Acton Institute Powerblog

Samuel Gregg on Just Money

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money-and-justice-scales“If a society regards governmental manipulation of money as the antidote to economic challenges,” writes Acton research director Samuel Gregg at Public Discourse, “a type of poison will work its way through the body politic, undermining justice and the common good.”

Money: it’s on everyone’s mind sometimes. In recent years, however, many have suggested there are some fundamental problems with the way money presently functions in our economies.

No one is seriously denying money’s unique ability to serve simultaneously as a medium of exchange, a measure and store of value, and a means of calculation. Yet deep reservations about the current workings of the world’s monetary systems, both foreign and domestic, have been expressed by people ranging from Senator Rand Paul (who is fiercely critical of the Federal Reserve), to Pope Francis (who has denounced what he calls “the cult of money”) and France’s François Hollande (who once described “big finance” as his “greatest adversary”).

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Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

Comments

  • housewar

    There is nothing antiquated about metallic currencies. Our experiment with fiat currency is extremely recent, and by all measures it has set us on course for colossal failure.

    Isaiah told Israel “Thy silver is dross”, likening their moral decay with the decay of the currency. Do not think for one moment that currency debasement is not a moral issue, that God has nothing to say about it. For centuries it was obvious to all men of character and faith that currency debasement was theft, and those that did it were potentially worthy of the gallows.

    Why fiat currency? So that debasement is easier. Why debase? So that the government can continue to increase it’s debts at minimal cost. If the government had to pay normal market interest rates, it would quickly default. How to keep rates low? Print money and buy up debt. This leads to a perpetual expansion of government. It discourages savings. It inflates the wealth of the wealthy while increasing the cost of living for laborers. It creates investment bubbles by injecting money into Big Finance. It turns stock ownership into a casino, where dividends are for suckers and big money is made on speculation. And what happens when these bubbles burst? When the dot-com-bomb explodes, or the real estate market or the S&P bubble of 2014? Lay-offs and more calls for increased government spending in an attempt to goose the economy which leads to greater debt, more bubbles, and larger economic catastrophes.

    Coupled with fractional reserve banking, which is a different kind of fraud, our money could not be any further from “justice”. The government and banks are perpetually raiding our savings accounts by debasing the value and then “borrowing” the money from us to lend on speculative investments without our expressed consent.

    In this digital age where virtually any currency or commodity could be divided into micrograms of gold or millionths of a bit-coin, there is no reason to be concerned with whether or not the quantity of money is large enough to handle global commerce, virtually any quantity will do.

    No entity is capable of finding equilibrium between supply and demand for cash holdings. Like everything else, it would be far better for the market to find that equilibrium.