Murray Rothbard

The Panic of 1819 exerted a profound effect on American economic thought. As the first great financial depression, similar to a modern expansion-depression pattern, the panic heightened interest in economic problems, and particularly those problems related to the causes and cures of depressed conditions.

It is important to realize that gold and silver are international commodities and that, therefore, when not prohibited by government decree, foreign coins are perfectly capable of serving as standard moneys.

Apart from medieval China, which invented both paper and printing centuries before the West, the world had never seen government paper money until the colonial government of Massachusetts emitted a fiat paper issue in 1690.

The expansionary operations of the Second Bank of the United States, coupled with its laxity toward insisting on specie payment by the state banks, impelled a further inflationary expansion of state banks on top of the spectacular enlargement of the central bank. Thus, the number of incorporated state banks rose from 232 in 1816 to 338 in 1818.

Out of the bitter experiences of the panic of 1819 emerged the beginnings of the Jacksonian movement, dedicated to hard money, the eradication of fractional reserve banking in general, and of the Bank of the United States in particular.

The Jacksonians were libertarians, plain and simple. Their program and ideology were libertarian; they strongly favored free enterprise and free markets, but they just as strongly opposed special subsidies and monopoly privileges conveyed by government to business or to any other group.

As 'Austrian' business cycle theory has pointed out, any bank credit inflation sets up conditions for boom-and-bust; there is no need for prices actually to rise.

Leading the boom of 1838 were state governments, who, finding themselves with the unexpected windfall of a distributed surplus from the federal government, proceeded to spend the money wildly and borrow even more extravagantly on public works and other uneconomic forms of 'investment.'

The Jacksonians were not monetary nationalists; specie was specie, and they saw no reason that foreign gold or silver coins should not circulate with the same full privileges as American-minted coins.

Only individuals can desire and act. The existence of an institution such as government becomes meaningful only through influencing the actions of those individuals who are and those who are not considered as members.

In order to institute action, it is not sufficient that the individual man have unachieved ends that he would like to fulfill. He must also expect that certain modes of behavior will enable him to attain his ends. A man may have a desire for sunshine, but if he realizes that he can do nothing to achieve it, he does not act on this desire.

All action is an attempt to exchange a less satisfactory state of affairs for a more satisfactory one.

On the market, all is harmony. But as soon as intervention appears and is established, conflict is created, for each may participate in a scramble to be a net gainer rather than a net loser - to be part of the invading team instead of one of the victims.

The majority is not society, is not everyone. Majority coercion over the minority is still coercion.

Lacking the direct test of success or failure, the voter tends to turn, not to those politicians whose measures have the best chance of success, but to those with the ability to 'sell' their propaganda. Without grasping logical chains of deduction, the average voter will never be able to discover the error that the ruler makes.

The politician and the government expert receive their revenues, not from service voluntarily purchased on the market, but from a compulsory levy on the populace. These officials, therefore, wholly lack the pecuniary incentive to care about serving the public properly and competently.

In the market, the fittest are those most able to serve the consumers; in government, the fittest are those most adept at wielding coercion and/or those most adroit at making demagogic appeals to the voting public.

Praxeology - economics - provides no ultimate ethical judgments: it simply furnishes the indispensable data necessary to make such judgments.

Among intellectuals who consider themselves 'scientific,' the phrase 'the nature of man' is apt to have the effect of a red flag on a bull.

The natural law is, in essence, a profoundly 'radical' ethic, for it holds the existing status quo, which might grossly violate natural law, up to the unsparing and unyielding light of reason.

The contemporary political scientist believes that he can avoid the necessity of moral judgments and that he can help frame public policy without committing himself to any ethical position.

The avoidance of explicit ethical judgments leads political scientists to one overriding implicit value judgment - that in favor of the political status quo as it happens to prevail in any given society.

If a man's free will to adopt ideas and values is inalienable, his freedom of action - his freedom to put these ideas into effect in the world - is not in such a fortunate condition.

Economics has revealed a great truth about the natural law of human interaction: that not only is production essential to man's prosperity and survival, but so also is exchange.

'The General Theory' was not truly revolutionary at all but merely old and oft-refuted mercantilist and inflationist fallacies dressed up in shiny new garb, replete with newly constructed and largely incomprehensible jargon.

In order to conquer the world of economics with his new theory, it was critical for Keynes to destroy his rivals within Cambridge itself. In his mind, he who controlled Cambridge controlled the world.

The major reason for Keynes's rejection of communism was simply that he could scarcely identify with the grubby proletariat.

There is no need for government to intervene in money and prices because of changing population or for any other reason. The 'problem' of the proper supply of money is not a problem at all.

The threat of gold redeemability imposes a constant check and limit on inflationary issues of government paper. If the government can remove the threat, it can expand and inflate without cease. And so it begins to emit propaganda, trying to persuade the public not to use gold coins in their daily lives.

It is human nature that when you see something work well, you do more of it. If, in its ceaseless quest for revenue, government sees a seemingly harmless method of raising funds without causing much inflation, it will grab on to it.

It should be clear that modern fractional reserve banking is a shell game, a Ponzi scheme, a fraud in which fake warehouse receipts are issued and circulate as equivalent to the cash supposedly represented by those receipts.

Hoover had prevented 'an immediate attack upon wages as a basis of maintaining profits,' but the result of wiping out profits and maintaining artificial wage rates was chronic, unprecedented depression.

By the 1890s, the leading Wall Street bankers were becoming increasingly disgruntled with their own creation, the National Banking System... while the banking system was partially centralized under their leadership, it was not centralized enough.

Investment bankers do much of their business underwriting government bonds, in the United States and abroad. Therefore, they have a vested interest in promoting deficits and in forcing taxpayers to redeem government debt.

Tied up with his dismissal of natural law is Hayek's continuous, and all-pervasive, attack on reason. Reason is his bete noire, and time and time again, from numerous and even contradictory standpoints, he opposes it.

Now judicial review, beloved by conservatives, can, of course, fulfill the excellent function of declaring government interventions and tyrannies unconstitutional. But it can also validate and legitimize the government in the eyes of the people by declaring these actions valid and constitutional.

The important desideratum is freedom of the market; a country or region will often best develop, depending on conditions of resources or the market, by concentrating on one or two items and then exchanging them for other items produced elsewhere.

The great fact of individual difference and variability (that is, inequality) is evident from the long record of human experience: hence, the general recognition of the antihuman nature of a world of coerced uniformity.

I do not go so far as the extreme male 'sexists' who contend that women should confine themselves to the home and children and that any search for alternative careers is unnatural. On the other hand, I do not see much more support for the opposite contention that domestic-type women are violating their natures.

Nature is simply the environment on earth in which man finds himself, and to treat it as a separate being in the image of man is sheer nonsense.

Private philanthropy is the direct expression of the great Christian principle of the brotherhood of man and the Golden Rule. Private philanthropy indeed is the only valid expression of these ethical principles; compulsory charity through 'social legislation' is the exact contrary: it is the evil imposition of force by one group on another.

To deprecate human reason by saying that none of us is or can be omniscient is absurd, for it takes an impossible standard as the judge of a possible and real condition. All of our knowledge we get from the exercise of our reason; to say that no man can be God and know everything is to take an irrational standard of evaluation.

Famine emerges from a lack of interlocal trade; when one locality's food crop fails, since there is virtually no trade with other localities, the bulk of the people starve. It is precisely the permeation of the free market throughout the world that has virtually ended this scourge of famine by permitting trade between areas.

The State thrives on war - unless, of course, it is defeated and crushed - expands on it, glories in it.

War has generally had grave and fateful consequences for the American monetary and financial system. We have seen that the Revolutionary War occasioned a mass of depreciated fiat paper, worthless Continentals, a huge public debt, and the beginnings of central banking in the Bank of North America.

The State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively 'peaceful' the lifeline of the parasitic caste in society.

Originally, Congress provided in 1793 that all foreign coins circulating in the United States be legal tender. Indeed, foreign coins have been estimated to form 80 percent of American domestic specie circulation in 1800.

Every man must have freedom, must have the scope to form, test, and act upon his own choices, for any sort of development of his own personality to take place. He must, in short, be free in order that he may be fully human.

What is so terrible about transaction costs? On what basis are they considered the ultimate evil, so that their minimization must override all other considerations of choice, freedom, and justice?

In a sense, the market, by expecting a fall in prices, discounts that fall and makes it happen right away instead of later. Expectations speed up future price reactions.