Fiat Money and the Euro Crisis

By Robert P. Murphy

 

 

In September I participated in the amazing Supporters Summit, held at the prestigious National Academy of Sciences in Vienna, where Eugen von Böhm-Bawerk once lectured. After my visit to Austria, I piggybacked an excursion to adjacent Slovakia where I was surprised to discover a large number of fans of the Mises Institute and Ron Paul.

 

 

Peter Gonda, working through the Conservative Economic Quarterly Lecture Series, had arranged for me to give a lecture, "Money and Banking: the State vs. Market," to two different audiences. (The videos of the lecture and Q&A period are here.) My lecture itself was quite theoretical, discussing the Mengerian/Misesian perspective on the development of money and banking, as well as the Rothbardian perspective on the dangers of central banking and fiat money.

 

 

In the Q&A period of the lecture, and during my interviews with local journalists, however, most people wanted to discuss the Greek debt crisis and the fate of the euro. Yet even here I showed the relevance of the Austrian insights: Germany, Slovakia, and the other frugal countries were only in this mess because the euro was a fiat currency. Had it been backed 100 percent by a commodity such as gold, then the… (Read on)

Source: Mises.org