Writing on the origins of the Federal Reserve, Murray Rothbard discussed the philosophy which helped produce it and which still dominates our political discourse today: progressivism. It’s not a commonly used word in modern politics, though it has of late become more popular as a self-descriptor on the left. Nonetheless, progressivism is a philosophy of social democracy, based in the general will of Rousseau, which seeks to improve society — to make it progress — through government intervention and programs.
Most examples of what is now called a “liberal” or a “leftist” is much more accurately termed a “progressive.” (The distinction is important, I promise. Who hasn’t been confused or confusing when trying to talk about classical liberalism with those who think of “liberals” as people who support overwhelming government intervention in the economy? Call them progressives instead and your problem goes away.) At any rate, Rothbard writes:
The Federal Reserve Act of December 23, 1913, was part and parcel of the wave of Progressive legislation on local, state, and federal levels of government that began about 1900. Progressivism was a bipartisan movement that, in the course of the first two decades of the 20th century, transformed the American economy and society from one of roughly laissez-faire to one of centralized statism.
Until the 1960s, historians had established the myth that Progressivism was a virtual uprising of workers and farmers who…surmounted fierce big business opposition in order to curb, regulate, and control what had been a system of accelerating monopoly in the late 19th century.
What actually happened is that big business realized that the only way it could achieve monopoly was to relieve itself of the honest restraints of the free market — to involve government in business on the pretense of fighting monopoly itself. Government happily seized the opportunity to expand its powers, and this fraud helped put us in our current position, fiat money and all.
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