The Case Against The Fed

Book Review: The Case Against the Fed by Murray N. Rothbard

The Case Against The Fed book cover

This book, originally published in 1994, is an excellent work by the late economist Murry Rothbard, laying out the case against central banking in general and the Federal Reserve in particular.

To quote Mr. Rothbard:

“There is only one way to eliminate chronic inflation, as well as the booms and busts brought by that system of inflationary credit: and that is to eliminate the counterfeiting that constitutes and creates that inflation. And the only way to do that is to abolish legalized counterfeiting: that is, to abolish the Federal Reserve System, and return to the gold standard, to a monetary system where a market-produced metal, such as gold, serves as the standard money, and not paper tickets printed by the Federal Reserve.”

Professor Rothbard then goes about to show exactly how to do that, in a multi-step process where the gold held by the Federal Reserve is returned to the American people, under a formula determined by the total ounces of gold held by the Fed in its vaults, divided into the total amount of debt money in circulation in the American economy. At the time of this book’s original publication in 1994, that figure came out to be $1555.00 of Federal Reserve Notes paper money, per ounce of gold coin. That figure is undoubtedly much higher now.

Professor Rothbard also delves into the nature of what constitutes sound money throughout human history, showing how this always came down to human societies using a valuable commodity metal (specifically gold, and to a lesser extent silver) as the preferred medium of exchange in their economies. Gold and silver coins provided a stable, value-based medium of exchange that wasn’t inflationary and was a substance of intrinsic value.

Professor Rothbard also goes into the history of how a nationwide central bank was tried several times in our country’s history, before finally being established long-term in 1913 with the Federal Reserve System. The Federal Reserve was actually the United States’ FOURTH attempt at a central bank, and not the first. After a lengthy period of manipulating the gold standard, the U.S. finally went off gold as money domestically in 1933 and internationally in 1971. Since 1971, our money has been entirely fiat (unbacked by gold or silver) paper, and has steadily lost purchasing power every year, as the Fed continues a massive program of currency inflation.

This is an excellent work that explains how we got to our current economic and monetary situation. This book can be purchased at or through the Ludwig Von Mises Institute in Auburn, Alabama (