Gold Passes The Market Test

Inflation reduces the purchasing power of money: and it causes the redistribution of wealth towards the ones favored by the interventionists. Both of these represent theft of private property and both are acts of injustice.

The free market chose gold as the medium of exchange simply because of the following: it optimizes the characteristics determined in the market to be necessary for a trustworthy medium of exchange. The ability to strongly prevent dishonest and untrustworthy acts by the interventionists is certainly one of those characteristics and is a good reason to return to the gold standard.

Free banking, where banks compete against each other for the trust of their customers, is almost completely sufficient to safeguard against fraudulent banking practices. Combined with refined and enforced property rights it is wholly sufficient. Having a strong and honest banking system has the advantage of encouraging savings.

Free banking is a very important component of a divine economy since it has the merits of self-regulation, and since it serves the people by providing a storehouse for capital. This is in contrast to the current banking practices which mask the insolvencies of banks and promulgate a system of capital consumption and wealth redistribution. 

 

Divine Economy Theory Policy #7: Gold Passes the Market Test

Policy Statement: Clear the banking system of all of its barriers and restrictions — these are acts of intervention designed to control the economy and direct wealth towards the favored ones of the ego-driven interventionists — and let the market process determine if the current system is a viable one or not. Legal tender laws are unnecessary in a divine economy where the medium of exchange is universally recognized simply because of its independence from monetary intervention, along with its other merits.

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War and Inflation Violate Property Rights

If people can trust the future they will have lower time preferences which will amplify the transforming capability of capital. There are very specific interventions into the economy that strongly influence the level of trust. If there is a tendency to choose war as the main or even as a viable alternative to diplomacy then the lessened trust that such an act engenders atrophies the economy. Or if there is a medium of exchange that can easily be debased by a central bank (for example, when there is a fiat currency) then the horizon of the time preference shortens, stifling prosperity. Both of these acts of intervention — war and inflation by the central bank — violate the property rights of humanity.

Those things that foster trust and trustworthiness need to be given particular emphasis as part of the learning process in the education system. The pivotal nature of property rights needs to be made crystal clear.

Divine Economy Theory Policy #6: War and Inflation Violate Property Rights

Policy Statement: War and its exorbitant costs and its associated destructiveness, and inflation of the money supply by the central bank, are unacceptable violations of property rights and those who try to impose either of these should be held accountable by legal means. Authority to take these actions (war and inflation) needs to be specifically assigned so that there is specific and definite accountability.

The legal liability for such acts needs to take precedence over the act itself. The government-created veils of self-protection and inculpability need to be removed so that property rights can be protected.

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Education About Entrepreneurship

The purpose of educating people about entrepreneurship is basically to encourage and foster the acquisition of the skill of discernment. This comes from learning about the learning process in humans. The more discernment and alertness there is in the market the more quickly knowledge will flow and the more quickly will it be acted upon. This leads to an advancement of the market process and to prosperity. If the market is in an inefficient condition the solution is to do a better job of educating people about entrepreneurship.

 

Divine Economy Theory Policy #5: Education About Entrepreneurship 

 

Policy Statement: A rational policy would be to encourage all providers of education to acknowledge the role of entrepreneurship in advancing prosperity and to teach any and all skills that help to make people discerning and alert.

See this policy in the greater context here.
 

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Enforcement of Property Rights

Corollary to having well-defined and refined property rights is the strengthening of the legal system such that it can effectively enforce property rights. The best means to protect private property rights is to strengthen the role of private providers since there is often a conflict of interest when the State is involved in protecting private property rights. Both the definition of property rights and the ability to enforce property rights are currently very weak, even weaker than they were 100 years ago.

 

Divine Economy Theory Policy #4: Enforcement of Property Rights

 

Policy Statement: A rational policy would be to initially begin enforcing property rights at the level of the individual, and then to learn how best to refine property rights from these efforts. Within each community this right and responsibility exists and needs to be given due attention. The proper role of government is to protect its citizens from fraud or acts of violence by enforcing property rights, however, competition by private providers of legal protection will ensure that the best means of enforcing property rights is always available.

See this policy in the greater context here.
 

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If you know of anyone interested in ethics and economics,
or liberty and justice, please send them this link:
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