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Title: Money and Your Freedom
Author: Laurance Labadie
Date: 1962
Language: en
Topics: money, Laurance Labadie, economics, letter
Source: Retrieved 1/8/2022 from https://c4ss.org/content/55687
Notes: Written to Ron and Laura Baker in 1962 and first appearing in publication in Mildred Loomis’s Go Ahead and Live! in 1965.

Laurance Labadie

Money and Your Freedom

Dear Ron and Laura:

Don has been East for a while and dropped in last night. Among other

things he brought me up to date on your thinking and plants. I knew that

my blast, when I was out to see you, would upset you. But I thought [it]

worth while if you could be prevented from getting deeper into the

economic rat race. Don showed me recent letters to and from you, and I

noted you wanted to do more thinking about it.

I’m willing to do this, but first I’d like to restate your predicament

as I see it. You’re in for a tough time either way—if you stay in and

bend to the status quo, or if you observe your scruples and step outside

of it. If you keep on “playing the game,” taking advantage of certain

expedients (government and otherwise), you might maintain a good income.

But it will come, directly or indirectly, from rent and interest. It

would be as if you were in a circle of persons each of whom filches from

his nearest neighbor. If they all filched in equal amounts it would be

the same as if they had not robbed in the first place. But in our

system, the rules are such that the filching is unequal. So it is tough

for those who come out short—and it’s tougher on those who don’t like

the filching.

Now you don’t want to be an exploiter, and you don’t want to be a part

of the military system. So you’re going to have a pretty difficult time

trying to make a living. I repeat that no one person is to blame for the

prevailing mess. It is our present institutional forms and methods which

are at fault. The inherent injustices of modern coercive institutions is

what traps everyone into earning their living in ways and for purposes

which any sane and intelligent person would consider nonsensical if not

indeed immoral.

So I’m interested in your present goal of an intentional community where

libertarian ideas might be practiced. As you can guess, I think this

would be only a drop in the bucket in comparison to the widespread need

for libertarian reform. But at least it is a step in the right

direction, and if you can achieve it, it will give you a good

environment—and it may encourage others to go and do likewise. As you

know, I consider what is called the ‘money’ problem very basic to

liberty so I’ll be glad to sketch here the issue as I see it.

Let us assume that in your hypothetical “city set upon a hill” each

individual and each family is now in equitable possession of their

portion of land. Now each produces what he wishes in goods like corn,

potatoes, wood, fruit, herbs; or in service like carpentry,

architecture, midwifery, teaching or psychological counselling. How will

they equitably exchange their time and energy?

You see, of course, that all commodities result from applying human

energy to land. Corn, potatoes, wood and fruit are different from land

in that they are the result of applying energy to land. The products

actually cost various amounts and quantities of human energy. If,

instead of producing from the land, some person chooses to process or

transport some product—or supply other needed services to the

community—he is merely offering his labor to others more directly,

without first mixing it with the land. But since he must have these

essential labor products (corn, potatoes, wood, fruit, etc.) his

services really represent, for him, some portion of those concrete

products. You see then how both goods and services are really extensions

of the human beings who produce them.

Let us suppose that you will find producing exotic herbs and teaching

music express your personality—or meet your needs. Therefore, how you

exchange your herbs or your music with others is very important to you.

If in the exchange you get something that you do not want, your goals

are not achieved. The opportunity to bargain on terms that satisfy both

you and the other, or others, with whom you exchange, is important to

all parties in the transaction. No party involved in this exchange can

do as well as you who are. No if ‘exploitation’ is built into a method

of exchange, you can see how it will distort freedom and equity. Let us

look at some different patterns or methods of exchange.

You said in a letter to Don that you liked to go into a modern market

and buy what you want. With your money you are making your own choices

to suit your needs, and with your purchases you are voting for those

products and encouraging some producer and transporter to continue his

work. You are really cooperating with them which is good, even though

you don’t know them. This is possible because of money. Money is a very

great invention. It becomes a tool by which we choose how we want to

achieve our goals.

But as you know, today money has some exploitive aspects. I remember

pointing out during our memorable visit that in our present money

system, only a certain group has the legal privilege of issuing money

and because of this they can control the supply and issue it on their

terms—at an interest rate which benefits them and exploits others. They

really loan money into existence on debt. Their money does not actually

represent specific goods, and this causes inflation, or the lowering of

the value of money. In addition, as I said to you earlier, the interest

charged to marginal borrowers helps set the price for all goods, and so

raises the price of everything you and others buy. Banks may loan out

eight and ten times more than is in their savings deposits, at rates

higher than they pay their depositors, so it becomes a very lucrative

practice for the bankers. These and other maladjustments are possible

because banking is a legal monopoly. The monopoly feature of money

injects enough negative aspects to counteract the advantages of

convenience and selectivity in the market which money gives you.

Many people, very understandably, want to eradicate the monopoly

feature. Some try to lessen the effect on themselves of a monopoly money

system by reducing the amount of money they use. The Labor Gift Plan,

2207, 150 Nassau St., New York City, is such a plan. Some people set up

a productive homestead and produce, instead of buying, many of their

services and most of their food. To the extent that they can do this

enjoyably, they are very wise. Other people are reviving the habit of

bartering commodity for commodity or service for commodity. I know

several people who pay their doctor’s bill in landscaping, or, who tutor

a child in return for butter and eggs. But barter is very clumsy and

time consuming in a complex society. Other people want no exchange

system at all. They put no evaluation on their labor or labor products.

This often occurs in the communities of total sharing where everyone

works as he is able; produces what he can, contributes to the pool and

takes out of the total product what he needs. The difficulty here is in

deciding what each one needs and who shall make the decision. If each

person makes it, I do not see that they have improved over some kind of

face to face bargaining. If a third party makes it, an element of

arbitrariness and authoritarianism comes into the picture.

As I see it, in this common pool, or ‘producing as they are able and

taking what one needs,’ everyone’s affairs are combined instead of

individualized. Some persons may thus become involved beyond their

wishes in getting the consequences of another person’s action, or their

failure to act. In such a system, a person may be protected from the

consequences of his acts and so be removed from the reality which could

help him to mature and become more responsible.

A third general type of exchange can be called complex barter.

A recent development in this group is Banks of Interchange in which

participating members do not use money. A member ostensibly “gives” an

object to another. Instead of selling it for money he accepts a receipt

from the “buyer” for an agreed value, and deposits this receipt with the

bank of interchange. He thus builds up a book-keeping credit against

which he can do business with others—issue receipts for goods he gets

from others in the system. The School of living can give information on

this.

In an older form of complex barter, an exchange medium called scrip is

issued. This is a piece of metal or paper which represents (i.e., is

based on and can be redeemed in) some actual stable product which is

widely acceptable and used. Scrip is much like a gift certificate. A

person has a certificate for a gift in a certain store. He doesn’t care

for this item, so he can exchange his gift certificate with someone who

does want it. Scrip is a gift certificate which has some general

acceptance. It is like the title to our house or car. Obviously we

cannot carry the objects around, but we can carry titles to them in our

pockets and in exchanging titles, we exchange the goods.

A Voluntary Exchange Association could help put this kind of exchange

medium into practice. It could issue scrip on acceptable goods as

generalized titles to actual products, thus, a group of people within an

area could make equitable exchanges. They would have the convenience of

an acceptable money medium with which to make selections in the quantity

and quality of goods and services they wanted. It would give the kind of

freedom in bargaining you like, and yet provide fairness for all

concerned in the exchange. Such a medium of exchange would permit the

infinite individuality among men. As Stephen Pearl Andrews said “it

would result in the equal sovereignty of each individual in that the

consequences of one’s actions would be assumed by himself. . . . The law

of genuine progress in human affairs is identical with the tendency to

individualize.” In this way a group of persons may “barter” not for

profit but merely to exchange the labor represented in the goods and

services.

This is all too brief a statement of this immensely important “public”

problem, which has been exposed many times, but about which most people

today are unaware or very confused. Two older books will help you see

how the present system developed: Delmar’s History of Monetary Systems

and Other People’s Money by former Associate Justice Brandeis. David T.

Bazelon describes today’s frightful and frightening mess in The Paper

Economy (1959, Random House).

For more traditional answers most people today are looking to Government

to issue and control circulating medium. Some feel that our complex

industrial system calls for the government to print money. Just print it

in amounts to equal and match the inexhaustible wealth which our

corporate and cybernated technology can turn out. With this they could

provide every person a government-guaranteed income, regardless of

whether or not he worked. This contented-cow philosophy resting on

government planning and support is unpalatable to one of my

individualist-anarchistic leanings. And don’t be afraid of that word,

anarchism. Individualist anarchism is an American product—from the

thinking of Lysander Spooner, Josiah Warren, Stephen Pearl Andrews, and

notably Benjamin Tucker. Dr. James Martin describes and discusses them

in his book, Men Against The State. These men proposed and developed an

economics based on contract and voluntary association in which each

person could grow and mature by getting the consequences of his own

acts. Individualist anarchists see that a truly free society has to

start with free and equal access to land and credit, with labor-created

products held as private property.

Silvio Gesell, a successful business man in Europe and South America,

developed and put into practice in the early 1900s, a combined land and

money system in a generally libertarian frame of reference. It is

described in his Natural Economic Order, available from the Free Economy

Association, 2618 East 54th St. Huntington Park, California. My own

concept of freedom in banking, based on Proudhon’s ideas, is in Property

and Trustery, from the School of Living. I hope you can sometime locate

a small book by Charles Dana, once editor of The New York Sun, called

Proudhon’s Bank of the People.

I will try to answer any questions you’d like to send on, and I

certainly want to keep in touch with you. Remember I am your friend,

Larry Labadie