This is a very simple proposition. Governments have basically three ways of raising funds for the things they do: they can create the money themselves – mint, print or electronically; they can tax it; or they can borrow it.
With the advent of bank notes, there was never any reason for any government to be short of money, because it could and can simply print it. Of course, everyone realises that simply printing money – or now creating it electronically – does not create wealth. On a small scale, it may and indeed does. If for example you manage to mint a few thousand £2 coins perfectly and spend them into circulation, you will be able to acquire perhaps a new TV set, a new computer, a month’s supply of groceries and even a new car at no cost. If say minting each perfect coin cost you 5p, you could go to your local supermarket and buy a pint of milk for 50p receiving £1.50 change. Net cost: 5p. Net gain: £1.45 and a pint of milk.
If you minted enough, you could also use your fake coins to buy tools and materials that would allow you to manufacture goods that would indeed increase the real wealth of the community.
Of course, if your scam were to be uncovered, HM Government would then provide you with free board and lodging for the next few years; most people would consider that to be one freebie too many.
Like I said, it works – or can work – on a small scale, but there are laws against forging currency for very good reasons. If people were able to acquire wealth simply by creating their own money, we would all be out acquiring the wealth of others until there was nothing left, or until prices rose dramatically (hyperinflation). The value of money is purely psychological, it works only as long as people believe in it, and no shopkeeper will part with so much as a can of baked beans unless he believes he can use the payment received from same to spend on something of at least equal value.
For this reason, the quantity of money must be limited, but while you or I would risk prison time for forging bank notes, banks do it all the time. We know that now. Why does the government allow this when it can simply create all the necessary credit itself and spend it into circulation responsibly? Another and equally important question, why does the great mass of people allow the banks to do this? Why at the very least don’t they pressurise the government to take this power away from the banks? True, some are, there has been an active financial reform movement now for a century and more, and resistance to usury long before that, but nothing ever seems to be done. Why not?
The reason usually given is that it is all a great conspiracy; at times this has been laid at the door of Jews, international Jews, Zionism, the Order of the Illuminati, the New World Order, and so on. There are legitimate reasons for all of these beliefs/claims. Some background to the Grand Conspiracy can be found here and here.
The taboo against any rational discussion of the true nature of the banking system has been created largely by the so-called Jewish Question. The development of banking is replete with Jewish names, and many of these Jewish financiers became extremely wealthy. According to The Universal Jewish Encyclopedia, a chronicler said of one Mediaeval usurer: “Aaron the Jew...held us in his debt, coming to the House of St. Alban in great pride and boasting, with threats kept on boasting that it was he who had made the window for our St. Alban...”
The biggest Jewish name in banking is of course Rothschild, and many including misguided idealists like David Duke – and others who are anything but idealists – having seen all these Jewish names linked together in banking down through the ages have put 2 and 2 together and made 5. An explanation for the true state of play and of those myriad Jewish names can be found here.
Suffice it to say that while any reference to Jewish bankers can and will be denounced as rabid anti-Semitism, persons of a certain political persuasion have absolutely no problem in blaming our current malaise on the ruling class of white capitalists, etc. The reality though is that banking throughout the world is run on the same lines, including the Far East where neither Jews nor Anglo-Saxons are particularly influential. If this is not a religious or racial conspiracy, nor a political one, what type is it? Why have these parasites got away with ripping us off for decades even centuries on an international scale? The answer to that question can be found in a book that has nothing to do with banking.
Cheats At Work by Gerald Mars was published originally in 1982. Subtitled An Anthropology Of Workplace Crime, this remarkable study demonstrates that everybody is on the take – big or small – and that while we all denounce graft, dishonesty and pelf in everyone else, we rationalise our own “fiddles”.
Mars divides workers into four groups: hawks, donkeys, wolves, and vultures. Some have more opportunities than other; as might be suspected, wolves hunt in packs. The classic wolf model is that of the dock worker. Dockers would steal a certain amount of cargo during the unloading process, and shippers would accept this. Obviously, if they stole too much, action would be taken, so the wolves ensured that their pilfering while lining their pockets, didn’t attract too much attention. The pack would keep each other in line so they didn’t kill the goose that laid the golden egg.
It is important to understand that everybody is on the take, everybody wants something for nothing. This is how the banksters have managed to get away with their crimes for so long.
Politicians are in their pockets, as are academics whether paid front men such as Niall Ferguson or well-meaning fools like Richard D. Wolff.
Then there are those who make a living out of charities and not-for-profits, such as the people at the top of War On Want, and workfare advocate Robert Rector.
Charities and foundations are able to compound their wealth tax free. True, while some of them are “think tanks” that do nothing but spout propaganda aimed at influencing social or government policy, many do good work, but if the banking system as it is were to be replaced by one that does nothing more than book-keeping and safeguarding people’s savings, and if all new money were issued debt-free, society and the world would be much better off, and most charities would go out of business for lack of demand.
Let’s stay with War On Want, what is the best way to help that woman picking tea in the fields all day, sending a donation to a charity to campaign on her behalf, or removing the oppressive taxation that is necessitated by the banking system so that she can work fewer hours for more pay, or that some form of mechanisation/automation can be introduced to lighten her burden and that of countless others?
If the politicians and academics have been bought off, ditto charities and not-for-profits, what about the rest of us? They dangle a smaller carrot, and the alternative is not the stick but the claim that unless we go along with the system, the sky will fall. The carrot for us is interest. Everyone knows that money invested in the bank earns interest, and many people, especially the elderly, are dependent on that interest and on growth, which is where pension funds and other investments come in.
The elderly, those living on fixed incomes, even those who have sizeable amounts in the bank, are all terrified of losing interest, of being worse off, but this is an illusion. The banksters steal a lot, then bribe us to go along with their corrupt system using a little of our own money, and most of us are afraid of rocking the boat. We see this sort of thing in politics all the time. In a 1984 speech about the Federal Reserve, Murray Rothbard explained how this bribery, coercion and graft works.
American steel producers are losing ground to more efficient and cost effective overseas companies, so they send a lobbyist to Washington to argue for tariffs on steel. What does this lobbyist say, that the firms he represents are worried about being undercut by superior competition and don’t want to lower their prices? Be serious. No, he makes noises about protecting the jobs of American workers from sweated labour or some such nonsense. Who is going to object to this? Not the people who buy steel, because they don’t know what’s going on. Not the steel industry unions, in fact as Professor Quigley points out in Tragedy & Hope, the unions will work hand in hand with big business on issues like this, something the comrades like Chris Bambery never mention because they are too gullible to see what is going on, being too preoccupied with their phony class war or the never ending struggle against the chimera of racism.
Soon, every industry under the Sun is lobbying not only for tariffs on imported goods but for export subsidies. Some companies that are too big to fail plunder the public purse with the connivance of politicians when they should be left to die. Of course, if subsidies could be plucked out of thin air, we could all be subsidised and live for nothing, instead we all end up paying through taxes, bigger bureaucracy, and the goods and services that could be produced but aren’t by people who spend their days pushing pens in government offices when they could be doing something productive. So what is the solution?
We have to abolish bank usury, and have all money issued debt-free by the government. An alternative proposal would see some of it created by the Internet by dint of the wealth it produces.
This would necessitate savers forgoing interest, and banks reverting to their original functions of book-keepers and strongrooms. In addition to that, they would charge people for looking after their money. People who genuinely wanted to invest money, in businesses and so forth, would become shareholders or partners. This is all in accord with Islamic banking practice, which is probably the real reason our masters fear Islam.
John Tomlinson has made similar proposals in his book Honest Money.
The big question is how do we bring this about? The answer appears to be, with great difficulty. In November last year, I started an epetition for debt-free money. To date it has attracted 120 signatures, including of course my own.
[The above blog was first published July 11, 2012.]
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