Big Head Press

L. Neil Smith's
Number 433, September 2, 2007

"Government itself consists of
nothing but brute force and fraud"


Thoughts About Money and Other Things
by L. Neil Smith

Attribute to The Libertarian Enterprise

Permit me to begin this by confessing, as a libertarian writer and thinker, that economics is not my long suit. F. Paul Wilson observed many years ago that our movement seems to be divided into two distinct groups: those he characterizes as "gnomes", whose principal interest is the politics of money, and those he designates "Flinters" whose highest priority is the practical issue of self-defense. I call the latter "hooligan libertarians" and I'm proud to number myself among them.

By contrast, many "gnomes" appear to find anything involving the theory and mechanics of self-defense somehow faintly unsavory or even embarrassing. A recent article posted by Lew Rockwell on his website, detailing what a libertarian administration should do in its first month, mentioned dealing with Second Amendment matters on the 28th day. (You might compare this with Hope, a novel that JPFO's Aaron Zelman and I wrote a few years ago concerning the first libertarian president.)

While never denying its importance, over the years I have come to believe that economics is more peripheral to questions of individual liberty than many of the gnome-types commonly believe it is. Some of them have even claimed, from time to time, that if the economy of a nation-state is free, then every other matter of individual liberty is automatically taken care of, or soon will be. Try mentioning morality if you enjoy abuse being heaped on your head. However, when I first came into the movement, Spain (just to name an example) was a "benign" dictatorship controlled by Generalissimo Francisco Franco. It was a popular place for rich Europeans and Americans to live, because, as long as you were rich, your financial life could remain relatively free.

If you weren't rich—say you were an American sailor on liberty and you happened to drive through a red light—the Spanish cops, known as the Guardia Civil, could and would machinegun you to death, and there was nothing the naval base commander or even the American ambassador could do about it. People like the Basques, Galicians, or Catalans, whose very languages were outlawed, were in even a worse position.

So much for a free market taking care of everything else.

It might surprise you, however, to discover that money and the economy are primarily First Amendment concerns. Most people may not realize it, but money, first and foremost, operates within a society as a vital medium of communication. As such (and despite the quaint, old-fashioned socialist Utopian views of Gene Roddenberry and other Star Trek writers who envisioned a future society without money), it is absolutely essential to the continued wellbeing of all human civilizations.

Here's why: the information that money conveys is called "price"—a word, in the study of economics, with a technical definition. Each of us contributes to the pool of that information whenever he buys something—or refrains from buying it—in the marketplace, as long as the marketplace, and the choices we all make, remain free and uncoerced.

With the purchases and non-purchases we make almost every day, we communicate to the merchants we patronize—and ultimately to the manufacturers who supply them—how much we want something, by how much we're willing to pay for it, or how much of it we're willing to buy.

In an unfree market, government stifles this kind of communication with policies like price controls and rationing. Government can also "jam" communications—that is, drown out the information we need with "noise"—by issuing vast amounts of worthless paper money or credit. In short, economic regulation is censorship, and inflation is propaganda.

In either case, you can't know the real price of anything (that is, the amount of money people are willing to give up in order to obtain whatever commodity or service we're talking about), whether it's bread, shoes, houses, gasoline, or ammunition. So manufacturers can't know how much of anything they should make, and merchants can't know how much to order and put on their shelves. Invariably, they both end up with warehouses full of unwanted shoes they made or ordered too many of, and vast shortages of bread that, historically, have killed millions.

Such deaths usually precede many more that occur once socialist theorists, beside themselvs with infantile fury because their theories can't possibly be wrong (so somebody must be deliberately sabotaging their lovely Utopian system), start putting those they regard as (or suspect of being) anti-social non-cooperators up against a wall and shooting them. Lenin, Stalin, Mao, and Pol Pot did quite a lot of this. Of course, as Aaron Zelman would point out, it can only happen—has only happened—in regimes where nobody but the government has guns.

Today, many believe—like General Franco's admirers—that you can have a free economy without political freedom and that somehow, economic freedom will seep into the system and bring about political freedom. China is the latest trying to get away with this nonsense—a free economy within an unfree nation, and they're being aided by American corporations so greedy they don't care who gets hurt in the process.

Yes, China is striving toward a free economy, but say the wrong thing online in the wrong place at the wrong time and Google or Yahoo—how do those sonsofbitches sleep at night?—will rat you out to the butchers of Lhasa who will cheerfilly throw you into prison where your organs may be harvested for the benefit of the geriatric nomenklatura

It's like exactly like helping Nazis murder Jews and Gypsies and gays—as IBM once did—and it does not represent progress toward liberty

But, as usual, I digress.

Viewed as a medium of communication, it's easy to understand why a free society requires the private issue of money. Government money consists of nothing but censorship and lies. That's hardly surprising, since government itself consists of nothing but brute force and fraud. Government is only capable of producing poverty, destruction, and death.

Only real people can create real money.

But only if they're really free.

Four-time Prometheus Award-winner L. Neil Smith has been called one of the world's foremost authorities on the ethics of self-defense. He is the author of 25 books, including The American Zone, Forge of the Elders, Pallas, The Probability Broach, Hope (with Aaron Zelman), and his collected articles and speeches, Lever Action, all of which may be purchased through his website "The Webley Page" at

Ceres, an exciting sequel to Neil's 1993 Ngu family novel Pallas was recently completed and is presently looking for a literary home.

Neil is presently working on Ares, the middle volume of the epic Ngu Family Cycle, and on Roswell, Texas, with Rex F. "Baloo" May.

The stunning 185-page full-color graphic-novelized version of The Probability Broach, which features the art of Scott Bieser and was published by BigHead Press has recently won a Special Prometheus Award. It may be had through the publisher, at, or at


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