Separation of money and state: How it could work

Many people talk about separating money from the state, but almost no one seriously attempts to imagine what that world would actually look like. The idea is usually treated as a slogan, not a destination.

There’s a famous quote from Friedrich Hayek that gets cited often:

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

The quote is powerful, but it raises a far more interesting question than it answers. What would really happen if this did play out? What if, in practice rather than theory, sound money were taken out of the hands of the state?

That question is why I support the eCash project. It is explicitly attempting what Hayek described: a “sly, roundabout” path toward unstoppable, sound money. More importantly, eCash isn’t just philosophical, but practical. To my knowledge, it’s the only cryptocurrency with a credible roadmap aimed at true human scale on the order of 50 transactions per day for 10 billion people on the planet.

Recently, a scandal on X involving fraudulent Somali daycare centers siphoning American taxpayer funds has sparked calls to stop paying taxes altogether. While I’m sympathetic to the impulse and ultimately supportive of abolishing taxes, I don’t think an abrupt shutdown of the system is wise today.

Imagine a scenario where enough Americans coordinated to stop paying taxes that enforcement became impossible. Government revenue collapses. Workers go unpaid. The state grinds to a halt. What happens next?

Do we rapidly self-organize under a new governance model? I doubt it. More likely, society fractures before it rebuilds. Would it become a lawless hellscape? Maybe. But I’d prefer not to find out the hard way.

The uncomfortable truth is that tearing down the current system without a fully functional alternative ready to take its place is far more likely to make things worse. This is the kind of scenario only hardcore preppers plan for. Our money itself depends on centralized authority; remove that authority overnight, and it’s not clear what remains.

So what is the alternative?