Today’s national money regimes bear no resemblance to Mises’s sound-money principle. The quantity and quality of money is no longer a free-market phenomenon; it is determined by government-controlled central banks. To prevent governments from misusing their coercive power in monetary affairs, two “institutional arrangements” have been put into place. First, central banks have been made politically independent to prevent politicians from trying to trade off benefits resulting from an inflation-induced, short-term, cyclical upswing against the medium- to long-term costs resulting from the debasing of the means of payments.

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