 Ladies and gentlemen, it is a great pleasure for me to have been invited to speak at the 8th Freedom and Property Society Conference in Bodrum. I would like to thank Professor Hans Hermann Hopper and his wife, Gülgün Hopper, for the invitation and the warm and most generous hospitality. Having been invited by Hans, I really felt encouraged to address a relevant and timely issue along the lines of praxeology to come up with an insightful and hopefully to the liking of Hans' intellectually radical message. Please let me start by reminding us of the title of my talk. It is, Organized Crime and the progression towards the World Fiat Currency. Now what does organized crime mean, you may ask? Well, the American Federal Bureau of Investigation, FBI, provides the following definition. The FBI defines organized crime as any group having some manner of a formalized structure and whose primary objective is to obtain money through illegal activities. Such groups maintain their position through the use of actual or threatened violence, corrupt public officials, graft or extortion and generally have a significant impact on the people in their locales, region or the country as a whole, quote ends. The mafia is often referred to as an example by excellence of organized crime. However, there's a much better example as the FBI's definition reveals and that is this state. And as you know, the state has a formalized structure. It obtains money through illegal activities. It maintains its position through the use of actual or threatened violence and there's corrupt public officials, graft and the whole thing has, of course, a significant impact on the people in the country as a whole. And so the libertarian theorist, Albert J. Nock, said the following quote, the state claims and exercises the monopoly of crime and further it forbids private murder but itself organizes murder on a colossal scale. It punishes private theft but itself lays unscrupulous hands on anything it wants, whether the property of citizens or alien. From a more theoretical point of view, let us take a look at the definition of the state as provided by Murray Rothbard. He said, quote, the state may be defined as that organization which possesses either or both, in actual fact almost always both, of the following characteristics. A, it acquires its revenue by physical coercion, taxation. B, it achieves a compulsory monopoly of force of ultimate decision-making power over a given territorial area, quote ends. The first element of Rothbard's definition, namely the power to tax, constitutes and establishes theft on a grand scale. And the second element, namely the compulsory monopoly of ultimate decision-making, prohibits free competition of agencies offering law and order services within a given territorial area. Identifying the state as a form of organized crime might provoke quite some disbelief, or did mildly among many. As a result, some explanatory remarks might be in order. The generally prevailing view that the state is good and indispensable stems from a thomistic view from Aristotle and Plato, who concluded that the state is the moral agency for mankind. For instance, it is often argued that the state is necessary for establishing property and property rights in the first place, and that this is what makes the state indispensable. Upon closer inspection, however, such reasoning is unconvincing. For individual property and property rights must have existed already at the time when the state emerged, for the state could not expropriate property, had people not already rightfully owned property at the time of expropriation. In fact, it is this insight that reveals the criminal origin of the state. The state, defined as a territorial monopolist of ultimate decision-making, has and must have emerged through aggression, not through man's voluntary action. Some may oppose such a conclusion arguing that the state has been established by a social contract, that this argument justifies the state. The answer is no. We all know from personal experience that there is no such thing as a social contract, that there has never been such a social contract, as pointed out on many occasions, in particular by Hans-Hermann Hopper. By the way, I maintain that no one who is in the possession of all his senses would sign such a social contract voluntarily, a contract that renders him, once and for all, a servant to the state, to an institution that we defined as organized crime. Again, to cut a long story short, the state has and must have originated through an act of aggression, namely violating individual property and property rights. In view of the criminal origin and nature of the state, we may ask ourselves, how can the state survive? This question is all the more important as state action necessarily creates victims. The state benefits a few at the expense of many others. So how can the state, which is typically represented by a few, uphold its criminal power over the majority of the population? The answer is that to uphold its power, the state can first use brute violence that is beating people into submission. Or it can, second, try to induce people to submit voluntarily to its rule. Using brute violence is a fairly costly undertaking. It creates too many conspicuous victims and thus will sooner or later make the suppressed stand up against the state. Inducing people to submit voluntarily to its rule is therefore a much more promising and attractive approach from the viewpoint of the state. How can this be achieved? It can be achieved by, first, successful propaganda that is making the majority of the people believe in the necessity and legitimacy of the state. Or second, by corrupting the majority of the people through letting them participate in the enjoyment of the loot coercively taken from natural owners of things. The modern democratic welfare state pursues the second strategy, as you may know. It takes from the homesteaders, producers and contractors, and, after having enriched itself, henceover the rest of the loot to non-homesteaders, non-producers and non-contractors. I should remind us here that the state, in particular the modern democratic state, keeps expanding. Hans-Simon Hoppe put this praxeological insight succinctly, quote, every minimal government has the inherent tendency to become maximum government. The explanation is this. In a democracy, there is public ownership of government. There is public ownership of government. And this power is put into the hands of temporary caretakers. We call them politicians. Democracy means majority voting. The majority of the people decides about who will serve as a temporary caretaker of public ownership of government. The average voter will support those politicians who are expected, rightly or wrongly, to improve the voter's economic situation. A voter has every economic incentive to act in this way. Irrespective of the fact that the income he may obtain in this way may result from expropriating fellow citizens. And I should add that this kind of progression is actually implied in the logic of human action. The explanation runs as follows. As you may know, it is irrefutably true that an earlier satisfaction of once is preferred over a later satisfaction of once. And that a satisfaction of once associated with low costs is preferred over a satisfaction of once with higher costs. In other words, individuals try to achieve their ends with as little input as possible in the shortest period of time. And having said that, A, Mr. A will aggress against Mr. B, that is, Mr. B's person and property, if and when he gets away with it. That is, if the expected benefits, Mr. A reaps from aggressing against Mr. B will be higher than the expected costs. He has to bear by doing so, including, for instance, persecution, commissuration, pangs of remorse, et cetera. So having said that, it is individuals' very economic incentive to aggress against other people's property that is actually at the heart of the emergence of the state. And with this in mind, let us go back to the caretaker of public ownership of government. The caretaker of public ownership of government has an incentive to secure the majority of the voters. He will therefore favor policies of expropriating the typically few high income producers to the benefit of the typically large group of less productive or even non-productive people. So the important insight here is the following. The state will expand, and it will over an ever greater number of the population. For more and more people, the state will become the essential source of income through transfer payments, profits, job opportunities, and other privileges. And this insight brings us to the following question. How can the state finance its rather costly expansion? The answer is by getting full control over money production. The explanation of this conclusion is straightforward. Imagine, isn't it simply wonderful if you were in a position to pay your obligations with self-produced money? Money that you can produce at will and at actually zero costs. And clearly, this is exactly what the state wishes for. But how does the state get into this invaluable position? That is, how can it obtain full control over money production? The state must succeed in replacing commodity money, which is what it finds in the unhampered marketplace by its own money. Mary Rothbard in his 1963 book, What Has Government Done to Our Money? explains how it works. In short, the state monopolizes the minting of commodity money, then monopolizes the issuance of money substitutes. These are claims to money proper, such as gold or silver. Then it allows for fractional reserve banking and central banking, which makes the fiat money architecture highly profitable from the viewpoint of those issuing the money. And then, to avoid the collapse of banks issuing money substitutes in excess of money proper, suspends the demobility of nodes, thereby severing the link between paper tickets and money proper. And the latter action will basically establish a pure fiat money regime. And as a side comment or footnote, I may say against the backdrop of what just has been said, we can now fully appreciate the words of the French economist and central banker, Charles Rist. Yvon said, quote, democracy killed the gold standard. Well, I would like now to draw your attention to the underlying theory of Rothbard's argument. Rothbard applied the so-called progression theorem, through which he explained why and how the state replaces commodity money by fiat money. The progression theorem can be understood as pointing out the praxeological sequence of state action. The progression theorem belongs to the a prioristic element of the Austrian historical method, with a letter resting on the so-called method of understanding as Ludwig von Mises put it. As was pointed out earlier, the nation state wishes to get full control over money production. And most countries, basically all countries have succeeded in doing so. But the story doesn't end here. The progression theorem would tell us. Once the nation states are admitted the word over, the move towards establishing a world fiat currency is set into motion. And this I would like to explain next. The first explanation is the move towards a single world fiat currency driven by military means. Hans Hermann Hopper in his 2006 article, Banking, Nation States and International Politics, argued that the economically and militarily dominant state will set out to establish its own fiat currency as the world's reserve money. The benefits for the issuing country is obvious. It reaps seniorage and enjoys a lowering of the cost of debt financing. As a result, the economically and militarily dominant state will pursue monetary imperialism by military means, that is by aggressive territorial conquest, namely war. The territorial expansion by military means requires the state to secure the support of its population, of course. This can be achieved through various means, in particular through generating widespread enthusiasm for the state's cause, brought about by spreading, by the spreading of nationalistic ideologies. However, as basically all states can expect it to take recourse to such a strategy, one can identify, and Hopper does, identify the relative economic wealth as the decisive variable for becoming successful in establishing a dominant monetary position by military means. He finds that the more free market-oriented a state is, the higher is its incentive to engage in aggression against other states. The reasoning is this. The richer a nation state is, relative to its peers, the more easily its government can extract resources from domestic homesteaders, producers, and contractors, and so the more easily expansionist wars can be financed and fought. I will now argue that, praxeologically speaking, states can also push towards setting up a world fiat currency by non-military means. And the key issue here is the proliferation of social democratic socialism. By social democratic socialism, I mean a societal order characterized by private ownership, but with no owner of the means of production enjoying full and unhampered control over his property. Under social democratic socialism, redistribution policies will unfold within each nation state, even though to a varying degree. And this leads to a growing harmonization of economic and social policies among nation states. This in turn will make it increasingly convenient and palatable for a state to engage in coordinated policy efforts with other states, especially when it comes to reducing the competition between national fiat currencies. And a state wishes to reduce international fiat currency competition. For if a state prints up too much money and thus increases inflation, domestic holders will substitute less inflationary currencies for the inflated domestic currencies. And this is of course fairly unfavorable for the state and its beneficiaries. In addition, under a fiat money regime, the state and banks in particular will keep accumulating ever great amounts of debt, making the economic system increasingly vulnerable to and dependent on monetary developments in other fiat currency areas. In particular, the internationalization of banking certainly adds to the urge of a fiat money country to team up with other fiat money countries in this world. How can interstate fiat currency competition be reduced? It can be reduced through an international cooperation and monetary affairs in the form of say, coordinated exchange rate policies. We saw that in the late 1970s and early 1980s in Europe, it was the so-called the European exchange rate mechanism. Such a strategy has shortcoming though. States can do better. And the most convenient way is to eliminate currency competition among nation states. And that is the merging of national fiat currencies into a single fiat currency. This is exactly what happened in Europe. National fiat currencies were replaced by single fiat currency, the Euro, in January 1999. And this development is widely interpreted as being a crowning step in the European political and economic integration process. A praxeological analysis, however, tells us a rather different story. It makes us understand that the introduction of the Euro was a logical consequence, effectively of the propagation of social democratic socialism. What is more, the introduction of the Euro can also be interpreted as a political, and I may add most frivolous, step towards establishing a single world fiat currency. I may not overstretch the point, I guess, if I argue that all modern states have adopted the ideology of social democratic socialism and that all of them have embraced openly or implicitly the concept of substituting a world fiat currency for their national currency. I would argue that there is already some evidence available to back up this praxeological conclusion. Perhaps most notably, the major central banks around the world under the leadership of the Federal Reserve have harmonized their monetary policies as a reaction to the financial and economic crisis. They have taken recourse to so-called liquidity swap agreements, thereby making sure that all banks around the world get the funds in any amount desired, be it 100 million or 1 billion, in any national currency desired, be it the US dollar, the Euro, or the yen. Another indication of attempts to push towards a world fiat currency came in April 2010 when the International Monetary Fund noted, quote, in light of repeated and costly international financial crises, it is timely to review the structure of the international monetary system to assess how it can be strengthened and made more resilient. In fact, the IMF suggested a reform, saying that, quote, much could be achieved by way of voluntary collaboration among nation states. However, the IMF's central idea is to make, quote, special drawing rights, SDR, the principal reserve asset in the international financial system. I should add, special drawing rights represent nowadays a basket of fiat currencies. Formerly, it was backed or defined in gold. Nowadays, it's just a basket of fiat currencies, including the US dollar, the Euro, the Japanese yen, and the British pound. And needless to say that a world monetary system based on special drawing rights wouldn't solve any economic and ethical deficiencies that come with fiat money. A much less disguised proposal for establishing a world fiat currency was made by the influential Canadian economist, Robert Mandel. In 2000, Mandel proposed a world currency, quote, the international monetary fund could be turned into a world central bank and granted the authority to produce a world currency and further. We might call this new currency, intor. And with int, he refers to international and or he refers to the French word for gold. I think I do not have to spend any time on explaining economically, politically, and socially destructive forces that would come with establishing a world fiat currency. The pressing question really is in this context, where does all this lead us to? Well, the disconcerning factor is this, a reduction in the competition between national fiat currencies, as we can observe nowadays, will make the world monetary system more robust compared with the system of uncoordinated national fiat currencies. For under reduced fiat currency competition, the chances that free market action can bring about the actually desired demise of national fiat money regimes are greatly diminished. This is not to say that social democratic, socialism will succeed in establishing centralized world fiat money. Fortunately, I may say, an insurmountable political problem will arise on that route. In an intermediate period, the process and progress towards the world fiat currency regime might be fueled and dominated by a fairly small interest group, most notably the financial or banking elite. However, sooner or later, such a development will require ever closer policy coordination among the nation state's concern. In other words, it will have to be accompanied by a move towards a single world government. However, such an effort will not succeed if and when it is made under democracy. Ludwig von Mises in his nation state and economy from 1919 pointed out the practical impossibility of a single democratic government in multi-ethnic states. Mises noted, quote, in polyglot territories, the application of the majority principle leads not to the freedom of all, but to the rule of the majority over the minority. And further, in polyglot territories, democracy seems like oppression to the minority. Where only the choice is open between oneself to suppress or to be suppressed, one easily decides for the former. Liberal nationalism gives way to militant, anti-democratic imperialism, quote, ends. Mises points out that a world democratic government implies coercive rule over an extended territory populated by ethno-culturally heterogeneous communities. The democratic state engages, as you know, in redistributive policies. This in turn causes interpersonal and intergroup conflicts even in ethno-culturally homogenous groups. The government plays one group of society against another, that is the rich against the poor, the prolific against the lazy, the old against the young. In an ethnically culturally heterogeneous group, however, a world democratic government would, and necessarily so, have to play one ethnically-culturally group against another, thereby heightening and even sharpening intergroup conflict. So the move towards a democratic world government, a political initiative necessarily accompanying the drive towards establishing a world fiat currency, is predictably leading to economic, political, and social misery on the grandest scale. And as long as there is ethno-cultural diversity among the people in this world, the push towards a single world democratic government accompanied by a single world fiat currency, will simply break down at some point. Ladies and gentlemen, my talk was about organized crime and the progression towards a single world currency. I hope it has become clear that the state is the presumably best developed form of organized crime, and that the state either by military means or by non-military means will systematically work towards the single world fiat currency, which of course would bring unseen tyranny and despotism to this world. The path towards a world fiat currency, as I try to point out, is already underway, even though it might be overlooked by many people. For this insight comes to us only through a praxeological analysis. And it was Ludwig von Mises who provided us with praxeology, the logic of human action. I would therefore like to conclude my talk by quoting Mises from his 1922 book, Socialism. Quote, it is not true that the masses are vehemently asking for socialism and that there is no means to resist them. The masses favor socialism because they trust the socialist propaganda of the intellectuals. The intellectual leaders of the people have produced and propagated the fallacies which are on the point of destroying liberty and Western civilization. What is needed to stop the trend towards socialism and despotism is common sense and moral courage, quotes Mises. In view of Mises' words, I really hope I could make a positive contribution with my talk as all the other speakers have done and certainly will do in the future at the Freedom and Property Society Conference. Thank you very much for your attention.