“Hülsmann’s speciality is money and banking, but he’s far from a dry technician studying the mechanistic workings of monetary systems. He is instead a real Misesian, someone devoted to explaining economics as the stuff of life and an integral part of human society. His excellent book The Ethics of Money Production is a short but lucid explanation of what happens when the state controls money: inflation, war, welfarism, deficits, loss of capital, loss of savings, and even personal destruction — all engendered by high time preference and low interest rates.”
JD: You have a chapter in your book called “The Cul- tural and Spiritual Legacy of Fiat Inflation.” I love this chapter because you demonstrate how an express policy of inflation makes government grow at home and abroad, by financing welfarism and foreign wars. But you go farther at the end of the chapter, and sug- gest inflation makes us worse people on an individual level. I sense there’s another book you could write on this idea alone.
GH: Actually one of my doctoral students is working on this topic. Let’s see how well he does! One big problem with monetary intervention is that it “de-responsibilize” us, destroys the virtues in us. It destroys morals from within. The whole point of morals is to lead a successful life. This is something that’s often not sufficiently appre- ciated because you associate morals with a whole item list of constraints that you put on what people would like to.
GH: Self-sacrifice for the mere sake of sacrifice, rather than in the pursuit of a higher end. But this is not the traditional conception of the virtues, as we find it most notably in the Christian canon of cardinal and theological virtues. These are attitudes, mental dispositions that make for success in life, that make us more successful, not only on our personal way to heaven, but also in our social relations. Now, monetary interventionism destroys this because what is virtuous holds true under the premise that you have clearly defined and protected private property rights, that you have something like responsibility, that if you make a wrong choice, there will be negative feedback because it ultimately falls back on you, you’re responsible for the wrong things that you do. You mess up your social relations, you mess up a friendship, you betray your relatives and your wife and so it will ultimately fall back on you. But, in our society, we do all kinds of things and have the government intervene in various ways, to prevent the cost being too high on people who behave recklessly, both in their social relations and as far as their own individual behavior is concerned. Think of drug consumption or sports that are excessively risky, or of divorce. We are socializing many of the risks associated with such behavior, and this of course cannot fail todestroy virtue from within, and at the end of the process, everybody asks themselves, well, first of all, why should I behave virtuously?”