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Murray Rothbard On The Euro Crisis

Another Monday, another snippet of insight from the Ghost of Libertarianism Past, Murray Rothbard. This week we take a look back at a clip from a 1989 Rothbard delivered at the 1989 Texas State Libertarian Conference entitled “The Current State of World Affairs”. As with many of Rothbard’s speeches, this one could have just as easily been delivered today, as the core ideas of libertarianism are consistent over the years, and there has hardly been a libertarian philosopher as consistent as Murray Rothbard.

In this clip, Murray looks into his crystal ball, and accurately predicts the fate of the European Union as it began the move toward one central bank and one currency shared amongst the various economies of the European Union.

Rothbard points out that the press has built up the idea of a European Union as a gigantic “free trade area”. Of course this would sound wonderful to most free market advocates if it were actually true. But much like the phony “free trade” agreements like NAFTA, the truth of the European Union is far more insidious. The real point of the EU is to take the central banks of all the nations of Europe and solidify their currencies under one, singular central bank. This of course simply gives one bank more power to inflate the currency, and spread the inflationary effects throughout multiple nations. This punishes more productive wealthier nations like Germany, while allowing smaller economies like Greece to spend beyond their means.

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a MWM bump.

a MWM bump.



Awesome. Thanks MM.

I am not sure I am buying Tom Woods' explanation of who benefits from inflation though. The main beneficiaries of inflation are not those who spend newly created money first. It is those who create the money out of nothing. They had nothing, they created money, they spent the money, or lent it out as the case is, and now they have wealth they did not have prior. The Greeks, in this case, are not the winners, the banks that create the money are.

For example, let's say a government contracts out the construction of a bridge. Let's say the government is the entity creating the money. The workers building the bridge get paychecks, their wages did not increase relative to workers building the house next store and they pay the same price for goods and services as the builders of the house. The bridge builders are not the winners, the new owner of the bridge is The losers were, all at once, any and all people who held the units of inflated currency, in direct proportion to the number of currency units they held. Each currency unit's value decreased by the rate of increase of the inflation. So if there were 100 currency units at the time the paychecks were spent, and there was 5 currency units dispersed, then each unit holder, at large, lost 5% of the value of his units.

I have heard Tom and RP talk about the people you spend newly created money first, but, either I cannot comprehend it or it's wrong.

Can anyone shed some light?

I'm actually under the

I'm actually under the impression that Ron Paul and Tom Woods use the terms interchangeably. Because the people who create the money ARE the people who get to use it first because they now have money that came out of nowhere.

In turn, the people who get to use the money second, third, fourth etc. still have an advantage n my opinion (although less and less every time money changes hands because demand will increase prices of the local stores that the previous people visited) because they're getting money that wasn't supposed to be in the market in the first place. For example, let's say the money changes hands 4 times and the 4th guy is a guy who sells backpacks. The guy who sells backpacks now gets a new customer that wouldn't have even bought anything had no money been created. So as prices increase, the people wo didnt get to touch the money once now have diminished money.

What made you think that "people who create the money" and "people who spend the money first" aren't the same person, by the way? I'm 100% sure they are referring to the same entity because the creator spends it first.

It's kind of like how the MIC works. The Fed monetized debt therefore allowing the Treasury a humongous budget to spend, and they give a lot of contracts to military contractors and stuff. So both the warmongers who love the MIC and the MIC itself receive superb benefits from nflation. I suppose that in this example, I would consider the warmongering Congressmen as the first party that uses the money first, and the MIC as the party that gets to use the money second. Since the money hasn't changed hands a lot yet, I use the slang term and group the MIC and warmongering Congressmen into a single group and loosely say that Both of them got to use the money "first."


So aggravating that the cycle of events continues to perpetuate itself

mondays with Murray

With a bonus Tom Woods video! It's like Christmas in November

I was feeling

I was feeling extra generous, as we approach the holiday season.

*Advancing the Ideas of Liberty Daily*