The news from the financial front is that the stock market is still soaring, but people still seem to be poor. At the same time, the “gold bugs” are claiming that a return to “the gold standard” is the silver bullet (sorry) needed to cure our economic ills and balance the budget.
|United States $10,000 Gold Certificate|
First, returning to the gold standard and balancing the budget are two different things . . . and reveal that there is no clarity on what people mean by “gold standard.” Is it that gold is the sole source of the money supply? That has never been the case in all of recorded history. Is it that all forms of money must be convertible into gold on demand? That’s a little unrealistic, too, and has also never been the case. Convertibility into gold (or silver, or whatever the standard is) has always been limited to negotiable instruments representing a deposit of gold in a bank or treasury, legal tender, or a promissory note that explicitly states it is convertible into gold on demand. Is it simply that the official currency or reserve currency is measured in terms of gold, with or without convertibility? What do they mean?
The fact is that gold is inadequate as a standard on many levels. This does not mean, however, that advocates of a return to “the gold standard” (whatever that actually means) are kooks or nuts. They realize that money must stand for something that has value. Ideally, all asset-backed money in all forms should be convertible on demand into the reserve currency, which should itself be asset-backed.
Gold is an asset, and many people trust it, but there is not enough of it. A reserve currency must not only be asset-backed, but in an advanced economy must also be “elastic,” i.e., expand and contract directly with the present value of existing and future marketable goods and services in the economy. This can be done by using the commercial and central banking system as described in CESJ’s Capital Homesteading proposal. Until then, however, here’s what we’ve been doing to encourage a return to social, political, and economic sanity:
• Members of the CESJ core group, Dr. Norman G. Kurland, CESJ president, and Michael D. Greaney, CESJ’s director of research, met yesterday with Monsignor Stuart Swetland, newly appointed president of Donnelly College in Kansas City, Kansas, at the Catholic seminary in Emmitsburg, Maryland. Msgr. Swetland is familiar to many people as the host of EWTN’s television series, Catholicism on Campus. Deacon Joseph Gorini of Mechanicsburg, Pennsylvania, representing Evangelization Enterprises, Inc., and informally representing the Confraternity of Catholic Clergy, arranged and moderated the meeting. Mr. Andrew St. Hilaire, a seminarian who recently graduated from the Catholic University of America, attended the meeting as an observer. The focus of the meeting was areas of agreement between the Just Third Way and Catholic social teaching, with special emphasis on the Justice University project. Msgr. Swetland agreed that there is widespread misunderstanding of basic principles of justice and the other virtues throughout the whole of society, and there is a great need for education at all levels, beginning in the home. We anticipate a very fruitful collaboration with Msgr. Swetland.
|"Bettendorf. It's Closer Than You Think."|
• Msgr. Swetland also mentioned that he had read Curing World Poverty: The New Role of Property (1994) when he was working on his doctorate, and remarked that he thought well of it. Limited quantities of Curing World Poverty are still available, and CESJ is working on revising the book, along with Capital Homesteading for Every Citizen, first published in 2004.
|William Cobbett, the "Apostle of Distributism"|
• Msgr. Swetland is also an authority on G. K. Chesterton, the noted British writer, whose 140th birthday was celebrated yesterday, the very day of the meeting (although that was not the reason for selecting that day . . . ). This is not surprising, as Sheen was referred to as “the American Chesterton,” although referring to Chesterton as “the British Sheen” seems more appropriate on this side of the pond. This might explain some of Msgr. Swetland’s openness to the Just Third Way, as a number of people have commented that the Just Third Way and distributism (at least the distributism of Chesterton and Hilaire Belloc) are very close, differing only in how capital can be financed, recognition of the act of social justice, and the optimal size of business enterprises — all things that can be resolved very easily. Given that, Msgr. Swetland might be interested in some of CESJ’s publications that we did not give him, such as William Cobbett’s The Emigrant’s Guide and William Thomas Thornton’s A Plea for Peasant Proprietors. Maybe we’ll send copies for the college library, as CESJ’s editions of these “Economic Justice Classics” are annotated and footnoted, making them potentially valuable as supplementary class materials.
• The “Unite America Party” has finalized its platform. Being based on universal principles, it is adoptable by any other political party that wants to embed common sense into its platform. We hope to have it up and readily accessible on the CESJ website by the end of next week.
• CESJ received an enquiry from Belgium this past week about becoming a volunteer. Someone who works in the administration of the European Parliament will be traveling to the United States this summer, and is investigating the possibility of volunteering some time at CESJ.
• As of this morning, we have had visitors from 65 different countries and 53 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the United Kingdom, Canada, Australia, and India. The most popular postings this past week were “‘Inequality Is the Root of All Social Evil’,” “Thomas Hobbes on Private Property,” “Aristotle on Private Property,” “‘Inspired Amateurs Should Avoid Politics’,” and “Why Did Nixon take the Dollar off the Gold Standard?”
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we’ll see that it gets into the next “issue.” If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we’ll see it before it goes up.