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06/23/2005 Archived Entry: "The nature of money today"
The nature of money today
Silver here. It is a real honor and a privilege to be a guest in this place, and I thank Claire for the opportunity.
The focus of this blog is freedom. What does money have to do with freedom? Money is one of those things, like air or electricity, which is so common and deeply ingrained in our everyday lives that most people don’t bother to worry about where it comes from, how it is made, who controls it. Take it away, and your life gets very difficult, very quickly. Manipulate it, and unscrupulous people can take advantage of the ignorant or unwary.
Most of us know from personal experience what comes from not having enough money. Charles Dickens was succinct: “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”
Happiness is not the same as freedom. A sweeping, unfair generalization about Amerika today would be “fat, dumb, happy, and less free every single day.” You can be poor and free, rich and a slave. (I'm aiming for rich and free, but that's another story.) As a nation, we’re rich, and we’re slaves. There are reasons we have come to this, and the nature of our money is one of those reasons.
Individual liberty is meaningless if it does not include the freedom to trade with others, to make contracts, to exchange goods and services. Even the most die-hard gulchers at TCF spend a lot of time discussing how gulches might organize their economies and trade within a gulch or with other gulches. Almost no one seeks individual autarchy, absolute self-sufficiency. The wondrous array of goods and services available today makes any attempt to live in complete isolation an exercise in severe deprivation, with a life that is shorter, sicker, lonelier, and much, much harder than it needs to be.
Money is absolutely essential to trade. There are no advanced barter economies in the world today. The introduction of money completely revolutionized trade, allowed entrepreneurs to make complex calculations regarding costs, prices, and profits, and solved the problem of one farmer with one cow to trade trying to find one merchant to sell him just the right combination of shoes, clothes, drink, spices, glass, jewelry, cooking oil, and fuel. It’s not that barter can’t work, it’s that money works so much better that barter immediately becomes a very minor part of economic life whenever money is introduced. Money was created by and for free people and free markets. Theft and violence, the basis of all government, preceded the creation of money, and when money was introduced governments quickly shifted their demands from shares of crops and indentured servants to money.
The nature of money today is very different than it has been for thousands of years, different than pretty much all of the recorded and unrecorded history of humanity. Modern money is a consensual mass hallucination. Today's money has no substance, no value of its own. We believe in our money because it is easy and convenient to do so, and because our masters command it. With direct deposit, credit cards, and on-line banking services, it is quite possible to live a perfectly normal lifestyle while only rarely touching the bits of colored paper that we call money. Most Amerikan money is in the form of electronic bits. They keep track of our bank accounts, record the transfer of money from our employer’s account to (first) the ever-growing legions of tax collectors, your 401(k), perhaps various loan payments, and whatever is left to your bank account, while reporting every detail to the federales on request. Most of the new money being created out of thin air is no longer printed; why pay $20 and change for $1,000 in new bills when you can do the same with a few keystrokes?
When William Gibson explored the concept of the matrix in his book Neuromancer it was possible to enter and exit at will. Today’s matrix, the consensual mass hallucination we call money, is nearly impossible to exit. But like all illusions, there are those who control its workings for their own benefit. In the essays to come, I hope to pull the curtains aside just a bit for those who are curious about this cornerstone of life, liberty, and the pursuit of happiness.
Posted by Silver @ 08:27 PM CST