Fiat Money and the Elderly

Yesterday I went to Montgomery, AL to speak to a group of about twenty-five retired gentlemen on the invitation of a certain Mr. Cluck. My Jeep CJ-7 committed suicide while I was en route, something for which I was not really prepared given that this occurred at around 7am. I do not usually rise until 8am or so. I was fortunate enough to be within close enough range of the speaking venue for Mr. Cluck to get in his car and pick me up from the side of Interstate 85.

I arrived at the appointed place at around 8:20am (twenty minutes late), and no one seemed angry. So far, so good. I had been asked to speak on monetary policy, gold, and inflation. Thankfully, I built the index for the new edition of Rothbard's What Has the government Done to Our Money?, which now incorporates his Case for a 100 Percent Gold Dollar (buy it here), over the summer. To shore up my monetary theory and history knowledge prior to my lecture, I read excerpts from The Gold Standard, (ed. Lew Rockwell; buy it here), Austrian Theory of the Trade Cycle (buy it here), and other assorted essays on money, including one by Walter Block. Despite this preparation, I was still quite nervous about delivering this speech--my first libertarian talk of substantial length to a non-libertarian audience.

Having never delivered a lecture of any length on money before, I wasn't quite sure where to begin. After talking about the Mises Institute's programs and activities for a few minutes, I dove right in. First, I started out with the basics: exchange arising as a result of the division of labor's benefits to participants, the increasing complexity of barter transactions relative to the specialization of the labor force, and the medium of exchange that reconciles all of these. I talked about the criteria for choosing a good money commodity (commonly valued, durable, divisible, homogeneous).

After the introduction to basic capitalist theory, I started in on the history of money in the United States, and the gradual move from sound money to fiat money. When presenting such a horror story of corruption and hubris, it is difficult to sound even nominally pro-government. I usually don't worry about such things, but, hey, I don't like for older folks to dislike me. They usually know what they are talking about, and I didn't need another blow to the old ego (some people close to me would disagree). Despite having at least some Social Security recipients in the room, not one person piped up to defend Franklin D. Roosevelt from my assault on his "good name."

Again, so far, so good. Then I went on to the even more controversial stuff. I started talking about inflation, and how it causes the business (boom-bust) cycle. Not having been terribly familiar with the fine points of Austrian business cycle theory, this was the portion of my talk that had me sweating the most before hand. I am not certain, but I feel fairly sure that everyone who heard me got some idea as to why inflation causes the boom-bust cycle. I concluded my talk by advising everyone to include gold in their investment portfolios as an inflation hedge, and by reading quotes from both Ludwig von Mises and Ron Paul about sound money and government.

As it turns out, I shouldn't have been nervous to begin with. The only questions that were asked of me with which I felt uncomfortable were more or less financial planning questions. Since my host, Mr. Cluck, is a certified financial planner, I gave a quick disclaimer about my not being an expert in the area of investment, offered some questionable advice, and then referred the question-asker to the professional. Everyone applauded in the end, and a few gentlemen even purchased books. To ice the cake, one kind fellow gave me a ride to a auto shop, where I waited to be picked up by the tow truck driver who would be my chauffeur back to Auburn.

So, to tally the final score for the outing, I lost a car in the deal, but I netted tons of confidence in my ability to lecture for the length of a normal class period. The coolest aspect of the whole ordeal was that I reaffirmed the truth of the old adage by Lucius Annaeus Seneca that "Men learn while they teach." Now I just hope that someone comes along and asks me to lecture on tons of topics with which I am not acquainted. Then, I really might end up knowing something.