XI
AMERICAN
LEADERSHIP
THE
INTELLECTUAL REVOLUTION
In
the minds of all peoples fighting this war, there is a reserve
resolve, once the external enemy is defeated, to deal with internal
problems. Therefore, revolutions will follow the declaration of
"peace." We too, must have a revolution. Let us have it
with our minds rather than with our muscles. Thus we may see, for
other nations, a pattern that will not only save blood but also
valuable time in attaining release from existing and menacing evils.
Such an universal pattern is possible, because there is a common
cause of human tribulations, and a mental attitude that is alike in
all peoples. The common cause of distress is the inability of people
to monetize their own labor and thus work out their own economic and
political freedom. The common mental attitude that deludes them is
the belief in "Santa Claus."
The
Government invariably presents the image of Santa Claus. In spite of
the frustrations of political paternalism, political prestige is now
at its zenith. The people of all nations have come to believe that
government is an agency for economic betterment. Individualism and
private enterprise are in the shadows cast by the towering state. The
teachings of scholars and old-time statesmen have been forgotten.
While there are still some who say, "yes, but," the "yes"
gets broader and the "but" grows narrower. The time was
when those who believed in the political means of salvation, would
say: "there oughta be a law." Now they say: "there
oughta be an appropriation."
When
government was largely a matter of prohibitory statutes, men like
Thomas Paine met concurrence in the thought that "government is
a necessary evil;" but now that we have government by
appropriation - and it essays to take care of us from the cradle to
the grave – men tend to believe that government is a necessary
blessing. What has brought about this transformation? Briefly, the
increasing need of money, and therefore the increasing dependence
upon government which monopolizes the money power.
As
the process of specialization of labor and resultant greater
productivity of wealth progresses, the need for exchange increases -
with resultant demand for greater money supply and its more equitable
distribution. A tradition having fixed in men's minds the error that
the state is the fountain of money, the political money system is put
under increasing pressure to meet the demands put upon it. This
pressure first manifested itself against the banking wing of the
political money system. As has been shown in the foregoing studies,
banks provide business with the power to create only substitute
money, and this expands the total money supply until the accumulated
deficiency - arising from the unliquidated interest charge, and from
the unbalance between substitute dollars and government dollars -
precipitates a reaction and depression ensues - and money supply is
depleted through bankruptcy of banks and borrowers.
This
process of alternate floods and droughts of bank money, called
"business cycles," operated in every nation; but had
greater ebbs and flows in the United States - where it reached its
climax in 1929. After waiting for four years for the cycle to renew
itself, there arose a public demand that the government intervene to
supply the money needed for revival. This pattern of ultimate
breakdown of the private substitute money mechanism is common to all
countries - with the result that the government intervenes and
becomes the main source (if not the only source, as in Russia), of
money supply. The banking valvular method, of pumping in and pumping
out, is now being superceded by the government constant flow method -
which has but one cycle, by the exhausting of one unit through
inflation and the creating of another.
In
assuming the responsibility of supplying the economy with money, the
government is put to it to find ways and means of channeling
circulation. Various public works projects are conceived, and various
subsidy and social benefit schemes are worked out, in an effort to
facilitate exchange and balance money supply with goods supply. This
end is pursued, not only by expanding money supply, but also by
reducing goods supply. The latter becomes necessary because a single
fountain cannot supply the necessary circulation, unless the
government goes into the production and distribution of goods - as in
Russia. Until we become further conditioned to the socialization of
private enterprise, the government does not dare to go into the
production of wealth; therefore it can go only into the destruction
of wealth - to relieve the unbalance between goods supply and money
supply.
The
killing of animals and plowing under of crops, and the paying for
this destruction, is done with the aim of prosperity through
scarcity; but that it is a prosperity of prostration is seen when it
evolves into its ultimate destructive force by means of war.
Militarism is the flower of the weed called "economy of
scarcity." There are too many men, just as there is too much
material - they must be "sacrificed" by occupying their
energies, and possibly consuming their lives, in the destructive
endeavors of war - or in the idle time-serving of peace-time standing
armies.
We
are now in the most colossal manifestation of the philosophy of the
economy of scarcity - with both the money-producing arm and the men
and material destroying arm, endeavoring to vindicate that
philosophy; and there are not wanting minds that see in it tremendous
postwar prosperity. To them, scarcity of goods and plentitude of
money means prosperity. They do not realize that the power of money
diminishes as its backing in goods diminishes; and that therefore we
are impoverished regardless of how we have pyramided dollars.
With
the peace, the problem will mount. To demobilize the military, and
spew them on the labor market, will violate the principle of the
economy of scarcity. To employ them on public works, or on "made
work," will increase the dollars in circulation (of which there
are already too many) without increasing consumer goods, of which
there is now too little. But the government cannot revert from its
role as Santa Claus; and it will continue to put dollar candy bars in
stockings, even though it bring digestive convulsions of inflation.
If the people persist in their belief that the government can be and
is Santa Claus it may destroy civilization itself. Once the mental
attitude of dependence becomes fixed in a people's mores, cultural
advancement becomes impossible and decadence inevitable. Dependence
is defeatism, leading to degradation. Crush individual initiative and
nothing remains worth saving.
The
illusion that there is a governmental Santa Claus, exists in the
minds of all peoples; and its influence is to sap them of their
substance and rob them of their initiative. As we have learned from
the Valun Studies, money can be issued only by the process of buying,
and the issuer of money commands the sphere of its influence.
Therefore, the government Santa Claus-process is one of buying our
the people's estate, and accomplishes by economic operation what
otherwise would have to be accomplished by military confiscation, as
was done in Russia. Let us examine how it has, and is, operating in
our country.
COMMUNISM
FROM SANTA CLAUS
When
the states created the national government, it was designed by the
Constitution to be a federation of sovereign states, and not a
merger. The Federal government was granted, by the states, certain
sovereign powers, such as the power to regulate inter-state and
international commerce; make war and peace; and, "coin money and
regulate the value thereof." The states of Maryland and Virginia
ceded to it the District of Columbia, wherein - as well as in the
territories and waters bordering the nation - it was granted
exclusive jurisdiction. All else was reserved to the states. It was
not dreamed that in the simple words - "coin money and regulate
the value thereof" - lay the seed from which would grow the vine
that would spread federal sovereignty, checking the sovereignty of
the states, and alienating their citizens. Yet today, we have almost
forgotten that we are, first of all, citizens of our respective
states and that the only exclusive citizens that the Federal
government has, are the voteless residents of the District of
Columbia, home of our Santa Claus.
Since
the Federal government functions by appropriation, a power that
cannot be employed by our states - due to their lack of money power -
we have transferred our affections to the great provider. The result
was briefly outlined in the Introductory. For further data read
"Bureaucracy Runs Amuck" by Lawrence Sullivan.
Beset
as we are, with swarms of government agents and all manner of
bureaucratic regulations, we should recognize that it is political
proprietorship that is creeping over us; the government is buying us
out. Bureaucracy is but the administrative machinery of a "buyocracy"
which has come upon us through the unlimited money issuing power of
the government. Unless we overcome the Santa Claus complex and
declare our independence of the political money power, we must become
a dispossessed people; and even the mantel piece on which we hang our
stocking, will be owned by Santa Claus.
"The
history of Liberty is a history of the limitation of governmental
power, not the increase of it. When we resist, therefore, the
concentration of power, we are resisting the process of death,
because concentration of power always precedes the destruction of
human liberties." - Woodrow Wilson.
But
how can we resist this "process of death"? Resistance to
governmental encroachments can be offered only by asserting
sovereignty, and when we fail to exert our money power we yield our
sovereignty. How can we desist that which we require, namely money,
if we accept the government as our main source of money supply?
"Nobody shoots Santa Claus," but there is no need to shoot
him. We need only quit writing notes to him and begin writing them to
ourselves through our money issuing power. It is the only way out for
the people, and the only way out for the government, which is the
victim of a perversive power, thrust upon it and accepted in
ignorance of the laws of money.
DECLINE
OF BANKERS' POWER
In
Wilson's day we still depended for our money supply mostly upon the
banks - a private institution. It was aristocratic, and was conducted
for private banker profit and not for the benefit of the economy.
But, there were then among us, at least a privileged group of
citizens who were permitted to assert their money power, and thus
kept the power from being exerted by government. The banking system
in every country is now socialized, and has no independent existence,
nor would we recommend returning to that false system of privileged
power, even if we could.
Yet
it must be said in fairness to it, that it built America and other
countries. Many an industry that is with us today, owes its existence
to it, and could never spring up under the present political money
monopoly. But it is no more, and we cannot return to it; we must go
forward.
In
the passing of the private banking system - the last remains of the
private money mechanism with which money began - it may be
appropriate to point out that it was foredoomed to ultimate
socialization when it first came under political control. The
government, by its sponsorship of money, established a double
standard for money - political money and bank-substitute money.
Private, or bank-substitute money, could expand only in ratio to the
existing supply of political money; and when it exceeded these bounds
- as it was compelled to do to meet the demands of expanding commerce
- it precipitated depression. These cycles of boom and depression
came with increasing frequency and severity. After the last war the
government adopted a surplus budget policy - thus draining political
money out of the economy, for the purpose of retiring bonds - thereby
reducing the base upon which the bank-substitute money pyramid was
being erected; and thus precipitated our worst private money
collapse. This was the final blow at the private substitute money
mechanism, but public disfavor toward the bank credit system was
bound to bring about, sooner or later, a demand for government money,
which has no swings of the pendulum, because it has but one cycle
through total inflation. There is nothing that can force it to
balance its budget, and there is no safety device. Thus the public
illusion lasts longer and the delusion is deeper and far more
menacing than the short term cycle of the bank credit system.
The
banking system, today, in every nation, is but an agency of
government - a deceptive device for political finance. With the money
system - which is the life blood of the economy - now socialized, it
is inevitable that the entire economy will become socialized, unless
we find the solution.
To
do this, we must become fundamental in our thinking. We must
comprehend the great liberating fact that the money power is in all
of us; that it must not be perverted by political control, and that
it must be democratically exerted to assure both economic and
political democracy. Otherwise, the present process of subjection
must continue. Every nation in the world is in the grip of the
political money power; and, unless the citizens assert their private
money power, all must go the way of Russia - where the government
ruthlessly asserts complete dominion, and imposes economic slavery in
the name of ideology. We have in America already the beginnings of
ideological opium in the thought that "the government owes every
man a living," and in the paternalism called "social
gains." These signal "the process of death."
Ideological
garments are cloaks for ugly facts. By violating the laws of money -
for which the people are themselves to blame – Governments become
the victims of a fallacy, whereunder they undertake to issue money on
behalf of the people. No government can issue money except
by acquiring something; and therefore, government money creation -
which is effected by deficit financing - inevitably develops
government proprietorship and private dispossession. As the fatalism
of this process manifests itself, "ideological"
justifications are invented to condition the minds of the people to
the transformation; opiates for an otherwise painful operation. When
in the evolution from the economy of scarcity - whereunder the
government merely destroys wealth and slows up its production - the
next step must be taken, by the operation of productive industries,
and the distribution of their products, the shift will come to the
people cloaked in a pretty "ideological" phrase to
sloganize it. The natural order never has any "ideologies"
because it needs no defense mechanisms.
PROTESTS
VAIN
Our
forty eight state governments, from the governors down, are in revolt
against the encroachments of the Federal government and its ominous
threat to state sovereignty, but their protests alone are vain.
Rescue can come only by the private action of the citizen through the
assertion of his money power. By such assertion the governing power
will lie at the grass roots in each state and be commensurately
reduced at Washington. If we do not do this the process of subjection
of states and citizens will continue unto communization.
We
have failed to realize that the Federal government's deficit power is
its money power. By this process it has created over two hundred
billions of deficit dollars, and continues at the rate of about five
billions a month. With these deficit dollars it buys everything that
is purchasable, and after the process has run its course through
total inflation unto worthlessness of the dollar, it will own title
to everything it has purchased and the people will have the paper
receipts. The process may then be repeated by the creation of a new
money unit. There is no such thing as government bankruptcy, since
its property cannot be levied upon, and there is no such thing as
"government debt," since everything it "owes" is
but a promise to issue another promise, ad infinitum. The viciousness
of political money power has never been comprehended by the people.
We are being socialized by a process that is beyond our ken, and
beyond the power of the Government to arrest without our aid, which
can be given only by the assertion
of our private money power.
CONGRESSMAN
WRITE HOME
To
state that the officials of state governments are opposed to the
expanding power of the Federal government, does not imply that
Federal officials are happy over it, or that it is the result of plot
or evil design. It is possible that among the bureaucracy there may
be some who are communist minded and who could say, "we planned
it that way," but certainly there are none among our elected
representatives. There is not a Senator or Representative at
Washington who does not share the resentment of his state officials
and the concern of thinking persons everywhere, over the serious
situation that exists and the danger that menaces us. They suffer
headaches and heartaches from the incessant appeals from constituents
to do the impossible or ultimately harmful. At last, under the
program for private action to assert the money power, a Congressman
can write home to the folks and ask them to do something for
themselves, and the release of the government from its dilemma.
Until
you assume your responsibility of monetizing your own labor, the
government
will have an insuperable problem, no matter who its officials may be
and its efforts to do for you what you must do for yourself will
miscarry - and with increasing evil results. You may, in your
perplexity, feel that the government must be changed. But, it isn't
the government that needs to be changed; it's you. You must be fit
not only for political self-government, but also for economic
self-government. In fact, without the latter, the former is
impossible. You cannot be a leaner on government. You must stand on
your own; government must lean on you.
In
asserting our money power, we will save political democracy by
founding economic democracy; and will thus show the world a pattern
of pacific revolution that all may emulate, and may gain thereby what
could never be gained by violence, or by opera bouffe revolutions.
ECONOMIC
DEMOCRACY
Economic
democracy is 100% democracy; political democracy is merely the rule
of the majority, leaving the minority forever tyrannized. However
tragic it may be to thwart the minority – which always contains the
seeds of progress, while the majority often represents decadence -
political democracy can nevertheless operate in no other way.
Economic
democracy, as asserted through the money power in all of us, involves
no tyrannies or repressions. Each vote counts, and each voter wins
the election. Elections are held in every market place, and in every
town and city and farm, every hour of every day. When you exert your
money power you cast the total vote in that exclusive sovereignty
which is YOU. John Jones, next door, votes for the goods with the
yellow label; you vote for the goods with the blue label. Neither has
to yield to the other - both win. The manufacturer of the goods with
the blue label may have the majority of the customers - but that
doesn't interfere with the yellow label manufacturer serving the
minority, no matter how tiny their number may be.
Because
political democracy is unfair to minorities and economic democracy is
fair to all, the sphere of the former must be minimized and the
sphere of the latter maximized. This will be the logical consequence
when we have asserted our individual money power and depend less upon
the political means of attaining ends. Ultimately we will have
complete separation of money and state - and will thus have achieved
harmonious operation of the twin democracies.
Do
you want to take part in this most fundamental of all revolutions to
rescue
both the people and the government from a fatal error? If so, you
must first of all have a one-man revolution within yourself by
casting out doubts of your inherent money power and fear from any
quarter. This accomplished, gang up with other like-minded
revolutionaries on the intellectual plane. Start talking - not in
whispers, for this is a revolution in a fish bowl with a loud
speaker. It can't hurt anyone. We're not going to grab the
government; we're not even going to try to win an election. This is a
cooperative and evolutionary revolution - the ins are in and the outs
remain as before, unmolested in their way of life.
Begin
radiating the new credo by parlor parleys of small groups. Use this
book as a text book, reading and discussing the studies. Expand your
number until you can meet at some restaurant or hotel where you may
have the space for the price of a meal. If in a rural section, ask
for the use of the county court house, or school house, or farmers'
Grange headquarters. If there be other valun groups in your city or
county, work out a federation or merger. Develop trade as well as
social intercourse among yourselves. Keep the press and radio
informed of your activities. Enlist the churches and fraternities and
commercial organizations. Be methodical; be persistent.
Remember,
you are agitating a revolution to end political revolutions; a
revolution that once and forever will make private enterprise really
free; and will give the state and Federal government a really secure
and well defined place in the scheme of life - where men and women
will be permitted to work out their individual destinies without
political intrusions and economic limitations, and where the threat
of wars will be ended.
Always
hold to this basic truth and resolve:
Money
can be issued only by the act of buying, and can be backed only by
the act of selling. I buy and I sell. Therefore, I have the right,
the power, and the duty to be a money issuer.
Government
should not sell. Therefore it has no way of backing money issues. As
it continues to issue unbacked money it gradually destroys the money
system and undermines private enterprise upon which our life depends.
Government's only alternative to the issuance of unbacked money is to
back it by going into the making and selling of goods. This means
government monopoly and dictatorship over all of us. Government can
give us sound fully backed money. The Russian dictatorship is, as
yet, the only government in the world that backs its money issues.
Every ruble is backed by goods in the hands of government and
available to its subjects to the extent of their meager holdings. But
competition is gone and this means that man is no longer catered to;
he is but a unit of man power in the machine that grinds out the
means of a miserable existence without liberty and individuality. We
can have sound money and stability and full employment
through communism and shall have it if that is all we demand. But we
must have all this with liberty and competition and free enterprise.
Therefore, we, ourselves, must make our money sound and our economy
stable by taking over the money issuing function and ultimately
denying it to government.
This
purpose must not be effectuated by an attack upon the political money
system. It would be foolish to attack an existing system without
first establishing a better one; and, when this is done, there will
be no need to attack the old - because it will die from attrition. As
more people come into the private money system, less trade will be
done under the political money system; and the victory will be won
purely by the test of public service and public preference. So, you
see, we need no legislation or political action of any kind. If the
idea of a private money system is sound, it is up to us to
demonstrate it by private action.
This
does not imply, however, that we do not need our public officials -
even though we ask no official action. We need their help because of
their public prestige and their forum capacities. Their help can be
enlisted because of their sincere interest in the public welfare, and
also because their cooperation with public movements leads to greater
political preferment for themselves. Therefore, the Governor and all
the legislators, Federal and state and municipal, the mayor and other
public officials, should be kept informed of the movement and invited
into it. The movement should have a unifying influence upon all the
elements of our society; and this will be a great contribution to our
common security in the disturbing days ahead.
THE
COMING STORM
There
is now brewing a cosmic storm that threatens every nation. Every
national monetary unit must pass through the trial of inflation; and
few, if any, will survive it. The dollar, which has been the North
Star for international monetary navigation, is being shaken from its
position; and the world will be without a standard. International
trade, such as survives, will resort to whole barter; and every
nation will have to struggle against the possible breakdown of money
exchange, even internally. Runaway inflation and the war's end will
come simultaneously - and either may precipitate the other.
The
world must face a grave disillusionment. Modern governments have
played an awful trick on their peoples. They have made the people
believe that government - even in war - need not be a tax burden to
the constituency, but can reverse the process, and, by means of an
unbalanced budget, can actually reward the people. It is but a new
and deceptive method of taxation that will fall upon the people all
of a sudden when they try to exchange their money for goods. The
collapse will be equal to all the South Sea and Mississippi bubbles
and speculative collapses of history, rolled into one.
When
the crisis comes, there will be a race between men and money - both
seeking employment. If the money reaches the market places before the
men reach the work places, there may result such a drastic and
threatening price rise that manufacturers may pause for the storm to
abate - and thus production paralysis may ensue while prices
skyrocket. Be prepared for these contingencies. A large number of
people will not listen to our program for a stable monetary unit
until, in panic, they seek a storm cellar. It is imperative that the
thinking, the far-seeing elements of our society begin the program
for the valun before the dollar becomes too wabbly; and that they be
thus prepared for the sudden onrush that may come from an inflation
stampeded populace.
Chaos
is a favorable climate for an emotional revolution; but not for an
intellectual revolution, such as [for which] we are agitating. Let
us, therefore, be fore-handed, sure-footed and cool-headed. The world
has great need for these stabilizing qualities of leadership, for
conditions will
grow
ever more critical until we turn from the political or centralized
concept of money to the private or diffused method of exerting money
power. With technology developing ever higher forms of labor
specialization, thereby increasing the need for facile exchange,
society is,
under the political money system, driven toward centralized
government and subjection. The only escape from this lies in the
ability of man to grasp the money power and thus save civilization
from decadence. The issue is - money or your life.
THE
END
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