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Venezuela Needs Monetary Freedom, and Soon

February 8, 2018 in Economics

By Luis B. Cirocco


By: Luis B. Cirocco

We’ve heard many excuses from the Venezuelan state: “private property can’t not be protected under such a system,” and “schools of economics will close because we won’t need economists to control monetary policy,” and “we tried that in the past,” and “our currency is a national symbol,” and “it destroys jobs!” Many have been the sophisms spread by Venezuelan “intellectuals” and politicians over decades to demonize what should be one of the most natural market processes of a society: monetary freedom, otherwise known as “currency competition.”

The selection of one particular medium of exchange (money) or various media of exchange as a market process, and not as a governmental imposition, is explained in a masterful way by Murray Rothbard in his essay What Has Government Done to Our Money? and by Friedrich von Hayek in his essay Denationalisation of Money, just to mention two outstanding examples. Detractors and criticisms based upon the most ridiculous and selfish fallacies are particularly abundant in Venezuela to justify the intervention of the state through “legal tender” laws and other laws designed to force citizens to use only the money approved by the Venezuelan state.

Why It’s Important

In my personal case, I first heard the concept of monetary freedom while I was studying in a master’s course in 2011. It was the first time I heard names such as Mises, Friedman, Hayek, and Rothbard, and then I became aware of the essence of their work in defense of liberty. It was in that class where Dr. Hugo J. Faría showed us that there is an efficient way to protect the fruit of people’s work that has been overlooked — on purpose — by our intellectuals and “leaders” for decades. The benefits of currency competition are ignored because it would empower individuals while curtailing the power of the state and other state-favored elites. 

Of course, in Venezuela at this point in history, denationalizing the money should also be accompanied by an effective and profound institutional reform focused on the protection of natural rights, the empowerment of citizens — and not of government, and the establishment of a free market economy.

How It Works

In the simplest form of the system, the US dollar, the euro, and the Venezuelan bolivar — for example — could coexist within the country, allowing people to have options to better protect their savings and negotiate with their employers the currency in which …read more


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