Purpose of Money

EARTH AS A COMMONS

The earth, which was here before Man, is not the fruits of anyone's labor, and is not private property in the same sense as labor products. Everyone has a right to access land, limited only by the equal rights of others to do the same. State-issued titles to unlimited property in land, which allows some to hold vast amounts, often without use or with a merely nominal use, and without continual compensation of those dispossessed, violates this principle

source: http://savingcommunities.org/principles/

Quoted from article How the World Works by JAMES FALLOWS

"In the long run, Friedrich List argued, a society's well-being and its overall wealth are determined not by what the society can buy but by what it can make. This is the corollary of the familiar argument about foreign aid: Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for his life.

The tree which bears the fruit is of greater value than the fruit itself.... The prosperity of a nation is not ... greater in the proportion in which it has amassed more wealth (ie, values of exchange), but in the proportion in which it has more developed its powers of production.

List was not concerned here with the morality of consumption. Instead he was interested in both strategic and material well-being. In strategic terms nations ended up being dependent or independent according to their ability to make things for themselves. Why were Latin Americans, Africans, and Asians subservient to England and France in the nineteenth century? Because they could not make the machines and weapons Europeans could.

In material terms a society's wealth over the long run is greater if that society also controls advanced activities. That is, if you buy the ton of steel or cask of wine at bargain rates this year, you are better off, as a consumer, right away. But over ten years, or fifty, you and your children may be stronger as both consumers and producers if you learn how to make the steel and wine yourself. If you can make steel rather than just being able to buy it, you'll be better able to make machine tools. If you're able to make machine tools, you'll be better able to make engines, robots, airplanes. If you're able to make engines and robots and airplanes, your children and grandchildren will be more likely to make advanced products and earn high incomes in the decades ahead."

Frederick Soddy ~  Wealth, Virtual Wealth and Debt (1926) 

Debts are subject to the laws of mathematics rather than physics. Unlike wealth, which is subject to the laws of thermodynamics, debts do not rot with old age and are not consumed in the process of living. On the contrary, they grow at so much per cent per annum, by the well-known mathematical laws of simple and compound interest ... It is this underlying confusion between wealth and debt which has made such a tragedy of the scientific era.

Power over men is the essence of debt. Power over Nature is the essence of wealth. The not owing and not possessing wealth owed to one individual by another or by the community gives that individual power over the other or the community until the debt is paid. When paid, the not-owner becomes owner. The wealth he now possesses, but the power over men he loses.

Money is a debt repayable in wealth. Whereas most debts are repayable in money.

Henry Ford Interview- by Donald Wilhelm ~ Liberty Magazine issue of September 5, 1942 

"Money isn't wealth," he said. "People are always confusing money with wealth. "Production is the only way to create wealth. Money is necessary to organize businesses and keep homes running. It saves transportation when you want to exchange the work you've put into raising a bushel of wheat, say, for the work some one else has put into making something, maybe a tool, in another part of the country. Idle money never does anybody any good. Gold is about the most useless metal we have. We've kept about the same amount of money in banks for thirty years. The main reason is that if we had to borrow, the bankers would try to take our institution away from us. They tried that — once."

HE is probably the richest man on earth. But it's easy to believe while with him that money-making has never been his main interest and urge, his great passion, the key to his make-up. Instead, this probably has been his inventive, creative turn. He didn't invent the automobile. His great invention was a formula, first for producing watches, his first love, in a time when they were a luxury, then for producing cars. 

The formula: To make things in a big way, make them cheap. To make them cheap, cut costs. To cut costs, make many all alike, use machines to make them. To make it possible for people to buy them, pay the highest wages. 

This formula was Mr. Ford's great contribution. He didn't invent mass production, but he was the first to make it work in a big way. He has lived to see it adopted by countless other makers of things, to see it multiply and cheapen the things on sale, change our way of life and living, become basic to our success in war.

Lest we forget: This idea of his was at first deemed crazy. His partners quit him. Manufacturers here in the land of the free and brave went though the ceiling, came down hopping mad, when in 1914 he established five dollars as his minimum daily wage and cut his working day from ten to eight hours. In 1922 he increased his minimum wage to six dollars. In 1928 he adopted the five-day week.

he said. "The time will come when not an inch of the soil, not a single crop, not even weeds, will be wasted. Then every American family can have a piece of land. We ought to tax all idle land the way Henry George said — tax it heavily, so that its owners would have to make it productive." "Production is the only way to have prosperity. I've been saying this for forty years. It was true then. It's true now. It will be true after this war."

There isn't such a thing as overproduction, he agreed. The problem is to maintain purchasing power, he said, and added, "The first thing the country should do when peace comes is to issue currency in dollars to pay back to the people the money they've loaned the government. That money would provide purchasing power, keep industry going, provide jobs, until we get squared around." Then he added: "The dollar is good all over the world. That's because there's plenty to make it good. It's backed up by the government, by the people of the country, by their ability to work. It don't even need to be backed up by all that gold we've got buried underground. Use that, if you have to. It's no good where it is. Idle money never does anyone any good. It never has. You've got to put it to work. There'll be plenty of work for it to do."

Thorstein Veblen, The Engineers and the Price System

The mechanical industry of the new order is inordinately productive. So the rate and volume of output have to be regulated with a view to what the traffic will bear — that is to say, what will yield the largest net return in terms of price to the business men who manage the country's industrial system. Otherwise there will be “overproduction,” business depression, and consequent hard times all around. Overproduction means production in excess of what the market will carry off at a sufficiently profitable price. So it appears that the continued prosperity of the country from day to day hangs on a “conscientious withdrawal of efficiency” by the business men who control the country's industrial output. They control it all for their own use, of course, and their own use means always a profitable  price. In any community that is organized on the price system, with investment and business enterprise, habitual unemployment of the available industrial plant and workmen, in whole or in part, appears to be the indispensable condition without which tolerable conditions of life cannot be maintained. 

That is to say, in no such community can the industrial system be allowed to work at full capacity for any appreciable interval of time, on pain of business stagnation and consequent privation for all classes and conditions of men. The requirements of profitable business will not tolerate it. So the rate and volume of output must be adjusted to the needs of the market, not to the working capacity of the available resources, equipment and man power, nor to the community's need of  consumable goods.

Silvio Gesell - The NATURAL ECONOMIC ORDER

Proudhon asked: Why are we short of houses, machinery and ships ? And he also gave the correct answer: Because money limits the building of them. Or, to use his own words: "Because money is a sentinel posted at the entrance to the markets, with orders to let no one pass. 

Money, you imagine, is the key that opens the gates of the market (by which term is meant the exchange of products), that is not true-money is the bolt that bars them."

"Full steam ahead ! Let's have the building fury, give us the building plague! Workers and employers, on no account let the trowel be snatched from your hands. Down with all who attempt to interfere with your work; they are your deadly enemies! Who are these that prate of a building plague, of over-production in the housing industry, while house-rents still show a trace of surplus-value, of capital-interest ? Let capital die of the building plague! For some five years only have you been allowed to indulge in your building fury, and already capitalists feel the pinch, already they are lamenting the decline of surplus-value, rents have already dropped from 4 to 3 % - that is, by a quarter. Three times five years more of untrammelled labour, and you will be revelling in houses freed from surplus-value. Capital is dying, and it is you who are killing it by your labour." 

Money simply will not suffer another house to be built in addition to every existing house. As soon as capital ceases to yield the traditional interest, money strikes and brings work to a standstill. Money, therefore, acts like a serum against the "building-plague" and the "working fury". It renders capital (houses, industrial plant, ships) immune from the menace of its own increase.

Having discovered the barring or blocking nature of money, Proudhon raised the slogan: Let us combat the privilege of money by raising goods and labour to the level of money. For two privileges, if opposed, neutralise one another. By attaching to goods the surplus weight now on the side of money, we make the two weights balance. Such was Proudhon's idea, and to put it into practice he founded the exchange banks. As everyone knows, they failed.

And yet the solution of the problem which eluded Proudhon is simple enough. All that is needed is to abandon the customary standpoint, the standpoint of the possessor of money, and to look at the problem from the standpoint of labour and of the possessor of goods. This shifting of the standpoint will let us grasp the solution directly. Goods, not money, are the real foundation of economic life. Goods and their compounds make up 99% of our wealth, money only 1%. Therefore let us treat goods as we treat foundations; let us not tamper with them. We must accept goods as they appear in the market. We cannot alter them. If they rot, break, perish, let them do so; it is their nature. However efficiently we may organise Proudhon's exchange banks, we cannot save the newspaper in the hands of the newsvendor from being reduced, two hours later, to waste paper, if it fails to find a purchaser. Moreover we must remember that money is a universal medium of saving; all the money that serves commerce as a medium of exchange comes to the savings banks and lies there until it is enticed into circulation again by interest. And how can we ever raise goods to the level of ready money (gold) in the eyes of savers ? How can we induce them, instead of saving money, to fill their chests or store-rooms with straw, books, bacon, oil, hides, guano, dynamite, porcelain ?

And yet this is what Proudhon really aimed at in attempting to bring goods and money to a common level. Proudhon had overlooked the fact that money is not only a medium of exchange, but also a medium of saving, and that money and potatoes, money and lime, money and cloth can never in any circumstances be looked upon as things of equal worth in the chests of the savers. A youth saving against old age will prefer a single gold coin to the contents of the largest warehouse. We cannot, therefore, tamper with goods, they are the primary factor to which everything else must be adapted. But let us look a little more closely at money, for here some alteration may prove feasible. Must money always remain what it is at present ? Must money, as a commodity, be superior to the commodities which, as medium of exchange, it is meant to serve ? In case of fire, flood, crisis, war, changes of fashion and so forth, is money alone to be immune from damage ? Why must money be superior to the goods which it is to serve ? And is not the superiority of money to goods the privilege which we found to be the cause of surplus-value, the privilege which Proudhon endeavoured to abolish ? Let us, then, make an end of the privileges of money. Nobody, not even savers, speculators, or capitalists, must find money, as a commodity, preferable to the contents of the markets, shops, and warehouses. If money is not to hold sway over goods, it must deteriorate, as they do. Let it be attacked by moth and rust, let it sicken, let it run away; and when it comes to die let its possessor pay to have the carcass flayed and buried. Then, and not till then, shall we be able to say that money and goods are on an equal footing and perfect equivalents - as Proudhon aimed at making them

whole purpose of machines is to get rid of work? When you get rid of the work required for producing basic necessities, you have leisure—time for fun or for new and creative explorations and adventures. But with the characteristic blindness of those who cannot distinguish symbol from reality, we allow our machinery to put people out of work—not in the sense of being at leisure but in the sense of having no money and of having shamefacedly to accept the miserable charity of public welfare. Thus—as the rationalization or automation of industry extends—we increasingly abolish human slavery; but in penalizing the displaced slaves, in depriving them of purchasing power, the manufacturers in turn deprive themselves of outlets and markets for their products. The machines produce more and more, humans produce less and less, but the products pile up undistributed and unconsumed, because too few can earn enough money and because even the hungriest, greediest, and most ruthless capitalist cannot consume ten pounds of butter per day. Any child should understand that money is a convenience for eliminating barter, so that you don’t have to go to market with baskets of eggs or firkins of beer to swap them for meat and vegetables. But if all you had to barter with was your physical or mental energy in work that is now done by machines, the problem would then be: What will you do for a living and how will the manufacturer find customers for his tons of butter and sausages? 

The sole rational solution would be for the community as a whole to issue itself credit—money—for the work done by the machines. This would enable their products to be fairly distributed and their owners and managers to be fairly paid, so that they could invest in bigger and better machines. And all the while, the increasing wealth would be coming from the energy of the machines and not from ritualistic manipulations with gold.

In some ways, we are doing this already, but by the self-destructive expedient of issuing ourselves credit (now called debt) for engines of war. What the nations of the world have spent on war since 1914 could, with our technology, have supplied every person on earth with a comfortable independent income. But because we confuse wealth with money, we confuse issuing ourselves credit with going into debt. No one goes into debt except in emergency; and therefore, prosperity depends on maintaining the perpetual emergency of war. We are reduced, then, to the suicidal expedient of inventing wars when, instead, we could simply have invented money—provided that the amount invented was always proportionate to the real wealth being produced. We should replace the gold standard by the wealth standard.

The difficulty is that, with our present superstitions about money, the issue of a guaranteed basic income of, say, $10,000 per annum per person would result in wild inflation. Prices would go sky–high to “catch” the vast amounts of new money in circulation and, in short order, everyone would be a pauper on $10,000 a year. The hapless, dollar–hypnotized sellers do not realize that whenever they raise prices, the money so gained has less and less purchasing power, which is the reason that as material wealth grows and grows, the value of the monetary unit (dollar or pound) goes down and down—so that you have to run faster and faster to stay where you are, instead of letting the machines run for you. If we shift from the gold standard to the wealth standard, prices must stay more or less where they are at the time of the shift and—miraculously—everyone will discover that he has enough or more than enough to wear, eat, drink, and otherwise survive with affluence and merriment.

It is not going to be at all easy to explain this to the world at large, because mankind has existed for perhaps one million years with relative material scarcity, and it is now roughly a mere one hundred years since the beginning of the industrial revolution. As it was once very difficult to persuade people that the earth is round and that it is in orbit around the sun, or to make it clear that the universe exists in a curved space–time continuum, it may be just as hard to get it through to “common sense” that the virtues of making and saving money are obsolete. It may have to be put across by the most skillfully prepared and simply presented TV programs, given by scientific–looking gentlemen in spectacles and white coats, and through millions of specially designed comic books. It will always be possible, of course, for anyone so inclined to earn more than the guaranteed basic income; but as it becomes clearer and clearer that money is not wealth, people will realize that there are limits to the real wealth that any individual can consume.

We may have to adopt some form of German economist Silvio Gessell’s suggestion that money not in circulation be made progressively perishable, declining in value from the date of issue. But the temptation to hoard either money or wealth will dwindle as it becomes obvious that technology will keep the supplies coming and that you cannot drive four cars at once, live simultaneously in six homes, take three tours at the same time, or devour twelve roasts of beef at one meal.

All this will involve a curious reversal of the Protestant ethic, which, at least in the United States, is one of the big obstacles to a future of wealth and leisure for all. The Devil, it is said, finds work for idle hands to do, and human energy cannot be trusted unless most of it is absorbed in hard, productive work—so that, on coming home, we are too tired to get into mischief. It is feared that affluence plus leisure will, as in times past, lead to routs and orgies and all the perversities that flow therefrom, and then on to satiation, debilitation, and decay— as in Hogarth’s depiction of A Rake’s Progress.

The moral challenge and the grim problem we face is that the life of affluence and pleasure requires exact discipline and high imagination. Somewhat as metals deteriorate from “fatigue,” every constant stimulation of consciousness, however pleasant, tends to become boring and thus to be ignored. When physical comfort is permanent, it ceases to be noticed. If you have worried for years about lack of money and then become rich, the new sense of ease and security is short–lived, for you soon begin to worry as much as ever—about cancer or heart disease. Nature abhors a vacuum. For this reason, the life of pleasure cannot be maintained without a certain asceticism, as in the time and effort required for a woman to keep her hair and face in fine condition, for the weaving of exquisite textiles or for the preparation of superior food.

At best, then, a leisure economy will provide opportunity to develop the frustrated craftsman, painter, sculptor, poet, composer, yachtsman, explorer, or potter that is in us all—if only we could earn a living that way. Certainly, there will be a plethora of bad and indifferent productions from so many unleashed amateurs, but the general long-term effect should be a tremendous enrichment of the quality and variety of fine art, music, food, furniture, clothing, gardens, and even homes— created largely on a do-it-yourself basis. Mechanical mass production will provide utilities, raw materials, tools, and certain foodstuffs, yet will at the same time release us from the necessity for much of the mass–produced trash that we must now buy for lack of time to make anything better—clothes, dishes, and other articles of everyday use that were made so much more exquisitely by “primitives” that they now adorn our museums.

Historically, luxuries of this kind could be afforded only by shameless aristocrats exploiting slave labor. Though still exploiters, the bourgeoisie were timid newcomers, often had Protestant guilty consciences and, therefore, hid their wealth in banks and did their very best to pretend that successful business is an ascetic and self–sacrificing way of life. But by ad 2000, there need be no slaves but machines, and it will then be our urgent duty to live in that kind of luxurious splendor that depends upon leisurely devotion to every form of art, craft, and science. (Certainly, we have long forgotten that a schola, or school, is a place of leisure, where those who do not have to grub for a living can apply themselves to the disinterested pursuit of knowledge and art.) Under such circumstances, what exuberant styles of life will be cultivated, for example, by affluent Negroes under no further pressure to imitate the white bourgeoisie?

The style of life will be colorful and elegant, but it will not, I feel, exhibit the sheer gluttony and greed of certain notorious aristocracies of the past.

And here‘s the nub of the problem. We cannot proceed with a fully productive technology if it must inevitably Los Angelesize the whole earth, poison the elements, destroy all wildlife, and sicken the bloodstream with the promiscuous use of antibiotics and insecticides. Yet this will be the certain result of the technological enterprise conducted in the hostile spirit of a conquest of nature with the main object of making money. Despite the growing public alarm over the problems of soil erosion, pollution of the air and water, and the deterioration of crops and livestock raised by certain methods of industrial farming, little is as yet being done to develop an ecological technology—that is, a technology in which man has as much respect for his environment as for himself.

In this regard, many corporations—and even more so their shareholders—are unbelievably blind to their own material interests; for the ill effects of irresponsible technology are appearing so rapidly that we can no longer simply pass the buck to our children. Recent investigations, both here and in England, show that the actual operators of chicken factories avoid eating their own produce; it may be as well for the appetites for their absentee shareholders that they do not know too much about raising hens in batteries. Does anyone care what happened to the taste of fruits and vegetables, or mind particularly if apples and tomatoes are often sprayed with wax to improve their looks? (I just scraped an apple, very gently, to prove it.) Is it either good business or good living to buy an $80,000 home in Beverly Hills and inhabit a miasma of exhaust fumes? (In Paris, last May, we didn’t mind the tear gas much; just used to L.A.) Is it even sane to own a Ferrari and, twice daily, jangle one’s nerves and risk one’s life by commuting from Norwalk, Connecticut, to Madison Avenue, New York? And what about the view from the plane between San Francisco and Seattle— acres and acres of brown Oregon hills dotted with nothing but tree stumps?

It is an oversimplification to say that this is the result of business valuing profit rather than product, for no one should be expected to do business without the incentive of profit. The actual trouble is that profit is identified entirely with money, as distinct from the real profit of living with dignity and elegance in beautiful surroundings. But investors take no long–term responsibility for the use of their capital: they clip coupons and watch market statistics with regard only for monetary results. They see little or nothing of the physical operations they have financed, and sometimes do not even know that their own funds are invested in the pithy potatoes they get for dinner. Their actual experience of business is restricted to an abstract, arithmetical translation of material fact—a translation that automatically ignores textures, tastes, sights, sounds, and smells.

To try to correct this irresponsibility by passing laws (e.g., against absentee ownership) would be wide of the point, for most of the law has as little relation to life as money to wealth. On the contrary, problems of this kind are aggravated rather than solved by the paperwork of politics and law. What is necessary is at once simpler and more difficult: only that financiers, bankers, and stockholders must turn themselves into real people and ask themselves exactly what they want out of life—in the realization that this strictly practical and hard–nosed question might lead to far more delightful styles of living than those they now pursue. Quite simply and literally, they must come to their senses—for their own personal profit and pleasure.

The difficulty is that most of our very high–ranking business executives live in a closed world. They are wafted from their expensive but unimaginative homes and clubs to offices of dreary luxury, wherein they are protected and encapsulated by secretarial staffs. They read only what is filtered through by underlings and consort only with others who are in the same Bigelow–lined traps. It is almost impossible for people outside their caste to communicate with them directly; for they are victims of a system (also a ritual) so habitual, so complex, and so geared in to the whole corporate operation that the idea of changing it seems as preposterous as rewiring the human brain. Actually, this life is a form of role playing with the reward of status; its material rewards are meager—for one reason, because it is tiring and time consuming. But to suggest that one should change an established role is to be understood by the player as suggesting that he become someone else, and this affront to his imaginary ego is such that he will cling passionately to a role of high status, however much it may be frustrating his natural and material inclinations. This would, perhaps, be commendable, if the role being played fulfilled important responsibilities to society; and many businessmen do, indeed, feel themselves to be doing just that. But their closed world prevents the realization that in the vast, long–range world of material events, they are highly irresponsible—both to their children and to themselves. This is precisely why so many of their own children drift off to the dubious adventures of Haight–Ashbury or the East Village: they find the high life of Scarsdale or Atherton, Lake Forest or Beverly Hills inconceivably dull.

But to make peace, the elders will have to move a long, long way from their present position.

Less hopeful are the prospects of a change of attitude in the ranks of successful blue–collar workers, who, as now organized in the once very necessary but now highly reactionary labor unions, constitute the real and dangerous potential for American fascism. For the unions operate under the same confusion of symbol and reality as the investors: the wage is more important than the work and, because all must conform to union hours and (mediocre) union standards, any real enthusiasm for a craft is effectively discouraged. But a work force so robotized is all the more inviting its replacement by machinery, since a contrivance that won’t work must inevitably be replaced by one that will. The basic assumption of unionism was not the dignity but the drudgery of labor, and the strategy was, therefore, to do as little as possible for as much pay as possible. Thus, as automation eliminates drudgery, it eliminates the necessity for the unions, a truth that is already extending up to such “high–class” unions as the musicians’. The piper who hates to play is replaced by a tape, which does not object when the payer calls the tune. If, then, the unions are to have any further usefulness, they must use their political pressure, not for a greater share of profits (based on rising prices to pay for rising wages) but for total revision of the concept and function of money.

The fear that adequate production and affluence will take away all restraint on the growth of population is simply against the facts, for overpopulation is

Quoted from The Modern Midas by BERTRAND RUSSELL

"The advantage of gold, in theory, is that it affords a safeguard against the dishonesty of Governments. This would be all very well if there were any way of forcing Governments to adhere to gold in a crisis, but in fact they abandon gold whenever it suits them to do so. All the European countries that took part in the late war depreciated their currencies, and in so doing repudiated a part of their debts. Germany and Austria repudiated the whole of their internal debt by inflation. France reduced the franc to a fifth of its former value, thereby repudiating four-fifths of all Government debts that were reckoned in francs. The pound sterling is worth only about three-quarters of its former value in gold. The Russians frankly said that they would not pay their debts, but this was thought wicked : respectable repudiation demands a certain etiquette.

The fact is that Governments, like other people, pay their debts if it is to their interest to do so, but not otherwise. A purely legal guarantee, such as the gold standard, is useless in times of stress, and unnecessary at other times. A private individual finds it profitable to be honest so long as he is likely to wish to borrow again and to be able to do so, but when he has exhausted his credit he may find it more advantageous to abscond. A Government is in a different position towards its own subjects from that in which it finds itself towards other countries. Its own subjects are at its mercy, and it therefore has no motive for honesty towards them except desire to borrow again. When, as happened in Germany after the war, there is no longer any prospect of internal borrowing, it pays a country to let its currency become worthless, and thus wipe out the whole internal debt. But external debt is another matter. The Russians, when they repudiated their debts to other countries, had to face war against the whole civilized world, combined with a ferocious hostile propaganda. Most nations are not in a position to face this sort of thing, and are therefore cautious as regards external debt. It is this, not the gold standard, that affords what security exists in lending money to Governments. The security is poor, but cannot be made better until there is an international Government.

The extent to which economic transactions depend upon armed forces is not usually realised. Ownership of wealth is acquired, in part, by means of skill in business, but such skill is only possible within a framework of military or naval prowess. It was by the use of armed force that New York was taken by the Dutch from the Indians, by the English from the Dutch, and by the Americans from the English. When oil was found in the United States, it belonged to American citizens ; but when oil is found in some less powerful country, the ownership of it comes, by hook or by crook, to the citizens of some one or other of the Great Powers. The process by which this is effected is usually disguised, but in the background lurks the threat of war, and it is this latent threat which clinches negotiations. 

What applies to oil applies equally to currency and debt. When it is to the interest of a Government to debase its currency or repudiate its debts, it does so. Some nations, it is true, make a great fuss about the moral importance of paying one’s debts, but they are creditor nations. In so far as they are listened to by debtor nations, it is because of their strength, not because they are ethically convincing. There is therefore only one way of securing a stable currency, and that is to have, in fact if not in form, a single world Government, possessed of the sole effective armed forces. Such a Government would have an interest in a stable currency, and could decree a currency with a constant purchasing power in terms of the average of commodities. This is the only true stability, and gold does not possess it. Nor will sovereign nations adhere even to gold in times of stress. The argument that gold secures a stable currency is therefore from every point of view fallacious. 

I have been informed repeatedly, by persons who considered themselves hard-headed realists, that men in business normally desire to grow rich. Observation has convinced me that the persons who gave me this assurance, so far from being realists, were sentimental idealists, totally blind to the most patent facts of the world in which they live. If business men really wished to grow rich more ardently than they wish to keep others poor, the world would quickly become a paradise. Banking and currency afford an admirable example. It is obviously to the general interest of the business community as a whole to have a stable currency and security of credit. To secure these two desi­derata, it is obviously necessary to have only one central bank in the world, and only one currency, which must be a paper currency so managed as to keep average prices as nearly constant as possible. Such a currency will not need to be based upon a gold reserve, but upon the credit of the world Government of which the one central bank is the financial organ. All this is so obvious that any child can see it. Yet nothing of the sort is advocated by business men. Why? Because of nationalism, that is to say, because they are more anxious to keep foreigners poor than to grow rich themselves. 

Throughout the world, not only in Great Britain, the interests of finance in recent years have been opposed to the interests of the general public. This state of affairs is not likely to change of itself. A modern community is not likely to be prosperous if its financial affairs are conducted solely with a view to the interests of financiers, and without regard to the effect upon the rest of the population. When this is the case, it is unwise to leave financiers to the unfettered pursuit of their private profit. One might as well run a museum for the profit of the curator, leaving him at liberty to sell the con­tents whenever he happened to be offered a good price. There are some activities in which the motive of private profit leads, on the whole, to the promo­tion of the general interest, and others in which this is not so. Finance is now definitely in the latter class, whatever it may have been in the past. The result is an increasing need of governmental interference with finance. It will be necessary to consider finance and industry as forming a single whole, and to aim at maximizing the profits of the whole, not of the financial part separately. Finance is more powerful than industry when both are independent, but the interests of industry more nearly coincide with those of the community than do the interests of finance. This is the reason that the world has been brought to such a pass by the excessive power of finance. 

Wherever the few have acquired power over the many, they have been assisted by some superstition which dominated the many. Ancient Egyptian priests discovered how to predict eclipses, which were still viewed with terror by the populace; in this way they were able to extort gifts and powers which they could not otherwise have obtained. Kings were supposed to be divine beings, and Cromwell was thought guilty of sacrilege when he cut off Charles is head. In our day, financiers depend upon the superstitious reverence for gold. The ordinary citizen is struck dumb with awe when he is told about gold reserves, note issues, inflation, deflation, reflation, and all the rest of the jargon. He feels that anyone who can converse glibly about such matters must be very wise, and he does not dare to question what he is told. He does not realize what a small part gold really plays in modern transactions, though he would be quite at a loss to explain what its functions are. He feels vaguely that his country is likely to be safer if it contains a great deal of gold, so that he is glad when the gold reserve increases and sorry when it diminishes. 

This condition of unintelligent respect on the part of the general public is exactly what the financier needs in order to remain unfettered by the democ­racy. He has, of course, many other advantages in dealing with opinion. Being immensely rich, he can endow universities, and secure that the most influential part of academic opinion shall be sub­servient to him. Being at the head of the plutocracy, he is the natural leader of all those whose political thought is dominated by fear of Communism. Being the possessor of economic power, he can distribute prosperity or ruin to whole nations as he chooses. But I doubt whether any of these weapons would suffice without the aid of superstition. It is a remark­able fact that, in spite of the importance of economics to every man, woman, and child, the subject is almost never taught in schools and even in universi­ties is learnt by a minority. Moreover, that minority do not learn the subject as it would be learnt if no political interests were at stake. There are a few institutions which teach it without plutocratic bias, but they are very few; as a rule, the subject is so taught as to glorify the economic status quo. All this, I fancy, is connected with the fact that super­stition and mystery are useful to the holders of financial power. 

Finance, like war, suffers from the fact that almost all those who have technical competence also have a bias which is contrary to the interest of the com­munity. When Disarmament Conferences take place, the naval and military experts are the chief obstacle to their success. It is not that these men are dis­honest, but that their habitual preoccupations prevent them from seeing questions concerning armaments in their proper perspective. Exactly the same thing applies to finance. Hardly anybody knows about it in detail except those who are engaged in making money out of the present system, who naturally cannot take wholly impartial views. It will be necessary, if this state of affairs is to be remedied, to make the democracies of the world aware of the importance of finance, and to find ways of simplifying the principles of finance so that they can be widely understood. It must be admitted that this is not easy, but I do not believe that it is impossible. "