3. “Countering Walter Block’s “Heroic” Private Counterfeiter.”
by Laura Davidson
Abstract: In his book, Defending the Undefendable, Walter Block (1976) makes the case that an individual counterfeiter of fiat notes does not commit a natural law crime, because money issued by the government is itself counterfeit. Several authors, including Murphy (2006), Machaj (2007), and Davidson (2010), have taken issue with Block’s argument. In Davidson (2010), I maintain that while the issuance and use of fiat currency by the state violates the natural law, fiat notes are not counterfeit, and their use by ordinary people is legitimate. The private counterfeiter is a thief when he exchanges his notes with these innocents, because they are rightful owners of both the fiat currency and the goods for which it is exchanged. Block (2010), in a rejoinder, disputes this on both ethical and utilitarian grounds. The present paper is a response to Block, and an elaboration of my original article. From a natural law perspective, I explore the ethical violations surrounding counterfeiting, and the legitimacy of producing and using fiat money by both the state and the individual.
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The US government actively commits fraud about the value of a dollar. Refer to http://www.govmint.com/search/Gold-Eagles/02GCEA/62. How can you explain that the first item is described by them as “$5″ and can be purchased for “$229″(today, anyway)?
I think Block’s position is better understood with the following thought experiment: imagine a violent gang of thugs took over your neighborhood. They began to print slips of paper with the gang leaders face on it and tell you that all protection services they provide you must be paid in this currency. Would you not agree that brave souls who worked to undermine this gang’s fiat money are heroes?
I agree with your analogy. The State is a violent gang. But I don’t agree that the right way to “undermine this gang’s fiat money” is to engage in private counterfeiting. My argument is that counterfeiting, even of fiat money, is immoral. The reason is this: Even though the use of fiat money by the government and its minions is illicit, its use by those not involved with the state — i.e. innocent people who are not a part of the “gang” — is legitimate. And the private counterfeiter steals from these innocent people. He commits the same act as the government. This hardly makes him a hero.
Theoretically, you could undermine the gang by creating counterfeit money and giving it, proportional to savings, to all non-gang members.
Great paper, by the way.