F. A. Hayek, Libertarianism, and the Denationalization of Money

Abstract

Amid the inflation crisis of the 1970s, the Austrian School economist F. A. Hayek presented a radical proposal to solve inflation: the denationalization of currency and the introduction of competing currencies into the monetary system. While Hayek's proposal proved too radical for mainstream economists, Hayek found support within the American libertarian movement. Libertarians realized that Hayek's radical proposal would limit state control over the monetary system and allow for the free exchange of gold. Even though libertarians were not immediately successful in bringing Hayek's plan to fruition, their continued activism paved the way for the creation of cryptocurrency in 2009. This article demonstrates how Hayek and his libertarian supporters opened a new chapter in the history of the “money question” in the United States by advocating for the elimination of the government monopoly over money and the abolition of monetary politics itself.