The Case for Natural Money

Critical Article: The Case for Natural Money



Ethics of Money Production

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Money and Scripture

There was a time not so long ago when I would read a verse that talks about money and quite easily correlate that term with the cash in my pocket or the balance in my accounts. After all, that is what we have been taught for a few hundred years.

But what if the word translated money in Scripture were actually something else?

Would this be important for us to understand?

What if our definition and understanding of money is completely different from the actual and intended meaning in Scripture? If there is a difference in meaning, should this difference be clarified?

We all know words take on new and different meaning over time and across cultural and generational boundaries...

Let's look at two passages of Scripture, one in the Old Testament and one in the New Testament:

Regarding Genesis 43:21 I want to illustrate three points.

1) Between the two translations noted below you will notice that one renders the term money and the other the term silver. This helps to illustrate that it is no great leap to challenge the proper English rendering of this underlying Hebrew word.

2) The underlying word is KSP or KeSeP, which is the word for silver. (not money)

3) This verse also has the added feature of specifically referring to the weight of the money, which is actually the weight of the silver. It is the actual quantity of a commodity that is being referenced and traded.

Genesis 43:21 and it came about when we came to the lodging place, that we opened our sacks, and behold, each man’s money was in the mouth of his sack, our money in full. So we have brought it back in our hand. NASB95

Genesis 43:21 But at the place where we stopped for the night we opened our sacks and each of us found his silver—the exact weight—in the mouth of his sack. So we have brought it back with us. NIV

Next let's look at a New Testament example.

1 Timothy 6:10 For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs. NASB95

We see here that the underlying Greek word is rendered love of silver.

What if English translations of Scripture used the word silver every place that the original languages used a word for silver? You know what I mean... Precise and accurate translation from the original language into equivalent terms currently in use today.

If one read silver instead of money each time the original text said silver, one would have cause to wonder about the difference between silver and the stuff we call money today.

The money spoken of and used in the Bible was honest money that, for its part, preserved everyone's property rights. Our money today quite literally causes fraud and theft every single day.

Even if we forget that Scripture says silver, not money, should we really be using the same term for both for honest money from Scripture and the destructive, dishonest, costless money in use today?

Ban guns and only the criminals will have guns

The second amendment is not about hunting.

A free people ought not only to be armed and disciplined, but they should have sufficient arms and ammunition to maintain a status of independence from any who might attempt to abuse them, which would include their own government. - George Washington

When the people fear their government, there is tyranny; when the government fears the people, there is liberty. - Thomas Jefferson

Goodbye Freedom, Hello Dictator

Are you ready for a New Constitution? Well its coming, if not now then soon, unless citizens of the several states find a way to stop it.

This Phyllis Schlafly article should be widely read. There are people and organizations who maintain and pursue a goal to overturn the USA as a free and sovereign nation. Considering where we stand today as a nation, a constitutional convention would provide the perfect working platform to swiftly destroy our current form of government.

By the way, "USA" refers to the United STATES of America, not a single central government with the label "USA". The reference is to a group of sovereign states who agreed to maintain a central, federal government which was to be subservient to the states and the people. We lost that long ago.

The primary tool used to destroy us, which we stupidly handed over, was our productivity, transferred through the process of inflation. Our labor has funded our enemies; the enemies of freedom; the enemies of the United States.

What have we done?

The State is Wise and the Market is Stupid

George F. Will recently wrote:

In his wise book "Capitalism, Democracy & Ralph's Pretty Good Grocery," John Mueller, an Ohio State political scientist, notes that John Maynard Keynes's central theme, according to his biographer Robert Skidelsky, was that "the state is wise and the market is stupid." Mueller continues: "Working from that sort of perspective, India's top economists for a generation supported policies of regulation and central control that failed abysmally -- leading one of them to lament recently, 'India's misfortune was to have brilliant economists.' " Many of them were educated in Britain, by Keynes's followers. In America today, everyone agrees that the president-elect's economic team is composed of brilliant economists.

I don't know anything about John Mueller, but he is correct in noting John Maynard Keynes' central theme: the state is wise and the market is stupid.

In other words, Keynes operated as though government, politicians, bureaucrats, laws, regulations, favored elites etc. are wise.

And likewise, Keynes believed the market (if you are a producer, that means you) is stupid.

Maybe Keynes was right. Clearly the free market is more productive, efficient, just and stable than any economic order government will ever be associated with engineering and thereby perverting and destroying.

However, someone, working on behalf of "government", has made choices which enable an elite few to pillage the producers. Maybe Keynes was part wrong; "the government" is certainly not wise. Interventionist government is sly, coercive, deceptive and destructive. But Keynes may have been right that the market (that's us) is stupid.

Even if you are one of those persons who know how the game is played, meaning you know how to operate so that you are pillaging your neighbors rather than being pillaged, your knowledge is useless unless you keep playing the game. When you stop pillaging, you are pillaged. Even as you go about your business of accumulating wealth, you participate in a system that can only move closer to destruction. Anyone who knows the truth and remains silent is helping to produce for their children and fellow citizens a legacy of doom and destruction.

I am an ardent supporter of capitalism and wealth. I strongly oppose theft through currency debasement, otherwise known as inflation. I strongly oppose forced income redistribution.

Benchmarking by the ravages of inflation and burgeoning government, we are productive, efficient and stupid.

Not to speak poorly of mules, but we seem to just bear up silently under the load like an old mule.

What happened to men and women of honor?

Where are our leaders?

Why have the citizens of this nation (and many other nations) been silent for nearly one hundred years while our homes, businesses, property and heritage are pillaged and destroyed through the process of inflation?

It makes me angry to think about those questions.

Comparing Keynes and the Austrians

First let us note that we labor under the ideology of the Keynesian school of economics. John Maynard Keynes is the system’s namesake and is the "highly revered" economist and intellectual who is credited with bestowing on us our current system.

We begin by comparing two facets of the Keynesian school of thought to the Austrian school of thought. Our first item involves the respective views of the “crisis”.

In the Keynesian view the current crisis should never occur because the central banking system, i.e. The Federal Reserve System, has the sophisticated tools necessary to prevent any such crisis from occurring. Consider Bernanke’s recent comments about the control the Fed has over the economy.

“Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

(Ben Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here” [Remarks before the National Economists Club, Washington, D.C., 21 November 2002])

And when things do break, the apologists have been trained to suggest that it would really be worse if the Fed hadn’t saved us.

“David Henderson and Jeff Hummel have managed to ruffle quite a few Austrian feathers with their recent Cato briefing paper, and no wonder: that paper claims not only that Alan Greenspan's Fed was innocent of any role in encouraging the housing boom but that Greenspan had actually managed to do something Austrian monetary economists have long claimed to be impossible, namely, solve the monetary-central-planning problem. Greenspan, by their assessment, managed to mimic the kind of money-demand accommodating money supply growth that would occur under free banking, thereby achieving (according to their paper's executive summary) ‘a striking dampening of the business cycle.’”

Guilty as Charged Mises Daily Article by George A. Selgin

Never mind the factors which systemically dampen the business cycle like JIT inventory, changing ratios of non-cyclical sectors in the broader economy, and foreign trade and dollar holdings. Any dampening of the business cycle is because of the stellar performance of the Fed, or so we are told.

Fundamentally the Keynesian view says there should not be any more business cycles and those in the past were caused by the Fed having inadequate “tools” to prevent the crisis. The answer has always been more power in the hands of the Fed.

The Austrian view, on the other hand, predicts, explains and offers solutions to the Business Cycle.

The Austrian view recognizes that Fractional and Fiat money, enjoying legal monopoly through the coercive power of government, causes money to be unrealistically cheap. Cheap money leads to malinvestment because the signal given by abundant, low cost money is that there are real savings present which will sustain longer term or lower margin investments. Because creating Fiat or Fractional money ex nihilo is not the same as creating real savings, the investments are overpriced and are not sustainable. In addition, the explanation shows how and why the cheap money primarily affects capital goods.

The solution involves several components, but in simplest form, one could say the Austrian view is that natural money as private property without government intervention essentially solves the problem.

Now we move on to our second comparison.

The Keynesian view begins with the primacy of the state and therefore seeks to justify state action, thereby rendering a fragmented and conflicting series of economic models. Suffice it to say; when one needs to justify actions in any context, something is amiss. In addition, the lack of a single, unified economic model suggests that earning the accolade of being a credible “school of thought” should be out of reach. Instead Keynesianism is glorified. Such is the world in which we live…

The Austrian view, on the other hand, begins with the primacy of the individual in economic and social affairs. As such, the effort is made to observe and seek an accurate and true explanation of economics and related social order. The result is a single, unified economic model at its core.

Foundations of Thought

On one hand there is Keynes who says the business cycle should never exist because the central bank has the "tools" to prevent a crisis and in all cases Keynesians begin by justifying state actions.

On the other hand there are the Austrians who predict, explain, and resolve the business cycle and, with a unified core model, rigorously explain specific realities of economic and social order.

Who should we believe?

The Keynesian school of thought which is constantly out of line with reality and is clearly destructive to liberty and private property?

Or the Austrian school of thought which matches reality and identifies principles which protect liberty and property...