Although there are more spectacular problems in the world, one of the more fundamental ones is the question of how people without capital ownership can become capital owners without harming anyone else. As regular readers of this blog are aware, this can not only be done without harm, but in a way that benefits everyone by reforming the monetary, tax, and ownership structures in society. So today we present a few thoughts on the subject:
• Gold Standard Push. Just Third Way proponents are, arguably, among the strongest advocates for a stable reserve currency by means of which all economic values in an economy can be measured. This could even be on a global scale, simply by pegging every country’s national currency to a single global reserve currency, and having all contracts specify that consideration is measured in terms of the global reserve currency instead of, or as well as, the relevant national currency. This is all the easier because in a broad sense, “money” is a means of measuring what goes on in a transaction, as Louis Kelso noted in Two-Factor Theory (1967). That is why we have antonymous feelings about the current push for a return to “the gold standard.” Yes, measuring all values in terms of gold would give a stable measure to a reserve currency. Keep in mind, however, that what is being measured is value . . . and the value of gold can change relative to everything else. It’s not like an inch or an ounce, which once having been set stays the same forever. Yes, an ounce of gold is always an ounce of gold, but an ounce of gold doesn’t always translate into the same value of fourteen or fifteen ounces of silver (a burning question when an economy is on a bimetallic standard). There is also the problem in that some of the people tossing around the term “gold standard” aren’t precisely clear on what they mean by it. 1) Do they mean that gold is the only “real money” and that nothing is or could ever be money? 2) Do they mean that gold is the only reserve currency, and that all other forms of money must be convertible into gold on demand? 3) Or do they simply mean that all money is valued in terms of gold? Historically, #1 has never been the case, either for gold or any other standard. Usually what has been meant by “gold standard” is a combination of #2 and #3, with all (other) values expressed in terms of gold, with occasional convertibility. Thus, in order to discuss a stable currency intelligently, whether the standard is gold, silver, or anything else, two questions must be answered, neither one of which is being addressed by either side in the debate: 1) What do you mean by “money”? and 2) What do you mean by “standard”? First answer those questions, then and only then will it be possible to decide on what standard to use . . . and the best one may not be gold.
|R. Buckminster Fuller: "Why not an energy standard?"
• Money is Power. As we noted above, the best monetary standard might not be gold. For one thing, it has not exactly been stable in value, rising and falling in response to discoveries of new deposits, civil and economic instability, and a host of other factors having nothing to do with the value of the gold as gold. For another, to ensure public confidence in a standard, all forms of money — not just the reserve currency — should be convertible into the standard itself on demand. In English, that means anyone can purchase as much of the standard as is wanted, anytime it is wanted (at least during normal business hours, that is). There is simply not enough gold to go around to be able to do that, at least not without changing the value of the currency in response to the supply of and demand for gold. Without going into our reasons (at least not right now), perhaps it’s time to consider adopting an electricity or power standard. Unlike gold or silver, power-as-power is pretty much nothing. It is only valuable (and then extremely valuable) when it is being put to use. Power can be stored, of course, but only for future use, and for no other reason. This actually comes very close to the philosophical understanding of the use of money: in Aristotelian philosophy, money-as-money has no value whatsoever, and the proper use of money is, well, to be used, that is, spent. The actuality of power, therefore, conforms most closely to the abstraction of money. You’ve heard that “money is power,” haven’t you? That’s something of a logical fallacy of equivocation the way we just used it, but it turns out to be true, after a fashion, especially if something like the price of the kilowatt hour is used as the standard. That changes only when the cost of producing electricity changes, not because somebody got into a panic or in response to other emotions.
|Anglo-Irishman Edmund Burke
• Reparations. In a Wall Street Journal piece this morning, there is a commentary comparing the latest demand for reparations for slavery with Edmund Burke’s reflections on the French Revolution, the two-hundred and thirtieth anniversary of which is coming up this weekend. In “Reparations and the Spirit of 1789” (07/12/19, A-15), Liam Warner of the Wall Street Journal quotes Burke: “To take the fiction of ancestry in a corporate succession, as a ground for punishing men who have no relation to guilty acts, except in names and general descriptions, is a sort of refinement in injustice belonging to the philosophy of this enlightened age.” Interestingly, Burke put his finger on the problem that still plagues us today, and not merely in the demand for reparations. That is the essential philosophy of two kinds of liberalism imposed over a third. European/French liberalism that assumes the sovereignty only of the collective and was the philosophy of the French Revolution, has combined with English liberalism that assumes the sovereignty of an élite, to displace American liberalism that assumes the sovereignty of the individual human person. All three are “liberalism,” but the first two simply assume that ordinary people don’t count; that their rights may be overridden at will or that they never existed in the first place. Burke was clearly of the American variety of liberal, but he was locking horns not only with the French type liberals across the Channel, but the English type liberals in his own country, and whose activities would lead to the development and spread of socialism, modernism, and New Age thought.
• Reparations, Part II. One possibility that no one seems to be considering as an acceptable form of reparations for currently unjust social structures that affect everyone adversely, is removing barriers that prevent full access to the common good by everyone. This, as thoughtful people throughout the ages have noted, requires capital ownership. That being the case, it makes sense that the best and most effective form of reparations for current injustice is to figure out a way to make everyone a capital owner — without taking anything away from existing owners except a monopoly over future ownership opportunities. This can be done with a Capital Homesteading program.
• Shop online and support CESJ’s work! Did you know that by making your purchases through the Amazon Smile program, Amazon will make a contribution to CESJ? Here’s how: First, go to https://smile.amazon.com/. Next, sign in to your Amazon account. (If you don’t have an account with Amazon, you can create one by clicking on the tiny little link below the “Sign in using our secure server” button.) Once you have signed into your account, you need to select CESJ as your charity — and you have to be careful to do it exactly this way: in the space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice Arlington.” If you type anything else, you will either get no results or more than you want to sift through. Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice Arlington” into the space provided, hit “Select” — and you will be taken to the Amazon shopping site, all ready to go.
• Blog Readership. We have had visitors from 31 different countries and 41 states and provinces in the United States and Canada to this blog over the past week. Most visitors are from the United States, Canada, Spain, India, and the United Kingdom. The most popular postings this past week in descending order were “News from the Network, Vol. 12, No. 27,” “When Did Notre Dame Become Notre Dumb?,” “America Delenda Est?” “Why Did Nixon Take the Dollar Off the Gold Standard?” and “More from Mortimer!”
Those are the happenings for this week, at least those 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.” Due to imprudent language on the part of some commentators, we removed temptation and disabled comments.