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The Maelstrom of Money

By John Taylor; 2008 Apr 11, 3 Jalal, 165 BE

 

A few days ago at the end of our daily Baha'i class, Silvie engaged me in a spontaneous dialog about finance. She offered the following proposition: "There are only three ways to make money, you can steal it, you can earn it, or you can inherit it." I responded,

 

"There is a fourth way. You can scan a ten dollar bill into the computer and print out as many copies as you want. Unfortunately, that is illegal; it is known as counterfeiting. But it would be perfectly legal to print out your own money, as long as you make it clear that it is yours. For example, Tomaso can print out his own "Tommy bucks," or Silvie her own "Silvie kopecks." That would be perfectly acceptable if your personal money did not resemble government-issued cash.

 

"Of course the value of your Tommy buck would depend on how well people trust him, whether he is known to be reliable, responsible and not so intemperate as to print out more Tommy bucks than necessary. As long as faith in him remains steady and his bucks are valuable and used, his currency will hold its value. Many organizations print their own money or partial money, known as coupons. Cooperatives and local communities sometimes print money as a way to encourage bartering and local spending. Here in Canada many establishments other than the stores accept Canadian Tire money."

 

The kids and I were called away for other tasks, but after writing this I thought up more ways to make money. Way number five of making money out of nothing is to borrow it. If you have credit you can use borrowed funds to finance your work or enterprise. If that increases your net worth you can use the profits to pay the loan back. This is financial magic, wealth growing out of nothing.

 

A sixth way is to save what money you have and reinvest the interest, new money harvested from old. Compound interest is another kind of wizardry. Better still, God not only permits this audacity but requires it. We get the word "talent" from the money entrusted to the servants in the parable of the talents. A householder requires each servant to hold it while he is absent, and he rewards those who nurture it and punishes those who hoard it. Everything we own, physical and spiritual, is either growing or declining, an asset or a liability, and we are responsible for how well we manage it. As Holy Writ warns, "all things are of God." Financial management is a divine injunction.

 

So of the six ways to make money, four are required by divine law in one way or another, and only one, theft, is forbidden. Another, gifts, windfalls and inheritance, is out of our moral control, although we are told that it is "better to give than to receive." Thus we are under a holy injunction to grow through wise investment.

 

You cannot ignore Mother Nature, nor can you flout the parable of the talents. The American economy is a textbook example of why this is so.

 

Public life in America is marred by ineffectual democracy and systematic consumerist propaganda that degrades citizens into blind materialists and mere consumers. Paradoxically, then, the elevation of capitalism to a religion is rotting out the largest collection of capital in world history. Rendered passive and impotent, we renounce our divine calling as householders, servants and producers, and forget to save and invest. The only goal is to spend. In order to buy more freely, we are embroiled in a decade-long orgy of borrowing. Meanwhile government for ideological reasons is averse to governing, much less investing in infrastructure. Worse, government too is borrowing like there is no tomorrow.

 

Fortunately for Americans, their dollar is bolstered by the fact that it is the de facto world currency. The wealthy of many nations avidly purchase dollars as a safe haven. As long as confidence is strong the value of the dollar stays steady; there is no need to print more dollars, hence almost zero inflation. Now,  in spite of that markets have started dropping, millions of mortgages are foreclosed and lending institutions are failing. Every indicator says that the world's largest economy is on the brink of a second Depression. Needless to say, when America falls the rest of the world is not likely to remain standing. Before we topple, maybe now would be a good time to start thinking about an official world currency, one managed with the interests of all of us in mind.

 

The Guardian described our situation during the First Depression in its earlier, less severe stage as not unlike a descent into a boiling maelstrom:

 

"The world is moving on. Its events are unfolding ominously and with bewildering rapidity. The whirlwind of its passions is swift and alarmingly violent. The New World is being insensibly drawn into its vortex. The potential storm centers of the earth are already casting their shadows upon its shores. Dangers, undreamt of and unpredictable, threaten it both from within and from without. Its governments and peoples are being gradually enmeshed in the coils of the world's recurrent crises and fierce controversies. The Atlantic and Pacific Oceans are, with every acceleration in the march of science, steadily shrinking into mere channels. The Great Republic of the West finds itself particularly and increasingly involved. Distant rumblings echo menacingly in the ebullitions of its people." (Shoghi Effendi, Advent of Divine Justice, 87)