The late economist Irving
Fisher, considered by the late Milton Friedman to be the greatest late economist
America ever produced (a remarkable statement by Friedman), once said something
to the effect that inflation was the same as “legal counterfeiting.” The late Paul Samuelson reportedly echoed
this sentiment, although we have not be able to find the source for either
Fisher or Samuelson. It doesn’t matter,
though, because we agree with it, at least up to a point.
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| Irving Fisher |
It is confusing,
however. What did Fisher mean, for
example, by putting “legal” in front of “counterfeiting”? Is something otherwise unethical or immoral
okay just because the government does it?
Is it okay to steal — and counterfeiting is stealing, regardless who
does it — just because someone is strong enough to do what he wants? Does might make right?
To hear the Keynesians and
others talk, yes, might makes right, and the State is (as Thomas Hobbes put it
in Leviathan) a “Mortall God” to be obeyed on Earth as the Immortal God
is obeyed in Heaven. According to
Hobbes, private property doesn’t really exist if the government wants to take
it. People only have private property
against other people, not the State. As
he explained in Chapter XXIX of Leviathan,
A
Fifth doctrine, that tendeth to the Dissolution of a Common-wealth, is, “That
every private man has an absolute Propriety in his Goods; such, as excludeth
the Right of the Soveraign.” Every man has indeed a Propriety that excludes the
Right of every other Subject: And he has it onely from the Soveraign Power;
without the protection whereof, every other man should have equall Right to the
same. But if the Right of the Soveraign also be excluded, he cannot performe
the office they have put him into; which is, to defend them both from forraign
enemies, and from the injuries of one another; and consequently there is no
longer a Common-wealth.
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| Thomas Hobbes |
How does this destroy private
property? By taking what belongs to another
as if it were “legal” to do so, thereby making private ownership completely
irrelevant. As John Locke pointed out,
For
if any one shall claim a Power to lay and levy Taxes on the
People, by his own Authority, and without such consent of the People, he
thereby invades the Fundamental Law of Property, and subverts the end of
Government. For what property have I in that which another may by right take,
when he pleases to himself? (Second Treatise on Government, § 140.)
So what has this got to do
with counterfeiting? Counterfeiting is
nothing more than issuing claims on other people’s wealth to which the issuer
of the claim has no legal right. For
example, someone who manufactures fake Barbie Dolls is stealing from the maker
of real Barbie Dolls, which loses a sale for every fake doll sold: theft.
Similarly, someone who issues
fake paper money or false coin is stealing from whoever ends up redeeming the
currency. When the government issues the
currency, someone who issues fake money is stealing from the people who
end up making good on the counterfeit coins or bills: the taxpayer.
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| John Locke |
It doesn’t make matters any
better when it is the government itself that issues the fake money. The government can only make good on the
money (redeem it) by collecting taxes . . . but in a democracy, the government
can only collect taxes IF the taxpayer agrees to it! That was John Locke’s point: that no
government can simply collect taxes without the consent of the governed, or it
is theft.
When it comes to issuing money, the problem is even worse. The government does not own
everything in the country, and so cannot issue claims against it in the form of
coins and banknotes backed by the general wealth of the economy. When it does, the government is making
promises that the taxpayer is going to end up keeping, when he had no say-so in
whether he would pay it. That is a
violation of the private property of the taxpayer, and is therefore theft.
What about the case where the coins and
banknotes the government issues are considered as a non-repayable debt the
nation owes itself?
Sorry, no. The government is a person, albeit an artificial
one. Taxpayers are also persons, and if
human beings, are “natural persons.”
(Corporations are artificial persons like the government.)
If one person, whether
natural artificial, issues claims against what other persons own, the person
that issued the claims — the counterfeiter — is a thief, because he (or it) is
taking something that doesn’t belong to him.
That is true, even if the government says it is okay, i.e., makes
it legal. When a government asserts that
it can make its own illegal acts legal, then it has broken the implicit or
explicit contract that permits the government to, well, govern in the name of
the people.
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| Abp. Fulton J. Sheen |
All the fancy rhetoric in the
world cannot make counterfeiting right, even if the government makes it
legal. It is still wrong. As the late Archbishop Fulton J. Sheen liked
to say, “Right is still right if nobody does it. Wrong is still wrong if everybody does it.”
That is why, even though John
Maynard Keynes declared that everything would eventually be A-O.K. if everybody
did wrong but pretended it was right, all that happened was that things would
never get better and could not get better.
As he said in an essay, “Economic Possibilities for Our
Grandchildren,” first published in 1930 and republished in his collection, Essays
in Persuasion (1931),
advocating that people lie to themselves and to others,
For at least another hundred years we must pretend to ourselves
and to every one that fair is foul and foul is fair; for foul is useful and
fair is not. Avarice and usury and precaution must be our gods for a little
longer still. For only they can lead us out of
the tunnel of economic necessity into daylight.
Yes, all you have to do is
lie to yourselves for “at least another hundred years” and everything will
suddenly be perfect!
. . . or not, if you happen
to live in the real world where counterfeiting is wrong and private property,
as has been assumed for thousands of years, is sacred and inviolable.
#30#
