WRITING to Thomas Jefferson in 1787, John Adams said, "All the
perplexities, confusion and distress in America arise from downright ignorance
of the nature of coin, credit and circulation." Downright ignorance is the
proper term, and it still abides with us. It applies to our academies, our
counting houses, our legislatures, and the man in the street. We do not know
what money is, what its virtues or vices spring from, what are the natural laws
governing it, nor its influence in determining the trend of a people toward
democracy or dictatorship.
Two forces are now pressing for its solution. One is the increasing
specialization of labor, which requires man to make more exchanges in ratio as
he reduces his self-sufficiency. In other words, the more man reduces his part
in the production of the whole product, the more exchanges are necessary and
hence the greater use of money. The other force making the solution of the
money problem imperative is the growth of dictatorship and the contraction of
democracy in ratio as governments exert the money issuing power.
Herbert Spencer, writing in Social Statics, said:
That laws interfering with currency cannot be enacted without the reversal of
state duty, is obvious; for either to forbid the issue, or enforce the receipt
of certain notes or coin in return for other things, is to infringe the right
of exchange—is to prevent men making exchanges which they otherwise would
have made, or is to oblige them to make exchanges which otherwise they would
not have made.
And further:
So constantly have currency and government been associated, so universal has
been the control exercised by the law givers over monetary systems, so
completely have men come to regard this control as a matter of course, that
scarcely anyone seems to inquire what would result if it were abolished.
Perhaps in no case is the necessity of state superintendence so generally
assumed, and in no case will the denial of that necessity cause such surprise.
In Spencer's day, the specialization of labor and the need of free monetary
exchanges had not been so highly developed as in our day. His challenge to
government money power therefore passed unnoticed. But we must heed it now. Let
us dare to question the propriety of government money power—and let us
speculate on "what would result if it were abolished.”
Another Englishman, Arthur Kitson, writing in 1894 in A Scientific Solution of
the Money Question, said:
To the average man, a currency that has not the authority or stamp of government
is inconceivable; and yet there is no good reason why communities should not
create and control their own currency without the aid or intervention of
governments, just as they incur debts or liabilities without such aid or
intervention.
Is it true that, in the language of Spencer, "to forbid the issue, or
enforce the receipt of certain notes or coin is to infringe the right of
exchange?" And is it further true that, in the words of Kitson,
"there is no good reason why communities should not create and control
their own currency?"
Freedom of exchange is now so imperative, and centralization of political power
so threatening, that it behooves us to inquire whether our economic and
political ills and the threat to peace are not due to misplacement of money
power in the state—and whether and how that power might better be
exercised by the people for progress, prosperity and peace.
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