A friend just sent me this piece on Adobe including code in Photoshop that prevents users from copying and manipulating images of many of the world's major currencies, presumably to prevent counterfeiting. There are a couple of worrisome things here, including the state apparently requesting/demanding that such code be included in private software, and Adobe agreeing and not informing customers about it. In addition, it would seems to be a limit on free speech to the extent artists might like to use Photoshop to create artistic images that involved currency. (Not to mention the fact that manipulating the image of currency is not per se illegal.) But I'd like to make a point that I haven't seen raised elsewhere: once again, this whole situation creates problems,and a bad precedent for state involvement, precisely because of the existence of state monopoly central banks. Where states control the currency, they will act in understandable ways to protect those monopoly rents, and presumably pressuring Adobe into doing this would be one of those ways.

In a world of competitive banking, not only would banks have plenty of good reason to make their currencies hard to counterfeit (and banks did so historically, before central banking), they could also negotiate competitively with companies like Adobe to make these sorts of deals. Adobe would certainly be in a better position to resist where the power of the state is not involved, but rather the more decentralized forms of power we see in the market. Moreover, banks and/or software manufacturers could test the market to see whether customers really cared about an issue like this, or whether they were indifferent. The discovery processes of the market would both allow for more options and put more pressure on all parties concerned to be more forthcoming about what is and is not in their software.