• Fiat money has a major influence on nation-state incentives, giving governments the ability to become authoritarian and destructive.
• Central control of money is an enormous prize, allowing those in power to steal their nation’s wealth.
• Governments can run deficits on their budgets more easily with fiat money due to lower interest rates and lack of opportunity cost.
Fiat money incentivizes individuals with higher time preferences due to ubiquitous debt and lack of savings vehicles. This means that people are encouraged to live for the present instead of planning for the future; this can lead to a cycle of debt as well as poor financial decision-making.
At the company level, fiat money encourages larger companies which can replace families or communal life. This artificial system creates zombie-like dynamics within economies and societies, where progress becomes stagnant and people become dependent on large corporations for sustenance.
The power of fiat money gives governments the ability to become more authoritarian through welfare/warfare states, surveillance states, police states, militaristic regimes and corrupt tyrannies. Additionally, central banking makes it easier for governments to take on deficits without having to make unpopular decisions like raising taxes or cutting spending in other areas; this allows them even further control over resources and wealth distribution.
Fiat money has had a huge effect on government incentives since its introduction in the 20th century; it gives governments unprecedented power over their citizens while also allowing them greater access to resources than ever before. While this may have some benefits (such as providing services more quickly), there are also significant risks associated with this kind of power that should not be taken lightly by those in charge.