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FAQs Econ
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The Truth about Money Value.
Q: Technical FAQs and Planetary Renaissance make it seem that bringing the earth and oceans to health and fertility are easy. But people are fighting wars on deserts and in oceans. They are making the most horrible new weapons: poisons and deadly viruses, mind control to amplify brain damage done by the mass media, weather control to cause droughts and floods, interference with the earth's force fields to create earthquakes... Economies are collapsing. People are losing their jobs, homes, belongings. Men have to join armies in order to live and feed their families - and are sent off to kill each other and die. Will there be any end to this other than the end of every one of us?
A: The world does seem to be in a mess. Life on earth survived several mass extinctions, and would doubtless continue beyond the one we seem to be preparing for ourselves. It seems fairly obvious that we will overcome our self-created difficulties together or they will overcome us. In order to get out of our mess we need to understand how we got into it.
The root of all evil had an honorable beginning. We give each other birthday, festivity and other gifts because giving others pleasure is pleasurable. Mutual gifting makes life more agreeable for all concerned. The value of such gifts is often more symbolic than utilitarian. Medals given for bravery in times of danger or other services rendered to the community are usually as useless as honorific titles - but the respect and appreciation of others can have much greater value than bread and potatoes. It is natural for young men want to give their best beloveds symbolic love gifts. Beautiful, durable gifts imply sincere, long-term commitment to their loved ones. The same symbolic gifts can circulate between the same families, clans and tribes as proof of good-will. Such gifting is usually formalized by good-will ceremonies because it strengthens community cohesion and ensures mutual assistance in times of danger.
Unspoiled nature is beautiful, bountiful. It is natural to want to return her generosity. But personification: 'Mother Earth, Mother Nature...' is dangerous. The ancient Middle East worshipped Goddesses - Astarte, Aphrodite, Innana, Venus. Love offerings made to their human representatives, originally in kind (food, work), became symbolic and were rewarded with kindness. Love temples became brothels when hierodules (priestesses) demanded standardized gifts - precious metal coins symbolizing sun (gold) and moon (silver) - for their services.
Great men tended to accumulate large harems and to increase their powers by using their relatives to run temple-brothels. When unattached women were in short supply, single men had to work to satisfy natural needs to love and protect wives and offspring. Love gifts became money as the oldest female profession engendered the oldest male profession: tax collector. Coins collected at the brothel door went to the palace to pay tax collectors to extort more money from other men. Legislators were employed to enact tax and other laws while judges, policemen, prison guards and hangmen to made sure such laws were obeyed. Other men worked to make weapons and build fortifications, standardize weights and measures, mine precious metals and, in general, assemble the apparatus of the first statelets. Each raided the others for slaves of both sexes - the women for brothels and harems the men for hard labour. So began that system of mutually justifying protection rackets that still motivates our more spectacular murderousness.
Love tokens eclipsed biological affection as they froze into bits of metal, circulated as liquidity that was exchangeable for any goods, rights or services while their value continued to be backed up by love-temple services. Such temples served many of the functions of our banks. Men preferred to leave their coins there for safekeeping - and to satisfy passing needs. Carrying loads of coins around was burdensome and risky - robbery, loss.. The temples thus stored many coins, and could lend some of them out without worrying about all depositors wanting their money back at once. Borrowers could spend borrowed money to buy cattle that multiplied, gave milk, meat and hides, sell a larger herd later, and gain from the increased size of the herd and the value of the milk etc they enjoyed while they owned the herds, houses, or what*ever they had borrowed the money for. Lenders could ask for more money back than they lent out, also due to the risk of borrowers' defaulting. Lenders as well as borrowers thus benefited from the usage, or usury, of loans. But lenders were few and they ran love-temple monopolies; borrowers were more numerous and dependent on the monopolies. The rest of the population did not benefit from money-lending at all.
When one part of a community obtains rights to real value from all of the others by exploiting their biological needs in this way, injustice is institutionalized. Pyramids of patriarchal power rise above masses of slaves. As writing was invented, laws codified, tribes began to expand to nations, smaller, fairer tribal communities were absorbed into larger ones - usually as slaves, or eliminated. The number of coins that can be lent into circulation at interest is limited - but compounding loans and interest grow indefinitely. The limit to the amount of money that can be spent into circulation, and the injustices of the monopoly that supports its value eventually destroy a society that grows money-lending. Less civilized, smaller, fairer tribal communities can invade it as it collapses.
Our banks are less fun than the love temples of classical antiquity were. One of the reasons for this is that around 550BCE King Croesus of Lydia decided to put some order in his treasury of more or less alloyed, bent, shaved, small, large and otherwise unequal coins. He ordered that treasury to mint standardized coins with identical shapes and sizes, their face value stamped onto one side, and his face onto the other. Coins of a given denomination (1, 2, 5, 10..) were all made of the same alloy of more or less precious metals. Such coins were interchangeable - his treasury would exchange worn coins for newly minted coins provided that it had minted the old coins. Counterfeiters were severely punished.
It is not possible to mint coins whose face value is smaller than that of their metal content. Doing so would cost more than they are worth, and they would be melted down immediately. But minting coins,whose face value is much larger than their production cost, is a form of theft by the state of the rest of the population. Theft is taking something of value from some one else without their permission. It is still theft when an organisation prints large numbers on scraps of metal or paper and spends them into circulation at their face value. Such theft usually benefits male power structures. Down-to-earth nature and fertility Goddesses lost their powers as women lost their control over money. They were replaced by Big Bullies who issued Commandments from on high and hurled fire and brimstone down onto those below who did not obey them to the letter.
Croesus invention was, nevertheless a great improvement over the prostitution racketeering way of filling rulers' coffers. Standardized money made it possible to compare the desirabilities of different real values, that is to say, prices. Croesus had invented unit measure of value. Transactions were simplified - land could be bought and sold without determining the size, weight and alloy of every single coin. Tradesmen and investors could calculate potential profits on many wares and investments in advance and select the most lucrative. They usually satisfied other people's needs best. The state could mint more money and raise more taxes from a more prosperous, larger population - hence provide more and better public services. The civilizations of ancient Greece and Rome would not have been possible without Croesus invention. It is, in many ways, still in use.
When one part of a population obtains rights to real values belonging to the rest by creating money that has a face value that is greater than its production cost, the real value of services rendered by the money creators can be greater than the real value taken by creating money value out of nothing. When a government is honest, intelligent and sincerely concerned about the well-being of its people, it creates least new money, hence least inflation. It also taxes least, and uses taxes in the best interests of all of the people. It never does anything for them that they cannot do themselves at less cost, and it keeps least for itself or its proteges, and parasites.
People who gain power by creating money are under no obligation to use it for the public good, and they have monopoly powers to tax, lay down the law and commit murder 'for the common good'. Some rulers used money value created out of nothing to build themselves palaces and tyrannize their subjects. A government begins to turn against its people and become tyrannical as they begin to realize that they have been cheated out of their freedoms, dignity and good-will towards each other, their possessions and their lives. Money creation divides societies into rich and poor, public and private sectors, left and right, liberal and labour.. A house divided against itself cannot stand. The injustice of money creation eventually destroys a civilization - either in revolution and civil war, or in wars arranged elsewhere to send some of them there and distract the rest. The history of the empires that rose and fell since Croesus may be studied for proof.
Our credit money is created by bank lending and backed by 'good faith' in the banking-government combine. The system started in the English North Country. It was far from Rome, and so poor, bleak and barren, that many people there did not merely protest against monarchical and ecclesiastical powers, they dissented - vehemently. They had enormous faith in themselves, reason, science, democracy, free competition and enterprise. That self-confidence and idealism expressed itself practically in projects to use A Darby's coke fired iron smelters, J Watt's improved steam engine, J Priestly's chemistry... for the betterment of mankind. They realized that there was a great need for the cheap goods that could be mass-produced with the then most modern technologies. They also realized that researching and building blast furnaces, steel and textile mills, ceramic and glass works cost much money that they did not have.
The solution was found by using Adam Smith's Invisible Hand argument to get enable numerous small farmers, craftsmen and shopkeepers to deposit their savings with bankers. These savings were then combined and invested into large highly profitable industrial enterprises. Those profits were not distributed fairly - bankers, borrowers and some bureaucrats in public services benefited much. The Industrial Revolution was, in many ways, a time of great progress. But many people, workers, small farmers and craftsmen remained as poor, or poorer than they had been before it began.
A credit money is similar to a love-temple economy in which coins are deposited in the temples and lent out at usury by the temples' high priestesses and priests. Lenders can ask for more money back than they lend out, also due to the risk of borrowers' defaulting. Lenders as well as borrowers thus benefit from the usage, or usury, of loans. But lending is monopolized and uses energy, rather than sex, as its supporting monopoly. Industrial profits go to lenders and borrowers - workers, small farmers, craftsmen pay the taxes and suffer from inflation. This cannot go on. Compounding loans and interest cannot grow indefinitely. There is a limit to the amount of new money that can be lent into circulation. The monopoly that supports its value is driving climate changes that may do away with all of us in the not so very distant future. Industrialized societies wasted so many of their resources on absurdly sophisticated, destructive and expensive weapons that they are almost incapable of defending themselves. As the rift between rich and poor grows there, fewer of the poor are willing to fight for the combine that acquired enormous wealth and power by exploiting their ancestors and sending them off to be killed. Why should they die, or even work, for it. They might even be inclined to invite foreigners in to rid them of their exploiter. Some people, whose ancestors were ripped off, and lands ripped up, by colonial exploitation, are being refused even food and water by the descendents of their erstwhile colonizers - who also claim to be great champions of human rights. The people who now don suicide belts would doubtless use more effective equipment that does not kill them. Such equipment could be cheap, unobtrusive and more or less remote controlled. As in the past well before Rome, less civilized, fairer peoples could soon invade collapsing capitalist economies with small losses and great gains.
It is true that people are fighting wars on deserts and in oceans. They are also making the most horrible new weapons: poisons and deadly viruses, mind control to amplify brain damage done by the mass media, weather control to cause droughts and floods, interference with the earth's force fields to create earthquakes... Economies are collapsing. People are losing their jobs, homes, belongings. This is not an inevitable part of the human condition. We live this way because our money tells lies when it says it has value but, in fact, does not. It is quite easy to replace our pathological system with an Immediate Eco-Nomy (home -order) that has prices but no money with imaginary intrinsic value.
March 2008.
Let many flowers blossom and spread their seeds.
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