Monthly Archives: September 2011

Hurrah! Free Money once again a topic of debate in U.S. politics

Once more, Congressman and Presidential candidate, Ron Paul has championed the cause of honesty and freedom, this time by introducing a bill (H.R. 1098) that would promote free competition in currency and end the monopoly control of money and finance by the banking and political elite. Seth Lipsky’s article below tells the story.

I’ve not read the bill, so I don’t know the details, and I don’t expect it to get very far in a Congress that is, by and large, bought and paid for by the same interests that the bill seems to challenge, but its very existence and the fact that is getting some media coverage could go a long way toward educating the public about the vital issues and systemic flaws that are involved in the money system.

The survival of democracy and the future of civilization depend on, one way or another, on liberating the credit commons from monopoly control. Action from the bottom up (the organization of private, free exchange alternatives) combined with action from the top down (popular pressure for legislative action) might eventually be sufficient to crack the nut.—t.h.g.

Ron Paul, Upping the Ante in His Campaign for Liberty, Hoists the Flag of Hayek

Offers a Bill To Allow Free Competition in Currencies

By SETH LIPSKY, Special to the Sun | September 29, 2011

http://www.nysun.com/opinion/ron-paul-upping-the-ante-in-his-campaign/87502/

The first time I met Friedrich Hayek was in 1980 at California, where he was staying at the home of another economist. Then a young editor for the Wall Street Journal, I’d asked to call on the Nobel laureate for a book review I was writing. His host invited me for dinner. Before the meal, Hayek and I retreated, alone, to the far end of the host’s living room, for a chat.

We were but a few minutes into our conversation when, suddenly, Hayek clapped a hand over his nose and mouth and started coughing convulsively, before slumping onto the couch. I raced back to the host to exclaim that Professor Hayek seemed to be in trouble, only to be told that it was okay, he was just taking his snuff. A jolt of the divine herb, it seems, and the sage was back on his feet.

Hayek died 12 years later at the age of 93. I never came to know him well. But this week I found myself imagining that were his long-ago collapse-into-a-coughing fit to occur in front of me today, I’d whip out a copy of a new bill in Congress, H.R. 1098, called the Free Competition in Currency Act of 2011, and wave that under the great economist’s nose. It’s hard to think of anything, even a pinch of the strongest snuff, being a greater pick-me-up for his spirits.

For Hayek was an advocate of, among other things, private money — competing currencies — and HR 1098 would end a ban on them that has obtained here in America since the Civil War. The new bill in Congress, introduced in March by Rep. Ron Paul, would repeal the legal tender laws, prohibit taxation of certain coins and bullion, and clean up other sections of our coinage laws.

It is not a measure the Congress is going to pass in a hurry. But it is being nursed by advocates of monetary reform, and it would be unwise to discount it entirely. Few, after all, gave Congressman Paul much of a chance to win passage of a measure to audit the Federal Reserve, but when it eventually passed it was with an overwhelming, bipartisan vote. It may yet be enforced by the courts.

The Free Competition in Currency Act is far more important. It comes amid a historic collapse in the value of the dollar to less than a 1,600th of an ounce of gold. The dollar has gained a bit of value in recent days, but it is still worth less than a sixth of what it was worth as recently as, say, the start of President George W. Bush’s first term.

One of the things the government has done in the face of that collapse is seek to enforce a prohibition against private “uttering” — that is, putting into use — of coins of gold, silver, or other metal as current money and making or even possessing likenesses of such coins. H.R. 1098 would end the ban on private uttering of coins and, presumably, stop any current prosecution of such uttering.

The drive for the bill is animated, if only in part, by the case of Bernard von NotHaus, who was convicted in March of issuing a private medallion called the Liberty Dollar. The government prosecuted von NotHaus even though the coins he issued were made of silver and are today worth much more, in terms of Federal Reserve Notes, than when they were issued.

What the government is doing in the Von NotHaus case is seeking to suppress sound money in order to protect the unsound, fiat money the government has been issuing via the Fed. A federal judge in North Carolina has agreed to consider post-conviction motions to throw out the von NotHaus verdict, partly on the argument that the Constitution does not enumerate a power of Congress to outlaw privately-minted coins, which were widely produced in America’s early decades.

H.R. 1098 would go way beyond the Von NotHaus case, by asserting the virtue of the idea of private money as a system. The idea was sprung by Hayek not long after he won his Nobel Prize, in the mid-1970s. He started with a lecture. He later wrote, in a slim volume called “Denationalization of Money,” that he’d been in “despair about the hopelessness of finding a politically feasible solution to what is technically the simplest possible problem, namely to stop inflation.”

“The further pursuit of the suggestion that government should be deprived of its monopoly of the issue of money opened the most fascinating theoretical vistas and showed the possibility of arrangements which have never been considered,” he wrote. He came to the view that a plethora of privately issued money would enable mankind’s millions to find their own mediums of exchange, and good money would end up driving out bad.

Hayek concluded “Denationalization of Money” by calling for what he termed “a Free Money Movement comparable to the Free Trade Movement of the 19th century.” He came to the view that the gold standard was not the solution, though it was “the only tolerably safe system” if the management of money were going to be the preserve of the government.

The Free Competition in Currency Act got an early hearing in Congress this month in the House Subcommittee on Monetary Policy. The hearing wasn’t widely attended, but there was testimony by the president of the Foundation for the Advancement of Monetary Education, Lawrence Parks, and by a professor at George Mason University, Lawrence White, who talked about how FedEx and UPS’s private competition with the Post Office has brought benefits to American consumers. He extended the analogy to money.

It’s too bad Hayek couldn’t have been at the hearings. He viewed the denationalization of money as the “cure” for “recurrent waves of depression and unemployment that have been represented as an inherent and deadly defect of capitalism.” In other words, as a cure for ills like the current crisis. How Hayek, who once called for a global debate on socialism versus capitalism, would have thrilled to the moment, pausing only for the occasional pinch of his favorite snuff.

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Money and Politics–what’s next?

This from Dmytri Kleiner is an excellent political analysis.
The vast majority of people in the world today have negative financial net worth, and, as their incomes shrink and their cost of living increases, their debts are becoming ever more unbearable.
A debtor’s initiative may be right on target.–t.h.g.

Debtors’ of The World Unite! The Initiative to form an International Debtors’ Party.

Dmytri Kleiner. 20 September 2011

Congratulations to the Pirate Party having won an astounding 8.9% in the Berlin elections.

As I wrote two weeks ago, this is their moment of relevance, the emergence of Information politics as a mainstream political topic. Having 15 Piratenpartei representatives in the local government will certainly be of direct material benefit to activists fighting against software patents, for network neutrality, online security and privacy, etc, and that is a development to be celebrated.

Modern politics has become a politics of identities and causes. Major parties construct identities, these identities function as Legitimization Brands, not so much tied to specific social outcomes, but rather to specific personalities, representations, framings and forms of apology.

People vote for a Party because that’s the kind of person they identify as: the kind of person that votes for that party and imagines themselves having the essentialized, yet drifting, characteristics the party markets as their image. Party membership is just another consumer identity.

The interests of the State and it’s ruling class doesn’t change from election to election, and the elected politicians of the ruling party’s job is to represent the policies demanded by the ruling class to the people that support them. The election is a market survey, designed to identify which Legitimization Brand will most effectively deliver public support.

The political policies of the major parties are formed byway of the campaign contributions and lobbying of the holders of the major economic power, not by the interests of the voters whose support they deliver.

Political resistance is limited to activist movements, which occasionally manifest as minor parties, the Greens and more recently the Pirate Party are such manifestations.

As minor parities, they are not integrated into the ruling class system, but rather represent the social power of movements around specific causes. These parties retain relevance to the degree that they are primarily the representatives of the activist social movements they emerged from, when they grow beyond being minor parties, like the Greens have in Germany, they become integrated into the ruling class, and begin representing ruling class interests.

The reason this happens is that as representatives of causes, they have no mass appeal.

The social power they can mobilize, although often visible and noisy, is not enough to propel them beyond the political fringes, yet maybe enough to attract attention from the same economic powers whose contributions and lobbies animate the major parties, and are thereby transformed into Legitimization Brands, like the other major parties, trading in the support of their now expanded constituencies so long as their legitimacy survives.

The masses are not interested in causes, at least not enough to mobilize around them.

And for very good reason, understanding complex causes like environmentalism and information politics seem complex and abstract to people, more concerned with their everyday lives. Activist campaigns often focus on the misdeeds of corporations and States. Most people feel unqualified to comment on it, and are therefore not so compelled to try to unravel the storms of claims and counter claims, accusations and apologies, all the rhetoric that drives such polemics. These are not their concerns, forming an opinion on such issues does not help in the daily challenges they face in their private lives. And the solutions presented are not clearly implied by their own conditions, thus they are happy to have these concerned administered for them, which the Legitimizing Apparatus is happy to do.

What’s missing from modern politics is, well… politics.

The traditional parties formed around the emerging power of different economic classes. Specifically from the interests of those who derived their incomes from the different Factors of Production, namely Land, Capital, and Labour.

Conservatives are called conservatives not because they have delicate sensibilities when it comes to sexuality or have regressive views of gender and racial roles, but because they wantwd to “Conserve” the system of Nobility, where elite families retained power and led society. Which, due to there superior genetic heritage, they where, aledgedly, uniquely able to do, and as they had done for centuries.

The primary economic power of the Conservative part come from those that controlled the land.

The Liberal are called Liberals, not because they emerged as movement of people who believed in being a little less uptight and a little less xenophobic, but rather because they represented the emerging Capitalist class, they believed that the State, meaning at that time, the Nobility, should let them conduct their businesses as they see fit, and not intervene in the marke.

The primary power of the Liberals came from those that controlled capital.

As Capitalism triumphed, and Feudalism disappeared, Liberals and Conservatives became not so much representatives of different classes in conflict, but rather competing brands to market the interests of Capital to the masses. Both parties represent only slightly differing views on how markets and governments aught to be run, and in whose interest

Labour Parties began as dissenting, activist parties, formed by groups of political intellectuals such as the UK Fabians, and began as minor parties that had grown out of the workers’ movement.

Yet, the workers’ movement was different from the types of causes we have seen emerge more recently.

The workers’ movement was not fuelled by intellectual appeals to abstract technical concepts, and was not focused on the reported conduct of remote corporations or states, but on the direct conditions and interests experienced by workers, and workers where legion.

Their cause was not based on morality or belief, but on the conditions of their daily lives. What’s more, the platforms where directly implied by their conditions, they where not administered beliefs, but known facts. Workplace safety, wages, working hours and other matters of direct interest to workers did not require subscribing to one ideology or another to understand.

The workers movement, because of its class basis, did not need to rely on campaign contributions and lobby to have power, because the workers where the masses.

The power of the worker’s parties came from control of labour.

However, this language of Landlord, Capitalist and Worker emerged in quite a different era. The Power Loom was the driving force of industry, Nobility controlled the land and the State, and being a worker in early industry was torturous, inhumane, and importantly, most workers where direct-producers. The value they created took the form of stocks of goods that where literally taken from their hand and into the possession of the Capitalists, who became their owners and profited from their circulation, while the workers where left with nothing more than that which their subsistence demands so they could toil another day. Workers knew their class interests. The exploitation of labour was not a theory, but a felt, daily experience. There demands where not opinions, but terms of struggle.

The workers’ movement won many of these struggles. Working conditions and hours where improved as a result of fierce battles between workers and capitalists. This began to make the demands of workers’ parties less pressing, more marginal and abstract, while theories of value and economy developed further, the immediacy of the issues fell away.

More and more workers became non-direct producers, working in administrative or technical fields that did not directly produce stocks of goods, appropriation of the product of the labour became not a felt and observed experience, but yet another theory, something about which one could have an opinion, but not something that was a uniting term of struggle.

All the while the most oppressive and harsh conditions where relegated to the margins of society or even to other ends of the world, with whom the great body of workers in developed society had no relationship at all, or if any, then as yet another cause.

Politics has vanished and in it’s place is a marketplace for legitimization.

The commodity has become the voter themselves, delivered to a consciousness industry made up of parties, public relation firms and other agents of economic power.

Absent from organized opposition, Capital has reshaped society towards it’s own interests. Where the owners of productive assets have increased power and freedom, unchecked by any kind of political contestation, and the masses are subjected, administered, and controlled. Workers are just another economic input, like energy and natural resources, who matter only enough to ensure reliable supply. Capital is spreading poverty, social stratification, environmental degradation and war with impunity, checked only by the economic and natural limits of such outcomes, and able to socialize or transfer the costs even when such limits are exceeded and catastrophe ensues.

To make politics relevant, to challenge and contest the interests of Capital and to represent the interests of the masses we need workers to once again unite in their common interests and make their social power felt.

Yet, workers’ politics is now failing because workers do not identify as workers, and thus any appeal addressed to workers is unlikely to achieve results. As the economy has moved on from the simple model of production that classical language was born in, so must the language of class politics. The workers are no longer direct witnesses to the product of their labour being ripped from their hands and hoarded by the Capitalist. Many people may hate their job, or their boss, but as the production of value is more abstract and remote, they do not feel that their boss is taking anything from them, rather they feel they are being given something, their job and their paycheque, etc. It is not in the workplace that the appropriation is felt, but rather after work, when they go home to pay their bills.

We can’t mobilize the masses as workers, but we can mobilize them as Debtors.

Debt is not simply a cause to build awareness and support for, it is the felt condition of the masses, who are struggling to pay their bills, who are frustrated and angry and who demand representation which no mainstream party will give them.

The Time has come for The Debtors’ Party.

Join the initiative to found an International Debtors’ Party. So far, the resources are small, come help us build a movement.

- Facebook group: http://bit.ly/debtorsfb

- irc channel: #debt on irc.oftc.net

- wiki: wiki.debtorsparty.org

With your help, much more to  come.

Anybody is Berlin is welcome to come to Stammtisch tonight and say hi, this is in no way an official meeting of the Debtors’ Party, just an informal get together, but no doubt the topic will be present. Stammtisch is at Cafe Buchhandlung, starting at 9pm. http://bit.ly/buchhandlung

Debtors’ of The World Unite!

Legal obstacles to moving your money

Now, more than ever, it is imperative that people move their available financial resources away from conventional Wall Street investments that offer the illusion of security toward real assets that can provide real security in basic living essentials. There are however legal obstacles that limit our ability to do that.

One of the best resources for information about that is Cutting Edge Capital. The September 2011 newsletter is a good place to start. Be sure to listen to Jenny Kassan’s presentation, ACCELERATING COMMUNITY CAPITAL WORKSHOP: The Legal Landscape, given at the recent BALLE conference.