📚 The Case Against the FED by Murray N. Rothbard
Bitcoiner Books #38
In The Case Against the Fed, Murray N. Rothbard explains that central banking (especially the U.S. Federal Reserve) doesn’t exist to “stabilise” the economy. It exists to fund government spending and enable taxation by stealth, resulting in a system that predictably produces repeated boom-and-bust cycles rather than genuine economic stability.
One of Rothbard’s strongest arguments is about money supply expansion. He argues that creating new money is essentially legalised counterfeiting. Printing more money doesn’t make society richer; it benefits the people closest to the money printer (governments, banks, and large institutions) who get to spend the new money first, while everyone else gets poorer as prices rise and savings are diluted. Bitcoiners now know this as the Cantillon Effect, but Rothbard was laying it out decades earlier.
Most people treat inflation as normal, just “how the world works.” Central bankers will confidently tell you that 2% inflation is ideal, without ever properly explaining why. Rothbard rejects this entirely. In his view, inflation isn’t natural or harmless, it’s the direct outcome of monetary manipulation. Constant money creation quietly destroys trust, makes long-term planning impossible, and rewards debt, leverage, and speculation over saving and actual productivity. The idea that the Fed “controls” inflation or smooths out recessions is, frankly, nonsense.
What makes The Case Against the Fed feel especially relevant today is how cleanly it contrasts with Bitcoin. Fiat money can be expanded endlessly, Bitcoin cannot. Central banking runs on authority and backroom decision-making, Bitcoin runs on rules, transparency, and voluntary participation. Rothbard never lived to see Bitcoin, but his writings about money has helped a lot of people understand why sound, scarce money matters and perhaps why Bitcoin is the perfect money.
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If you don’t have time to read the book, watch this short, interesting analysis!
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Excellent connection between Rothbard's critique and Bitcoin's architecture. The point about how money creation benefits those closest to teh printer (Cantillon Effect) is crucial and watching this play out in real-time with Fed policy has made Rothbard's arguments from decades ago feel almost prophetic. I always found it intresting that mainstream econ still defends 2% inflation targets without acknowledging that it's just institutionalized wealth transfer, not some neutral economic constant.