By Jorg Guido Hulsmann

Who has the right to modify the quantity of money? … [I]n a free society, the obvious answer is: all producers of money have the right to produce more money, and all the owners of money have the right to use their property as they see fit.

In a truly free society, the production of money is a matter of private initiative. Money is produced and sold just as any other commodity or service. And this means, in particular, that in a free society the production of money is competitive. It is a matter of mining precious metals and of minting coins, and both mining and minting are subject to the competition emanating from all other market participants. In selling his product, the money producer competes with all other people who own money and seek to buy the same goods that he desires. And in buying factors of production, the money producer competes with the producers of chairs, theater performances, telephones, carpets, cars and so on. In a word, in a free society the production of money is constrained within fairly narrow limits, limits that are determined by the willingness of other members of society to cooperate with our money producers rather than with someone else.

[Editor’s Note: This was taken from DEFLATION AND LIBERTY Auburn: Ludwig von Mises Institute, 2008, pp. 29-30.]