WEBVTT NOTE The Euro Currency in the Light of the Progression Theorem 1 00:00:00.000 --> 00:00:07.800 Mainstream economists have been fervently advertising the economic advantages of Europe's single currency, the euro, 2 00:00:07.800 --> 00:00:19.800 which was introduced on 1st January 1999, meant to mark the final and crowning step in Europe's political and economic integration. 3 00:00:19.800 --> 00:00:27.800 The purpose of this article is to revisit and reinterpret the logic of the emergence of the euro 4 00:00:27.800 --> 00:00:34.800 Along the lines of the progression theorem, which denotes, to use a quote from Hoppe, 5 00:00:35.400 --> 00:00:41.680 a theory of the destruction or devolution of money by government. It will be argued in 6 00:00:41.680 --> 00:00:48.680 my paper that the euro is an illustration par excellence of what the progression theorem 7 00:00:49.440 --> 00:00:56.440 holds, namely that states will first replace commodity money with fiat money, second cooperate 8 00:00:56.440 --> 00:00:59.840 Second, cooperate for eliminating competition 9 00:00:59.840 --> 00:01:04.240 between national fiat monies, thereby three, 10 00:01:04.240 --> 00:01:07.240 working towards establishing a world fiat currency, 11 00:01:07.240 --> 00:01:10.800 a process fueled by the propagation 12 00:01:10.800 --> 00:01:13.100 of social democratic socialism. 13 00:01:15.200 --> 00:01:20.200 So, on this chart you would see the content of my paper, 14 00:01:20.400 --> 00:01:24.880 and let us go to part two, on the progression theory. 15 00:01:24.880 --> 00:01:29.000 In What Has Government Done to Our Money from 1963, 16 00:01:29.000 --> 00:01:30.560 Murray Rothbard took recourse 17 00:01:30.560 --> 00:01:32.560 to what can be called the progression theorem, 18 00:01:32.560 --> 00:01:37.080 and I took from an article written by Professor Hülsmann 19 00:01:37.080 --> 00:01:40.080 that it was Joseph Salerno, Professor Joseph Salerno 20 00:01:40.080 --> 00:01:44.480 who coined the term progression theorem. 21 00:01:44.480 --> 00:01:46.440 This progression theorem is actually derived 22 00:01:46.440 --> 00:01:49.680 from praxeology applied to human history. 23 00:01:49.680 --> 00:01:53.720 In that sense, it represents the aphoristic part 24 00:01:53.720 --> 00:01:57.680 of the Austrian historical method, which, as you may know, 25 00:01:57.680 --> 00:02:01.400 rests on the method of understanding. 26 00:02:01.400 --> 00:02:05.120 The progression theorem outlines a praxeologically necessary 27 00:02:05.120 --> 00:02:11.040 sequence of action, as implied by the axiom of human action, 28 00:02:11.040 --> 00:02:15.160 from which a number of irrefutably true propositions 29 00:02:15.160 --> 00:02:17.160 can be logically deduced. 30 00:02:17.160 --> 00:02:21.640 For instance, only individuals act, not collectives as such. 31 00:02:21.640 --> 00:02:24.320 for the Acting Individual, Means for Achieving, 32 00:02:24.320 --> 00:02:27.240 ends are scarce, which requires economizing, 33 00:02:27.240 --> 00:02:30.480 scarcity is a category of human action, 34 00:02:30.480 --> 00:02:33.360 and earlier satisfaction of ones is preferred 35 00:02:33.360 --> 00:02:35.800 over later satisfaction of ones, 36 00:02:35.800 --> 00:02:40.800 a finding which is reflected by positive time preference. 37 00:02:41.880 --> 00:02:45.120 Rothbard's progression theorem based explanation 38 00:02:45.120 --> 00:02:49.680 of why the state replaces commodity money with fiat money 39 00:02:49.680 --> 00:02:53.320 starts with his new theory of the state. 40 00:02:53.320 --> 00:02:55.720 And according to Rothbard, the state is, quote, 41 00:02:56.640 --> 00:02:59.880 that organization which possesses either or both 42 00:02:59.880 --> 00:03:02.860 in actual fact almost always both 43 00:03:02.860 --> 00:03:05.440 of the following characteristics. 44 00:03:05.440 --> 00:03:10.440 A, it acquires its revenue by physical coercion, taxation, 45 00:03:10.900 --> 00:03:14.840 and B, it achieves a compulsory monopoly of force 46 00:03:14.840 --> 00:03:18.080 and of ultimate decision-making power 47 00:03:18.080 --> 00:03:20.920 over a Given Territorial Area, quote, ends. 48 00:03:21.760 --> 00:03:23.960 A central insight in this contact is 49 00:03:23.960 --> 00:03:25.800 that the state has a necessary, 50 00:03:25.800 --> 00:03:29.520 so an inherent tendency for expansion. 51 00:03:29.520 --> 00:03:33.160 As Hoppe said, quote, every minimal government 52 00:03:33.160 --> 00:03:37.000 has the inherent tendency to become maximal government. 53 00:03:37.920 --> 00:03:40.960 Government expansion, of course, has to be financed 54 00:03:40.960 --> 00:03:43.760 and the ultimate pillar of its aggrandizement 55 00:03:43.760 --> 00:03:46.740 is the monopolization of money production. 56 00:03:46.740 --> 00:03:54.140 Once a fiat money regime has been established, government can increase its income at the 57 00:03:54.140 --> 00:04:01.900 expense of those outside government at practically no cost and without having to fear bankruptcy. 58 00:04:01.900 --> 00:04:06.580 And to be in a position to make use of fiat money inflation in particular combined with 59 00:04:06.580 --> 00:04:13.600 the issuance of public debt as an instrument of raising its revenue, government must obtain 60 00:04:13.600 --> 00:04:17.400 in full control, that is, the monopoly over money production. 61 00:04:17.400 --> 00:04:20.440 For as long as there is unhampered currency competition 62 00:04:20.440 --> 00:04:23.220 at the national or international level, 63 00:04:23.220 --> 00:04:25.600 government's ability to make use of inflation 64 00:04:25.600 --> 00:04:29.520 and debt issuance as a source of financing remains limited. 65 00:04:30.440 --> 00:04:32.920 This is because a policy of open and high inflation 66 00:04:32.920 --> 00:04:35.220 would sooner or later make domestic money users 67 00:04:35.220 --> 00:04:39.000 replace the inflated domestic currency 68 00:04:39.000 --> 00:04:42.280 with less inflated foreign currencies. 69 00:04:42.280 --> 00:04:45.600 and so taking recourse to the progression theory, 70 00:04:45.600 --> 00:04:49.280 Rothbard identified a number of steps taken by government 71 00:04:49.280 --> 00:04:52.600 to replace commodity money by fiat money. 72 00:04:52.600 --> 00:04:55.640 In short, government monopolizes the minting 73 00:04:55.640 --> 00:04:59.620 of commodity money, then monopolizes the issuance 74 00:04:59.620 --> 00:05:04.080 of money substitutes, so claims to money proper, 75 00:05:04.080 --> 00:05:07.640 allows for fractional reserve banking and central banking 76 00:05:07.640 --> 00:05:10.980 and then to avoid the collapse of banks issuing 77 00:05:10.980 --> 00:05:14.980 Money Substitute in Excess of Money Proper, 78 00:05:14.980 --> 00:05:17.380 it suspends the redeemability of notes, 79 00:05:17.380 --> 00:05:20.380 thereby severing the link between paper, tickets 80 00:05:20.380 --> 00:05:23.700 and book entries and money proper. 81 00:05:23.700 --> 00:05:27.100 So the letter will be placed by central bank money 82 00:05:27.100 --> 00:05:29.980 resulting in a pure fiat money system. 83 00:05:30.860 --> 00:05:34.180 Now let me go to part three of my paper 84 00:05:34.180 --> 00:05:36.780 titled Monetary Imperialism, 85 00:05:36.780 --> 00:05:39.200 The Path of the Military Means. 86 00:05:39.200 --> 00:06:00.200 Hans-Hermann Hoppe in his article Banking Nation States and International Politics argued that the economically and militarily dominant state will set out to eliminate competition between national fiat monies and establish its own fiat currency as the world's reserve money. 87 00:06:00.200 --> 00:06:06.200 The reserve currency issuing government reaps seigniorage and enjoys a lowering of the cost of debt financing. 88 00:06:06.200 --> 00:06:11.560 financing. According to Hoppe, the economically and military dominant government will pursue 89 00:06:11.560 --> 00:06:18.560 monetary imperialism by military means, that is by aggressive territorial conquest, in 90 00:06:19.260 --> 00:06:26.260 other words, war. And this leads me directly to part four of my presentation. It's titled 91 00:06:26.480 --> 00:06:32.800 From National Fiat Currencies Towards the World Fiat Currency, The Path of Social Democratic 92 00:06:32.800 --> 00:06:38.000 Socialism, the conclusion derived from the progression theory, namely that a group of 93 00:06:38.000 --> 00:06:43.720 nation states will move towards a world fiat currency can be reached without having to 94 00:06:43.720 --> 00:06:49.400 take recourse to the idea that the economically and militarily dominant government employs 95 00:06:49.400 --> 00:06:52.800 military means as argued by Hoppe. 96 00:06:52.800 --> 00:06:59.080 The logical tendency towards a world fiat currency can also be explained by the propagation 97 00:06:59.080 --> 00:07:06.920 of Social-Democratic Socialism, meaning a societal order characterized by private ownership, 98 00:07:06.920 --> 00:07:13.560 but with no owner of the means of production enjoying full control over his property. 99 00:07:13.560 --> 00:07:20.960 Under Social-Democratic Socialism, redistribution policies unfold within each nation state, 100 00:07:20.960 --> 00:07:26.520 even though to a varying degree, and this leads to a growing harmonization of economic 101 00:07:26.520 --> 00:07:30.580 and Social Policies Among Nation States. 102 00:07:30.580 --> 00:07:33.320 This in turn will make it increasingly convenient 103 00:07:33.320 --> 00:07:35.640 for a national government to increasingly engage 104 00:07:35.640 --> 00:07:39.320 in coordinated policy efforts with other nation states. 105 00:07:40.260 --> 00:07:42.560 As noted earlier, any government has an interest 106 00:07:42.560 --> 00:07:46.820 in aggrandizement which can most conveniently be achieved 107 00:07:46.820 --> 00:07:48.480 by its monopolistically issuing 108 00:07:48.480 --> 00:07:51.080 an inflationary fiat currency. 109 00:07:51.080 --> 00:07:54.320 An internationally prevailing social democratic socialism 110 00:07:54.320 --> 00:07:57.840 will therefore work in particular towards eliminating 111 00:07:57.840 --> 00:08:01.680 interstate fiat currency competition. 112 00:08:01.680 --> 00:08:03.800 And the latter can be brought about 113 00:08:03.800 --> 00:08:06.940 through international cooperation in monetary affairs 114 00:08:06.940 --> 00:08:09.920 by way of, say, pursuing a policy 115 00:08:09.920 --> 00:08:13.240 of fixing bilateral exchange rates. 116 00:08:13.240 --> 00:08:17.800 Such a strategy, however, has a couple of shortcomings, though. 117 00:08:17.800 --> 00:08:22.400 For as long as these policies rest on voluntary cooperation 118 00:08:22.400 --> 00:08:29.840 among nation states, those states deviating from the agreement cannot be sanctioned effectively. 119 00:08:29.840 --> 00:08:35.480 What is more, it might not be attractive for those nation states that pursue a relatively 120 00:08:35.480 --> 00:08:40.660 low inflation policy to team up with governments that are already pursuing a relatively high 121 00:08:40.660 --> 00:08:48.100 inflation policy. A political solution to this problem can be found though, namely merging 122 00:08:48.100 --> 00:08:54.100 and investing national fiat currencies into a single currency under the political promise 123 00:08:54.100 --> 00:08:59.100 that the new single fiat currency will be non-inflationary and that would be the first step. 124 00:08:59.100 --> 00:09:05.100 And then once this has been accomplished, embark on a policy of actually high inflation. 125 00:09:05.100 --> 00:09:08.100 That would be the second step. 126 00:09:08.100 --> 00:09:15.100 I should say at this juncture that of course fiat currencies are not only inflationary 127 00:09:15.100 --> 00:09:28.100 As you know, and we heard interesting lectures about what Mises found in his book The Theory of Money and Credit in 1912, 128 00:09:28.100 --> 00:09:39.100 naming that fiat money leads, and necessarily so, to boom and bust cycles, to malinvestment, to social and economic crises. 129 00:09:39.100 --> 00:09:49.100 And once national fiat currencies are established the world over and markets are allowed to work freely and unrestricted in terms of international capital flows, 130 00:09:49.100 --> 00:09:56.100 the still fragmented fiat money world order will increasingly bring about a crisis on an international scale. 131 00:09:56.100 --> 00:10:05.100 And these kind of crises caused by fiat currencies, national fiat currencies, actually work as a catalyst for bringing about a world fiat monetary system 132 00:10:05.100 --> 00:10:10.900 in the monetary system because it sets into motion an economic incentive for governments 133 00:10:10.900 --> 00:10:17.980 to increasingly cooperate in monetary affairs and at this point I would like to show you 134 00:10:17.980 --> 00:10:27.060 one graph just to bring some actual data into the debate. 135 00:10:27.060 --> 00:10:38.180 What you would see is from January 2007 up to March 2012, the so-called Euro Cross Currency 136 00:10:38.180 --> 00:10:43.540 Basis Swap Spread, this red line. 137 00:10:43.540 --> 00:10:44.540 What does it mean? 138 00:10:44.540 --> 00:10:50.780 It shows you the cost of funding, the cost of funding for Euro area banks which try to 139 00:10:50.780 --> 00:10:53.460 get hold of US dollars. 140 00:10:53.460 --> 00:11:00.620 So a bank, for instance in Europe, has not only refinancing needs in dollars or in Japanese 141 00:11:00.620 --> 00:11:03.600 yen, but also in US dollars. 142 00:11:03.600 --> 00:11:05.900 And how can a bank obtain US dollars? 143 00:11:05.900 --> 00:11:12.700 It could either issue a dollar denominated bond, and if that doesn't work, it could do 144 00:11:12.700 --> 00:11:13.820 the following trick. 145 00:11:13.820 --> 00:11:22.380 It could issue a euro denominated bond, take the proceeds, convert these proceeds into 146 00:11:22.380 --> 00:11:29.660 U.S. dollars and at the same time do enter a forward contract, namely getting the dollars 147 00:11:29.660 --> 00:11:36.340 back into euro. And what you would see here is the cost of these transactions. As you 148 00:11:36.340 --> 00:11:45.340 can see in 2008 when Lehman Brothers went bankrupt, the market so to speak dried out. 149 00:11:45.340 --> 00:11:52.340 So it was very difficult for your area banks to obtain dollar funding. And as you can see 150 00:11:52.340 --> 00:11:55.780 The same problem reappeared quite recently. 151 00:11:55.780 --> 00:12:01.820 And at the end of November, the 30th of November, 2011, 152 00:12:01.820 --> 00:12:03.620 the major central banks in the world 153 00:12:03.620 --> 00:12:06.660 announced so-called liquidity swaps, 154 00:12:06.660 --> 00:12:11.820 meaning that they would be prepared to finance any kind 155 00:12:11.820 --> 00:12:13.780 of money needed by banks. 156 00:12:13.780 --> 00:12:16.460 So the US Federal Reserve basically 157 00:12:16.460 --> 00:12:21.460 announced to provide any unlimited amount 158 00:12:21.460 --> 00:12:26.800 of West dollars to all banks in the world and at the same time the European 159 00:12:26.800 --> 00:12:31.540 Center Bank would do the same and so would the Bank of Canada, the Bank of 160 00:12:31.540 --> 00:12:36.780 Japan, the Bank of England and the Swiss National Bank and this is I would say an 161 00:12:36.780 --> 00:12:43.540 unprecedented action taken by Center Bank and it should give you an insight 162 00:12:43.540 --> 00:12:48.700 how far advanced this kind of international coordination of monetary 163 00:12:48.700 --> 00:12:51.800 Policy has already become. 164 00:12:51.800 --> 00:13:00.300 So let me move to the fourth part of my presentation, what the progression theorem tells us about 165 00:13:00.300 --> 00:13:02.740 the euro currency. 166 00:13:02.740 --> 00:13:09.300 Against these theoretical considerations above, we are now in a position to revisit and reinterpret 167 00:13:09.300 --> 00:13:13.660 Europe's process towards setting up a single currency. 168 00:13:13.660 --> 00:13:18.040 And it has been long in the making, the push towards introducing a single currency stems 169 00:13:18.040 --> 00:13:25.320 comes from the early 1970s under the so-called Werner Plan, former Prime Minister of Luxembourg 170 00:13:25.320 --> 00:13:30.600 who suggested that the then six countries participating in the European Economic Community 171 00:13:30.600 --> 00:13:37.640 should converge their economies and currencies. In 1979, the European Monetary System was 172 00:13:37.640 --> 00:13:43.120 set up for reducing the degree of fluctuations of exchange rates between these countries 173 00:13:43.120 --> 00:13:53.720 And in June 1989, the President of the European Commission put forward his so-called three-stage plan for achieving economic and monetary integration, 174 00:13:53.720 --> 00:14:01.520 a plan that resulted in the so-called Maastricht Treaty, which was signed on 7 February 1992, 175 00:14:01.520 --> 00:14:12.120 establishing the European Union and laying down the foundations for a single currency and the European Monetary Union in three successive stages. 176 00:14:12.120 --> 00:14:19.080 The political challenge for establishing a single currency in Europe had been to win over Germany, 177 00:14:19.080 --> 00:14:25.720 the continent's largest and most populous economy with a tradition of hard money. 178 00:14:25.720 --> 00:14:30.920 The latter resulted obviously from the dismal experience made in the early 1920s 179 00:14:30.920 --> 00:14:36.920 when there was hyperinflation through which the former currency, the Reichsmark, was completely destroyed. 180 00:14:36.920 --> 00:14:41.920 In fact, it was the German population's preference for relatively low inflation 181 00:14:41.920 --> 00:14:48.920 that had made the Deutsche Bundesbank, so Germany's central bank, 182 00:14:48.920 --> 00:14:51.920 the least inflating central bank and, accordingly, the DMACC, 183 00:14:51.920 --> 00:14:54.920 being the least inflated currency in Western Europe. 184 00:14:54.920 --> 00:15:00.920 With fully convertible currencies and free flow of capital across Europe, 185 00:15:00.920 --> 00:15:09.920 The monetary policy of the Bundesbank had put an effective limit to high inflation policies in European countries. 186 00:15:09.920 --> 00:15:23.920 The German population's resistance against giving up monetary sovereignty and joining a European single currency was finally overcome with the fall of the Berlin Wall on 9th November 1989. 187 00:15:23.920 --> 00:15:26.440 This event, according to some observers, 188 00:15:26.440 --> 00:15:28.680 resulted in a political deal. 189 00:15:28.680 --> 00:15:31.240 Namely, France demanded replacing the DMACC 190 00:15:31.240 --> 00:15:33.920 by the single currency as the political price 191 00:15:33.920 --> 00:15:36.980 Germany had to pay for the West's approval 192 00:15:36.980 --> 00:15:39.300 to German reunification. 193 00:15:39.300 --> 00:15:42.400 And be that as it may, the German euphoria 194 00:15:42.400 --> 00:15:45.820 of the world's demolition effectively gave the then 195 00:15:45.820 --> 00:15:50.120 so-called ruling a conservative liberal coalition, 196 00:15:50.120 --> 00:15:52.680 which was more inclined to pursue a kind of 197 00:15:52.680 --> 00:15:57.680 Social Democratic Socialism, I may add, government carte blanche. 198 00:15:59.380 --> 00:16:01.200 The government enthusiastically embracing 199 00:16:01.200 --> 00:16:04.120 political integration in Europe agreed to hand over 200 00:16:04.120 --> 00:16:08.560 monetary sovereignty to a supranational body. 201 00:16:08.560 --> 00:16:12.720 This decision could be made by German parliamentarians 202 00:16:12.720 --> 00:16:16.040 without holding a referendum. 203 00:16:16.040 --> 00:16:18.880 The German government's approval to replacing the DMACC 204 00:16:18.880 --> 00:16:21.960 by a single currency came with some conditions though 205 00:16:21.960 --> 00:16:24.640 for Becoming Lingering Stability Concerns 206 00:16:24.640 --> 00:16:26.280 Among the German Electorate. 207 00:16:26.280 --> 00:16:28.800 The institutional framework governing 208 00:16:28.800 --> 00:16:31.400 the European single currency had to comply 209 00:16:31.400 --> 00:16:33.640 with German stability standards, 210 00:16:33.640 --> 00:16:35.540 so-called stability standards. 211 00:16:35.540 --> 00:16:37.160 Most important, the German government 212 00:16:37.160 --> 00:16:39.440 demanded a European central bank constructed 213 00:16:39.440 --> 00:16:41.840 along the lines of the Deutsche Bundesbank. 214 00:16:41.840 --> 00:16:44.120 This included, for instance, that the European 215 00:16:44.120 --> 00:16:46.200 central bank would be politically independent, 216 00:16:46.200 --> 00:16:49.320 dedicated to a monetary policy of low inflation, 217 00:16:49.320 --> 00:16:53.920 and prohibited from financing public sector deficits. 218 00:16:53.920 --> 00:16:57.060 What had long been desired by adherence 219 00:16:57.060 --> 00:17:00.280 to social democratic socialism became reality 220 00:17:00.280 --> 00:17:03.040 as from the 1st January 1999. 221 00:17:03.040 --> 00:17:05.100 National fiat currency were replaced 222 00:17:05.100 --> 00:17:06.980 by the single fiat currency, the euro, 223 00:17:06.980 --> 00:17:09.440 managed by the European Central Bank. 224 00:17:09.440 --> 00:17:12.080 With the euro in place, the economic and political 225 00:17:12.080 --> 00:17:14.800 incentives for individual nation states 226 00:17:14.800 --> 00:17:19.020 to play by the rules declined sharply, to say the least. 227 00:17:19.020 --> 00:17:21.860 As soon as 2003, the ECB had abandoned 228 00:17:21.860 --> 00:17:25.300 its so-called monetary pillar, making it even easier 229 00:17:25.300 --> 00:17:28.140 to pursue an inflationary policy 230 00:17:28.140 --> 00:17:31.700 in terms of increasing bank circulation credit. 231 00:17:31.700 --> 00:17:33.480 With the financial and economic crisis 232 00:17:33.480 --> 00:17:36.060 becoming ever more severe, the ECB has been 233 00:17:36.060 --> 00:17:40.180 increasingly buying bonds since May 2010 234 00:17:40.180 --> 00:17:42.620 and providing the Euro-era banking sector 235 00:17:42.620 --> 00:17:46.820 with unlimited amounts of base money to prevent bankruptcies. 236 00:17:46.820 --> 00:17:51.820 In fact, the ECB policy has already embarked upon a policy 237 00:17:52.060 --> 00:17:54.300 of running the printing press. 238 00:17:54.300 --> 00:17:58.540 This observation corresponds to what was suggested earlier. 239 00:17:58.540 --> 00:18:01.580 It is the logical second step following from the first step, 240 00:18:01.580 --> 00:18:04.540 inflating the single currency above the level 241 00:18:04.540 --> 00:18:08.980 seen in the least inflationary national fiat currencies. 242 00:18:09.860 --> 00:18:13.140 If the chairman allows me two more minutes, 243 00:18:13.140 --> 00:18:18.140 I briefly touch upon the last paragraph, 244 00:18:18.140 --> 00:18:21.220 the way towards world fiat currency. 245 00:18:21.220 --> 00:18:23.980 Under social democratic socialism, 246 00:18:23.980 --> 00:18:26.340 this story, of course, does not end here. 247 00:18:27.220 --> 00:18:29.740 The progression theorem holds that the existence 248 00:18:29.740 --> 00:18:32.380 of national governments brings with it the tendency 249 00:18:32.380 --> 00:18:36.360 for setting up world fiat currencies by non-military means. 250 00:18:37.700 --> 00:18:41.540 It is, of course, beyond the scope and available time 251 00:18:41.540 --> 00:18:47.740 to go into detail about, for instance, various reform proposals which have been put forward 252 00:18:47.740 --> 00:18:54.300 for reforming the international monetary architecture. I would also, I would just like to conclude 253 00:18:54.300 --> 00:19:00.180 with the following. The progression theorem reveals the inherent tendency of pushing towards 254 00:19:00.180 --> 00:19:06.180 a world fiat currency and the introduction of the euro is a step along this path. Such 255 00:19:06.180 --> 00:19:11.380 Such a development bodes badly, I should say, given the economic problems of national fiat 256 00:19:11.380 --> 00:19:18.020 money, namely inflation, malinvestment, indebtedness, you name it. 257 00:19:18.020 --> 00:19:24.060 It goes without saying that a world fiat currency would increase all these bad developments 258 00:19:24.060 --> 00:19:25.860 greatly. 259 00:19:25.860 --> 00:19:32.340 Most important, a world fiat currency is not compatible with a free market society. 260 00:19:32.340 --> 00:19:34.380 It would actually destroy it. 261 00:19:34.380 --> 00:19:37.740 And it was Mises who put it succinctly, quote, 262 00:19:37.740 --> 00:19:40.620 it would be a mistake to assume that the modern organization 263 00:19:40.620 --> 00:19:43.740 of exchange is bound to continue to exist. 264 00:19:43.740 --> 00:19:47.900 It carries within itself the germ of its own destruction. 265 00:19:47.900 --> 00:19:50.840 The development of fiduciary medium 266 00:19:50.840 --> 00:19:53.860 must necessarily lead to its breakdown. 267 00:19:53.860 --> 00:19:56.900 Ladies and gentlemen, by following 268 00:19:56.900 --> 00:20:01.980 the pure progression theorem, we actually 269 00:20:01.980 --> 00:20:08.980 find that the progression theory makes another praxeological case against the state. Thank you very much.