More on Money
By John Taylor; 2008 July 04, 11 Rahmat, 165 BE
Money and language have always mystified me. When Silvie and Tomaso ask what money is I unhesitatingly answer that I do not have the slightest. Last night I re-watched with them on YouTube the animated feature "Money as Debt" that we have been discussing here the past several days. In my experience, if it is an animated film, these kids will watch it, no matter how abstruse. This thing is nothing more than a complex lecture illustrated by desultory moving clip art and rolling quotes, but it does not matter. They lapped it up.
I hoped that this might answer their questions about money. It did, in spades. By the time it was over eight-year-old Thomas had grasped enough of the financial system to have set up his own lending institution with an upside-down cardboard box. He offered promissory notes based on a down payment of a dime in return for a signed agreement to pay a dime a day for ten days. By the time he was asleep he had got his mother and sister in on the deal and had a float of thousands of credits based on an installment plan of three dollars. How he did it, I do not know. As I say, I do not understand money. Thomas proved that an eight-year-old can flummox me completely in less than an hour.
The most important thing to remember is that money is not printed by governments but under the current system is created by the closed lending of funds in and among banks and trusts. The more borrowing goes on, the more money is spawned.
As the movie points out, this is not well understood. And small wonder most people do not understand; we have twelve years of science and math training in primary and high school, but in most cases there is nary a mention of what money is or where it comes from. Yet, in spite of the fact that money and lack of it dominate our lives, we show very little curiosity and are willing to put forth very little mental effort to understand it.
Before retiring for the night, despairing of ever grasping this mystery, I posted on the Badi' Blog a song that keeps going through my head, "It's Money That Matters." I may not know what it is, but I know that it matters.
For most of the suffering souls in the world right now, the money question is a question of despair. And the world is in an increasingly precarious situation, what with the petroleum delivery system strained to the limit. One shock, anywhere in the pipeline, will send oil prices soaring into the stratosphere. Then the money question will be one of brute survival, even in rich lands.
The Money as Debt movie expresses the opinion that governments should stop the fractional reserve system of raising money through private debt. There are other ways of raising funds that are better suited to a sustainable economy, including raising funds based upon infrastructure. They also suggest that a quick way to reform the entire international financial system would be to completely eliminate private lending to government. Most tax money goes into heavy debt and interest charges paid out to private lenders. Why? If we only knew what is in our own interest, our representatives would end this ongoing swindle and raise our own funds in different ways.
One consideration the filmmakers overlook is that this dependency of government on debt to private banks has the advantage of simplicity. If everybody uses the same fiat currency, it is easy to assess and calculate income taxes. Centralized funding to central governments depends upon this system. I was talking to a small businessperson lately about "barter bucks." He told me that this alternative dollar system was working well for some area entrepreneurs until the taxman came down on them. He ruled that barter bucks count the same as "fiat currency" as far as taxation is concerned. This ended the labor and services bartering scheme for all but a few private individuals. However, as the film points out, local bartering has advantages of security; it is inflation and recession proof, and would be our only resort in the event of a world financial meltdown.
The question that springs to mind is: would local bartering and so-called "green bucks" seem as inimical to the localized financial system of the Master's proposed rural storehouses? Or would the security advantages outweigh any perceived loss of revenue? I cannot answer that question off the top of my head but it seems to me that we could fairly easily if we set up games and simulations of storehouses. The Master's scheme is very simple. He described it in a few paragraphs. It should be quite easy to try it out in a computer simulation, or even a board game like "Monopoly."
The complication is that, locality-oriented as this scheme is, it is clearly intended to fit into a world system united by a single world currency. We can presume that unlike national currencies, a world currency would not be threatened by bartering and other experimentation at the local level. While most financial activity would take place locally, the world currency would allow for coordination across borders far beyond what presently is feasible. Shoghi Effendi wrote that in future,
"The economic resources of the world will be organized, its sources of raw materials will be tapped and fully utilized, its markets will be coordinated and developed, and the distribution of its products will be equitably regulated... A world federal system, ruling the whole earth and exercising unchallengeable authority over its unimaginably vast resources, blending and embodying the ideals of both the East and the West, liberated from the curse of war and its miseries, and bent on the exploitation of all the available sources of energy on the surface of the planet, a system in which Force is made the servant of Justice, whose life is sustained by its universal recognition of one God and by its allegiance to one common Revelation -- such is the goal towards which humanity, impelled by the unifying forces of life, is moving." (World Order, 204)
In contrast with these grand schemes operating on a world level, local storehouses would focus on one thing: assuring common welfare. Their prime mandate is to assure that, in Shoghi Effendi's words,
"Destitution on the one hand, and gross accumulation of ownership on the other, will disappear..."
However, the "gross accumulation of ownership" would be only partly addressed by storehouses. The great Baha'i scholar Mirza Abu'l-Fadl saw the inheritance provisions of the Aqdas as a major part of the solution. Let us close with that, followed by a caution by the Guardian about how far we can go in putting the "Baha'i" into Baha'i economics. (I would appreciate if some math literate reader explained what Abu'l-Fadl means by the number 2520 being the "lowest number comprising the integral fractions of 9")
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Avoiding Gross Accumulation of Family Fortunes
From: Mirza Abu'l-Fadl, The Brilliant Proof
One of the abstruse problems of social philosophy is the prevention of monopoly and wealth control by certain individuals. This subject has been discussed by the philosophers of the world for many years. The wise men of
But if a soul should ponder and reflect upon the divine institution concerning the question of heritage and the modus of operandi of the distribution of legacies among heirs according to the laws of this Dispensation, he will see that this all-important problem has been solved in the simplest manner. The distribution of wealth among the nations has been established according to the best method.
Inasmuch as the matter of death among mankind is an unavoidable event, if the distribution of the estate left by those who ascend to God should be effected according to this divine recommendation, it will be impossible for wealth to be accumulated by the few or for any particular family to exercise a monopoly, leaving others deprived and afflicted by poverty and want. For the Mighty Lawgiver has dealt with this important affair in this manner: He has divided the heirs of the deceased into seven classes, including teachers, who are the spiritual fathers of enlightened individuals in the world of humanity. The heritage is divided according to the number 2520, which is the lowest number comprising the integral fractions of nine. Under this division the seven classes eligible to legacies are as follows:
First: Offspring
Second: Wife
Third: Father
Fourth: Mother
Fifth: Brother
Sixth: Sister
Seventh: Teachers
The nearest relatives are arranged the closest. Each class receives its due according to the number sixty, which runs down through all. He has decreed that these seven classes mentioned will come equally into possession of their legitimate rights, each receiving his (allotted) share from this division. When the people of insight reflect upon that which has been recorded they will see that with this command in operation wealth will never be monopolized by a limited few and no individual through sheer forceful skill will come into possession of another's wealth. Wealth will always be in circulation among all. All mankind will inherit from one another and all will be benefited from this capital. Yea, when a person reflects upon the distribution effected in the Book of Bayan by the Bab, he will conclude that such a division mentioned therein may affect the interest of the offspring, but the manner in which it is provided for in the Book of Aqdas, through the Supreme Pen (of Baha'u'llah) wherein the heritage of the children is multiplied, dispels this fear. To all people of insight it is evident that in this Most Great Cause all the means of comfort for the nation have been provided and a plan of readjustment for the affairs of the people of the world from all standpoints has been established. That which has been stated here will suffice to answer in brief the objections of Mr. Easton and those like him.
Mirza Abu'l-Fadl, The Brilliant Proof, pp. 34-36
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Regarding Problems of Ownership, Control and Distribution of Capital
“Regarding your questions concerning the Baha'i attitude on various economic problems, such as the problem of ownership, control and distribution of capital, and of other means of production, the problem of trusts and monopolies, and such economic experiments as social cooperatives; the Teachings of Baha'u'llah and 'Abdu'l-Baha do not provide specific and detailed solutions to all such economic questions which mostly pertain to the domain of technical economics, and as such do not concern directly the Cause.
True, there are certain guiding principles in Baha'i Sacred Writings on the subject of economics, but these do by no means cover the whole field of theoretical and applied economics, and are mostly intended to guide further Baha'i economic writers and technicians to evolve an economic system which would function in full conformity with the spirit and the exact provisions of the Cause on this and similar subjects.
The International House of Justice will have, in consultation with economic experts, to assist in the formulation and evolution of the Baha'i economic system of the future. One thing, however, is certain that the Cause neither accepts the theories of the Capitalistic economics in full, nor can it agree with the Marxists and Communists in their repudiation of the principle of private ownership and of the vital sacred rights of the individual."
(From a letter written on behalf of Shoghi Effendi to an individual believer, June 10, 1930, Lights of Guidance, #1862, p. 548-549)
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