It is true that egalitarianism has given room to all opinions, which include the delusions of grandeur of those who would have it otherwise. We all imagine ourselves as heralds of Truth and kings in palaces if given the chance. In our lives we wish for a chance to assume a greater role – an opportunity to prove us worthy and to demand sacrifices of ourselves. Yet every day drifts by just like the previous.
Therefore I would be glad to make a restatement on the monetary system and the banks that run it.
National debts are increasing all around the civilized world, as does our wealth. But in the end the money ends up in the hands of those who make good use of it. This is not because of the generosity of our bankers, but because people look out for themselves. Our banks merely supply the money, and it is the individual’s choice to take out the money. The money will come to those who invest it wisely, and therefore it is in the end a fair system. It will have winners and losers, yet that is due to the unequal distribution of our inherent flaws, and our system – if is to produce wealth – requires inequality to thrive.
Nobody ever took out any loan against his will, and therefore banks cannot be blamed for national debts. There is not a true problem with our monetary system, because by investing it carefully, as is inevitably done on a free market by people with the right entrepreneurial spirit, we will produce economic growth that expands faster than our debts. If people would only stop trying to imitate the idols they see on MTV and started paying their rent, there would have been no housing crisis to begin with.
All of the previous is, of course, a joke. And not because there is not a single grain of Truth in it whatsoever. It is because people are so easily cowed into following images of what they would want the world to look like, instead of what it actually is. Once one achieves a certain degree of eloquence and familiarity with a wide variety of philosophical, economic and political positions, any outlook becomes defensible. We could pick a niche, crawl into that, boost that rhetoric, grow stronger, enrich ourselves. A smart person would probably do that.
And I would have, had I not started my philosophical self-education by reading Plato’s Politeia, and thus my ultimate allegiance is to Truth.
When I approached at the scene of the Occupy Wall Street protest I was greeted by a young man whom I estimated to be about my own age. He stammered slightly yet spoke with an airy tone of voice. He was thin and wore a military coat. I had arrived simultaneously with an elderly professor and an art salesman whom I met on the spot.
“What can I do in my personal life to improve the situation?” the salesman asked.
“The world’s too big to change on your own.” the youngster in the military coat replied, who was a representative of the protest-site. “This demonstration must become a snowball-movement,” he added, “and as long as these people are here, and arrive here, it can become that.”
I recalled my discussion with the elderly professor, who had mentioned Keynes. I had told him that the Keynesian model of economics is a typical tool of the Socialist parties. After all, in times of crisis everyone is afraid to lose customers or to become unemployed. Therefore, if the state throws money at the mass, it’s a good thing, because it will prevent unemployment and will keep the economy running.
However when it’s time to cut cost again, to save money which can be spent later, the Keynesians are never anywhere to be found. Too busy preparing the next elections, most likely.
I pointed out this mechanism in Keynesian policy to my history teacher when I was fifteen years old. He refused to acknowledge it. I understood then that no matter how many arguments and facts one has to back himself up, there will always be those who can never bring themselves to face the Truth. They refuse to acknowledge it even when you poke them in the eye with it. I learned long ago that arguments do not suffice as weapons.
Of course it is true in many countries that, if your bank goes bankrupt, the state pays you a substantial contribution. You are ensured in that sense. But where does the state get this money to begin with? It is issued by banks. Which means that governments must pay interest over that money. There is a substantial difference between how a government gets money and how a bank gets money.
The monetary system allows for the following exploit: Bank A can bring one dollar to another bank, bank B, which can then legally borrow that money to others ten or even fourteen fold. Bank B can bring that money to bank C, and bank C can do the same again to bank A. By that time the money has increased without any actual product or service of value having been added to the world. Someone who calls himself a “Conservative,” would surely recognize that as an outrage. I am convinced that Socialists, and probably even Liberals, are uneasy with it as well. Especially if you consider that both Adam Smith and Karl Marx acknowledged that productive labor added services and goods to the world.
For Smith and for Capitalism in the true sense, hard work is worthy of good pay. You put a bit of yourself in your enterprise, by studying and working you develop yourself as a person. Your labor is a part of your craftsmanship, of your expertise, of your pride. And you may ask a substantial reward to acknowledge the worth of whatever you sell. My cousin is a carpenter, “I would never want to be a teacher if my pupils would be completely spoiled and ungrateful.” he told me once; “When I’m constructing an attic for a house, even when it’s freezing, I know what I’m working on. What I’m creating. I can see what my labor provides and does for the world. There’s honor in my work.”
That, in the end, comes much closer to the spirit of conservation. That’s what I told the professor too: “The media does its best to paint the protesters as crack-using hippies, ridiculing them and smiling at them. With this image the bourgeois go to work, so proud of their own industrious work ethic. But meanwhile captain finance-Capitalism is smiling at them, as they are gambling away with the money of their pensions. Any money given to Greece goes straight into the pockets of bankers, who will otherwise confiscate Greek properties. And if they do so, an economic recovery will be equally impossible.
The bottom line is that my generation will suffer for it, because when I work, the government subtracts money for pensions. But we’re dealing with a declining population, and the part that reproduces the fastest is the least industrious. So who is going to pay for my pension?”
As I asked myself these questions – and not because I’m ‘selfish’ but because I possess common sense – the words of Hady came vividly alive to me: It means nothing to salute a flag if that flag represents a dying society. Likewise, it’s a sign of poor health to be well-adjusted to a profoundly sick society. Or, the words of Brett Stevens: “In the time of universal decline treachery may not be what it appears.”
He was hit by that, the professor, when he heard it, and he showed me a part of an article:
“An important part of our wealth is not owed to blood, sweat and tears – as it is supposed to be – but to debts,” says Edin Mujagic, monetary economist. Because to grow as fast as we did the past decennia, we had to spend large amounts of money. Very large amounts. We did not have that. But, no problem, because we found a solution; making debts. We agreed that the money that you spend now but in fact do not possess, can be paid back at any point in time. This can go well for a while, as long as you keep growing so that there comes a point in time when you will have the money. And it went well for a while. The biggest problem is that our monetary system became addicted to debt; because in order to make money to pay off our debts, we needed more money. This is where the banks come in, since for every bit of debt we owe to a bank, the bank is allowed to rent out more money, which gives us a chance to pay off our debts.”
However this means that the total debt always grows exponentially faster than anyone’s means to pay off that debt. I must stress this is not a conspiracy – this is something which spontaneously rose up because people recognized opportunities to game the system.
And now, our governments are trying to compete against that by creating a trust-funds that must ward off speculators. However we saw before that banks have ways of exchanging money through mutual promises to pay – which can legally be counted as owned capital. This is virtual capital that can increase infinitely without being tied up with anything substantial.
Yet the wealth of the world is tied up with physically limited labor and resources. A government gains money by either taking out credit from banks (thus increasing the total amount of interest which must be paid, which is debt) or by taxing property and services. Hence the money governments can extract is tied up with the physically limited world. Which means that the governments can’t compete against large-scale speculation. It’s a balloon that keeps flooding and nobody dares to puncture it. But everyone knows it will soon burst – they just don’t want to be around when it happens.
“Yeah but this must be some sophomore’s reasoning who’s been listening to liberal professors. So it can’t really be taken serious anyway. The methods that have been tried and tested for 300 years will surely prove that nothing is wrong with our monetary system.”
Except those were 300 years in which the West completely dominated the world and anyone who refused to play the game by their rules, excluded himself from taking any part in the wealth of nations. Let me just quote the words of Leo Strauss (a not so Liberal thinker):
“The West—in fact this country [United States] together with Great Britain and Germany—could have laid down the law for the rest of the earth without firing a shot. Surely for at least a century the West controlled the whole globe with ease.” – ‘Introduction’ to: The City and Man
I looked upon the prole-test and I saw an immigrant, it looked like he hadn’t slept for days, and had been stiff on speed. Some fat Bulgarian with a heavy accent and a safety-vest approached him and said: “I’m part of the protection here. Are you tired? Do you want to sleep? I’ll show you a tent please come along with me.” The immigrant followed him slowly with an absent gaze, while the Bulgarian pushed him on by pressing his hand into his lower back.
I saw a wanderer sleeping on a worn sofa, a bottle of vodka clutched firm in his hand. There were tiny specks of egg left in his beard.
“We’re democrats,” the young man in the military coat continued, “We don’t stand here because we’re looking for someone to blame. We’re here because we want to look at ourselves. We don’t want to put someone in charge. Because then we can all go home and blame someone else in case it doesn’t go as we expected.”
“You guys are trying to bring in too much stuff.” the art dealer retorted, “And you’re bringing in things that aren’t even relevant. At least not for the financial crisis. You want to solve hunger in Africa, you promulgate free love and romance, and you’ve put up anti-nazi signs. This all really has nothing to do with it – it’s distracting.”
“Yes it does,” the protester responded, “because banking is putting the world into a more competitive state. They’re withdrawing their money from the markets. They’re taking the humanity from our lives. If you want luxury, fine you have to work, I agree. But there should be a basic minimum for everyone. There shouldn’t have to be starvation on this planet.”
“First of all,” I replied, “you need leadership. What I see around here is a bunch of people smoking pot, each on their own island with their own ideas. It’s a bundle of private opinions you’ve gathered here. This is anarchy. If you want the world to be serious about your message – and I see many civilized people have traveled here just because they’re worried about the financial prospect of our civilization – you need a concise message. But you have none. You have a bunch of hippies who are only here because they have nothing better to do. People are whimsical, they’ll say they agree with this protest, because protesting is part of their self-assembled identity. To counter that whimsicalness, you need leadership. You need some form of authority. A bunch of individualized isles is not going to create a snowball effect.”
I knew what those protesters wanted. In the bottom of their hearts they weren’t seriously concerned about government debts. What they wanted was a government to provide for them. A sort of nanny. They wouldn’t demand much of that nanny – all they wanted was a smoke a day and they’d be satisfied. A society where one might dream about ideals, virtues and goals and visions, as long as they could be kept to the private room. Other than that, invisible forces would make it very difficult for you to do anything outside of routine. But officially, you wouldn’t be forbidden to. The very way De Tocqueville imagined human Greatness would one day come to an end.