The Ethics of Money Production: Chapter 8

Chapter 8: Legalized Falsifications

1. The legalization of counterfeited certificates can mean the declaring of a debased money to be mandatory for use by everyone - but that will be analyzed later.

More importantly, it can mean the state decides to stop understanding common language. For example, a coin marked "an ounce of gold" will be allowed to have any amount of gold or none, and can have any meaning.

(This would be a great place to include an example, as this feels unbelievable... though I faintly remember something of the sort. At least the famous "promise to pay" from Chapter 6 is mentioned. Another specific example would be great here.)

This willful ignorance has of course inflationary tendencies for the "privileged" money. In a still partially free market can people protect themselves against this, by choosing another money. If coins are debased, they can use only the new coins for payment, while pawning off solid old coins for their true metal content, or hold them. Finally, counterfeiters will jump on the opportunity to do what is the state is doing. It is impossible to exchange all of the coins at once. And so will be the government's intended profit smaller.

2. The legalization of counterfeit money is by itself relatively harmless. But it is a necessary ingredient for other abuses. Oresme is quoted at length about its morality: that it is a shame on the ruler and unacceptable, unless all users of money agree. Even then should it be never used as a regular source of income, but only for emergency situations.

Update:

There, found a review of the book on Mises.org. Just for the reference.