Freddie New, a lawyer and political strategist, draws parallels between ancient Rome's economic practices and contemporary monetary challenges. He highlights that currency debasement, the reduction of a currency's value, has historically led to significant economic instability.
The pound sterling, for instance, has lost approximately 95-96% of its purchasing power over the last century. This decline in value, New explains, often traps governments in a cycle of printing more money to meet obligations, such as paying military or dependent populations. Once this cycle begins, it becomes difficult to halt, exacerbating the problem.
New emphasizes the fundamental role of money in complex societies, enabling trade and supporting large power structures. He points to Rome's economic history, noting that coins were debased even when their nominal value was understood to be less. This historical pattern, he argues, offers critical insights into modern monetary policies.
Specifically, the detachment of the US dollar from gold in the 1970s allowed for 'artificial' money creation, leading to inflationary pressures. Studying these historical patterns, New suggests, is crucial for understanding human behavior and current geopolitical and economic movements. The consequences of currency debasement, including decreased purchasing power and potential collapse, remain relevant lessons for contemporary fiscal policy.