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.
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.
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.
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.
|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.