Category Archives: Hard money

Ron Paul: End the Fed


Prior to my full conversion to libertarianism, I held two opinions of Ron Paul.  On the one hand, I admired his apparently principled and consistent vision of limited government conservatism. He seemed to walk the walk. Seeing him openly trash the legacy of Saint Reagan in the Republican primary debates lives in my memory as one of the single biggest moments of political audacity I’ve ever witnessed. 

On the other hand, I regarded him with a sort of bemused, smug condescension.  His views seemed painfully simplistic at best and outright delusional bordering on conspiracy theory territory at worst. In other words, the very attitudes to which I’m subjected on a daily basis on social media whenever I assert my point of view! 

His argument against the Federal Reserve seemed tainted with just a bit too much of an InfoWars/John Birch Society stink.  And there was so much establishment opinion deriding it as na├»ve, I simply couldn’t allow myself to go there.  Marx had delusions of an omnipotent state, so why should I entertain delusions of a limited state whose scope rendered it seemingly irrelevant? 

Needless to say, I eventually came around to a purely libertarian view, and thankfully, I can now fully appreciate the magnitude and elegance of what Mr. Paul has achieved in 210 pages. 

This is the single most potent political argument of our time. 

This book is equal parts history lesson as well as a primer on Austrian business cycle and hard money theory embedded in a minarchist polemic. 

Mr. Paul is a master of brevity and he succeeds in packing a lot of great stuff in a short space.  After a brief overview of personal and American economic history dotted with generous references to his Austrian forebears (Rothbard, Mises, Hazlitt, et al), Paul lays out his case. 

He devotes two chapters to transcripts of his exchanges with Greenspan and Bernanke and exposes them as cagey, prevaricating gasbags.  Mr. Paul revels in needling Greenspan over his abdication of his objectivist convictions around hard money, and his responses are exactly the kind mealy mouthed obfuscating ramblings that define all too many bureaucrats. 

But even if Greenspan suffered from acute bureaucratrititis, Bernanke makes him seem generous and accommodating by comparison. 

After giving a brief tour through the Fed’s historical origins, the connection between the warfare state and central banking, business cycles before and after the Fed, the depreciation of the dollar, and the current state of economic affairs, he lays out the argument in four parts.  The philosophical, the Constitutional, the economic and the libertarian. 

The moral case is certainly compelling on its own. Here, he touches on the secrecy of the Fed and its ability to inflate without restriction. I certainly believe that the roots of the illusion of something for nothing, a free lunch, start here. He exposes the collusion between corporate interests and the state that everyone can see, but few trace down to its roots in the halls of the Eccles building. 

The only thing that undermines this section are his attempts to bolster the case by making reference to the Biblical passages which specify hard money as legitimate currency. Despite the cognitive dissonance inherent in their own fealty to the state, statists denigrate the notion of free markets and libertarianism itself as religious belief.  This strikes me as an appeal to tradition and helps neither the case for libertarianism or hard money. 

Ironically, the Constitutional case, though sound in terms of a strict reading, is actually the weakest. Article 1, Section 10 of the Constitution is explicit.  He proceeds to torpedo this argument a few pages later.

In reality, the Constitution is incapable of achieving what we would like in limiting government power, no matter how well written.

He goes further by showing how the Supreme Court itself has been largely ineffectual in ruling in favor of this reading of the Constitution. Easily the least compelling of the arguments. 

He returns to solid ground with the economic case.  The regime of the floating dollar and interest rate management by technocratic planners has bred an unhealthy incentive to borrow and consume in excess. It has undermined economic growth and enshrined a culture of permanent moral hazard where people continually overlook the source of the malignancy and politicians prey on this ignorance by insisting that another expansion of the regulatory state will deliver the Real Change. 

It is revealing that Keynes and Marx, two of the left’s intellectual leading lights, were explicit about the impact of monetary inflation and the importance of central banking in maintaining authoritarian rule. The former once repudiated it as a malicious invisible tax, but like Greenspan, abandoned his principled stance as his influence grew.  The latter advocated for it openly and without reservation.  The legacy of totalitarianism and suffering that was carried out under the banner of Marxism is explicit and undeniable. 

We are seeing the poisonous outcomes of this arrangement unfold once again as the current catastrophe in Greece attests. 

And what more can be said about Ron Paul that hasn’t already been said?  Without a doubt, he has one of the most interesting stories in American politics. He has certainly earned a place in the history books alongside the likes of Wright Patman as one of the most outspoken critics of the Fed. There’s also no doubt that he did everything he could to stop the encroachment of the state and that his political career was just as much about advancing the ideas of the liberty movement as it was about trying to stop bad legislation.  

Would we be better off as a country if more politicians were as principled as Mr. Paul? 


But not all politicians are and after 20+ years in politics, all it really got him was a reputation as a gadfly.  Don’t get me wrong. The fact that he got as far as he did is nothing short of remarkable, but the establishment forces have clearly prevailed.

And this is where the minarchist argument runs out of gas for me. Despite what was an apparently earnest attempt to set up a framework which would presumably keep government limited, we have the biggest government in the history of human civilization. There is no “change from within” to be made. His son is proving this point each day as he tries to contort himself into new and increasingly contradictory shapes.  A 15% flat tax and yet somehow the entitlement state can be funded by business taxes? Right.

The cause of liberty must be waged in the battlefield of ideas. Not the ballot box. 

Keynes famously derided opponents of state intervention with the oft quoted line, “In the long run we are all dead”.

This approach has been tried and the verdict is in.  

End the Fed.