Fiat Privilege

what it is and how to fight it

Fiat privilege is a concept that highlights the unfair societal advantages that people with proximity to the money printer have over people of savings. With roots in the physics envy prevalent in twentieth-century macroeconomics and the widespread financialization made possible by the severing of the dollar’s peg to gold, fiat privilege has developed in circumstances that have broadly sought to protect the interests of those who most directly benefit from unconscious inflationism.

Fiat privilege denotes both obvious and less obvious passive advantages that people of proximity may not recognize they have, which distinguishes it from overt authoritarianism and financial repression. These include cultural affirmation of one’s own worth and contribution to society; presumed greater social status; and a rate of growth of one’s wealth above the rate of inflation. Fiat privilege is pervasive and undeniable and exists in all of the major systems and institutions that operate in society, as well as on an interpersonal level.

For people who have never heard the term before, fiat privilege can evoke reactions of defensiveness and even outrage. This concept has been termed, “fiat fragility,” and reactions can range from fear, avoidance, defensiveness, and discomfort, to more extreme reactions such as shaming, covert aggression, intolerability, invalidation, and weaponizing privilege. On the other hand, for some, the idea that a person could have special privileges just because of their proximity to the money printer is an unsettling realization and can elicit feelings of shame, guilt, and confusion. If you are an inflationist and feel like the concept of fiat privilege doesn’t pertain to you, you are likely mistaken. Persons of proximity often feel the need to fiatsplain their fiat privilege away, but a denial of fiat privilege is usually evidence of fiat privilege.

Fiat privilege is an advantage that protects people of proximity against any form of discrimination related to their ability to produce goods and services for which others will freely exchange. Fiat privilege, however, does not imply that inflationists have not been or cannot be productive. It just means that it is much easier for a person of proximity to avoid being productive. Inflationists tend to assume the universality of their own experiences — working for an investment bank or a non-profit, or teaching university economics, say, or railing against energy usage or large families — while people of savings are “othered” on a daily basis, and are forced to navigate a world that is not designed for them.

It is not uncommon for fiat privilege to become so embedded in the lived experience of a person of proximity that it can develop into what scholars call “fiat supremacy” — the false narrative that people of proximity are actually better than people of savings and add more value to society. This narrative is rooted in the historical falsehood that fiat money is superior to other kinds of money. This falsehood is a product of a systemically inflationist education system and functions to preserve fiat privilege.

The most damaging aspect of fiat supremacy is the belief in the possibility of “epistemic Cantillon neutrality” — that one can be neither an inflationist nor an anti-inflationist. This is fiat privilege par excellence. In reality, if you are not overtly anti-inflationist, you are an inflationist.

If you would prefer to be an anti-inflationary ally, you need to take responsibility for your privilege, your mistakes, and your education.

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