Essays
Civilization,
or culture, is fundamentally commercial and only superficially
political. Politics has been superimposed, and man has become
politically disposed, because he has fallaciously believed that, as a
money sponsor and issuer, the state is necessary to the commercial
intercourse upon which his life depends. When he learns that he can
have a monetary system without political authority and unconfined by
political boundaries, he will cast off his political shackles and
develop, through commerce, a civilization far higher than any
attainable or dreamed under political dictates.
ESSAY 1
The
Money Pact
IF
MONEY is but an accounting instrument between buyers and sellers, and
has no intrinsic value, why has there ever been a scarcity of it? The
answer is that the producer of wealth has not been also the producer
of money. He has made the mistake of leaving that to government
monopoly.
If
you wish to trade one thing for another thing, even Steven, you need
only the consent of the other party, do you not? This shows that
trading is essentially a private affair. Now if you wish to acquire
something from another and give a receipt therefore, it is still
solely up to you both, is it not? A receipt, of course, is not money,
but we are getting warm. Keep thinking about yourself and the other
fellow and don't bother about any outside power.
Suppose
the other fellow says, "I'll accept your receipt if I can give
it to someone else in exchange for something I need." What would
you do? Take your time. It took our ancestors several centuries to
figure that one out.
Our
ancestors hit upon the scheme of depositing gold and silver and other
valuable things with goldsmiths and silversmiths, who in their turn
gave the depositors warehouse receipts, which they could sign over to
someone else, who could assign it to another, and so on. Later they
got to making the receipts out to bearer, and that obviated the need
for signatures. Thus the receipts circulated without coming back to
the warehouse. Most holders were not interested in the metal in the
warehouse, but everyone wanted a medium of exchange. This was the
birth of currency money.
Now
the warehouseman had some inside dope. Said he to himself, "Since
most of the receipts never come back, why can't I issue some without
deposits?" He tried it, and, by golly, it worked. That was the
beginning of "phony" money. The tradesmen were giving
actual values in exchange for the receipts, and this kept them sound.
But the warehouseman put them out with nothing back of them, and,
thus, invented inflation.
That
initial dishonesty was but the first of an unbroken chain of
perfidies that have been perpetrated down to the present day in the
record of money, both while money was a private affair and after it
became a political monopoly. But this history of deception
demonstrates that anything that people believe is money serves as
money as long as it is believed. Thus were men intrigued out of
barter into money exchange by illusions, and even today a monetary
system need not be sound to cause it to be used.
After
these side remarks, we come back to the unanswered question—what
would you do if the other fellow wanted a receipt that he could pass
along? Of course we want an honest solution this time, not a tricky
one. You must write your receipt so that it will be acceptable to a
third party whom you don't know and who wants to pass it to another,
and so on. Obviously, you cannot write the receipt in terms of
things, because the other fellows might not want those things. What's
that? You say you'll have to talk it over with the other fellows?
That's just what the valun plan proposes. The valun proposal is
merely a plan for a convention wherein a sizable number of traders
get together and agree among themselves how to write receipts for
goods and services to be exchanged among them and then set up the
machinery for bookkeeping and clearing those receipts. It merely
means carrying out private agreements and understandings without
bothering about politics or any power outside the traders themselves.
If,
now, you are disposed to get together with other persons to build a
personal enterprise monetary system, you may have concluded already
that the basis of a true monetary issue is not a promise to pay, but
a promise to accept. The purpose of money is to permit buying.
therefore it can spring only from a buyer and, to be consummated,
must be accepted by a seller. Obviously, there must be some agreement
involved. The only pledge the buyer can make, and therefore the only
one a monetary transaction can imply, is that the buyer will accept
the money in exchange for his goods or services at the best price he
is able to get when, as a seller, it is tendered to him. No price for
such goods and services can be agreed upon, since the buyer does not
know the condition of the market for his goods when he shall be
called upon to sell, nor does he know who the buyer may be. The buyer
merely pledges, when he issues money, that he will in turn accept it
in exchange for his goods or services at the best price he can get
when it is tendered to him. This common pact among all traders in a
monetary system is the only pact underlying money. Nothing further is
needed and nothing can be added.
ESSAY
2
Ignorance
of Money
WRITING to Thomas Jefferson in 1787, John Adams said, "All the perplexities, confusion and distress in America arise from downright ignorance of the nature of coin, credit and circulation." Downright ignorance is the proper term, and it still abides with us. It applies to our academies, our counting houses, our legislatures, and the man in the street. We do not know what money is, what its virtues or vices spring from, what are the natural laws governing it, nor its influence in determining the trend of a people toward democracy or dictatorship.
Two
forces are now pressing for its solution. One is the increasing
specialization of labor, which requires man to make more exchanges in
ratio as he reduces his self sufficiency. In other words, the more
man reduces his part in the production of the whole product, the more
exchanges are necessary and hence the greater use of money. The other
force making the solution of the money problem imperative is the
growth of dictatorship and the contraction of democracy in ratio as
governments exert the money issuing power.
Herbert
Spencer, writing in Social Statics, said:
“That
laws interfering with currency cannot be enacted without the reversal
of state duty, is obvious; for either to forbid the issue, or enforce
the receipt of certain notes or coin in return for other things, is
to infringe the right of exchange—is to prevent men making
exchanges which they otherwise would have made, or is to oblige them
to make exchanges which otherwise they would not have made.”
And
further:
“So
constantly have currency and government been associated, so universal
has been the control exercised by the law givers over monetary
systems, so completely have men come to regard this control as a
matter of course, that scarcely anyone seems to inquire what would
result if it were abolished. Perhaps in no case is the necessity of
state superintendence so generally assumed, and in no case will the
denial of that necessity cause such surprise.”
In
Spencer's day, the specialization of labor and the need of free
monetary exchanges had not been so highly developed as in our day.
His challenge to government money power therefore passed unnoticed.
But we must heed it now. Let us dare to question the propriety of
government money power—and let us speculate on "what would
result if it were abolished.”
Another
Englishman, Arthur Kitson, writing in 1894 in A Scientific Solution
of the Money Question, said:
“To
the average man, a currency that has not the authority or stamp of
government is inconceivable; and yet there is no good reason why
communities should not create and control their own currency without
the aid or intervention of governments, just as they incur debts or
liabilities without such aid or intervention.”
Is
it true that, in the language of Spencer, “to forbid the issue, or
enforce the receipt of certain notes or coin is to infringe the right
of exchange?” And is it further true that, in the words of Kitson,
“there is no good reason why communities should not create and
control their own currency?”
Freedom
of exchange is now so imperative, and centralization of political
power so threatening, that it behooves us to inquire whether our
economic and political ills and the threat to peace are not due to
misplacement of money power in the state—and whether and how that
power might better be exercised by the people for progress,
prosperity and peace.
ESSAY
3
The
Right-Wing Socialists
THERE ARE three classes of socialists: the left-wing, or Marxist, group, who believe that the government should own and control everything; the middle-of-the-road socialists, who believe the government should own and operate public utilities; and the right-wing socialists, who believe that the government should control only the monetary system.
The
right-wing socialists are by far the most dangerous, because they are
not known as socialists and call themselves capitalists,
individualists, private enterprisers, etc. They even believe
themselves to be anti-socialist and profess full faith in private
enterprise. They are not only numerically the largest group of
socialists but are also individually the most influential. Among them
are the leading industrialists and mercantilists and bankers and
statesmen.
The
right wing socialists believe that with production and distribution
facilities in the ownership and operation of private interests, and
with monetary facilities in the hands of government, we can have free
enterprise. They might as well believe that if a man owns an
automobile, he need not worry about who or what controls the gas.
Private
enterprise means the right among men to come to voluntary agreement
on the exchange of their goods and services. These agreements, some
written, some oral, some implicit, some explicit, run into the
millions, and upon their fidelity rests the entire social structure.
In a money economy, all these contracts are expressed in terms of the
monetary unit, which is itself based upon a contract—the basic
contract which is the foundation of the entire pyramid of contracts.
What
is the money contract that makes possible or impossible the faithful
performance of every other contract? Ask any businessman, banker,
lawyer, economist or statesman, and you will find that his idea is
not only vague, but that it involves legislation. In other words, he
believes that money is a political product.
In
contrast with this universal belief, the truth is that the state is
incompetent to legislate money and powerless to issue it. The
substance of money is supplied entirely by private enterprise. The
state's intervention in money is at best an impediment to private
enterprise, and with the assertion of the issue power, it becomes the
active agent of socialization. Thus those who believe in or accept
political money power—and their number is legion—are the most
dangerous, though innocent, socialists.
While
the great mass of people have no ideology, those who think on the
issue between private enterprise and socialism are virtually all
socialists of the three classes named. This is a startling fact that
we must recognize before the final battle lines are formed. The
would-be friends of private enterprise must be made real friends,
instead of innocent fellow travelers with those who would destroy our
liberties.
Private
enterprise, to survive, must control its three facilities, namely,
the means of exchange, the means of production, and the means of
distribution. To control the means of exchange, we must have
separation of money and state.
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