Michael S. Rozeff has a challenging post over at LRC.
In it he calls for entrepreneurs to produce money and chides Austrian school economists who call for gold or silver to be used as money.
But does money really need to be "produced" and does it have to be produced by entrepreneurs?
Rozeff seems to forget the teachings of Ludwig von Mises and Friedrich Hayek who taught us that money, namely gold and silver, emerged without out it being the plan of anyone. Sort of like the way language without a central planner, Hayek would say.
To be sure, there are miners of gold and silver, but are these mining operations a necessary part of money?
We know from history that, in American POW camps, cigarettes became a means of exchange, that is, money. Some additional cigarettes may have found their way into camps but there was no one "producing" and there was no need for such production for the cigarettes to remain money.
Austrian economists who call for a return to gold and silver may just be demanding that exchange be returned to the medium that was used before governments took control of the printing of paper money.
But this does not necessarily mean they are against a free market in money. Hayek has made clear that a society should allow markets in money to emerge. This could possibly be through an entrepreneur who has hit on a fascinating medium of exchange, or it could develop without direct human guidance, the way gold and silver emerged, or quite likely, if left to free markets, gold and silver would reassert themselves as money that is exchanged on a daily basis.
Of course, an Austrian who is adamant that gold and silver must be the money does not understand free markets. However, an Austrian who is lightly advocating a return to gold and silver as a means to get rid of government controlled money is not committing a grievous sin, if when further questioned he makes clear that ultimately free markets should determine the money.
It is more of a serious sin to state that it must be entrepreneurs who "produce" and create the money. That is not how gold and silver emerged as money and, in a free market, gold and silver could very likely emerge as daily money----even if all gold and silver mines collapse and the supply of gold and silver stays constant.
New production is not necessary for a money and neither is entrepreneurship,