The value of one particular currency may not be near the value of another. You could move to a new town and the currency that you have would then be worth very little. It would be extremely difficult for people to live, and for the economy to work. How will multiple currencies be able to be managed and maintained in the economy? There would be value disparity. This would cause a fractured economy that just wouldn't function.
Is it not plausible, if not outright likely, that as competing currencies worked the market, a few would rise to the top?
I think we have to distinguish between "free entry to the market in money production" versus "a market of many competing monies". We know, a priori, that money is inherently eliminative and that is Hoppe's point. The same process that causes money to arise in the first place (indirect exchange) will inevitably result in the use of a single, global money.
Particularly, is it not plausible, if not outright likely, that gold-backed currency would become the preferred currency of the market? Then it would matter little that, say the US used "dollars" that were backed by 1 / 20 of an ounce of gold and China used a "yuan" backed by a gram of gold, no? After all, then an American could buy a Chinese product that cost 28 yuan for 20 dollars, and a Chinese man could buy an American product that cost 20 dollars for 28 yuan.
And what's the use of these nationalized, incompatible quantities? Why not use an ounce or a gram?
The market may even pop up with businesses that take currencies back to their source to redeem them for a fee, facilitating the trade further. If you speak specifically of my example of corn or wheat backed monies, consider that they will likely only be used by those that benefit from using such a currency, like if they buy mostly local and all local businesses value that particular commodity.
Local monies are not precluded by Austrian monetary theory - however, it is incorrect to characterize local monies as "competing" with the global money. They serve different functions as only local goods would be priced in a local money whereas all goods - including local monies! - would be priced in terms of the global money.
Clayton -
The only one worth following is the one who leads... not the one who pulls; for it is not the direction that condemns the puller, it is the rope that he holds.
@ Phi Est Aureum: I'm sorry about the confusion and the delay in my reply. Anyway, you got it right... I guess the question of whether government revenue collection, storage, and dispersal in gold by weight/purity only vs. govt fiat legal tender for revenue collection, storage, and dispersal instead depends upon whether the govt should have gold or whether as much as possible of the worthless paper it creates should be returned right back to it. I just don't understand how a govt (especially a non-confederation) could be restrained in anyway if it creates and then collects nothing of value even if it is not legal tender for private debts. If more States could also print their own money, then it would more easily make gold the preferred medium of the market, but I think it is just best to reinstate a modified Articles of Confederation where the central govt can only borrow, store, and pay gold, but can't tax and can't print or coin money. Going back to Jacksonian monetary policy (i.e., US gov only recognizes gold by weight and purity, all US govt revenue collected in gold, stored in a fully public physical sub treasury system, and paid out of that) and people can use whatever they want for private debts) immediately under the current constitution would be the next thing, but it wouldn't last. However, the problem with republican unions and monarchies is that they are too centralized so gold can't be dominant within them. That said, I highly doubt we will ever see gold fully legalized again in a centralist union... but maybe I'm just being too pessimistic.