What Has Government Done to Our Money? (Murray N.

Rothbard_ISBN: 978-1-61016-
142-8)

The author clearly explains what is money and because is necessary in life in society.
Rarely someone takes time to think about it. But, the simple way for understand the
economy found in this book is really impressive.

Beginning for shows how impracticable is the Barter System, e. g. “If A has a supply of
eggs for sale, and B has a pair of shoes, how can they get together if A wants a suit?”.
So, he details the money’s nature for indirect exchange. However, the writer establishes
some very innovative (at last for me): the money isn’t necessarily ‘coin’ or ‘bits of paper',
“money is a commodity”.

Yeah, see the money just a “medium of exchange” is a new idea for me. By extension,
this meaning that it’s subject to the laws of supply and demand.

Also, he remember that “many different goods have been used as media: tobacco in
colonial Virginia, sugar in the West Indies, salt in Abyssinia, cattle in ancient Greece, nails
in Scotland, copper in ancient Egypt, and grain, beads, tea, cowrie shells, and fishhooks”.
And, he makes clear that “two commodities, gold and silver, have emerged as money”,
through the centuries.

Then, I need agree with him: “money is a commodity, learning this simple lesson is one of
the world’s most important tasks… It [only] differs from other commodities in being
demanded mainly as a medium of exchange.”

Think about it: People “buy” money by selling their goods and services for it, just as they
“sell” money when they buy goods and services. It’s a fundamental true!

Thus, after talk about how gold have been traded by weight for long centuries, the author
explains how it was conveniently “broken down into coins”. This shape has proved more
convenient than others, but not for free. The writer adds that “any kind of transformation
from one shape to another costs time, effort, and other resources”. It leads us for the
coinage, essentially a business like any other; but, a private service until this moment.
And, by excuse to prevent fraud, the governments gradually monopolized the supply of
coins.

The book contains an interesting question about it: “If government cannot be trusted to
ferret out the occasional villain in the free market in coin, why can government be trusted
when it finds itself in a position of total control over money and may debase coin,
counterfeit coin, or otherwise with full legal sanction perform as the sole villain in the
market place?

For explain the source of paper money, the author tell us that even in the convenient
shape of coins, gold is often cumbersome and awkward to carry and use directly in
exchange, principally for larger transactions. So, for solve this problem, was born gold
warehousing business, storing gold for its myriad owners. The owner’s right to the stored
goods could be established by a warehouse receipt which he received in exchange for
storing the goods. And, convenience inevitably leads to transfer of the warehouse receipt
instead of the physical gold itself. So, warehouse receipts (or banks receipts) for money
come more and more to function as money substitutes.

Consequently, for protect our savings, the governments make the ‘Central Banking’ for
storing all banks reserve of gold. And, itself begin to mint receipts or ‘notes’ for all
economy. Therefore, as a result, we arrive at this historic moment.

Chair of the Federal Reserve Jerome Powell in funny meme printing money and the correspond number’s reality.

In my opinion, it’s a great book about something so basic… How much your money
really worth?