This article originally appeared on heartland.org.
The Impending Monetary Revolution, the Dollar and Gold, Second Edition By Edmund Contoski; American Liberty Publishers, November 2014
281 pages, ISBN-13 978-0-9655007-1-5
$28.95 on publisher???s website,http://www.amlibpub.com/order.html
The first edition of Edmund Contoski???s book The Impending Monetary Revolution, the Dollar and Gold was excellent, and it makes an outstanding textbook for a college economics course.
The second edition, released in November 2014, is even better. He has added significant new chapters on issues such as the world???s gold economy, alternative currencies, andthe logical inconsistency of Keynesian economics.
In my opinion, this book ranks among those written by Adam Smith, Frederick Bastiat, and Ludwig Von Mises. Understanding Contoski???s message will make a reader a more effective participant in the fight to fix our country???s flawed economic policies.
Inflation: Cause of All Recessions
By reading Contoski???s clearly written book???a rare trait among economics books???one gains an understanding of just what money is. By inflating the money supply beyond the amount of resources supporting currency reserves, governments are the cause of all recessions, readers will learn.
The world is effectively covered in what is called fiat money, paper currency unrepresentative of value from physical resources, Contoski notes.
The author explains the history of bank notes and checks, and he explains fiat money descended from the receipts given by goldsmiths, the keepers of a valuable physical resource. Contoski also tells entertaining true stories of intrigue, such as how a single individual working at Goldman Sachs was able to keep Greece???s debt crisis from becoming public knowledge for years, collecting $300 million as a reward.
This and other parts of the gold story read like a best-selling mystery thriller.
He makes the failure of Fannie and Freddie easy to comprehend, naming the politicians who created the housing bubble, which began with the Community Reinvestment Act and expanded through FHA and various HUD housing mandates, involving characters such as Janet Reno and Barack Obama.
Another compelling true story is Contoski???s retelling of some of President Richard Nixon???s economic measures to shift the American monetary system to a fiat system.
Reading Contoski???s commonsense approach to economics makes one wonder how governments can get monetary policy so wrong. In a free market, he notes, every transaction benefits both sides, according to their own judgment. If a transaction did not benefit all parties, they would not participate in it.
However, in transactions forced by government, it is a win-lose game, because government seeks to benefit one side by imposing a loss on the other.
???When plunder becomes a way of life for a group of men living together in a society,??? French economist and philosopher Frederic Bastiat wrote, ???they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.???
Throughout his book, Contoski provides evidence we live in such a society. The Founding Fathers, Contoski notes, feared the evolution of such a system in which politicians would enact policies by force, declaring such unilateral actions as beneficial to all.
Calls for Constitutional Convention
This fear is coming true, Contoski writes, as government actions and regulations become more aggressive.
On a positive note, however, The Impending Monetary Revolution, the Dollar and Gold is refreshing because of the author???s pragmatic recognition of the improbability politicians will solve the nation???s economic problems.
Because of individual politicians??? desire to win votes by favoring some of their constituents, Contoski concludes a constitutional convention to change the rules by which government plays represents the best hope for success.
State legislators, he writes, should be willing to call for a constitutional convention to retake their power over the government???s operation. At some point during the nation???s history, the states allowed themselves to become subservient to the federal government, an outcome our Founding Fathers would have found undesirable.
Contoski describes a simple set of amendments he believes would meet with widespread approval during a constitutional convention and put our nation back on its intended track.
Examples include reforming the Electoral College and a Balanced Budget Amendment punishing legislators with forced resignation should the national government fail to balance its checkbook.
Other suggested reforms include the restoration of the constitutional limitation on congressional authority to the enumerated powers of the Constitution, repealing the Federal Reserve Act, and restoring the earlier, more limited, definition of the term ???interstate commerce.???
My favorite suggestion, though, is official recognition of the right to pursue happiness, a reform which would eliminate government control over which crops we plant and which light bulbs or bathroom showerheads we install in our homes.
???Either we return to the principles on which this country was founded which were the basis for its success,??? Contoski soberly concludes, ???or we face a bleak future.???
This outstanding text is a cautionary tale worth reading by anyone who has a serious interest in our economy.
I rarely rate the books I review, but economics books???often called ???the dismal science??????sometimes scare readers away. Giving it ???five stars??? may encourage people to pick up this enjoyable and informative book.
Jay Lehr, Ph.D. (firstname.lastname@example.org) is science director at The Heartland Institute.