Review Questions for Murray Rothbard’s ‘What Has Government Done to Our Money?’

This set of review questions is part of the Liberty In the Books program, a monthly discussion group. These questions cover Murray Rothbard’s What Has Government Done to Our Money?

Note: Because paginations differ across editions, here page numbers corresponding to the 1990 edition (ISBN 0945466102) are used with titles of Rothbard’s sections.

Reading I: Through Page 54 (Parts I and II)

1. Does a voluntary exchange indicate an equality of value among the goods exchanged? (Page 16, “The Value of Exchange”)

2. How did money arise? (Pages 15-20, “The Value of Exchange” through “Indirect Exchange”)

3. What are the key limitations of barter? (Pages 16-17, “Barter”)

4. Why did gold and silver displace other commodities as money? (Pages 18-19, “Indirect Exchange”)

5. What is the significance of the fact that money is a commodity? (Pages 19-20, “Indirect Exchange”)

6. What economic advances does money facilitate? (Pages 20-21, “Benefits of Money”)

7. Originally, to what did the names of currencies refer? (Pages 22-24, “The Monetary Unit”)

8. Why does Rothbard endorse private coinage? (Pages 25-29, “Private Coinage”)

9. In Rothbard’s view, what is the proper supply of money? (Pages 29-34, “The ‘Proper Supply of Money”)

10. What is the consequence of an increase or decrease in the supply of money? (Pages 32-34, “The ‘Proper’ Supply of Money”)

11. Does hoarding of money on a free market present a problem? (Pages 35-39, “The Problem of ‘Hoarding'”)

12. For what legitimate reasons do people increase or decrease their cash reserves? (Pages 35-36, “The Problem of ‘Hoarding'”)

13. Why does Rothbard disapprove of the phrase “circulation of money?” (Page 37, “The Problem of ‘Hoarding'”)

14. Should government promote stable prices? (Pages 39-40, “Stabilize the Price Level?”)

15. Can a free market accommodate more than one currency in the same region? (Pages 41-43, “Coexisting Money”)

16. How does a free market in money lead to the exchange of paper receipts, token coins, and checks? (Pages 43-46, “Money-Warehouses”)

17. What is Rothbard’s case against fractional reserve banking? Is his case sound? (Pages 47-53, “Money-Warehouses”)

Reading II: Page 55 to 111 (Parts III and IV)

1. What is the primary difference between the way private individuals and government acquire more goods and services? (Page 55, “The Revenue of Government”)

2. Why does Rothbard write, “Counterfeiting is evidently but another name for inflation?” (Page 56, “The Revenue of Government”)

3. How does counterfeiting (or inflation) transfer wealth from some to others? (Page 57, “The Economic Effects of Inflation”)

4. Which groups are most harmed by inflation? (Pages 57-58, “The Economic Effects of Inflation”)

5. What is the impact of inflation on business calculation? (Pages 58-59, “The Economic Effects of Inflation”)

6. How does inflation discourage “sober effort,” penalize thrift, and encourage debt? (How does this pertain to the modern housing crisis?) (Page 59, “The Economic Effects of Inflation”)

7. How can inflation morph into hyper-inflation? (Pages 59-60, “The Economic Effects of Inflation”)

8. How can inflation cause a business cycle? (Page 61, “The Economic Effects of Inflation”)

9. Before widescale banking and paper receipts for money, how did governments inflate the money supply? (Pages 61-64, “Compulsory Monopoly of the Mint” and “Debasement”)

10. What happens when a government attempts to impose “bimetallism” to control the exchange rate of commodity moneys? (Pages 64-67, “Gresham’s Law and Coinage”)

11. How do legal tender laws act to further devalue the money supply? (Pages 67-68, “Gresham’s Law and Coinage”)

12. How does granting banks the government privilege of “suspension of specie payment” contribute to inflation? (Pages 69-72, “Permitting Banks to Refuse Payment”)

13. How did central banking arise, and what did it do to the money supply? (Pages 72-76, “Central Banking: Removing the Checks on Inflation”)

14. By what mechanisms does the central bank inflate (or deflate) the money supply? (Pages 77-79, “Central Banking: Directing the Inflation)

15. Why do central banks go off the gold standard, and what is the result? (pages 79-84, “Going off the Gold Standard” and “Fiat Money and the Gold Problem”)

16. How does central banking interfere with international trade? (Pages 84-87, “Fiat Money and Gresham’s Law”)

17. What were the basic steps in the U.S. government’s monetary policy over the last two centuries? (Pages 90-111, Part IV)