2. Money and Prices

Many believe that if governments would just issue greater quantities of money then all problems would be solved. In truth that would create unsurmountable problems by lowering the purchasing power of each money unit. Money is the one good that is not made better by increasing its supply.

Rothbard discusses how money originates. Products are originally merely exchanged between people. This is the barter system and it is based upon the double coincidence of wants. Very shortly, one or two commodities like wheat or tobacco emerge on the market as more marketable than others. Money is now a medium of exchange. Calculations and the process of accounting become possible when there is money. Gold and silver emerged over years as the best money. Metals were exchanged in measures of weight, like grams. The slippery slope was created when, instead of weights, names were used for money like francs or dollars.

The second of eight sessions from Murray Rothbard's Economics 101 series.