On The Relationship Between Libertarianism and Fascism

In the August 2, 2017 episode of the Tom Woods Show, Woods talks about the moral outrage of left-libertarians and their tendency to call other libertarians fascists, Nazis, or whatever other insults they can muster. To follow up these complaints, he asserted that libertarians and fascists are completely contradictory political perspectives and could never be combined, alluding to the “libertarian fascists” and libertarians with fascist sympathies. He also said that when one embraces fascism, one must have relinquished one’s libertarianism, as there is no other solution that would make sense. In the historical sense of fascism, libertarian fascism is a contradictory term. A person who is a libertarian cannot actually and fully consider themselves a fascist in that sense, or vice versa. However, we can treat libertarian fascism as a placeholder term for a broader ideological shift toward a synthesis of libertarianism and fascism. We may also consider how a private property owner in a libertarian society could have a fascist structure within the bounds of private property.

Examining Premises

The first mistake that Woods (and many other libertarians) make is to assume that the combination of different ideological perspectives is dependent on policy and not the fundamentals of their philosophy. From this, Woods implies that fascism is about centralization and boundless idealism, while libertarians accept people as they are and favor decentralization. Some more simple-minded people also think that fascism is about authority and state power while libertarianism is the complete opposite. This may be true when we look at policy proposals, but policy cannot be the arbiter of ideological coherence or ideologies themselves. We need to analyze the premises of different ideologies if we are to analyze how compatible these ideologies are. This is necessary because ideologies are fundamentally systems of thought and analysis flowing from basic premises. A person using an ideology is a person looking at the world in a certain way and proposing policy positions from that set of value judgments.

To illustrate this, let us consider the example of Milton Friedman. Milton Friedman is claimed by both libertarians and neoliberals as representing their ideologies. This means that both libertarians and neoliberals see Friedman as using their methods of analysis and looking at the world in the same manner that they do. But here we find a contradiction; there appears to be a problem if we are to place neoliberalism and libertarianism on a scale of politics. First, we have to establish that there is a connection between Rothbard and Friedman when it comes to libertarianism; that is, that one could draw a straight line from Rothbard to Friedman and it would naturally follow from their ideological positions. This may be done; one can see that both men respect property rights, advocate for reducing the size of the state, and wish to increase the freedom of the market. But one must also draw a line from Hillary Clinton to Friedman, as they are both neoliberals. Both are cosmopolitan, fairly progressive, and advocate for a sort of economy that is not only free but also open. Although they differ in their degree of state intervention, one can ideologically connect Friedman and Clinton.

But there is a problem, in that no such connection is present between Rothbard and Clinton. There is no consistent line that could connect Rothbardian thought with Clintonian thought. Their philosophies and perspectives are mutually exclusive. There is no principled alliance or synthesis between them; only alliances of convenience may exist. However, when it comes to Friedman, there may be a synthesis between these ideologies. Both Rothbardians and Clintonians will have their criticisms of Friedmanites, but Friedman’s position is palatable for both neoliberals and libertarians. This is because Friedman used both the premises of neoliberalism and the premises of libertarianism. He analyzed the world in a way that followed from the neoliberal desire for openness and personal freedom and the libertarian desire for self-determination and liberty. We can boil down these two positions to this: the neoliberals want looseness while libertarians want property. Neoliberals tend to favor whatever makes national identity, economic policy, or social cohesion looser. Libertarians tend to favor whatever makes property rights stronger, whether it be self-ownership, non-aggression, or property rights in external objects. Coming from both perspectives, one would both appreciate property rights and self-determination but also a loose society without national identity or strong social norms, and this explains the desires of left-libertarians. Friedman was first and foremost an economist, so we see more of the propertarian side of him, but he was also a neoliberal.

The Premises of Fascism

We have already established that the libertarian premises are self-ownership, non-aggression, and property rights. Libertarians tend to favor whatever increases the power of the property owner over his justly owned property. But what do the fascists take as their premises? Contrary to popular belief, it is not opposition to property or to personal liberty. No fascist regime has ever gotten rid of property and the personal liberty question has only been a policy proposal, not something most fascists believe in strongly. There are some fascists who are against property, but they are few and far between and have never had a strong presence in a notable fascist government. In fact, most fascist governments suppress these left-wing variants. In fiction, some fascists are opposed to personal liberty on principle, but these are not reflected in reality; the closest real approximation are people who believe that control is necessary for virtue. But in that case, the premise is virtue rather than control, as the fascist does not want control for the sake of control. To really understand the fascists, we need to look at fascist movements.

In Italy, there were the national syndicalists that eventually became the fascists. They believed in creating a pseudo-syndicalist economy that combines worker interests and business interests to reduce class conflict. They also believed in strengthening Italian society and creating an incredibly traditionalist social order. The Nazis shared the second point, but they wanted an economy where there is comparatively stronger property and there are more capitalistic structures, but on the condition that these structures benefit the nation. In this form, national socialists treat property owners as trustees given property by the nation to take care of the wealth and resources of the nation. We can see many other movements that hold themselves to be both anti-communist and anti-capitalist, but eventually, end up with what we would call a fascist economic policy.

Other movements were somewhat different. The Francoists come from the more orthodox Falangist position, and they are outliers because Franco eventually liberalized the economy and created a more free market than many people would have favored originally. Though Hitler privatized multiple industries, this was nothing compared to the Spanish miracle. The Greek military coup lead by Papadopoulos constantly referred to their movement as being explicitly temporary, however, the attempts of liberalization by Papadopoulos were shut down by other people within the government. It is impossible to know how Greece would have developed if these liberalizations had occurred, but the government was overthrown and Greece eventually became a leftist mess.

One could include Pinochet and use the Chilean miracle as another example of success, but fascists often consider Pinochet to be a sellout, and it is not entirely clear whether Pinochet was actually a fascist or simply a paid CIA operative; an anti-communist or globalist agent. Finally, one can look at the American Nazi party. They are certainly fascists, but they are also constitutionalists. They want to return to the founding documents of the United States, and support sound money and free markets. This contradicts the common image of fascism, and thus may befuddle any libertarian who has not analyzed the premises of fascism.

The Conclusions of Fascism

What all these movements had in common was the ultimate goal of creating a better nation. This meant creating a world where the destructive forces that were threatening to the nation could not take hold and the nation could prosper. They all wanted a society and an economy based around the nation, which they believed would create a better life for the people within that nation. One can see how the policies of all these movements actually follow from the nationalism that fascists take as their ultimate premise. Many say that fascists have no coherent economic policy, but this is untrue. The economic policy of fascists is and always has been to strengthen the nation. The 20th century was marked by a struggle between Marxist world socialism and liberal world capitalism. The Marxists agitated the workers while the liberals agitated the middle and upper classes, creating an immense class conflict that fueled revolution and chaos. The fascists in the early 20th century came along and attempted to create an economy that would work both for the upper and the lower classes, an economy where the workers would get what they think they deserve while the capitalists could keep their capital and use it productively. To do this, they wanted the state to have control of the economy to make sure that no one is exploited (at least, by any entity other than the state) and that everyone will work for the nation to ensure a lack of parasitism for greedy or materialistic purposes (again, outside of the state itself). When this was shown to be unsustainable, the smart fascists shifted to a policy of privatization. This happened under Hitler and Franco to various degrees; they ultimately let go of some state property and handed it to people who used it productively. The Nazis were not ready to give up their desires for the aesthetic advancement of the German people, so they needed to expand their empire to fuel their faulty economy, but some privatization still took place.

The social policy of fascist regimes has always been to make sure that the nation is sustainable and that the nation does not slide into degeneracy. From this follow positions against promiscuity, homosexuality, drug use, and whatever else people do in order to derive hedonistic pleasure at the expense of a healthy society. It also has a strong connection to the view that traditional family structures should be the basis of society, meaning that incentivizing motherhood and the creation of strong men to take care of the women is proper for sustaining the nation. This explains the ethnic element of fascism, as all nations are ultimately determined by the genetic stock of their people and the historical condition where the people have developed. Furthermore, this explains why anti-Semitism is present in historical fascist movements, as fascists tend to view Jews as a hostile minority with disproportionate influence that works to undermine the nation with moral degeneracy and financial manipulation while refusing to assimilate into the host nation.

Libertarianism and Fascism

First, from the premises of libertarianism, fascism is a lesser evil than left-wing socialism. Fascism undoubtedly preserves property more than left-wing socialism does, thus fascist sympathies cannot be construed as completely anti-libertarian. But one cannot take as ultimate goals both nation and property, as the conflicts between these goals would have to be solved by means of arbitrary decision. This means that libertarianism and fascism cannot be combined as ideologies because their premises are different. One may combine republicanism, minarchism, monarchism, anarcho-capitalism, etc. into a broad political movement, as the premises of these positions are sufficiently similar. But there is no way to create a big tent movement that can accurately represent the interests of both fascists and libertarians; the premises come into too much conflict.

Second, there is some value in the notion of being a fascist politically while being a libertarian philosophically. This is a position that some people are becoming more and more sympathetic towards. Left-libertarians like to refer to these people as “helicopterists,” so we can use that term to describe this position. What these people tend to believe is that a military dictatorship is necessary or beneficial if we are to establish a libertarian social order and that we cannot simply transition to absolute liberty without first making sure that policies are implemented to push society toward that goals. These people often argue for violent suppression of leftists, which is not what libertarians traditionally favor, and for a general purge within society that would result in favorable conditions for the formation of a libertarian society.

Third, libertarians may take nationalism as a premise and fascists may take property as a premise, even thought these cannot be their ultimate premises due to the aforementioned conflicts. Fascists may advocate for free-market economics insofar as it increases the health of the nation, while libertarians may advocate for nationalism insofar as it strengthens self-ownership, private property, and non-aggression. In this manner, libertarians and fascists can find common ground by using common premises, and they can create a compromise that is palatable for both fascists and libertarians. We touched upon Milton Friedman earlier to show that it is theoretically and practically possible to embrace different premises even though the policy proposals may contradict themselves. Although there can be a degree of collaboration between libertarians who value the nation and fascists who value property, they will still ultimately be fascists and libertarians, respectively. The priority between property and nation determines with which camp people identify.

Finally, it is possible for a private property owner to administer one’s holdings according to the structure of a fascist dictatorship. Being the owner of property means having a right to exclusive control over it, including its governance structure. However, libertarian standards do not permit forcing non-aggressive people to come into such a structure or remain there against their will, so a libertarian running a fascist governance structure within private property will have to be far less oppressive than statist fascists in order to keep a regime populated. This kind of governance, which offers people no voice and free exit, has proven best at limiting state power throughout history. It would also be best for limiting the tyranny of the private property owner that so concerns critics of libertarianism.

On the Supply Objection to the Gold Standard

Since the gold standard was abandoned in 1971, many people have sought to return to such a standard in order to combat inflation and rein in central banks. Keynesians and others who support fiat currency and central banking present several criticisms of this approach. One of these criticisms is particularly nonsensical, but occurs with increasing frequency: that there is not enough gold in the world to back the quantity of currency in existence, and thus returning to gold would set off a deflationary spiral while destroying several industries that depend on gold. Let us address this question from a scientific standpoint, return to economic matters, and address the claimed effects.

Physical Limits

Let us begin by finding the absolute limit of what gold can do for a monetary system. As the United States dollar is the world reserve currency at the time of this writing, it makes sense to use it as the currency to peg to gold. The smallest unit of gold is the atom, and the smallest unit of dollars is the penny. The most extreme possible case would be to set one penny equal to one atom of gold. What would this look like in practice? Any basic text on chemistry can lead us to the answer. The only stable isotope of gold is Au-197, and its molar mass is 196.967. This means that in about 197 grams of gold, or 6⅓ troy ounce coins of the type minted by many governments and private mints, there will be Avogadro’s constant of atoms, which is 6.022140857×10^23. Setting one penny equal to one atom of gold, this is $6.022×10^21 or $6.022 sextillion easily fitting in one’s hand.

This amount of money is so large that people cannot truly understand it due to the lack of a frame of reference for it. Few people will handle anything beyond millions of dollars at any point in their lives. Large businesses may deal with billions of dollars. The most powerful governments have budgets in the trillions of dollars. According to a History Channel documentary, the dollar value of the entire planet is in the quadrillions of dollars, checking in at $6,873,951,620,979,800, and subtracting Earth’s gold content leaves $6,862,465,304,321,880. As the limit of one penny per atom allows one to hold the current market value of a million Earths in one’s hand, it is clear that science imposes no physical limit to make a gold standard infeasible.

Another useful exercise is to try setting the value of all available gold equal to the value of the rest of the planet. The total available gold content at present amounts to 186,700 metric tons. Defining this amount of gold to be worth the above figure of $6,862,465,304,321,880 gives a gold price of $36,756.64 per gram or $1,143,259.40 per troy ounce. This is very expensive by current standards, but current standards do not come close to economizing the entire planet. The actual price would therefore be far lower than this, but this exercise is useful for setting an upper bound.

Current Prices

Perhaps critics of restoring sound money mean to say that the gold standard could not be reintroduced at current gold prices. In this, they are correct; at the time of this writing, gold trades at $1,284 per troy ounce. Multiplied by the 186,700 metric tons of gold available, this gives $7.707 trillion of gold-backed currency, which is not enough for the United States economy, let alone the entire world. The solution, then, is to devalue fiat currencies to fit the available gold supply. According to the CIA World Factbook, the gross world product in 2015 was $75.73 trillion. Covering this with the available gold gives a gold price of $12,616.75 per troy ounce, which is an order of magnitude above current prices, but not outlandish.

Possible Effects

Gold has gained several practical applications in recent times, particularly in medicine and technology. Critics claim that returning gold to monetary use would devastate these industries, along with the jewelry industry. In each case, critics are overreacting. Research toward creating substitutes which work nearly as well in electronics is promising. Gold salts in medicine have numerous side effects, monitoring requirements, limited efficacy, and very slow onset of action. Finally, there is no particular reason why we should care about an industry that produces impractical novelties to the extent of protecting it through fiat currency. It would be better to free up jewelers to do something more productive and helpful to others.

The other major criticism is that returning to a gold standard will cause a harmful episode of deflation. Paul Krugman writes,

“[W]hen people expect falling prices, they become less willing to spend, and in particular less willing to borrow. After all, when prices are falling, just sitting on cash becomes an investment with a positive real yield – Japanese bank deposits are a really good deal compared with those in America — and anyone considering borrowing, even for a productive investment, has to take account of the fact that the loan will have to repaid in dollars that are worth more than the dollars you borrowed.”

But those who are less willing to spend or borrow are necessarily more willing to save, which will allow them to spend more later or fund new businesses and investments. There is also the matter that one cannot hold out forever; one must eventually purchase goods and services. That the technology industry thrives despite producing the most deflationary goods shows that there is nothing harmful about this. It turns out that the value of using a current computer over the next year is worth more than holding out for a more powerful computer next year. It is also true that holding out for more food next month does not work if one cannot survive until then without food now. One may object that this would concentrate wealth in the hands of those who can hold out, but this is a feature rather than a bug because it redistributes resources to those who have been good stewards of resources.

Those who have already borrowed face a larger debt burden in a deflationary environment, and though creditors experience an equal gain, creditors are unlikely to increase their spending to offset the reduced spending of debtors. But again, this is a feature rather than a bug because it incentivizes saving over borrowing while pushing some debtors into default, thus punishing unwise lenders with loss of principal and unwise borrowers with bad credit ratings.

With falling prices, profits and wages usually have to fall as well. But profits are a function of prices and costs, which are also prices. This leaves profits largely unaffected on a percentage basis. Wages are prices as well, and the need to cut nominal wages in a deflationary environment could both incentivize firms to release their worst employees and provide pushback against minimum wage laws.

Finally, there is the belief that the sort of deflation that may be caused by returning to gold would cause a recession. But the above rebuttals deprive this problem of any mechanism by which it might occur. In fact, the empirical evidence suggests that deflation is linked to economic expansion, as occurred in the United States during the 19th century. The only period in which a correlation between deflation and depression does appear is the Great Depression (1929-34), and this may be linked to the central bank policies of the 1920s, which fraudulently inflated the money supply beyond the set gold exchange rates of the time.

Conclusion

While a free market in money would be the most desirable condition from a libertarian perspective, returning to a gold standard is a superior option to that of allowing fiat currency and central banking to continue as they are. The concerns about a lack of gold supply for returning to a gold standard are without merit, and the fears of deflation and devastation to industry are unfounded.

Book Review: Our Sister Republics

Our Sister Republics is a book about the history of the United States and its relations with Central and South America in the early 19th century by history professor Caitlin Fitz. The book discusses the popular sentiment in favor of revolutions against Spanish and Portuguese control in Latin America following the War of 1812, which turned sour after 1826 as the new republics suffered civil unrest and incompetent governance while the United States turned toward racialist nationalism.

Fitz first presents a map of the Americas as they were in 1825, to which the reader should continually refer while reading through the book in order to have a better sense of the involved geography. In the introduction, she explains her terminology, briefly covers American history from the Revolutionary War to the War of 1812, and gives a short overview of what she covers at length in the rest of the book.

The opening chapter explains the context in which Americans first came to look fondly upon South America. Early references to Christopher Columbus would lead to the concept of a liberty-loving Columbia. Spain’s distractions with European wars resulted in less trade restrictions between the US and Spanish America. These factors led to affinities for Spanish America once they began to revolt against their colonial masters. Even then, there were some reservations about the ability of South Americans to form republican governments. From 1810 until the mid-1820s, these reservations came to be expressed only when revolutionaries faltered. It helped that the US fought a second war for independence while the South Americans were fighting their first.

The second chapter discusses the agents of revolution who came to the US to foster support for South American rebels. Occasionally exceeding neutrality laws and frequently using American presses for propaganda purposes, they helped provide revolutionaries with the materiel they needed to secure independence. Fitz shows that this was a colorful cast of characters in more ways than one, and illustrates the undercurrent of race which would eventually come to the forefront.

The third chapter gives an overview of the activities of the press in the 1810s, showing how they affected (and sometimes manipulated) public opinion in favor of the revolutionaries. There were occasional dissenters, but they would be marginalized and rebutted until some years into the 1820s. Fitz demonstrates that then as now, there is no such thing as objective journalism because editors are more likely to publish and treat favorably that which they support.

The fourth chapter is about Simon Bolivar and the perception of him in the US. Fitz shows through toasts and baby names that Bolivar gained much admiration in the US, even as Bolivar did not respond in kind. Both whites and blacks found something to like in Bolivar, even though these aspects were quite different. Whites saw republican unity; blacks saw an abolitionist leader.

In the fifth chapter, Fitz discusses the US government’s actions toward South America at the time. Some black and white pictures augment the chapter, and would have improved the book elsewhere had they been included in other chapters. The role of merchants in financing and supplying revolutionaries is examined, along with the activities of privateers and filibusterers. Many Americans today would be surprised to know how many in those days volunteered to serve in foreign militaries. The second half of the chapter focuses on the important American political personalities of the time: Henry Clay, James Monroe, and John Quincy Adams, but finally the rise of William Smith and those like him who eagerly defended racism and slavery.

The sixth chapter begins with the election of 1824 and the “corrupt bargain” that awarded the Presidency to John Quincy Adams instead of electoral vote leader Andrew Jackson. This event set the stage not only for the Whig versus Democrat party system, but for the turning of the tide in relations with South America. Fitz explains how the passivity of the egalitarian sentiments of the time left them vulnerable to growing slavery in the southern US and the arguments in favor of it. The controversy over the Panama Congress of 1826 furthered the shift in American views toward their southern neighbors. Though Clay, Adams, and Bolivar had high hopes, the congress was a disaster. It is interesting to note that some themes have been constant throughout American history; the Democrats’ antebellum platform of limited government, nationalism, racism, opposition to social reform, and economic populism has much in common with the views of the alt-right. And as always, when rhetoric and reality depart from one another, reality always wins in the long run.

The conclusion looks forward to the 1830s and beyond, showing how the sentiment of the 1810s and its reversal in the 1820s manifested going forward. Fitz ends the book by wondering how America could have turned out differently and for the better had the sentiments of the 1810s not been overthrown. The second half of the book shows how American exceptionalism originated as a pro-slavery, white supremacist idea, and how the US came to be a foe of anti-colonial movements in the 20th century.

Fitz’s appendix and notes demonstrate that she certainly did an appropriate amount of research for the project. Overall, this is an excellent book that covers an oft-neglected aspect of early US history in a manner which engages the reader much better than the average history book.

Rating: 5/5

Cut Puerto Rico Loose

On May 2, the Puerto Rican government missed an interest payment on bonds it has issued to an extent of $422 million. Worries of default on the territory’s general obligation bonds are continually rising, as it appears that a $2 billion payment due on July 1 will also go unpaid.

Of course, the usual suspects are calling for intervention to “save” the island from its financial woes. Some Democrats are openly clinging to Keynesian ideas of bailouts for troubled financial instruments, despite the abject failure of such measures to repair the mainland U.S. economy since 2008. Meanwhile, House Speaker Paul Ryan has made the statement that “[o]ur primary responsibility is to protect the American taxpayer and to help bring order to the chaos that will befall Puerto Rico if the status quo continues going in the direction it’s going,” which is contradictory because attempting to rescue Puerto Rico will require victimizing not only the American taxpayer, but everyone who holds U.S. dollars.

That such a bailout would be funded by money gained by the state through extortion and currency debasement is terrible enough, but rescuing Puerto Ricans from the just consequences of their actions also creates a moral hazard. If Puerto Rico, then why not Detroit? Chicago? California, even? If $72 billion in debt plus $44 billion in unfunded liabilities for a outlying territory, then why not more for the U.S. mainland? Rewarding and subsidizing bad behavior only encourages more of it, not only from some irresponsible actors, but from all of them.

It must also be noted that in the current political climate, Republicans will be demonized by Democrats and the lapdog media regardless of what happens, and the Republican rank-and-file will be given the shaft. If there is no bailout, then Democrats will accuse Republicans of being too stingy to help people in need, especially ethnic minorities. If there is a bailout and trouble continues, which it will under such circumstances, then Democrats will blame Republicans for not using enough stimulus and/or for allocating the funds poorly. If one will face accusations regardless of one’s actions, then one might as well get one’s money’s worth and do the right thing. And what is the right thing?

Do not only abstain from bailouts; cut Puerto Rico loose.

Let us face facts; Puerto Rico has never really been a part of America, not in terms of economics, culture, language, or identity. In fact, it was not a part of America at all until 1898, when the United States gained control of it from Spain (along with Guam and the Philippines) under the Treaty of Paris, which ended the Spanish-American War. For four centuries prior since being claimed by Columbus in 1493, Puerto Rico had been a Spanish colony. The people there used the Spanish language, but developed their own sense of culture and national identity. (This commonly occurs upon islands, as the ocean makes for a clear barrier between in-group and out-group.) That they may call themselves U.S. citizens is only a matter of law.

The economic well-being of Puerto Rico is not on par with the rest of the United States. If it were an independent nation, it would rank between 60th and 62nd in GDP, with a similar economic output to Angola, Morocco, and Slovakia, none of which are exactly paragons of economic development. If it were a U.S. state, it would rank 37th out of 51. The difference is far more pronounced when considering other measurements. In terms of public debt to GDP, Puerto Rico has a debt of 66 percent of GDP, while no U.S. state exceeds 25 percent. The per capita public debt of Puerto Rico is $19,486.60, which exceeds that of every U.S. state but is lower than that of the District of Columbia. The per capita income in Puerto Rico is $11,241, placing it just above half of the worst U.S. state (Mississippi, $21,036) and far below the best (D.C., $45,877; Connecticut, $39,373).

While cutting Puerto Rico loose is a matter of rational self-interest for mainland Americans, it is also a way to end their victimization at the hands of central bankers and the investors who react to their pernicious policies. While a free market would have much higher interest rates and no currency debasement, central banks like the Federal Reserve have kept interest rates artificially low and have greatly expanded the monetary supply. Savers who are used to getting a reasonable rate of return in a savings account thus have to seek riskier alternatives. Those who have enough capital to access hedge funds, high-risk sovereign debt becomes an attractive option. Those who are poorer either sit on fiat currency as it loses value or venture into precious metals and cryptocurrencies, which can pose even more risk and volatility. While Puerto Rico would likely form a central bank and issue its own fiat currency if it were cut loose, this would keep the Federal Reserve from imposing an economic system which encourages booms that favor foreign investors at the cost of busts that burden Puerto Ricans. A problem of this sort has already been seen in Greece, and the mistakes made by the European Central Bank should not be repeated.

The Federal Reserve Turns 100: A Timeline Of Economic Mismanagement

On Dec. 23, 1913, Congress passed the Federal Reserve Act, which created a central banking system in the United States, of which all nationally chartered banks were forced to become members. (State banks had a choice, but nonmember banks had to keep deposit accounts with member banks, and so were under control of the Federal Reserve as well.) The Federal Reserve Note, the current legal tender, was also created at this time. It has now been a full century since this institution was created, so let us reflect upon its various (mis)deeds. This a timeline of some of the major events involving the Federal Reserve over the past century:

1913: The Federal Reserve is created.

1914: Benjamin Strong becomes the first Governor of the Federal Reserve Bank of New York, which was the most powerful position in the Federal Reserve until the Banking Acts of 1933 and 1935. Charles S. Hamlin becomes the first Chairman of the Federal Reserve.

1916: Prices have increased over 10 percent since 1913. William P. G. Harding becomes Chairman of the Federal Reserve.

1918: World War I drives prices higher. Prices have increased over 50 percent since 1913.

c. 1919: The money supply has doubled since 1913. This is an inflation rate of 100 percent in a six-year period by the correct definition of inflation.

1920: Prices have doubled since 1913. This is an inflation rate of 100 percent in a seven-year period by the commonly used (but incorrect) definition of inflation. This, along with the realignment to a peacetime economy following World War I, helps to cause the Depression of 1920-21.

1921: Following the Depression of 1920-21, the Fed continues inflationary policies to pay off war debts and help the Bank of England maintain a phony gold standard. This consequences of this were partly to blame for the Great Depression.

1922: Prices fall, but have still increased 70 percent since 1913. Prices remain near this level for the rest of the decade. Daniel Crissinger becomes Chairman of the Federal Reserve.

1927: Roy A. Young becomes Chairman of the Federal Reserve.

1928: Benjamin Strong dies in office. George L. Harrison becomes President of the Federal Reserve Bank of New York.

c. 1929: The money supply has tripled since 1913.

1930: Eugene Meyer becomes Chairman of the Federal Reserve.

1930-33: Prices fall again, and continue falling until reaching a low of 31 percent above 1913 levels in 1933. Prices remain near this level for the rest of the decade.

1933: Eugene R. Black becomes Chairman of the Federal Reserve. President Franklin Roosevelt orders that gold owned by American citizens be confiscated and replaced with Federal Reserve Notes.

1933-35: The Banking Acts create the Federal Deposit Insurance Commission, insuring individual deposits and thereby creating a moral hazard for banks, which no longer needed to be as careful with their assets.

1934: Marriner S. Eccles becomes Chairman of the Federal Reserve.

1938: The Federal Reserve panics at the potential for inflation, and doubles the minimum reserve requirements. This sends the economy into a tailspin of credit liquidation.

c. 1941: The money supply has quadrupled since 1913.

1941-45: World War II drives prices higher, from 41.4 percent above 1913 levels in 1941 to 81.8 percent above 1913 levels in 1945.

c. 1943: The money supply has quintupled since 1913.

1947: Prices are again more than double those of 1913.

1948: Thomas B. McCabe becomes Chairman of the Federal Reserve.

1951: William McChesney Martin becomes Chairman of the Federal Reserve.

c. 1952: The money supply has increased ten-fold since 1913.

1960: The money supply has increased twenty-fold since 1913.

1961: Prices have tripled since 1913.

1966: The money supply has increased thirty-fold since 1913.

1970: Arthur F. Burns becomes Chairman of the Federal Reserve. The money supply has increased forty-fold since 1913.

1971: Prices have quadrupled since 1913. President Nixon ends the Bretton Woods system, closing the gold window. From this point onward, the Federal Reserve is able to create currency at a much greater pace, leading to much faster inflation and price increases.

1972: The money supply has increased fifty-fold since 1913.

1975: Prices have quintupled since 1913.

1978: G. William Miller becomes Chairman of the Federal Reserve.

1979: Paul Volcker becomes Chairman of the Federal Reserve.

1980: The Depository Institutions Deregulation and Monetary Control Act gives the Federal Reserve more control over non-member banks. The money supply has increased one hundred-fold since 1913.

1983: Prices have increased ten-fold since 1913.

1987: Alan Greenspan becomes Chairman of the Federal Reserve.

1990: The money supply has increased two hundred-fold since 1913.

1995: Prices have increased fifteen-fold since 1913.

2000: The money supply has increased three hundred-fold since 1913.

2004: The Federal Reserve lowers its interest rate target, leading to malinvestments in housing that create a bubble. The money supply has increased four hundred-fold since 1913.

2006: Ben Bernanke becomes Chairman of the Federal Reserve. Prices have increased twenty-fold since 1913. The housing bubble peaks.

2008: The money supply has increased five hundred-fold since 1913. The housing bubble bursts. The Federal Reserve begins quantitative easing in an attempt to mitigate the financial crisis of 2007-08.

2009-2011: Bloomberg L.P. sues the Board of Governors of the Federal Reserve System for disclosure of information about banks and other financial institutions that had borrowed from the Federal Reserve discount window during the United States housing bubble and ensuing financial crisis. The Fed was forced to release the information, which showed that the Fed had made as much as $1.2 trillion available to banks and other companies in the form of emergency loans between 2007 and 2010.

2013: Over the past century, the US dollar has lost 95.6 percent of its purchasing power. On average, an item that cost $100 in 1913 costs $2,354.23 at present. Also, while there were approximately $16 billion in circulation in 1913, this has expanded to $10.9718 trillion, an increase of over 68,000 percent.