Monetary policy these days is complicated, ineffective, and quite possibly immoral. The complexity is inevitable; there is no simple way to ensure that the supply of money and credit is appropriate in a large modern economy. The ineffectiveness is evident: central bankers let that supply grow too fast before the 2008 financial crisis, and have unable to return monetary conditions to normal since then.
The moral lapses may be subtle, but I believe the lack of attention to the common good in the management of interest rates and the monetary system causes three serious problems.
1) Dangerous freedom
Imagine a world in which anyone can use anything as a currency. This perfect monetary freedom would be a disaster. With strangers, I would only be willing to deal in gold, or some other scarce substance that could be carefully measured, because I would have no way of evaluating verbal or written promises to deal fairly. I might be able to trust members of my social group in economic transactions, but only because our monetary freedom was balanced by strong social constraints; they would be punished if they tried to cheat me.
The example is extreme, but it brings out the dangers that come with all monetary freedom. Money is always a token of value, but the value of the token is hard to determine. Invincible ignorance is one issue. No individual can hope to know how much a dollar, or an ounce of gold, should be able to buy at any time, and even monetary authorities struggle to keep track of the supply of both money and the things that money can buy.
But greed is even more dangerous than ignorance, and the freedom to create money – as banks do by lending out deposits, or as anyone can do by issuing promissory notes – is an invitation to greed. The borrower or the issuer is constantly tempted to acquire more spending power than justice would allow.