Fiat Money and the Nation-State
• Fiat money has given governments the ability to become more authoritarian, leading to a welfare/warfare state, surveillance state, police state and militaristic tyrannies.
• The central control of money empowers governments to run deficits on their budget, allowing them to spend without having to tighten budgets or raise taxes.
• This has enabled unprecedented destructive power of governments in the last 100 years.
Individual Level Incentives
Fiat money has incentivized individuals to have higher time preferences through ubiquitous debt and lack of savings vehicles. This means that people are more likely to prioritize short-term gains over long-term stability and growth. This can lead to decisions which are not always in their best interests as they focus on immediate rewards rather than building for the future.
Company Level Incentives
At the company level, fiat money has led to unnaturally large companies which have replaced families in some cases. These mega corporations are often focused on maximizing profits at all costs and this can lead to practices which may be detrimental to workers or local communities. Furthermore, this can reduce competition as large companies dominate markets and crush smaller competitors with little incentive for innovation or true competition in the market place.
Nation-State Level Incentives
At the nation-state level, fiat money gives those in power an immense amount of control over their country’s finances due its obscured mechanisms of central banking. Governments are able to run deficits on their budget with impunity while free market interest rates remain high – meaning there is an opportunity cost inherent in sound money which disappears under fiat money systems. As a result, government authority and power have expanded significantly over the past century with dire consequences for many citizens around the world.
In conclusion, it is clear that fiat money has had a significant impact on how individuals live their lives as well as how businesses operate at both company and nation-state levels. From increased debt levels amongst individuals leading greater risk taking behavior, through artificial corporate giants dominating markets reducing competition – right up to governments running deficits with impunity – it is plain that much of our modern society is built upon a house of cards constructed from fiat currency and its associated incentives systems..