Inflation, as we have found, exists because the state needs it—and it is politically far more convenient than ordinary taxation. However, inflation and the state monopoly on money have “side effects” that are equally, if not more, beneficial to the state and destructive to society. First of all, there is the limited utility, and in many cases the meaninglessness, of savings. There is no point in saving (and often it is simply impossible) if tomorrow everything can vanish as a result of inflation or devaluation. This makes people dependent on the state. And this applies not only to the pension system, but also, for example, to mutual insurance systems and to “pooling” activities in general, which become quite difficult under conditions of inflation. If we are talking about horizontal ties and civic activity as an alternative to the state, solid money is needed for them to take root.
The monetary monopoly also facilitates the “divide and rule” principle. Bank depositors, of their own free will, fight against bank runs, “rumors,” and “panic”—working for a system that robs both them and their fellow citizens. Borrowers blackmail the government and the central bank, and these institutions then “accommodate” them—at the expense of taxpayers, of course. One can find many examples of this kind.