many of us think that this would be how 
this world fiat currency came about? Not me – probably not you, either. More likely I think it would be imposed on us, and that’s anathema to liberty. Mr. Polleit continues:
However, if states monopolize money production, a single world currency cannot develop through voluntary decision-making. In 2023, several national fiat currencies coexist. But this is not a stable equilibrium. Rather, here too, there is a tendency to create a single world currency—because it is optimal for everyone in the world to trade and calculate with the same currency. This is what democratic socialism takes advantage of.
Creating a single world currency is a means to an end for democratic socialism. Its adherents recognize that a single world state cannot be established directly. The national resistance that would have to be overcome is too great. The detour, the indirect way, by which democratic socialism can achieve its goal is by creating a single world currency under state control. The eurozone can serve as a “model” for this process. We’ve seen nations voluntarily give up their monetary sovereignty and accept a single fiat currency that is issued by a supranational central bank. Within the eurozone, money is no longer controlled by individual national parliaments.
And that’s what the international socialist community is shooting for. Also, the elimination of cash is one of those goals:
However, a world central bank can easily enforce the abolition of cash by shutting down cash production. Without cash, the money is “trapped” in bank accounts and can no longer be withdrawn from the banking sector. The negative interest rate policy can then be implemented unchecked. Money holders no longer have the opportunity to evade the devaluation of money and savings. Individual states welcome the abolition of cash for another reason: they will be able to track the financial dispositions of citizens and companies, who will only be able to make payments electronically: banks will be required to provide full information on the payments and financial assets of bank customers at all times. As a result, the taxation possibilities of states will be increased immensely.
Feature, not bug.
Read the whole article (it’s long and turgid in places) but bear a few things in mind:
- This global fiat currency and the abolition of cash wouldn’t only expose your reserves to easier taxation, presumably by direct withdrawal. It would also open every financial transaction in your life to government scrutiny, and even refusal. Want to buy some primers to reload a bunch of 12-gauge hulls for a trap shoot this weekend? Sorry, you’re over your government-determined allotment of sport shooting supplies – disallowed. Want to buy an F-150 to pull your camper? Sorry, but you already own a Chevy Tahoe, that puts you over your carbon limit – disallowed. Bye-bye, privacy.
- Bear in mind that there would have to be some global governing agency for a state-monopoly global fiat currency. How will this be handled? By the UN? The UN couldn’t find its own ass with both hands and written instructions. Some international banking body? Either way, it’s a huge blow to national sovereignty.
Mr. Polleit continues:
A world state, equipped with its own global fiat money monopoly, would open a dark chapter in the history of humankind and lead to a civilizational catastrophe. The world state would have no competitors to fear. No one could escape from it. Emigration would be impossible; the world state would be everywhere. The hope that the expansion of the power of the world state could be effectively curbed by democratic electoral acts would prove to be illusory as soon as oligarchization set in—and this is to be expected, of course, as already impressively illustrated by the expansionist drive of the nation-states in recent decades.
It is downright absurd to think that a world state with its own fiat world currency would not sooner or later mutate into a totalitarian tyrant.
Which would be precisely my fear.
Now, by all means, continue on to the second half of this lengthy treatise, which describes a voluntary global currency, a free market for money, as it were. I’m skeptical that this could happen. The world is too big a place, with too many nations with governing philosophies and resources that are too different, to make any one global voluntary currency work; even the Eurozone has problems with this, problems stemming from forcing the productive (by European standards, anyway) Germans into a common currency with the debt-ridden PIGS nations. That, on a global scale, is not going to happen voluntarily.
If there is to be a world fiat currency, it will be imposed. And it will be the end of individual liberty and free markets.
