Central Bank Digital Currencies: Funny Money That Will Destroy What Is Left of Private Property, Free Markets, and Personal Liberty
by J.B. Shurk • April 12, 2023 at 5:00 am
[E]ven when you have followed every law to the letter and paid every fee to the cent, there is still no guarantee that government agents will not later invoke eminent domain laws to swipe what you own because they believe they can use your private property more fruitfully for the "public good" – and, since Kelo v. New London, even for someone else's private good. So much for private ownership.
Competition, in theory, forces markets to naturally discard bad and expensive products, while keeping the prices of the best products low.... In practice, however, mature students of capitalism understand that entrepreneurs are never in search of markets for competition but rather conditions for maintaining monopoly.
The end result is that capitalists are always in pursuit of ways in which they may take advantage of laws and regulations, specialized knowledge, government contracts, or other exclusionary mechanisms to restrict potential competitors from ever entering the market.
The usefulness of money over traditional bartering for goods and services comes from its three chief functions providing (1) a unit of account, (2) a store of value, and (3) a medium of exchange.
[O]ver the last century and a half, the important steps have all been the same: First, some form of paper money is introduced and backed by the government's promise to pay the holder of each note a fixed sum in gold or silver. Next, the introduction of a private central bank comes into existence holding a de facto monopoly power to print paper money according to its best judgment for maintaining a healthy national economy. Finally, the gold or silver backing of those paper money currencies is revoked.
[G]overnments... spend money like drunken sailors precisely because central banks right across the street will buy up their debt and facilitate the printing of more money. How could politicians object to an arrangement that allows them to spend recklessly without any normal free market consequences?
Now with the central banks printing money and reckless government spending pushing Western economic systems to the brink, a new kind of financial hocus-pocus has been proposed: central bank digital currencies (CBDCs).
If governments and central banks control the creation, distribution, and exchange of virtual money, whatever remains of free markets will disappear. If governments and central banks monitor every transaction between consumers and producers, then all industries will be subjugated to the centralized command of the State. If governments and central banks assert the legal power to determine who may store value, how much value may be personally stored, and how long that value will be permitted to last, then whatever remains of private property will cease to exist. If governments and central banks maintain a digital monopoly over the only legalized forms of money, then they may redistribute wealth or penalize personal behavior without regard for individual rights or limits to their control.
No doubt propaganda campaigns will cloak this oppressive monitoring in the West's own "politically correct" language of fighting "hate" or "racism" or "climate change" or the next COVID-like scare, but the West's system of control over its citizens will be no different from the Chinese communist version: Individuals will have their digital wealth confiscated or replenished according to whether their behavior conforms to the strictures of the State.
[A]n overhaul of the financial system and a transition to mandated CBDCs threaten what remains of Westerners' personal liberties.
[T]hose who value liberty know that personal ownership and the unfettered exchange of goods, services, and ideas remain the bedrock of those free nations that refuse to be enslaved.
During the Cold War, the East-West divide was commonly portrayed as pitting communism against capitalism. The Soviet Union, its satellites, and allies operated command economies in which centralized authorities directed the allocation of resources, agricultural production, and industrial manufacturing of the State. The United States and the Western Bloc championed liberal democratic norms and free markets. That division, of course, was always too simplistic. Not only did the US support third-world dictatorships when doing so would produce strategic advantages against the USSR, but also the demarcation between free and controlled markets was never so plainly cut-and-dried.
