Academic journal article Anarchist Studies

Of Money, Heresy, and Surrender: Part I: The Ways of Our System, an Outline, from Bretton Woods to the Financial Slump of 2008

Academic journal article Anarchist Studies

Of Money, Heresy, and Surrender: Part I: The Ways of Our System, an Outline, from Bretton Woods to the Financial Slump of 2008

Article excerpt

ABSTRACT

This is the first of a two-part study of a fundamental but neglected truth concerning the nature of money. Pushing alone against the doctrinaire cross-currents of the monetary maelstrom, anarchist reformers have since the 1920s discussed the introduction of time-dated money. The institutional and theoretical issues underpinning this revolutionary innovation, as well as the questions of its workability in the contemporary framework, will be presented in Anarchist Studies 18.1 (2010). The present article prefaces this extraordinarily important chapter of reformist thought by providing a summary historical account of the monetary system in which we live. This is done with a view to casting in relief the intimately dysfunctional and inequitable constitution of the latter and to contemplate how a blueprint for communal reform based on the principle of perishable money may correct such wrongs.

Key words Money, policy, empire, United States, business cycle, finance, economic history

INTRODUCTION

It has been the exclusive merit of the German communal/anarchist thinkers of the 1920s, namely Silvio Gesell (1864-1930) and Rudolf Steiner (1861-1925) to have conceived and articulated the genial idea of overcoming the chief obstacles strewn along the distributive chain of the economy by means of a time-sensitive money certificate. The logic supporting the concept is, in fact, straightforward: Gesell and Steiner reasoned that if it is agreed that 1) money is indeed a symbolic medium -perfected with the sole aim of expediting exchange, and that 2) such an exchange is between goods (and services), which perforce are (or rely on means and resources that are) perishable, then it must logically follow that the key to a wholesome arrangement of productive factors and remunerative flows should itself be boosted by a form of money bearing an expiration date. In other words, simple economics demands that money die.

The political consequences that would arise from the implementation of such an intuition are momentous: it is clear that a reform of this sort would definitely encroach upon the privileges of the banking industry, which is the most guarded and powerful oligopoly of all. Incidentally, the legitimacy of this cartel on the one hand, and American hegemony on the other, are two of the chief tenets of orthodox western ideology: all western practitioners of the social sciences that wish to advance in the incumbent power structure know that these are never to be questioned overtly - i.e. pricked in their neuralgic nodes. Among other aspects of the question, this essay will show how these two articles of modern political faith (money and US primacy) are intimately tied, so much that, as evidenced by the recent crisis, it is nearly impossible to discuss national monetary /economic issues - European or otherwise - without making constant referrals to the role of the United States.

How then would the privileged position of banking be threatened by timedated certificates or virtual renditions thereof? The bulk of what we call money is put into existence, not by central banks - which act as issuing appendices of this complex amalgam of private and public affairs - but by the private banking network itself through a systematic process of 'mortgaging' (or wealth, income, etc). In other terms, commercial banks derive their power from the license, which states grant them, to manufacture money by way of loans, a process which is itself enabled by the management of virtual ciphers (money) that never die. By grace of this monetary hoard, which by definition may be withheld whenever investment prospects arc not deemed promising, and by grace of their control over a vast network of payments, credit institutes have from time immemorial exacted from the body economie copious rents (interest charges), which make them the force they are. 'Hoard' is the key word in this case. If perishable money, which carries the anti-hoarding device in the expiration date, were injected into the productive fabric of society, it would outflank the banking network by spurring a circuit of its own - one where banks would on the one hand inevitably, and justly, surrender a sizeable measure of decisional clout to the productive sector, and on the other, no longer base dicir investment policies on mere interest-driven exigencies. …

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