Thomas Jefferson himself was quoted as saying "Paper is poverty". Milton Friedman disagreed, saying anything can be money. In fact, Friedman argued in his book "The Optimum Quantity of Money" that if the Federal Reserve did not allow the quantity of money to drop by 1/3 that the Great Depression, as we know it, couldn't have occurred.
So who's right?
Both are right. But Friedman makes arguments on how to keep a paper system afloat, while Jefferson sees paper as inherently flawed. Jefferson's long-term view of government can be well understood by his quote “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure.”
In essence, Jefferson understands that gov't, regardless of the intentions, will become corrupt and/or ineffective. Paper money may work for a while, but eventually greed and power will overpower the systems inherent flaw - the ability to print whenever you want. Jefferson may not have the economic stature of Friedman, but he understood something Friedman didn't - something academics can't seem to grasp - that human nature will over come the best designed systems. More regulations, more oversight, more laws will never fix an inherently flawed system. Paper money is flawed.
But wait, you ask - "Wouldn't the Great Depression have been just as bad if Jefferson was in power, because he never would have advocated devaluing the dollar by 50% as the Federal Reserve did in 1934?"
The question is moot, because Jefferson never would have allowed the Federal Reserve to exist in the first place. And if it wasn't for the FEDS easy money policy of credit creation in the 1920's, the Great Depression never would have occurred.
Jefferson passed away before Lord Acton wrote "Power tends to corrupt, and absolute power corrupts absolutely.", but I believe Jefferson would have whole heartedly embraced the phrase. Intellectuals and academics, like Friedman, believe they can put rules and laws in place to keep powerful institutions from corrupting themselves and society.
Based on what we have seen through the course of human history, the economic genius of Friedman fails the most basic test, that of man's love of power and self righteousness.