the Nature of the Beast
We have got so used to how our governments run our money that we often can’t imagine it being done any other way. It can, easily, just cross the border into any other country and see, every one is different to some degree. Not that they may necessarily be doing anything you would want to emulate, but the point is not whether they are doing so well, as that they are doing things differently. Government, culture, rules and money are all created constructs, they are dreamed up out of nothing. There are very few basic laws of nature that say things have to be the way they are. Some things might be necessary like sewage and water systems, but after that things start becoming arbitrary pretty fast. That’s actually a good thing, it means we can change them if we need to or want to. I think we are rapidly approaching a time when we will need to and want to. That means we can and should, I would argue, look at changing how we conceive of and employ money in our societies.
Much of what we do is tradition and precedent, a lot too though is human nature. If you leave money operations to private interests then you end up with self-serving enrichment scams schemes. And if you leave it to governments then money is wasted or funnelled into political objectives (and not in a good way). It has been said about politics, that anyone who actually wants to be involved should be automatically barred from participation because the type of people who are attracted to power are the very last people you want wielding it. Much the same applies to money, the nature of money is to attract avarice, and the people who are most interested in it are the people to be least trusted with it. Inevitably the love of money and power both end up being about control over other people’s money and other people’s lives. That is the beast in the human heart, the hunger to dominate and control.
As for the traditions and precedent, that is a tricky one. Every conceivable law and regulation has been dreamed up over the centuries, many of them perfectly reasonable and desirable as well. On the other hand, just as many are completely unreasonable and all have been manipulated and evaded at some point too. Who is to decide what is reasonable or workable? In some circumstances the best solution is to make no decision at all. Should the interest or exchange rate be X or Y, actually the correct answer to that is NO. The rate shouldn’t be subject to some-ones discretion or, ideally, anyone’s manipulations either. Rates are an expression of relativity between two factors, the integrity of that relationship could do with considerably more respect, rather than the attempts at manipulation it typically attracts. They attract such attempts of course because of the money that can be made from skewing the playing field. I wont call that profits, because profits imply hard work, fair trading and mutual benefit. Manipulation is none of those and is the essence of the casino – the house always wins. If there is one true tradition and precedent, unfortunately it is the attempt to manipulate and game the system.
Most of us experience and use money on a pretty simple level. For us it is a medium of exchange for goods and services. I buy a pie off you, you buy a shirt from me. It is simple and straight forward. That is not the case with everyone. Some people trade not in goods or services, but instead deal in money. Often it is a family business that has lasted generations and has made them rich and powerful. In that sort of context, money is many, many things. It is power and influence, it is capital and investments, it is access to options and possibilities the rest of us barely imagine. It is all of that because they know what they are doing and the rest of us don’t.
That can be taken two ways – either:
A.) they have taken the time and trouble to learn a complicated mechanism and therefore have the skills, resources and experience to achieve what the rest of us can’t. – or..
B.) they have concocted some secret and crooked deals that wouldn’t stand the light of day.
Typically both of those things are going on, although not necessarily by the same person.
Unfortunately, neither is terrible conducive to the greater good ultimately. The scam and the crook are simple enough to point the finger at, but even an honest money lender is problematic. The problem is not the individual per-se, it is in the systemic consequences of their circumstances. They own and control a vastly disproportionate percentage of the wealth. To some extent that is unavoidable, it is the 80/20 Pareto principle. On the other hand, even with the best will in the world, there is no way that can do anything other than create networks of influence and interest that decides outcomes. With enough influence the outcomes are invariably going to favour the interests of the already wealthy. Power and wealth concentrate and the beneficiaries claim it is merely natures course – how could they not. Never the less, it is not. It is system capture and it is the process that ultimately brought down the Roman Empire. It is a natural process in so far as it is a typical consequence of basic human nature, but it is by no means preordained, inevitable or necessary. Whatever anyone’s opinions of their own inherent superiority, enough aristocratic heads have fallen to le’ madam Guillotine to put the lie to that theory.
The world passed the point of being able to be run by aristocrats over 200 years ago. Inspite of numerous attempts to reinvent the model, the societies that have persisted with or resurrected divine elites have fallen from it. Be they communists, racists, high priests or financiers(Goldman Sachs ~ “we are doing gods work…”), there is no such thing as a group that has enough intelligence, wisdom or righteousness to run the world. We are all going to have to be involved and we are going to have to be educated, activist and invested enough to make it work. Regulation can only ever do so much. Good outcomes rely on good people, not just good rules. A crook can always evade or just break the law, and a clever crook can do it in plain sight without you knowing the difference. But you can’t fool all of the people all of the time. So the whistle blowers needs to have the protection of the law and not just end up being the only person prosecuted, but equally we all need to stand up and be counted when those sorts of shenanigans are going on.
Whether we like it or not, money is a major part of how we do things. It defines much of our relationships. Therefore, how we chose to construct it will define how we chose to construct our society. On one level at least, cash is cash, what is there to define? On another level our whole system of government is defined by money and vica versa; who gets to print it, how much, when, who gets to spends it, who is taxed and how much, what is the interest or exchange rates, what is legal use of money and what is not, how is it regulated, how is it denominated?
A lot of that is custom and precedent, a lot is pure utility, what works, but it could all stand to be re-examined. What began as the privilege of Kings and Courts is vastly bigger and more complex than that now. Excise taxes for instance were simply the local force de’jure taking his cut of the passing trade. As kingdoms grew bigger, it became profitable to institute a sovereign currency, once again skimming a percentage of everything. By defining and enforcing a legal currency, everyone has to buy their currency from the crown and sell it back at set and favourable rates, it is money for nothing. Or at least it was, while the same principle is still applied the complicating factors have multiplied. As the problems increase, so too do the expedient remedies, layers upon layers of them. Sometimes it is worth going back to first principles and starting over. If you were to do it all over again from scratch, what would you do differently, what would you change?
That is the great thing about a revolution, inherently you get to have a do-over, in fact it is pretty well mandatory. The new regime must have a new currency, otherwise you are just the old system in drag. Now, the politics and international relations of that are by no means easy, but they aren’t insurmountable either. Basically it comes down to people being reassured that their investments and savings aren’t about to get looted or eliminated. There is no need for that, in spite of the temptations to do so – why pay a debt if you can simply legislate it away? The answer on a purely practical level is because that isn’t how you win friends and influence people, let alone any moral considerations. And the whole point of a revolution was to aim at a more equitable and just construction of money, yes?
I will look at considerations, definitions and constructions of a sovereign currency in my next ‘Money’ essay.