In 1984, the economist Friedrich Hayek said: "I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop."
He was describing a problem, not a product. Money controlled by the state will be used by the state: to fund wars, to paper over deficits, to reward friends. The history in this course is that pattern repeated.
The Austrian view, in one paragraph
Prices are information. They tell producers what to make and savers what to do. When the money itself is manipulated, every price is distorted, capital is misallocated, booms are inflated and busts follow. The cure is not a smarter committee; it is money nobody can manipulate.
What a separated money would need
- A supply set by rules, not by people.
- Rules anyone can verify, not just trust.
- No issuer who can change its mind.
- Open to anyone, with no permission needed.
Gold came close on the first point and failed on verification and portability, which is how it ended up in vaults behind paper. Whether something digital can satisfy all four is the question the next course answers.
You have finished Money 101
You can now judge any money by what it does, how it is made and who controls it. Continue with Bitcoin explained, or take the short tour first: Bitcoin in 21 minutes.