The euro is a Frankenstein Monster

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Mary Shelley (Copyright: Richard Rothwell, Public domain, via Wikimedia Commons )

By Prof. Dr. Thorsten Polleit 

In 1818, the English writer Mary W. Shelly (1797-1851, picture) published her gruesome novel ‘Frankenstein. The Modern Prometheus’, which became world-famous. What is it about?

The scientist Dr Victor Frankenstein pieces together a human-like creature from cadaver parts in his laboratory and succeeds in breathing life into its body.

But Frankenstein would immediately like to eliminate the monster he has created. He sees it as a demon, calling it a ‘disgusting monster’, a ‘cursed Satan’.

The monster immediately realised that it is excluded, outcast from human society. It becomes bitter and vengeful, bringing great misfortune, death and destruction.

Shelly’s Frankenstein has undergone many interpretations over the years. One is that the transgression of boundaries – such as Frankenstein’s ungodly urge to want to create life like God – ends in disaster. Linked to this: The elevation of man above what is assigned to him, his arrogance, the uncontrollability of human creation contrary to nature, come to a bad end.

And if you reflect a little longer and look at the recent past, Shelly’s Frankenstein book somehow reminds of the euro, the supranational single currency that was ‘released from the laboratory’, so to speak, on 1 January 1999.

An artificial currency

The euro was created artificially, ‘in the retort’ so to speak, by declaring the previously fixed exchange rates of the participating currencies irrevocable among themselves and against the ‘euro’ as an artificial unit and then merging them into it; the national currencies such as the Deutschmark, French franc, Austrian schilling etc. were absorbed into the euro, and the euro was pieced together from them, so to speak.

The national currencies themselves were all fiat currencies. In other words, they represented state-monopolised money that was literally created out of nothing. All of them were therefore thoroughly and literally unnatural types of money, unnatural or contrary to nature, especially in the sense that they did not come into existence through voluntary co-operation, but were enforced top-down by the state’s monopoly on the use of force. And this lack of individual components is also inherent in the ‘super fiat’ euro, the conglomerate of these national fiat currencies.

It is true that the creators of the euro made all kinds of promises and drew up rules and laws to make the public believe that their euro creature would be a reliable money.

For example, the Maastricht Treaty stipulated that the European Central Bank, which was henceforth to increase the euro money supply, should be politically independent, that it should ensure ‘price stability’ (a euphemism for ‘low price inflation’) and that it should not finance the participating countries’ budget deficits with new loans and new euros.

The states were also to be placed in a ‘fiscal straitjacket’: They were not allowed, it was said in the run-up to the creation of the euro, to take on new debt by more than 3 per cent per gross domestic product per year and their debt burden was not allowed to exceed 60 per cent of gross domestic product.

Broken promises

But what has happened?

All the ‘good things’ that the creators of the euro promised the public have not materialised. On the contrary, their euro creature is causing destruction.

For example, economic growth in the countries that adopted the euro from the outset was much lower on average than in the period before the euro.

Eurozone member states have not adhered to the debt rules. On the contrary, their debt levels have continued to rise and rise.

The net taxpayers in the countries that are still relatively better off have to pay for the mismanagement of the less economically successful countries.

De facto debt mutualisation has occurred. For example, in the form of the European Stability Mechanism, which was established in 2013 and which holds net taxpayers liable for dizzying amounts across euro borders.

The ECB is now gearing its interest rate policy to the needs of ailing state finances, de facto financing outstanding bills with newly created euros. Preferably through ever new government bond purchases. 

The euro currency union is now deeply divided, as the increased Target 2 balances show and which document a breathtaking redistribution of wealth between the euro countries – the Target 2 deficit countries are better off at the expense and to the detriment of the productive citizens of the Target 2 surplus countries.

The inhibition to let the electronic printing press rotate has dwindled more and more. If necessary, the ECB provides de facto unlimited amounts of credit at favourable interest rates, especially to faltering banks.

In the course of the politically dictated lockdown crises of 2020 to 2022, the ECB then also unabashedly drastically expanded the money supply in the hands of the general public, causing hyperinflation that devalued people’s purchasing power and savings.

The euro: a cause of disaster

In sum. the euro, almost as soon as it was released from the laboratory, caused disaster, and more disaster.

The euro has taken on an uncontrolled life of its own, just like Frankenstein’s monster. The euro single currency creates one crisis after another because – like Frankenstein’s monster – it is literally unnatural.

The euro is fiat money, and fiat money is known to have blatant economic and ethical defects. It is inflationary, socially unjust, causes financial and economic crises, drives national economies into over-indebtedness and allows the state to grow unchecked at the expense of the freedoms of citizens and entrepreneurs. It can be said that the ‘super fiat’ euro has exacerbated and potentiated these defects inherent in national fiat money.

Economic theory, had it been consulted, could have diagnosed this from the outset: No better, reliable and ethically sound money can be created from individual national fiat currency parts by merging them. On the contrary, merging them creates something even worse.

And the attempt to preserve the euro creature at all costs only makes it even more evil. The damage it causes will foreseeably ruin the wider population in the eurozone in the truest sense of the word.

Frankenstein

Dr Victor Frankenstein’s monster grew out of a fatal aberration, which Frankenstein immediately recognised shortly after his deed. However, he failed to undo his work.

The euro monster is different.

The creators of the euro – unlike Dr Frankenstein – show no signs of purification, either because they do not recognise the euro for what it is: bad money that is gradually destroying the free economy and society (or what is left of it).

Or because some of them are quite happy with the consequences of the euro, because they see it as having a planned effect: Namely, it turns freedom into unfreedom.

At the same time, many people do not see the euro as a monstrosity, do not recognise it as a disaster and do not hold it responsible for the damage it causes.

In the end, Mary Shelly has Frankenstein’s monster die in the Antarctic and go up in flames. Frankenstein himself dies shortly afterwards, having passed on his story to posterity.

The end of the euro creature cannot be deduced from this, but from an economic point of view it is clear that the euro will not have a happy ending either.

You may now say: the euro is not a human-like creature like Frankenstein’s monster was, so we should not associate the euro with the story of Frankenstein’s monster.

In response to this objection, it can be said that the comparison is not flawed if one realises that both cases are ultimately about human attitudes, about human ideas. They underlie the ‘unauthorised’ deeds – such as the arrogance of wanting to create something unnatural, or perhaps bringing something disastrous into the world under the pretext of good.

Seen in this light, the root of evil is the bad idea, and the Frankenstein monster and the euro are only the respective symptoms that human action, instigated by bad ideas, produces.

In order to put a stop to the euro creature, people need to change their way of thinking, to realise that a uniform, politicised, dictated, centralised fiat currency is not a good idea, but rather that the good idea is that people must have unrestricted freedom in their choice of money so that they can have good money.

So it makes perfect sense, I think, to link the Frankenstein monster and the euro creature, to think about them in the way that has been done in this essay.

Professor Dr Thorsten Polleit worked as an economist in international investment banking for 15 years and then in the international precious metals trading business for 12 years. Thorsten Polleit has also been an honorary professor of economics at the University of Bayreuth since 2014. His latest books are: “The Devil’s Money. Der faustische Fiatgeld-Pakt – wie wir ihn kündigen und zu gutem Geld zurückkehren”(*) (October 2023), ’The Global Currency Plot. How the Deep State Will Betray Your Freedom, and How to Prevent It”(*) (2023), ’Ludwig von Mises. The Uncompromising Liberal”(*) (2022) and ’The Road to Truth. A Critique of Economic Reason”(*) (2022). Thorsten Polleit’s website is: www.thorsten-polleit.com. Follow Thorsten Polleit on Twitter/X here.

Originally published in German on Misesde.org  

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