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.
Abstract: In the inflation-deflation debate, deflationists view credit as the most important factor affecting prices. As far as they are concerned, the credit contraction of 2008 caused prices-in-general to fall, and prices will continue to fall unless bank lending resumes. But are these opinions based on a sound understanding of economics? The first part of this article examines the causes of price inflation and deflation from a theoretical perspective. The analysis is firmly in the Austrian tradition. The theory is then applied to recent historical data to show that the general price deflation that began in the wake of the financial crisis was not the direct result of a contraction of credit. The article concludes with a discussion of the prospects for price inflation and deflation in the future.