Although
ostensibly it is dodgy real estate loans that are bringing the banks
down this year [2008], in the seminal book that you hold, Rothbard
shows that it is really the fraudulent nature of fractionalized
banking that is the real culprit for the bankers’ demise.
From the
introduction by Douglas French
It's a strange fact
about life that whilst we can pay incredible levels of attention to
complex towering issues, the most fundamental and axiomatic questions
often go not only unanswered but unasked. One glaring example of
this is money, we use it all the time yet how often do we consider
what it is, where it comes from and why it has value?
I remember when I
was a teenager sitting down with pen and paper and trying to figure
out how money came about. (Doubtlessly I was avoiding doing some
other, ostensibly more important activity, like English course work
on Shakespeare or Levi's jeans commercials or something like that).
To cut to the end, I couldn't do it, I couldn't figure out a fair way
that a central government could inject 'money', some token of
exchange backed by nothing, into a barter system, which is the way I
assumed money had come about.
I didn't think about
it much more and years went by before I stumbled onto a copy of
Murray Rothbard's 'The Mystery of Banking'. Within the first fifteen
pages or so, this book eloquently explains the history of money, how
it cannot be created by decree but rather must evolve out of a barter
system, absent of government involvement. Rothbard goes on to
explain that in spite of the near ubiquitous contempt in which
bankers are held today, theirs is at least in principal a noble
profession corrupted by a nefarious relationship with governments.
Money is a concept
so intimately entangled with government that it's hard to conceive of
how the two are really quite separate. Murray Rothbard's book cuts
through the unnecessary complexity to reveal that understanding money
is really quite a simple affair, yet a necessary one if we're ever
going to stop being victims of financial piracy!
'The Mystery of
Banking' available free at the Mises institute:
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