THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Thursday, October 27, 2011

Halloween Horror Special X: Hungry Grass

According to William Butler Yeats in his Fairy and Folk Tales of the Irish Peasantry (1888), an Fear Gorta — "The Man of Hunger" — is a spirit born out of a patch of "hungry grass" (féar gortach, a.k.a., "fairy grass"). The spirit, sometimes termed a fairy, resembles a man who died of starvation. It walks the roads, seeking charity. Depending on the source, you are either blessed with good fortune for giving something (preferably food) to the Fear Gorta, or cursed just for seeing it. (That being the case, it's probably safest to give alms, giving you a 50/50 chance of escaping the curse.)

As horrifying as the Fear Gorta might be, féar gortach is worse. It's one of the legends that, like the Fear Gorta, came out of the Great Famine — An Gorta Mór — that ravaged Ireland from 1846 to 1852 . . . although, according to historian Cecil Woodham-Smith in The Great Hunger: Ireland, 1845-1849 (1962), it was never really "over." Fairies that you've harmed or irritated in some fashion sow féar gortach in revenge for some harm or slight you've offered them, real or imagined. If you walk on it, you are instantly afflicted with a perpetual and insatiable hunger.

It's not entirely clear whether the Fear Gorta is someone who has walked on féar gortach, or whether the Fear Gorta springs from féar gortach as the result of spontaneous generation. Whatever the case may be, it's a good reason not to tick off any Irish fairies that happen to be around.

How does all of this fit into the Just Third Way? Two ways. One, a .pdf of CESJ's Economic Justice Classics edition of William Thomas Thornton's A Plea for Peasant Proprietors is now available. There's no cover yet, and we're still finalizing the index, but if you want to take a look at the book for free, send an e-mail to "publications [at] cesj [the dot goes here] org" and we'll send you a link that will let you download it. It's in .pdf, so we can send it anywhere in the world.

Two, it's remarkable how closely a "folk tale" that originated over a century and a half ago resembles the current world situation. The need for more and more non-productive debt incurred by creating money backed by the present value of future tax collections that afflicts governments throughout the world is like the craving for food of someone who walked across a patch of hungry grass.

Like the curse of hungry grass, the lust for non-productive debt can never be satisfied. The more credit you extend to a government for non-productive uses, the worse the situation becomes. Allow a government to create yet more money, and it goes away for a short time, like the Fear Gorta, but returns soon after with an even greater hunger. Despite the push for "austerity" and tax increases, there is no cure for the curse of non-productive debt. A government with an insatiable appetite for non-productive debt is doomed to eventual starvation — and death.

Note, however, that the curse of féar gortach is only inflicted if you walk across the hungry grass. Similarly, a government can avoid the curse of ever-increasing non-productive debt if it doesn't create money in anticipation of future tax collections, creating a liability it may never have the capacity to repay.

It is bad enough for a government to borrow from existing pools of savings. As Henry C. Adams explained in Public Debts: An Essay in the Science of Finance (1898), this renders the government unaccountable to the taxpayer for the source of the funds.

It is fatal for a government to create money backed only by its own "faith and credit." That raises a specter far more frightening than the Fear Gorta: a colossal mountain of debt bounded only by politicians' insatiable appetite for spending.

Fortunately, a government afflicted with debt-hunger, even seemingly insatiable debt-hunger, is not in the same situation as the Fear Gorta or someone who walks across féar gortach. Politicians' appetite for spending cannot be controlled — but the ability to spend can.

The relatively simple reforms of the money and credit system embodied in Capital Homesteading can establish accountability on the part of government. By linking all new money creation directly to the present value of existing and future marketable goods and services by discounting and rediscounting private sector bills of exchange at commercial and central banks, respectively, there would be no more non-productive debt.

It would no longer be a question of how much non-productive government — or consumer — debt the economy could take, but how to encourage agriculture, commerce, and industry to rebuild the tax base and raise money by legitimate means, that is, by producing marketable goods and services. A restored tax base would allow governments, by inflicting austerity on themselves, not their citizens, to live within their means and begin paying down some of the debt they've incurred during the spending spree of the past century or so.

One more thing is needed to end the debt-hunger. Ensure universal, direct ownership of all new capital financed with productive credit extended directly to the private sector through the commercial banking system and rediscounted at the central bank instead of being filtered through non-productive government spending.

Capital ownership by people who will use the income from the new capital first to pay for the acquisition of the capital and thereafter for consumption will ensure a sustainable level of demand without creating money for either non-productive consumer debt or non-productive government debt. The Fear Gorta of debt will finally be able to rest in peace.