Friedrich A. Hayek - Take money out of the hands of government

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop.

Our take on this quote:

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Friedrich Hayek's quote speaks to the idea that true monetary reform and the creation of "good money" may only be possible by reducing government control over currency. Rather than a direct confrontation, Hayek suggests that change could come through innovative, decentralized methods that operate beyond governmental reach - hinting at concepts of decentralized currencies like Bitcoin.

His perspective encourages thinking about how financial systems can evolve to promote greater economic freedom and independence, potentially outside traditional government frameworks. The quote underscores the importance of innovation and subtlety in creating lasting change in the world of finance.

Friedrich Hayek, a renowned economist and advocate for free-market principles, suggests in this quote that true monetary reform requires removing money creation and control from government hands. However, he acknowledges the impracticality of forcefully extracting this power from governments, implying that the solution may lie in creating alternative forms of money that operate independently of governmental control. Hayek’s vision resonates with the rise of decentralized digital currencies, such as Bitcoin, that present an innovative approach to money, free from direct government intervention or manipulation.

Breaking down the quote

"I don't believe we shall ever have a good money again before we take the thing out of the hands of government..."
- Hayek argues that government-controlled money is flawed by nature. Historically, governments have often misused their control over currency, leading to inflation, currency devaluation, and other economic problems.
- By “good money,” Hayek refers to a stable currency that retains value over time and isn’t subject to manipulation. In his view, true economic stability cannot exist under a system where governments can freely print and devalue currency to suit political or economic goals.
- His call to “take the thing out of the hands of government” speaks to his belief in free-market solutions and individual financial autonomy.
"...we can't take them violently out of the hands of government..."
- Hayek recognizes the impracticality and danger of trying to forcibly remove government control over currency. Governments wield substantial power over financial systems, and any attempt to forcefully oppose their control would likely result in significant resistance.
- Rather than advocating for a revolutionary overthrow of government monetary systems, Hayek hints at a more strategic approach to creating alternatives.
"...all we can do is by some sly roundabout way introduce something that they can't stop."
- Here, Hayek is essentially describing the need for a discreet or innovative approach to introduce an alternative monetary system that can’t be easily obstructed by governments.
- He envisions a form of currency that could coexist alongside traditional money without direct conflict or opposition. By designing a currency that operates outside conventional systems, it would be immune to government intervention, effectively bypassing the limitations of state-controlled money.
- This line captures the essence of decentralized currencies today, particularly cryptocurrencies like Bitcoin. Bitcoin was designed specifically to be decentralized, resistant to censorship, and independent of any central authority, embodying the type of “unstoppable” currency Hayek imagined. Read a free bitcoin course.

Hayek’s ideas and cryptocurrency

While Hayek passed away before the advent of cryptocurrency, his thoughts are often seen as prophetic regarding the rise of digital, decentralized money. Cryptocurrencies provide an alternative form of currency that isn’t directly controlled by any government, aligning with Hayek’s vision for a financial system independent of state manipulation.

Decentralization as a “roundabout way”
- Cryptocurrencies achieve what Hayek suggested through decentralization. Without a central authority, no government has complete control over the currency’s supply, issuance, or value. This “roundabout” approach enables these currencies to operate outside of government intervention.
- Blockchain technology underpins cryptocurrencies, allowing secure, transparent, and censorship-resistant transactions. By design, this structure makes it challenging for governments to exert influence, as there is no central point of control.
Resistance to inflation and manipulation
- Bitcoin, in particular, has a limited supply (21 million coins), which prevents inflationary practices commonly seen in fiat currency systems. This quality aligns with Hayek’s desire for “good money” that retains its value over time and isn’t vulnerable to government-imposed devaluation.
- Hayek’s ideal of sound money finds a natural ally in cryptocurrencies, as their structures inherently discourage the creation of new units beyond set limits, preserving purchasing power.
Global access and financial sovereignty
- Cryptocurrencies enable individuals worldwide to participate in a financial system that is borderless and open to all. Hayek envisioned a financial future where individuals had more control over their wealth without government oversight, and cryptocurrencies fulfill this vision by granting users complete ownership over their assets.
- With digital wallets, individuals can store and transfer cryptocurrencies independently, without needing permission from banks or governments. This level of financial sovereignty was central to Hayek’s ideals.
Bypassing Traditional Gatekeepers
- Cryptocurrency networks operate independently of traditional financial institutions, making them difficult for governments to shut down or control. Unlike traditional banking, which is regulated by national policies, cryptocurrencies function on decentralized protocols, offering an alternative that doesn’t rely on government support or intervention.
- Cryptocurrencies effectively bypass traditional gatekeepers, providing users with a currency that is harder for governments to tax, inflate, or restrict.

Key takeaways

Innovative alternatives to government-controlled money
Hayek’s quote emphasizes the need for creativity in establishing an alternative monetary system, as direct opposition to government-controlled money is impractical. Cryptocurrency represents this alternative by existing outside traditional financial systems.
Decentralization as a shield against intervention
Hayek’s idea of “something that they can’t stop” is exemplified in decentralized cryptocurrencies, which are difficult for governments to control due to their reliance on peer-to-peer technology and distributed networks.
Sound money and inflation resistance
The limited supply of cryptocurrencies like Bitcoin prevents inflation, aligning with Hayek’s belief in “good money” that retains value over time. This fixed supply protects users from devaluation, addressing one of his main critiques of government-controlled currency.
Empowerment of individuals over financial authorities
Hayek’s vision was centered on giving individuals greater control over their money. Cryptocurrencies enable users to bypass traditional financial systems, granting them unprecedented financial freedom and autonomy.

Friedrich Hayek’s belief in an alternative monetary system, free from government control, has remarkable relevance in today’s world of digital finance. His vision finds a strong ally in cryptocurrencies, which embody the concept of money beyond government reach. Hayek’s thoughts reflect a prescient understanding of the challenges inherent in state-controlled money and the need for decentralized alternatives to offer stability and freedom. Cryptocurrencies fulfill his dream of “good money,” providing a practical way for individuals to retain control over their wealth and protect against inflationary government policies.

In the modern context, Hayek’s insight serves as a foundational argument for the potential of decentralized finance (DeFi) and digital currencies. His quote resonates with proponents of financial freedom, advocating for a system that empowers individuals, bypasses centralized power structures, and fosters global financial inclusion.

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