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Volume 10, Issue 31: August 4, 2008
- How Private Money Ended a Financial Crisis
- Study Criticizes “War on Terror”; Calls for Law-Enforcement Approach
- Despite Worldwide Apathy, Cuban Dissident Group Perseveres
- This Week in The Beacon
- Student Seminar in Oakland, Calif. (Aug. 11-15)
Is private enterprise unable or unfit to coin money? If you think so, then the history of private coinage may surprise you. In the late 1700s, Great Britain’s Royal Mint presided over a coin shortage, and had private coin-makers not come to the rescue, the Industrial Revolution would not have hit full stride. Economist George Selgin recounts this fascinating and important yet almost unknown story in his new book, Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775-1821.
In the summer of 1787, Selgin explains, the owner of a copper mine in Wales began to pay his workers using coins he minted himself. Over the next decade, private merchants and industrialists (many of them button makers) issued 600 tons of custom-made “commercial” copper coin—more copper coin than the Royal Mint had supplied during the previous half century. In 1797, eight years after he opened the most sophisticated mint in the world, Matthew Boulton landed a long-desired contract to coin money for the Crown. Unfortunately for Boulton, after he helped to modernize the Royal Mint the government reneged on its promise to let him go on supplying British copper coins. By 1817, the government forced all but a few private coin issuers to close down.
Good Money not only examines the crucial role of private coinage in fueling Great Britain’s Industrial Revolution, but it also challenges beliefs upon which all modern government-currency monopolies rest. In doing so, it sheds light on contemporary private-sector alternatives to government-issued money, such as digital monies, cash cards, electronic funds transfer, and (outside the United States) spontaneous “dollarization.”
Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775-1821, by George Selgin. Purchase. Read a detailed summary.
“George Selgin’s understanding of eighteenth-century economic theory and practice is absolute, allowing him to write with verve and clarity.”
—Richard Doty, Curator of Numismatics, Smithsonian Institution
“George Selgin’s story of how private enterprise solved a monetary problem that threatened seriously to retard the Industrial Revolution is a splendid piece of historical analysis.”
—Milton Friedman, 1976 Nobel Memorial Prize winner in Economics
The publication of “How Terrorist Groups End”—a thorough new report by RAND, a think-tank with historic ties to the U.S. military—vindicates critics of the “global war on terror” who have argued that a law-enforcement approach to fighting al-Qaeda, rather than a military war, with all the bluntness that wars entail, would have been better for protecting Americans. “The report concluded that the administration’s war on terrorism has not significantly degraded al-Qaeda and that the group has morphed into a more formidable enemy,” writes Ivan Eland, Senior Fellow at the Independent Institute and director of the Center on Peace & Liberty.
Because al-Qaeda terrorists “still threaten the U.S. homeland,” Eland argues, the United States has few other options than to focus on motivating the Pakistani government to pursue al-Qaeda in its stronghold in Pakistan’s western frontier region—even if that requires dropping the U.S. battle against the Taliban in neighboring Afghanistan. That’s because it is the al-Qaeda terrorists, and not the Taliban itself, who directly threaten the United States, Eland argues.
“In return, for increased influence in Afghanistan through its Taliban proxy, Pakistan would have to find the al-Qaeda leadership and turn it over to the United States,” Eland writes. “If a stick is needed, the U.S. could threaten to cut off the billions in military and economic aid Pakistan receives if the Pakistanis do not produce the al-Qaeda chieftans.”
“We Don’t Need a War on Terrorism,” by Ivan Eland (8/1/08)
Our Own Strength Against Us: The War on Terror as a Self-Inflicted Disaster, by Ian S. Lustick (4/4/2008)
The Empire Has No Clothes: U.S. Foreign Policy Exposed (Updated Edition), by Ivan Eland
Center on Peace & Liberty (Ivan Eland, Director)
Although the European Parliament awarded its 2005 Sakharov Prize for Freedom of Thought to the Ladies in White—relatives of 75 Cuban journalists, librarians, and activists imprisoned by the Castro regime in 2003—the group has received relatively little worldwide recognition for its work to keep the plight of Cuba’s prisoners of conscience in the public eye. Still, the Ladies in White march in Havana every Sunday, despite continued harassment by thugs backed by Fidel and Raul Castro.
Independent Institute Senior Fellow Alvaro Vargas Llosa spoke recently with the Ladies in White, who explained to him that their imprisoned relatives are persevering despite horrendous prison conditions. Also, the group criticized the European Union’s recent decision to lift its “timid” political sanctions against Cuba, even though those sanctions “merely limited diplomatic contacts and instructed the European embassies in Havana to invite dissidents to their events,” writes Vargas Llosa. Economist and former political prisoner Oscar Espinosa Chepe, who joined the Ladies in White in its Web conference with Vargas Llosa and others, also argued that Raul Castro’s announcement of economic reforms was a sham, as government authorities have imposed an estimated 50,000 fines and closed dozens of clandestine factories.
Why has the Castro brothers’ backlash against dissidents and entrepreneurs received little international attention? One answer is knee-jerk anti-Americanism. “Many governments, international organizations and intellectuals tend to equate supporting Cuban human rights causes with supporting U.S. foreign policy and therefore shun Cuba’s victims,” writes Vargas Llosa. Despite the international apathy or antipathy, however, the Ladies in White and groups like it may become the “moral reserve” that will play a crucial leadership role when the Castro regime ends—just as the activist group Charter 77 played a moral leadership role when communist rule collapsed in Czechoslovakia.
“The Ladies in White,” by Alvaro Vargas Llosa (7/30/08) Spanish translation
Center on Global Prosperity (Alvaro Vargas Llosa, Director)
Purchase Lessons from the Poor: The Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa.
Purchase Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa.
* Peter Klein on the Fourth Amendment and the Department of Homeland Security
* David Theroux takes another look at hyperinflation in Zimbabwe.
The Beacon invites your comments.
Few students have the opportunity to learn the basic ethical and economic principles of open markets and free societies. Yet these principles are essential for understanding, appreciating, and preparing them for the world they will soon enter. The Challenge of Liberty Summer Seminars help high school and college students better understand real-world issues they will encounter throughout life.
This five-day series of lectures, readings, films, multimedia presentations, and small group discussion teaches students what economics is, how it affects their lives, and how understanding it can help them achieve better lives for themselves, their communities, and the world at large. Informative, inspiring, and fun, these seminars are an ideal way to make summer vacation intellectually rewarding.
Seminar Leader Brian Gothberg and Seminar Faculty James Ahiakpor, Gregory Rehmke, Fred Foldvary, Anthony Gregory, and Carl Close will address a wide range of issues, including the ethics of liberty, economic development, immigration, monopolies, inflation and the business cycle, and peace and national security.
WHEN:
August 11-15
9 a.m. to 4 p.m.
WHERE:
The Independent Institute
Conference Center
100 Swan Way
Oakland, CA 94621
REGISTRATION:
Tuition: $195 (includes books). Scholarships are available but limited.
Registration Form
PRAISE from Previous Student Participants:
“This is a really great program! I really enjoyed learning about all of the famous economists, their basic philosophies, and their influence on economic reasoning. Overall, an outstanding week!”
“I enjoyed having a small group, making it easier to concentrate on everyone's questions and statements, in more comfortable atmosphere.”
The Challenge of Liberty Summer Seminar
“The Challenge of Liberty: A Fresh Perspective,” by Katarina Koncokova (Hawaii Reporter, 7/19/2007)
Contact Academic Affairs Director Carl Close, for further information.
