There’s a pretty serious crisis in government going in the United States so far this month, which relates to a slightly lesser crisis in government throughout Europe and many other parts of the world which are making a believable pretense at democracy. The crisis is basically this: the burden of pretending to be democratic is getting in the way of those who would wish to run things in a more autocratic fashion, and therefor there are major efforts underway to undermine people’s faith in the institutions of democracy, potentially clearing the way for a group of self-appointed moral guardians of the people to take charge of the running of things without the messiness of the “less moral” populace getting involved in the process. This is the definitive essence of fascism. This is effectively the partially considered strategy of the “Tea Party” faction within the US Republican Party.
The scary part about this is not that, as in the time of St. Augustine, we are witnessing the inevitable collapse of a dominant empire in the world; but rather that in previous historical eras when an empire controlling more than half of the world’s economic systems and armed forces was collapsing the dangers of their technologies falling into the hands of unscrupulous warlords were not nearly as great. Thus I write this hoping that I can play some small role in convincing some would-be moral(istic) Americans not to go along with the ideological destruction of systems of democratic government in the United States, for the safety of all of us –– American and non-American alike –– who still have to share this planet for most of the foreseeable future.
Besides childish objections to the idea of health and education being seen as basic human rights, the basic excuse that the Tea Partiers are offering for discrediting democratic institutions and trying to shut down the US government on a longer-term basis has to do with deficit spending. In the words of my friend Joel, who seems to have marginal sympathies in that direction: “Every single hour, of every single day, the U.S. government spends about $200 million that it doesn’t have… For a point of reference, consider that in just two months, the government borrows more money than the combined annual profits of the 100 biggest publicly traded companies in America.
“That’s absolutely incredible, isn’t it? Keep this up and we won’t have a country that allows us to debate and work through issues surrounding voting, immigration, privacy matters, military intervention, terrorism, social justice, abortion, guns, drugs, race relations, gay marriage, religious rights, taxes, health care, national security, national parks, et al.
“Most every citizen feels absolutely impotent as to what to do about this mess, while watching the ‘clowns’ (no disrespect to actual circus clowns) in Washington — run by TWO party machines (and lobbyists) that do not truly care about the tax-paying citizens. All these politicians (not statesmen) care about is acquiring or staying in power. And they seem to use ANY means to do so…until they run out of tax-payer’s money.”
With all due respect to Joel and other Tea Party sympathizing PhDs, the basic problem is that he seems to have forgotten what money actually is and where it comes from. Or I don’t know, maybe he doesn’t know. In real terms the system is designed so that no one can really understand the system of money creation entirely –– sort of like the Christian doctrine of the Trinity in that regard.
It actually reminds me of the time I spent as part of the board of directors for the oldest continuously operating student organization in Finland: the University of Helsinki’s theology student organization, currently going by the initials TYT. TYT got to be the oldest in this sense by surviving the Tsars’ purges of “potentially subversive” student organizations back in the 19th century by taking advantage of the complexity of the Finnish language and its absurd potential as a tool of bureaucracy. The founding theology students, with a little secret help from their friends in the faculty of law, put together a constitution for this organization in the most obtuse Finnish Bureacratese ever written, so that when the Russian governors of the time came to inspect to make sure things were operating in a proper and respectable manner they were able to make neither heads nor tails of the proceedings. Consequently no official protest against their operations were ever filed and useful forum was preserved for gathering bright young minds who worked on building a respectable Finnish culture as such –– and eventually a state to go together with it –– through Finland’s final years as a grand duchy of the Russian Empire.
The international banking system in use in the world today uses much the same tactics, only rather than using it to keep imperial inspectors at a distance, they use it to keep common citizens at a distance. Bankers go to great lengths to play their own games at the expense of everyone else in the system, keeping things just complicated enough so that when they are caught breaking the rules everyone else remains too confused to get upset about it.
But let’s break it down into simple terms that pretty much everyone can understand. The most important thing to wrap your head around is this: There is no form of money which is intrinsically valuable. As Eric Garland wrote in The Atlantic last year regarding the gold standard, “Unless you decorate state capitol domes for a living, nobody really needs gold — but it is tangible and limited, though you can mine more if you happen to be really motivated.” But the main point is that it “can be exchanged directly for goods and services, if you find someone who will take the trade.” The value of any currency then is not God-given, but based on who is willing to give you what in exchange for it.
These days there are a number of local exchange programs based on the concept of certificates worth a given number of hours. I spend a certain number of hours mowing your yard or splitting your fire wood or tutoring your children, and in exchange for that you give me the appropriate number of hours’ certificates so that I can use those to get someone else to fix my teeth or pick berries for me or wash my laundry. For some types of work fewer than 60 minutes’ effort is considered to be worth an hour’s worth of “normal labor” but that can be negotiated between those who are willing to trade on such a basis. The point of these systems is to get local people to work together and provide each other with the things they need to maintain their lives, liberties and pursuits of happiness. National and international currencies are effectively based on the same principle, but the question is, who gets to write out the certificates to start with, and what is to stop them from writing out more of them whenever they feel like it just to get people to do what they want them to do while offering no other service in return?
Imagine that there are a few hundred of us stranded on a deserted island, as in Lost on a bigger scale, before it starts getting seriously mystical. If we accept that rescue is not immediately forthcoming, money, jewelry, etc. from the outside world will come to be of little value between us. Power and cooperation is not going to be based on who has such symbolic items. Rather, in the short-term, it will be based on who is able to seize control of resources others actually need for survival; and in the longer-term on what people are able to do to help each other out.
If the society is small enough where literally everyone knows everyone, your word and honor is your currency: Someone helps you out on the expectation that they can trust you to help them out in the future. People contribute to the “general good” so that they will have access to others’ contributions to the “general good” later on. But if things get too big for us to know and keep track of everyone then we need some form of written records or symbolic items to help keep track of who has contributed what to the well-being of which others. So let’s imagine that within our little society we appoint some authority to produce a set of certificates that help us keep track of such things. These certificates will have a number of different denominations, but we might say that the basic unit will be worth an hour’s labor. So what makes these certificate valuable is a general public agreement of what people are willing to do to get them. They have no value in themselves, their value will be in what people are willing to do for them.
That’s actually the same with any sort of money we have in the world today.
Now imagine that the fellow who is physically producing these certificates starts treating himself to all sorts of extra favors with the power that this gives him. He want’s someone to build him a bigger house than anyone else’s, so he writes out all sorts of hour’s work certificates to those who agree to build this fancy house for him. It doesn’t cost him anything to do so, and the certificates go into circulation in our little society from there pretty freely and productively. Is there any harm done in the certificate writer using his power to his advantage in this way?
One risk is that he writes out so many of these certificates that everyone ends up with piles of the things and no one really cares to bother to do anything anymore to get them –– they cease to serve as a measure of exchange value because they are in unlimited supply. But what if the fellow who is writing out these certificates is being subtle enough about it so that there aren’t too many of the things around, but still the only way anyone gets any new ones is by doing what he selfishly wants them to do? How far can this go before it leads to some sort of revolution?
Perhaps to keep one guy from abusing the system in this way we should appoint a group of guys to do this together and keep tabs on each other in the process. But what’s to stop them from forming a sort of cartel which enables them to work together in effectively cheating everyone else? The fundamental question remains the same: How far can their corruption go before it brings the whole system crashing down?
This is the basic situation in the world of banking today. Central banks are organizations somewhat separate from governments which have been given the right to literally make money that people within the societies in question can use as a basis for working together and exchanging services. They give the money they make out of thin air to governments and others who wish to borrow it from them in exchange for promises of getting whatever they want in return. Bankers are thus able to write obscene salaries for themselves in exchange for doing nothing more than roughly keeping track of how much money they print and pass around. They’re not doing anything to make this money valuable; the people who are willing to work for that money are the ones who give it value.
Meanwhile (most) governments have sort of removed themselves from the process of making their own money, mostly to keep people from getting too spooked by the idea that money is being made out of thin air to start with. Governments “borrow” this money from the banking organizations who make it out of nothing, on licenses granted by the governments themselves. To keep this process believable, governments have to be able to pretend to pay this money back to the banks, and to private parties who have made deposits in these banks, not so much from new money being produced, but from the value of the work done for that money coming back around to the government in the form of taxes.
In the little island society example and in the global financial system in practice today, the most important issue is not how much debt there is –– how much service has been promised but has yet to be delivered –– but rather what and how much are people capable of and willing to do for each other, and on what basis can they believe that they will be fairly compensated for their efforts. This is imperfectly measured by the ratio of new money creation to the GNP, and the national debt is relevant to this primarily as one of the factors driving the former variable.
People are generally willing to allow a certain number of individuals to be exempt from actual productive labor so that they can keep things organized for the good of all involved in the system, but when those doing the organizing start to get too distant from those whose labors they are trading in to care about their well-being any more, and when the people who are doing the actual production lose trust in those who are organizing the interaction between them because of the obvious corruption they see at the upper levels, that’s when the entire system is in the greatest danger of collapse.
Democratic institutions, or some believable pretense at such, seem to be the best means humans have yet discovered for maintaining some stable sense of trust between those doing the organizing and those providing more concrete services to each other. Keeping banks sort of at arm’s length from the legislative process also seems to be a useful strategy for keep people trusting in the value of the money that the banks make. This trust would be significantly improved if more governments were able to do like Iceland did recently and seriously punish the most corrupt and incompetent members of their banking communities. But the last thing we should be worried about these days is debt: making sure the bankers keep getting back their fair share of the fruits of everyone else’s labors. Our primary concerns need to be arranging things so that people continue to feel as though they have something of value to offer each other, and so that helping each other out –– by way of both market activity and non-market activity –– is something people remain motivated to do.
A significant part of this in moral terms is to base as little of that motivation as possible on threat and blackmail. We don’t want societies operating on the premise of, “You do what I tell you to or your child dies!” It’s easy to forget sometimes just how close we are to such a dynamic.
There was a time, just a few generations ago actually, when it was more the rule than the exception that most families would lose a child or two before they reached adulthood to malnutrition, disease or accidents caused by lack of safety precautions (which would have been too expensive). Poor people worked hard to reduce the odds of that happening to their children, as long as they believed that their work could make a difference in the matter. For some of the psychopaths in charge of large businesses having a few poor children die every now and again was a necessary part of keeping the system going.
These days we are more inclined to take it for granted that all children, even poor ones, have a right to live into adulthood, but there are some corporations which are doing everything in their power to return us to the “good old days” in those respects. In parts of the United States they have been quite successful in this regard. The thing that is slowing them down in this process though is a (pretense at a) system of (small d) democratic government which is based on a premise of “the little people” being able to come together to stand up for their rights, including children’s rights to education and health care that keeps them from dying of preventable causes, regardless of how much their parents do or don’t get paid for what they do for work. So it would be far better for business if they could shut down as much of the system of democratic government as possible.
As I said at the start here, my fear is that if the psychopaths behind the Tea Party movement fully succeed in this process not only will thousands more poor American children lead sad lives and die young (and I’m not being melodramatic here), but the tools of economic and military dominance which have been developed over the past century or so will come to be used with even less pretense of restraint. This could lead to the de facto enslavement of billions more people and further reckless exploitation of limited natural resources, leading to billions more unnecessarily early deaths. Some in the American Religious Right would disagree with me on such matters, but I still hold to an ethical position that contributing to such processes is a morally wrong thing to do.
My strongest hope is that enough Americans will start believing enough in the idea of democracy as such to make it true again –– in some ways for the first time –– within the United States; that people they will stop letting those who are milking the system by doing nothing more than finding creative ways of telling others what to do for them run things without even a pretense of interest in the well-being of those they are abusing in the process. I realize that a lack of philosophical content within the education system has seriously reduced the likelihood of many there figuring this problem out, but there are some smart people there who might get it anyway, and it remains remotely possible that they might be able to wake up just enough of their (our) countrymen to stop the complete collapse that things now seem to be headed towards.
Joel, others… care to help?