Early economic theory was rooted in the Italian, French, and Spanish traditions, which were subjectivist oriented. Then it shifted onto the terrible path by Smith and Ricardo and the British classical tradition, which is 'objectivist' - values are in inherent in production.

Originally, Congress provided in 1793 that all foreign coins circulating in the United States be legal tender. Indeed, foreign coins have been estimated to form 80 percent of American domestic specie circulation in 1800.

Commercial banks - that is, fractional reserve banks - create money out of thin air. Essentially, they do it in the same way as counterfeiters.

Many and subtle are the ideological weapons that the State has wielded through the centuries. Once excellent weapon has been tradition. The longer that the rule of a State has been able to preserve itself, the more powerful this weapon; for then, the X Dynasty or the Y State has the seeming weight of centuries of tradition behind it.

The picture of the free market is necessarily one of harmony and mutual benefit; the picture of State intervention is one of caste conflict, coercion, and exploitation.

The politician and the government expert receive their revenues, not from service voluntarily purchased on the market, but from a compulsory levy on the populace. These officials, therefore, wholly lack the pecuniary incentive to care about serving the public properly and competently.

The very essence of political philosophy is the carving out of an ethical system - strictly, a subset of ethics dealing with political ethics. Ethics is the one rational discipline that demands the establishment of a rational set of value judgments; political ethics is that subset applying to matters of State.

Fractional reserve banks are sitting ducks and are always subject to contraction. When the banks' state of inherent bankruptcy is discovered, for example, people will tend to cash in their deposits, and the contractionary, deflationary pressure could be severe.

Ultimately, there is no entity called 'government'; there are only people forming themselves into groups called 'governments' and acting in a 'governmental' manner.

What is so terrible about transaction costs? On what basis are they considered the ultimate evil, so that their minimization must override all other considerations of choice, freedom, and justice?

Positivism eliminates any kind of natural law principle - for example, that there are economic laws which can be transgressed only at your peril. With positivism, there is a tendency to leap into ad hoc economic theory.

Tied up with his dismissal of natural law is Hayek's continuous, and all-pervasive, attack on reason. Reason is his bete noire, and time and time again, from numerous and even contradictory standpoints, he opposes it.

In a sense, the market, by expecting a fall in prices, discounts that fall and makes it happen right away instead of later. Expectations speed up future price reactions.

Subjectivism is not an absolute principle; it is a necessary but not sufficient condition for sound methodology.

While deficits are often inflationary and always pernicious, curing them by raising taxes is equivalent to curing an illness by shooting the patient.

We have gotten to the point where everything the government does is counterproductive; the conclusion, of course, is that the government should do nothing at all, that is, should retire quickly from the monetary and economic scene and allow freedom and free markets to work.

In order to continue in office, any government (not simply a 'democratic' government) must have the support of the majority of its subjects. This support, it must be noted, need not be active enthusiasm; it may well be passive resignation as if to an inevitable law of nature.

While the seeming independence of the federal judiciary has played a vital part in making its actions virtual Holy Writ for the bulk of the people, it is also and ever true that the judiciary is part and parcel of the government apparatus and appointed by the executive and legislative branches.

The State has invariably shown a striking talent for the expansion of its powers beyond any limits that might be imposed upon it.

Since the State necessarily lives by the compulsory confiscation of private capital, and since its expansion necessarily involves ever-greater incursions on private individuals and private enterprise, we must assert that the State is profoundly and inherently anticapitalist.

As the greatest and last major crisis before 1836, the panic of 1819 holds considerable interest for the study of business cycles and for the present day. It was an economy in transition, as it were, to a state where business cycles as we know them would develop.

In his second Inaugural Address, on March 5, 1821, Monroe admitted at last to a general depression of prices, but only as a means of explaining the great decline in the federal revenue. Despite this, he asserted that the situation of America presented a 'gratifying spectacle.'

In the panic of 1819, the protectionists stressed the lack of consumer markets abroad and the necessity for building up a market at home. The inflationists, on the other hand, stressed the shortage of money capital available to manufacturers as a cause of the crisis.

The most famous and one of the most thoroughgoing opponents of bank credit was Thomas Jefferson. Jefferson reacted to the panic of 1819 as a confirmation of his pessimistic views on banks.

The expansionary operations of the Second Bank of the United States, coupled with its laxity toward insisting on specie payment by the state banks, impelled a further inflationary expansion of state banks on top of the spectacular enlargement of the central bank. Thus, the number of incorporated state banks rose from 232 in 1816 to 338 in 1818.

Out of the bitter experiences of the panic of 1819 emerged the beginnings of the Jacksonian movement, dedicated to hard money, the eradication of fractional reserve banking in general, and of the Bank of the United States in particular.

Leading the boom of 1838 were state governments, who, finding themselves with the unexpected windfall of a distributed surplus from the federal government, proceeded to spend the money wildly and borrow even more extravagantly on public works and other uneconomic forms of 'investment.'

The Jacksonians were not monetary nationalists; specie was specie, and they saw no reason that foreign gold or silver coins should not circulate with the same full privileges as American-minted coins.

Only individuals can desire and act. The existence of an institution such as government becomes meaningful only through influencing the actions of those individuals who are and those who are not considered as members.

In order to institute action, it is not sufficient that the individual man have unachieved ends that he would like to fulfill. He must also expect that certain modes of behavior will enable him to attain his ends. A man may have a desire for sunshine, but if he realizes that he can do nothing to achieve it, he does not act on this desire.

All action is an attempt to exchange a less satisfactory state of affairs for a more satisfactory one.

Play, as a consumers' good, is subject to the law of marginal utility, as are all goods, and the time spent in play will be balanced against the utility to be derived from other obtainable goods.

On the market, all is harmony. But as soon as intervention appears and is established, conflict is created, for each may participate in a scramble to be a net gainer rather than a net loser - to be part of the invading team instead of one of the victims.

Praxeology - economics - provides no ultimate ethical judgments: it simply furnishes the indispensable data necessary to make such judgments.

Among intellectuals who consider themselves 'scientific,' the phrase 'the nature of man' is apt to have the effect of a red flag on a bull.

The natural law is, in essence, a profoundly 'radical' ethic, for it holds the existing status quo, which might grossly violate natural law, up to the unsparing and unyielding light of reason.

The fact that natural-law theorists derive from the very nature of man a fixed structure of law independent of time and place, or of habit or authority or group norms, makes that law a mighty force for radical change.

The contemporary political scientist believes that he can avoid the necessity of moral judgments and that he can help frame public policy without committing himself to any ethical position.

The avoidance of explicit ethical judgments leads political scientists to one overriding implicit value judgment - that in favor of the political status quo as it happens to prevail in any given society.

Economics has revealed a great truth about the natural law of human interaction: that not only is production essential to man's prosperity and survival, but so also is exchange.

'The General Theory' was not truly revolutionary at all but merely old and oft-refuted mercantilist and inflationist fallacies dressed up in shiny new garb, replete with newly constructed and largely incomprehensible jargon.

In order to conquer the world of economics with his new theory, it was critical for Keynes to destroy his rivals within Cambridge itself. In his mind, he who controlled Cambridge controlled the world.

Keynes was scarcely a 'revolutionary' in any real sense. He possessed the tactical wit to dress up ancient statist and inflationist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science.

Keynes eliminated economic theory's ancient role as spoilsport for inflationist and statist schemes, leading a new generation of economists on to academic power and to political pelf and privilege.

As Ludwig von Mises conclusively demonstrated in 1912, money does not and cannot originate by order of the State or by some sort of social contract agreed upon by all citizens; it must always originate in the processes of the free market.

There is no need for government to intervene in money and prices because of changing population or for any other reason. The 'problem' of the proper supply of money is not a problem at all.

The threat of gold redeemability imposes a constant check and limit on inflationary issues of government paper. If the government can remove the threat, it can expand and inflate without cease. And so it begins to emit propaganda, trying to persuade the public not to use gold coins in their daily lives.

An attempt by the Mongols to introduce paper money in Persia in the twelfth and thirteenth centuries flopped because no one would accept it. The public had no confidence in the paper money despite the awesomely coercive decrees that always marked Mongol rule.

In the United States, after World War II, it took about two decades for the message to slowly seep in that inflation was going to be a permanent fact of the American way of life.

One grave and fundamental Keynesian error is to persist in regarding the interest rate as a contract rate on loans instead of the price spreads between stages of production. The former, as we have seen, is only the reflection of the latter.