This is the third post in the “the role of…” series and perhaps I should have written this first as its the key to everything.
If you happen to live in a part of the world or society where you have reasonable access to a currency with sufficient buying power to meet your needs and wants then your outlook on the monetary system will be a positive one. However throughout history until very recent times (post world war 2) the majority of people in this world did not have this kind of access. Even now 50% live on just $2.50 per day and 22000 children die each day due to poverty. I ask myself why?
What I have come to realise is considering that this system dictates every aspect of all of our lives, people have little knowledge of it. it’s not surprising as very little is taught in mainstream education and what is taught is a misleading view. There is so much jargon surrounding it that most people are confused, put off and just accept that if they go to work money will appear in their bank account which they can spend. I was certainly in that boat until very recently but now I have become immensely critical of the very system that people believe is the key to their standard of living. I will attempt to explain this stance by looking back at history and why this system is not what it seems by addressing the following questions:
- What is money?
- What is it used for?
- Where does/did it come from?
- Do we actually need it?
So what is money? Economic historians state that money came about as a medium of exchange, to overcome the disadvantages of bartering such as a “coincidence of wants“.
However history shows us that in our hierarchical world the elite have forced the majority to work for them whether they were chattel slaves or peasants/working classes. A combination of violence, religion, law and money or the lack there of were some of the major weapons wielded.
Two incredibly important areas have been defined by money:
- Human needs such as land, food, water, housing, clothing, health care and energy.
- Taxation payments (historically the main purpose of which was war).
The only way to satisfy these requirements is to work for the elites who created companies that exchange our labour for money. Therefore we are forever in their debt, money represents control over the masses.
Types of money that have existed are:
- Commodity (metallic coins)
- Representative (paper notes that represented a commodity standard)
- Fiat (Latin for “let it be done”, coins, paper, electronic and digital, but represents no commodity eg. gold)
This debt-based monetary system was standardised by the advent of the bank. The one that stands out in history and became the foundation of the largest empire the world has ever seen is the Bank of England. It came into existence on the 27th July 1694 as a private joint-stock company via the granting of a Royal Charter by King William III in order to fund the war against the French Empire. The Bank was created to raise £1.2 million at 8% interest. This meant we had a bunch of financiers/speculators that wanted to see if they could increase their wealth through war; violence, murder and death. If successful in this battle the British elite would gain more control of world resource. A monetary system in a symbiotic relationship with a capitalist system, both as immoral as each other. Who would pay for this? Through the blood, sweat and tears of millions of native Americans, Africans, Indians, Aborigines and many others. However it would also be through the native British who also lived in terrible conditions throughout the times of the British Empire. Unfortunately this is lost to history, where millions of us are now told to be proud of the countless wars fought in the name of the Empire and be proud of the Capitalist Industrial Revolution powered by tens of thousands of child slaves. Now huge numbers contribute to the upkeep of huge manor houses that were built during these times of mass poverty by visiting them. What does this say about the morals of the elite and their attitude towards their fellow human being?
Gold and Silver based monetary standards were widely used in the European empires as traditionally the elite saw these metals as precious and controllable. The issue arose when trying to increase their own money stock as the elite had to continually source mines, mint coins and if this failed then begin to debase them. Representative money was introduced by issuing paper notes that represented an amount of gold in a bank that as the holder you could redeem against. The issue arose when a bank reduced its reserve requirements, a bank lent out more than they had in commodity reserves and a bank run ensued where they couldn’t redeem all the paper notes. However a bank has the same objectives as any other capitalist company, generate as large a profit as possible by reducing its costs and selling more. For a bank that is reducing money production costs and increase lending. Once the technology arrived electronic fiat money was conceived where there was no expense in producing it. It’s just digits on a screen, but the purpose is the same. Lower classes still require it to live! Lending it became the next hurdle, how would the lower classes pay the elite back? Wages were increased in designated consumer countries through service industry jobs but operations that require a large workforce were sent to cheap labour countries. It was not just private lending that saw huge increases so did government national lending. Taxation would be increased to pay the national debt but the elite have no care in paying this so the concept of offshore secrecy solved that, which the City of London duly applied. Therefore the tax burden fell on the lower classes.
You could argue that times have changed, we have democracy now, granted independence to the former colonies and the majority in Europe and the US live comfortably. Hurrah to the elites they have changed their spots! But have they? The US is no shining beacon of democracy and having installed the same monetary system has now taken over the role of the British Empire. We still have a world where a now global financial system supports a global capitalist system dominated by a few banks. All that matters to the elite is if the lower classes are still working for them via this system. Generating money to pay off previous debt can only be taken so far until the world cannot sustain the output.
So do we need money which is proportional to war, resource stripping, environmental destruction, animal cruelty, human slavery and the loss of huge amounts of time and energy to the goals of capitalism? No we don’t! This notion that an increased monetary return on monetary investment must be replaced. What we need are people working together in institutions whose purpose are to meet the basic human needs of us all in a sustainable manner. We have all been infected by capitalist ideals that has spread individualism to an extreme. We need to view our fellow man as equal no matter what colour, creed, religion or class. We need to make a stand together against this monetary system or divisive elitist politics will pull this world apart once more! I believe it has to take place outside of government and one solution that may sound extreme and nuts but suggested by 2 professors who wrote “Debt as Power” was for everyone to not pay a mortgage instalment for one month! That would send a clear message that the people have had enough of this immoral system of debt! I think until a politician suggests the abolishment of the present banking and capitalist system then we have to find a solution that bypasses the voting booth. An absolutely inspiring demonstration of this was Gandhiji’s Salt March. It sums up the continual struggle of true freedom against the elitist agenda! I’m not a Christian but the one time Jesus displays aggression in the Bible is when he cleanses the temple of the money changers. It’s a recurring theme throughout history that the use of money to gain from the weak is seen as unjust. I believe this is going to require a fundamental paradigm shift where we have to curb our manipulated obsession with materialism by pursuing a more spiritual philosophy.