Think for a moment about the basic necessities of life. One can live only a few minutes without air, a few days without water, and a few weeks without food. We also need shelter from the heat and cold, from rain and snow and sun. We need energy–gas, oil, electricity–to warm us when the weather is cold and to cool us when it is hot, to help us do our work and enable us to move about.
And how do we acquire those things? Air is still freely available, although it may not always be clean or healthy to breathe. Water is increasingly not free, even if we draw it from the kitchen faucet, and all of those other necessities, we depend upon others to provide. But at every turn there is someone with an outstretched hand saying, “Pay me.” The point is that there is another element that we are utterly dependent upon–MONEY!
As Adam Smith observed long ago, “When the division of labor has been once thoroughly established, it is but a very small part of a man’s wants which the produce of his own labor can supply” (Wealth of Nations). That puts economic exchange and the devices we use to facilitate it at the center of human interaction. Money has become so familiar to us in our daily lives that we hardly even notice it, except when it is lacking. But our ignorance of the nature of money, where it comes from, and how it is created has cost us dearly both in terms of material comfort and increasingly in our loss of freedom.
Economics and politics are inextricably linked; they are in fact a unitary system which early economists like Adam Smith, John Stuart Mill, and Jean-Jacques Rousseau recognized, using the term “political economy” to categorize their work. Economics as a separate discipline did not exist until about a hundred years ago when latter day academicians sought to cloak the fact behind a mask of mathematical rigor. But it cannot be denied that economic structures and policies have heretofore made implicit choices about who would be the winners and who would be the losers. The challenge before us today is to build political-economic systems that allow everyone to win, not just in terms of material comfort, but in terms of peace, harmony, dignity, and freedom. We cannot change politics without changing economics, and we cannot change economics without changing money.
In my own work I have often credited E. C. Riegel for much of my enlightenment on these matters. He said:
“We have been pursuing the illusion that by voting political ballots biennially and quadrenially, we controlled our affairs. While the government must beg us each two years for our political ballot, we beg the government every day for our economic ballot. Since we are dependent upon our government for our daily dollar ballot, there stands over our political democracy a monetary autocracy. Therefore, we are not democratic governors; we are economic subjects. … The process whereby parchment freedoms become sterile is quite simple. It begins with the fact that we need a constant money supply to effect our exchanges whereby we live. The supply is completely in the hands of government. We beseech the government to issue it. … Is not every public expenditure the result of pressure by some large or small segment of the citizenry? And are not these pressure groups impelled by the necessity of petitioning government since it is the only source of the economy’s life blood? How can we blame the government for spending and on the other hand, how can we blame those who invent schemes for spending, without which our economy would stagnate? It is the false concept of political money power that converts citizens into petitioners, and makes government a dispenser of patronage instead of a public servant. This power of patronage utterly destroys the democratic system of government–since the people cannot be both petitioners and rulers” (Private Enterprise Money (1944. pp. 78-79 in print edition).
Riegel devoted his life to showing not only how the political money system corrupts both economics and politics, but also how it can be transcended, a work that I have taken up and pursued over the past 40 years. My own books, lectures, interviews, and web posts have built upon, interpreted, and extended the works of E. C. Riegel, Henry George, Ralph Borsodi, Ulrich von Beckerath, Heinrich Ritterschausen, and many others. My latest book, The End of Money and the Future of Civilization, is a comprehensive treatment of money and politics and a guide to how to create effective exchange media that are independent of government, banks, and political money. Once we realize that money is credit, and that it is in our power to give or withhold it, we can take back control of the exchange process and our government.
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” Since we are dependent upon our government for our daily dollar ballot, there stands over our political democracy a monetary autocracy.” Riegel had a lot of interesting ideas, but he got that one completely wrong. Government does NOT create money. The FED and its bevy of private banks create money. Yes, they have the legal backing of government, but it means very little, since government is equally as dependent on the bankers as we are for their daily dollar-ballots. That is the reason they need to lick the bankers´ boots daily and cuddle with lobbyists. If they created the money, none of that would be necessary.
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Linda, both Riegel and I are quite aware of the collusive arrangement between politicians and bankers and we both have written extensively about it. Each gets what they want. The government gets to spend whatever they want without regard to tax revenues (deficit spending), while the bankers get to create money by lending it at interest. The Bank of England in collusion with King William III in 1694 established central banking model that has been replicated everywhere. To say that legal backing of the government for bank-created money “means little” is not correct. Read my book The End of Money and the Future of Civilization for more about that. The main point is that no political authority, either a banking cartel or national government, or both in collusion, should have control of money. The money power belongs to sovereign individuals in their capacity as producer-sellers. Money is, after all, credit and it is in our power to give credit to one another.
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Thank you for your response, Thomas.
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