If sound money was a corollary of the principles of the free society, an essential barrier to prevent government abuses, fiat currency is a natural consequence of the principle that there are no absolute truths: that law is a mere instrument of the state, that words can mean whatever the bureaucrats and the politically correct crowd say that they mean. This positivism has also infected economic policy. I believe that there is such a thing as non normative economic science, “positivist economic science.” But economic science, as it deals with human action, needs to be based in a true conception of what is human action. Economic policy, requires a direction, and a non-normative science, like economics, cannot give ultimate criterion of value. Paraphrasing Wilhelm Roepke, the battle against fiat currency also “belongs to the things which can be understood and remedied only in the area beyond supply and demand.”
