makes a laughingstock out of its banknotes—“Not worth a Continental.” So if a government can lie about the amount of a commodity that is backing its currency—as the Stockholm Banco, Banque Royale, and Continental Congress did—why can’t a government lie about everything? Instead of passing a law saying one dollar equals X amount of gold, why not pass a law saying one dollar equals one dollar? This is “fiat money” (from the Latin for being forced to drive a cheap, unreliable car), and it’s almost the only kind of national currency left in the world. Fiat money is backed by nothing but faith that a government won’t keep printing money until we’re using it in place of something more important, such as Kleenex. Concerning this faith, the experiences of Wiemar Germany, Carter America, and Yeltsin Russia make agnostics of us all. The only thing that protects us from completely worthless money is our ability to buy and sell. We can move our stock of wealth from the imaginary value of dollars to the fictitious value of yen to the mythical value of stock shares to the illusory value of real estate, and so forth. Our freedom to not use a particular kind of money keeps the issuers of that money— honest wouldn’t be the word—moderate in their dishonesty. I subjected myself to a large dose of economic theory because I’d finally realized that money was as important as love or death. I thought I would learn all about money. But money turns out to be strange, insubstantial, and practically impossible to define. Then I began to understand that economic theory was really about value. But value is something that’s personal and relative, and changes all the time. Money can’t be valued. And value can’t be priced. I should never have worried that I didn’t know what I was talking about. Economics is an entire scientific discipline of not knowing what you’re talking about. Trying to observe economic practice showed me that I needed to learn some economic principles, and trying to examine economic principles showed me that I’d better look at the practice again. If I was going to continue trying to understand economics, I had to go back to reality—a remarkable example of which is Russia. In contemporary Russia, there are all kinds of economics, good and bad, capitalist and socialist. The economic activity is being conducted under conditions of anarchistic freedom and totalitarian restraint. The people who make the laws have too much power,
Made with FlippingBook - professional solution for displaying marketing and sales documents online