"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians"

Henry Hazlitt expresses skepticism about the wisdom of entrusting political authorities with control over money. His statement emerges from an understanding of human incentives and the potential for self-interest or short-term thinking within government bodies. When politicians hold substantial sway over how much money is created or what backs its value, there is an inherent risk that these powers will be used for expedient political objectives rather than the long-term economic health of society. Politicians, responding to voters, lobbying groups, or their own goals, may be prone to practices such as inflationary monetary expansion, currency debasement, or arbitrary changes to the nature of money, actions which can undermine economic stability.

Hazlitt’s perspective is informed by a tradition that sees stable, predictable money as a vital precondition for economic growth, fair exchange, and savings. When the supply or quality of money can be manipulated, either to fund government deficits, stimulate short-term booms, or respond to political pressures, ordinary citizens bear the consequences, often through rising prices and diminished trust in the currency. By arguing for a system that minimizes political influence over money, Hazlitt implicitly supports mechanisms like independent central banks, commodity standards (such as the gold standard), or even fully private monetary systems, all aimed at insulating the currency from manipulation.

At the heart of the argument is a concern for the concentration of power. Giving politicians substantial control over the monetary system is seen as dangerous precisely because it enables the abuse of that power. Ideally, money should serve as a neutral gauge of value, stable and reliable, rather than as a tool for policy experiments or political gain. By advocating for the limitation of political authority over money, Hazlitt seeks the preservation of monetary integrity, fostering trust and confidence between individuals, businesses, and society at large.