Rothbard on the Medium of Exchange

It has generally been found, on the free market, that the best commodities for use as a money have been the precious metals, gold and silver.

- Murray Rothbard, The Ethics of Liberty, page 37, 1998 edition

I must admit upfront that my knowledge of monetary history is very weak and I can't contradict what he says here. However, can it really be said that a "free market" has existed in any substantial form for any substantial length of time, especially considering the historical context? The gold standard is long gone from regular use; he can only be referring to events prior to, say for simplicity, 1900. Were there free markets during those imperialistic, feudal, colonialistic times and did the de facto establishment of gold, silver, etc. as the medium of exchange during these times therefore represent a "free market vetting" so to speak of the medium? I find this particularly interesting given his defintion of a free market on page 40:

The free market is a society of voluntary and consequently mutually beneficial exchanges of ownership titles between specialized producers.

Emphasis in original.

Certainly the mercantilist era can't qualify as an example of this concept of free market, correct?

An inquiring mind wants to know. Reading suggestions (I'm aware of - but have not read - Rothbard's Man, Economy, State and What Has Government Done to Our Money?), historical evidence, pure conjecture, and theories are welcome.

Posted by Drizzten at March 01, 2005 07:10 PM