We will never see an end of ructions, we will never have a sane and steady administration until we gain an absolutely clear conception of money. I mean an absolutely not an approximately clear conception.
I can, if you like, go back to paper money issued in China in or about A.D. 840, but we are concerned with the vagaries of the Western World.
1. MEASURE OF PRICE. Let us be quite clear. Money is a measured titled or claim. That is its basic difference from unmeasured claims, such as a man's right to take all you've got under wartime requisition or as an invader or thief just taking it all. Money is a measure which the taker hands over when he acquires the goods he takes. And no further formality need occur during the transfer, though sometimes a receipt is given. The idea of justice inheres in ideas of measure, and money is a measure of price.
2. MEANS OF EXCHANGE. Money is valid when people recognize it as a claim and hand over goods or do work up to the amount printed on the face of the "ticket," whether it is made of metal or paper. Money is a general sort of ticket, which is its only difference from a railway or theatre ticket. A railway ticket is a measured ticket. A ticket from London to Brighton differs from one for London to Edinburgh. Both are measured, but it miles that always stay the same length. A money ticket, under a corrupt system, wobbles. For a long time the "public" has trusted people whose measure was shifty. You will hear money called a "medium of exchange," which means that it can circulate freely, as a measure of goods and services against one another, from hand to hand.
3. GUARANTEE OF FUTURE EXCHANGE. We will have defined money properly when we have stated what it is in words that can NOT be applied to anything else and when there is nothing about the essential nature of money that is omitted from our definition. When Aristotle calls money "a guarantee of future exchange" that merely means that it is an undated ticket that will be good when we want to use it. Tickets have sometimes stayed good for a century. When we do not hand over money at once for goods or services received we are said to have "credit." The "credit" is the other man's belief that we can and will some time hand over the money OR something measured by money.
Most men have been so intent on the individual piece of money as a measure that they have forgotten its purpose, and they have got into inextricable muddles and confusions regarding the total amount of money in a country.
A perfectly good hammer is useless to pick your teeth with. If you don't know what money is for, you will get into a muddle when using it, and still more will a government get into a mess in its "monetary policy."
Statally speaking, that is from the point of view of a man or a party that wants to govern justly, a piece of money is a ticket, the country's money is a mass of tickets for getting the country's food and goods justly distributed.
The job for a man today who is trying to write on money is not to say something new, it is simply to make a clear statement about things that have been known for 200, and often for 2,000 years.
You have got to know what money is for.
The aim of a sane and decent economic system is to fix things so that decent people can eat, have clothes and houses up to the limit of available goods.
Take money in such a system as a means of exchange, and then realise that to be a just means of exchange it must be measured.
What are you going to use to measure the price of anything? An egg is an egg. You can eat it (until it goes bad). Eggs are not all the same size, but they might serve among primitive people as an approximate measure.
Unterguggenberger, the Austrian monetary reformer, used work as a measure, "Arbeitswert," 10 schillings' worth of work. That was o.k. in a mountain valley where everyone could do pretty much the same kind of work in the fields.
Charlemagne had a grain measure, so many pecks of barley, wheat or rye worth a denar, or put it the other way on. The just price of barley was so much the peck.
In 796 A.D. it was 2 denars.
And in 808 A.D., it was 3 denars.
That means that the farmer got more denars for the same quantity of barley. Let us hope that he could buy more other goods with those denars.
Unfortunately the worth of all things depends on whether there is a real scarcity, enough or more than can be used at a given time.
A few eggs are worth a great deal to a hungry man on a raft.
Wheat is worth more in terms of serge in some seasons than in others. So is gold, so is platinum.
A single commodity (even gold) base for money is not satisfactory. (Emphasis mine.)
State authority behind the printed note is the best means of establishing a just and honest currency.
The Chinese grasped that over 1,000 years ago, as we can see from the Tang state (not bank) note.
Sovereignty inheres in the power to issue money and to determine the value thereof.
American interests hide the most vital clause in our constitution. The American government hasn't, they say, the right to fix prices. But it has the right to determine the "value" of money and this right is vested in Congress. This is a mere difference in legal formalities and verbal arrangements. The U.S. government has the right to say "a dollar is one wheat-bushel thick, it is one serge-foot long, it is ten gallons of petrol wide."
Roosevelt and his professors were on the right line with their commodity dollar. But the hooeyed and smoke-screened and dodged the problem of having enough tickets to serve the whole people, and of keeping those tickets moving.
There is nothing new in creating money to distribute wealth.
If you don't believe the Emperor Tching Tang issued the first national dividend in B.C. 1766 you can call it something else. It may have been an emergency dole, but the story will at least clear up one muddle. The emperor opened a copper mine and issued round coins with square holes and give them to the poor "and this money enabled them to buy grain from the rich," but it had no effect on the general shortage of grain.
That story is 3,000 years old, but it helps one to understand what money is and what it can do. For the purpose of good government it is a ticket for the orderly distribution of what is available. It may even be an incentive to grow or fabricate more grain or goods. But it is not in itself abundance.
The term "inflation" is used as a bogey to scare people away from any expansion of money at all.
Real inflation only beings when you issue money (measured claims) against goods or services that are undeliverable (assignats of the French Revolution issued against the state lands) or issue them in excess of those wanted.
That amounts to saying: two or more tickets for the same seat at the same time, or tickets in London for a theatre performance tonight in Bombay, or for a dud show.
Money can be expended as long as each measured claim can be honoured by the producers and distributors of the nation in goods and services required by the public, when and where they want them.
It is useless to talk of economics or to listen to talk about economics or to read books on the subject until both reader and writer know what they mean by the half-dozen simplest and most necessary terms most frequently used.
The first thing for a man to think of when proposing an economic system is: What is it for?
And the answer is: to make sure that the whole people shall be able to eat (in a healthy manner), to be housed (decently) and be clothed (in a way adequate to the climate).
The Left claim that private ownership has destroyed this true purpose of an economic system. Let us see how ownership was defined at the beginning of a capitalist era during the French Revolution.
OWNERSHIP "is the right which every citizen has to enjoy and dispose of the portion of goods guaranteed him by the law. The right of ownership is limited, as are all other rights, by the obligation to respect the rights of others. It cannot be prejudicial to the safety, nor to the liberty, nor to the existence, nor to the ownership of other men like ourselves. Every possession, every traffic, which violates this principle is illicit and immoral." -- Robespierre.
The perspective of the damned XIXth century shows little else than violation of these principles by demoliberal usurocracy. The doctrine of capital, in short, has shown itself as little else than the idea that unprincipled thieves and anti-social groups should be allowed to gnaw into the rights of ownership.
This tendency "to gnaw into" has been recognised and stigmatised from the time of the laws of Moses and he called it neschek.
And nothing differs more from this gnawing or corrosion than the right to share out the fruits of a common cooperative labour.
Indeed USURY has become the dominant force in the modern world.
"Moreover, imperialism is an immense accumulation of money capital in a few countries, which as we have seen, amounts to 4 or 5 thousand million pounds sterling in securities. Hence the extraordinary growth of a class, or rather a stratum, or rentiers, i.e. persons who live by 'clipping coupons,' who take absolutely no part in any enterprise, and whose profession is idleness. The exportation of capital, one of the most essential economic bases of imperialism, still further isolates this rentier stratum from production, and sets the seal of parasitism on the whole country living on the exploitation of labour of several overseas countries and colonies." (V.I. Lenin, quoting Hobson, in Imperialism the highest stage of Capitalism.)
The only people who do not seem to have read and digested this essay are the British Labour Party and various groups of professing communists throughout the Occident.
Some facts are now known above parties, some perceptions are common heritage of all men of good will.