Brian D. Colwell

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Fiat Money Is Control

Posted on June 3, 2025June 25, 2025 by Brian Colwell

Money touches every aspect of our daily lives—from the morning coffee we purchase to the homes we dream of owning. Yet few of us pause to question what money actually is, or more importantly, what modern fiat currency represents. We accept these colorful pieces of paper and digital numbers as having value simply because we’re told they do, rarely examining the profound implications of a monetary system divorced from tangible assets.

The transition from commodity-backed currencies to pure fiat money represents one of the most significant yet least understood revolutions in human history. Where once a dollar bill represented a claim on actual gold or silver held in reserve, today’s currencies float freely, tethered to nothing but government decree and collective faith. This shift didn’t happen overnight, nor was it accidental—it was a deliberate transformation that fundamentally altered the relationship between citizens and their governments, between savers and spenders, between those who create wealth and those who create currency.

Understanding fiat money requires looking beyond economics textbooks and examining the mechanics of power itself. When we trace the flow of newly created money through our economic system, when we observe who benefits from inflation and who suffers, when we consider why certain monetary policies persist despite their obvious failures, a pattern emerges. That pattern suggests our monetary system serves purposes far beyond facilitating trade and storing value.

Whether we examine this through the lens of Austrian economics, Marxist critique, or simple common sense, the conclusion remains striking—fiat money is not merely a neutral tool of commerce, but an active instrument of social engineering.

Fiat Money Is Control

Baron Acton observed in 1887 that “Power tends to corrupt, and absolute power corrupts absolutely.” Since fiat currencies are created by monetary monopolies out of nothing and from nothing through loan contracts, they provide a legal means of obtaining something for virtually nothing. As a result, those responsible for issuing fiat currencies enjoy almost unlimited influence over economic and, therefore, political life. As famously written by Roman poet Juvenal, “Quis custodiet ipsos custodes?”, or, “Who will guard the guards themselves?”.

If fiat money isn’t “sound money” what is it? Simply put, fiat money is control of freedom and power over people. As stated by Ron Hera: “The erroneous conflation of ‘money’, which is an abstraction, and ‘value’, which is an abstract concept, is an example of sophistry; a trick of words played on unsophisticated minds. In fact, fiat currencies which exist today, not principally as notes or coins, but as electronic digits in computers, have no value.”

Beyond the obvious moral hazards encouraged by fiat currencies, fiat currency schemes always, without objection, function as a means to redistribute and concentrate wealth. Arbitrarily increasing the quantity of currency in an economy becomes a hidden tax on savers and wage workers, distorting the distribution of money and, therefore, redistributing purchasing power. The political and corporate elite have a well-protected and legal means by which to steal wealth from and control the majority, a point illustrated by former Federal Reserve Chairman Alan Greenspan in his well known 1967 essay, Gold and Economic Freedom: “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

Further, it is through power over money printing that governments enable “Centralisation of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly,” as listed by Karl Marx and Friedrich Engels in their Communist Manifesto of 1848 as #5 in a list of measures necessary to establish communism. Central banks around the world do control money issuance, and certainly do not seek to give up this power. Governments maintain an exclusive and legally protected monopoly over money printing while “owing no allegiance & acknowledging no responsibility to the people.” – Julian Assange in State & Terrorist Conspiracies.

As Francisco d’Anconia, one of the central characters in the novel Atlas Shrugged by Ayn Rand, explains in his famous “money speech”:

“…Money is made possible only by the men who produce… Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into bread you need to survive tomorrow… Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values… Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims…”

As written by John Maynard Keynes: “Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” – In The Economic Consequences of the Peace (1919).

Final Thoughts

The journey through the nature of fiat money reveals a sobering truth: what we call “money” today is less a medium of exchange than an instrument of control. The voices across history—from Acton to Assange, from Greenspan to Keynes—converge on a singular warning about the concentration of monetary power.

The ability to create currency from nothing grants its controllers an almost divine economic authority, yet with none of the divine wisdom or benevolence such power would require. This system doesn’t merely enable wealth redistribution; it necessitates it, creating a perpetual transfer from those who earn to those who print.

Perhaps most troubling is how this monetary alchemy operates in plain sight yet remains invisible to most. As Keynes noted, not one in a million can diagnose the process by which their savings evaporate and their labor is devalued. The complexity serves as camouflage for what is, at its core, a simple truth: fiat money is a claim on future production backed only by force, not by present value.

The question before us isn’t whether this system can persist—history shows that all fiat currencies eventually return to their intrinsic value of zero. The question is what we, as individuals and societies, will do with this knowledge. Will we continue to accept promissory notes backed by nothing but promises? Or will we seek monetary systems that restore the connection between money and actual value, between effort and reward, between savings and security?

In an age of digital currencies and monetary experimentation, these questions grow ever more urgent. The guards of our monetary system have shown they will guard primarily their own interests. Perhaps it’s time we became our own guards.

Thanks for reading!

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