Pretty much every economics textbook explains how money has four functions. It is first and foremost a medium of exchange, and it ultimately derives all of its other functions from its usefulness as a medium of exchange.
For both social contract theory and monetary theory, theorists are considering something that never happened in the past and that they have no reason to believe will happen in the future. No such considerations are useful.
Right now, we have a disordered and dysfunctional money system. This poses very acute risks and dangers that because of the nature or money can have system-wide effects. We should look at how monetary systems have been reformed in previous times, and also rethink the way money is commonly taught and thought about.
What we’ve learned is that money can be privately produced. Hayek’s dream of choice in currency can be reality. What form it will take in the future no one can know for sure. What’s more, there is no end game here. The process of innovation will never stop.
Hayek’s commodity reserve standard would automatically serve to stabilize prices and output. In our discussion of rule-based monetary policy and sound money, the mechanics and principles guiding Hayek’s proposal deserve careful consideration.
Requiring that citizens track transactions in gold or alternative currencies and pay taxes on gains and losses relative to the dollar is just another mechanism for keeping the monetary playing field unbalanced in favor of government fiat.
The personal signature has a notorious history: J.S. Bach’s on his compositions, the founding fathers on the Declaration of Independence, Picasso on his paintings, and the president’s today on executive orders. Creating your own was a right of passage. With credit card companies admitting the obvious that it does nothing to verify your identity, does it matter anymore? The signature isn’t going away. It has just changed forms.
In many ways, we are better off than we were in the era of the international gold standard. But monetary freedom is not one of them.