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Title: Money and Politics Author: Laurance Labadie Date: 1933 Language: en Topics: money, money monopoly, decentralization, Laurance Labadie Source: Retrieved on 1/27/22 from https://c4ss.org/content/55882 Notes: Originally written for the second anarchist journal named Mother Earth. and, in 1933, published therein by John G. Scott and Jo Ann Wheeler.
Money, especially credit money, is undoubtedly one of the greatest of
cooperative discoveries. Without it no great specialization of labor
seems possible, except under an all-inclusive state control of industry,
and even here something of its nature would be necessary to maintain a
check of and on consumption
Money is inconceivable without at the same time thinking in terms of a
standard of value, and, surely, a basis of issue. To say that it is a
“pernicious delusion that there must be something in back of money” is
to utter an absurdity. Money, being a claim on wealth, must be based on
something more substantial than mere promises in order to be sound,
stable, or trustworthy. And this something is tangible wealth, i.e.,
anything of value which is not liable to quick and severe depreciation.
It is also as absurd to think that under a really sane monetary system
hoarding is an evil causing hard times as to say that a man who has
saved for a rainy day will suffer for it. Hoarding being merely
pos[t]poned consumption, there is no warrant in reason in believing that
it can fundamentally change either the production or distribution of
wealth. When it is understood that the natural limit of credit money is
the amount of wealth on which it is based, it is an obvious mistake to
think that hoarding can curtail the amount of needed currency as long as
there is any unmonetized wealth.
Another “pernicious delusion” is that the “proper increase or withdrawal
of currency” can affect its value or “stabilize” it. Money is a promise
to pay. If Smith has 1000 bushels of wheat and issues 100 promises each
for 1 bushel against it, how can it affect the value of those promises
should he issue 100 more? The value can only decrease if he over-issues,
i.e., when there is not “something back of (his) money.” “Unstability”
is a characteristic of a faulty monetary system.
After all, what is the money problem? It is to furnish a sound medium of
exchange at a low cost. Interest has been too often proved to be an
artificial phenomenon and the main cause of exploitation. It may be
caused by two things, an insufficiency of money or the control of its
issue in few hands. Today it is caused by both, but principally the
latter. The actual labor cost of banking is probably less than one-half
of one percent. All charges over this is pure interest, in other words
robbery and swindle.
As far as we know, gold, more than anything else, possesses the ideal
qualities of a standard of value. It is comparatively stable in value,
useful, durable, easily recognizable, uniform in quality, can be
subdivided without impairing its value, and has comparatively great
value in small quantities. But it makes a very poor basis of issue
measured in terms of gold but should have an equal opportunity with gold
to serve as a basis for the issue of money.
Today we have the spectacle of those privileged individuals, the owners
of gold, thru the Federal Reserve System receiving interest from 8 to 15
times their original capital. When it is understood that money interest
is the main cause of business profits, the enormity of this swindle is
manifest. It is vital in understanding economic processes to
differentiate between the industrial and financial fields. The financial
sphere is almost pure leachery. Banking interests are inevitably
gobbling up and gaining control of industry.