Kitchen Table Talk 4
"In this sense, the theory of the Communists may be summed up in the single sentence:
Abolition of private property."
Manifesto of the Communist Party - Karl Marx and Frederick Engels
The Road to Serfdom
"Tell me my friends, how many of you own your house?" All hands go up around the table.
"How many of you own your house without a mortgage?" Half of the hands go up again.
"What would you say if I told you that you really do not OWN anything?"
"Oh Dave, there you go again. Off on one or your crusades," says Tony.
"Maybe, but its fun. Answer this question. How many people pay property taxes?" All hands go up.
"What happens if you refuse to pay your property taxes?
"The county government will eventually thrown you out and put your house up for auction, right? Then do you really own your house? I mean REALLY own it?
"The answer is NO, you do not TRULY own your home. If you owned your home then you could not be thrown out of your home, especially without a mortgage on the home.
"What has really happened here is that with the advent of the property tax, home owners have become analogous to feudal serfs. The serfs would rent the land from the noble, work the land, and pay a tax to the noble. Now, instead of paying the rent to the noble, you pay the rent to the state. The state has replaced the noble but the feudal system remains."
As Marx and Engels said "The French Revolution, for example, abolished feudal property in favor of bourgeois property."
I argue that the 20th century has abolished bourgeois property and replaced it with state property.
"Let’s look at another example. How many of you own a car?" All hands go up.
"What would happen if you were to drive your car without a license plate?"
"Why, you would be arrested Dave. But we need license plates to track cars if they are stolen, lost, in an accident, etc.," says Connie.
"I know. But why is it that you cannot drive your car without permission from the state?"
"Because we are trading in a little bit of our freedom for state protection," says Maria.
"But is it really state protection? Is filling out a stolen car report PROTECTING you? Is chasing the bad guys really protecting you? The answer is no, the state cannot protect you. It can only investigate and punish the criminal. Individuals must take it upon themselves to protect themselves.
"The real answer to the question is that you do not own your car. You are only driving your car with the blessing of the state."
There is obviously a lot more to this but the essay is getting long. The point is that what we think is our personal property is not our personal property. We are allowed to use state property, houses, land and cars, as long as we register this use with the state and pay the appropriate taxes, fees, etc. How many other pieces of "personal" property will we allow to be subjected to management by the state before we yell STOP?
We are no different that feudal serfs. Just better dressed.
As Marx and Engels said: "We Communists have been reproached with the desire of abolishing the right of personally acquiring property as the fruit of a man's own labor, which property is alleged to be the groundwork of all personal freedom, activity and independence."
And as Lenin said: "Communism is just socialism in a hurry."
Checks and Balances
There has been a lot written lately about the need for not just a return to a gold standard but a return to a gold/silver standard. I would like to offer up one more justification for this argument.
But first a little bit about myself. I started in the computer business at the age of 19 in 1977. By the mid-1990s I was consulting independently helping companies’ design and implement large-scale document imaging systems. These were complex multi-million dollar hardware and software systems designed to get control of the massive amounts of paper, enhance worker productivity and save the companies money.
The first part of the document imaging process is known as document entry. Here the documents are prepared, scanned, indexed and stored on optical platters in a "jukebox." The document entry process is crucial to the integrity of the system. Therefore, when designing such as system, a series of checks and balances has to be implemented to make sure than what comes out is equal to what goes in. Basically this meant counting pages and documents at each step in the process. Once this is implemented properly, it will always work because the computer is not capable of changing its instructions.
The US Government is a complex system. Three branches of government, executive, legislative and judicial, are designed to work together each with its own responsibilities and with checks and balances in place to assure (we thought) that no branch could become too powerful. The Founding Fathers tried to develop a system whereby a limited federal government with checks and balances existed but they left the ultimate check and balance to the citizens.
The monetary system of a nation is a complex system. There are savings accounts and demand deposit accounts, CDs, loans, and the possibility of various forms of money based on what the market determines to be money. What the market determines to be money may be very different from what the government determines to be money.
Because history has shown that the market and the government are usually at odds with one another over what should constitute money, the monetary system requires checks and balances. Like the system of government, this responsibility should be left to the citizens.
Over the years a bimetallic monetary system of gold and silver evolved. If we are going to use precious metals as the base of a monetary system, then this system needs its own checks and balances. A gold standard is a great idea but even gold needs something to balance it. This is where silver comes in and maybe even platinum.
No matter what is used for money, there must be checks and balances in order for the money to retain its purchasing power. Today we have no checks and balances in the monetary system. Private bankers control the cost of money, the interest rate, and they control the amount of money in the system. As others and I have pointed out before, it is not really "money" which we use, but credit as our medium of exchange. Today these central bankers are issuing credit at alarming rates. They can do this because we have removed all the checks and balances from the system. The decisions are now arbitrary1.
The citizens of today, who are the ultimate arbiters of what is money do not seem to care that their money is controlled by a small group of people. Do they also not care that their government is also controlled by a small group of people?
I think that someday soon they might start to care again. We can only hope and try to educate.
Fiat Money
Fiat n. An arbitrary1 order or decree. [< Lat., let it be done.]
"Here we are, back on our little island. All 8 of us. This time I am not the banker or the baker, I am the government.
"Since I happen to like these shiny little seashells on the beach, I hereby decree them to be money. We will use these sea shells, only the ones with the pinkish hue."
Oh well, you get the point. Since government has a monopoly on force, the government can decree whatever it wishes to be used as money. It can be seashells, pieces of wood, rocks, and coins minted from metal or pieces of paper with ink on them.
Any of them would fit the description of fiat money. Whatever the government says is money is money.
This system of pure fiat money can and has worked in the past. With no debt associated with the money and with little or no inflation the money can be used as a medium of exchange and as a store of value. This happened in 1760s America with "Colonial Script" and in England for 726 years with the "tally" stick2. The "tally" stick was nothing but pieces of wood used by the monarch for the payment of goods and then accepted as payment for taxes.
As Benjamin Franklin said of the Colonial Script, "We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one."3
Of course the problem with pure fiat is that is can be created at will and therefore loose value very rapidly. This happened in the US during the Revolutionary War with the "continental." Fiat-only money, including our credit-based fiat money, is only good as long as confidence in its value remains.
I added this section because I was very disappointed in the last exchange between Rep. Ron Paul and Chairman Alan Greenspan. Rep. Paul continually used the term "fiat money" when he should have used the term "fiat credit-money." The "credit" part is just as important to understanding our monetary system as the "fiat" part, and just as dangerous.
David Champeau
champeaudavid@yahoo.comApril 5, 2002
The best way to lose something precious, be it a good wife or your freedom, is to take it for granted.
1 – Arbitrary adj. 1. Determined by whim or caprice. 2. Not limited by law; despotic. [<Lat. arbitrariuis ]
2 -
http://www.xat.org/xat/history1.html3. Autobiography of Benjamin Franklin