I just finished a book regarding the relationship between a strong government and the currency, regarding counterfeiting in the United States. The quotation that follows concerns the libertarians' preference for strong state controlled the currency in the late 19th century.
The book makes the case that the counterfeiters supplied liquidity that made the economy much stronger. It has an interesting chapter regarding the despicable beginnings of the Secret Service, which was created almost by subterfuge by a Cheney-like a master of bureaucratic manipulation, who took it on his own to organize a national police force to fight counterfeiters. Incidentally he was also was a practitioner of unconstitutional handling and mishandling of people who came under his control. Mihm, Stephen. 2007. A Nation of Counterfeiters: Capitalists, Con Men and the Making of the United States (Cambridge: MA: Harvard University Press). 361-2: "The relationship between the country and the currency thus underwent a profound shift in the decades following the Civil War. Confidence in the currency had formerly been associated with highly subjective, ever-changing criteria: the a appearance of the note, the demean or of the person presenting it, the corresponding information in a counterfeit detector. But by the time Sumner was writing, it had become entwined with faith in the nation itself: thanks to the abolition of the monetary system controlled by state-chartered banks and its replacement with a uniform currency of greenbacks and national bank notes adorned with nationalist symbols. This raised a curious paradox: the most vocal defenders of nationalizing the currency were also, like Sumner, proponents of laissez-faire economics. For these reformers, the nation had an important, but singular, role to play in the economy. It would provide the currency; entrepreneurs, speculators, and other practitioners of capitalism would provide the rest." -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
