THIS BOOK PRESENTS a new concept of money, one that promises
greater freedom and a broader base for democracy. It points up
the futility of the political ballot—and the facility of the
monetary 'ballot'—for the attainment of human aspirations. It
elucidates an evolution that has progressed unobserved since the
inception of monetary media and that is now coming to an end in
what appears, on the surface, to be a world calamity.
What man does not understand, he fears. But today's disturbances,
which many take to be omens of approaching adversity, are in fact
signs of a departing perversity, the perversity of political power
over money. In this, the decay of the old order, all schools of
economics and politics, unconscious of the meaning of money, are
vainly striving to preserve the politically based monetary system.
Such attempts will fail and chaos will ensue unless fresh insights
are brought to the problem. This book is the first to depart from
the traditional concept of money as an instrument of the state.
It is the first to propose that money and state be separate.
It is not necessary to attempt to alienate society from the
declining system, nor to conduct any crusade against it. The flight
from inflation that has already begun, and that is gaining momentum,
is the popular movement away from the decaying system and, in
itself, represents a search for a stable monetary medium. In times
past, many national inflations have reached the point of extinction
of the local monetary unit. In each such crisis, there remained
other political monetary units to which flight could be taken.
But in this world crisis, as I see it, there will remain no stable
politically based unit to which the panicky will be able to flee.
There will be a total inflation of all existing monetary units.
To avert the chaos and catastrophe inherent in a moneyless
world, I visualize the emergence of a nonpolitical monetary system
to which business will resort for self-preservation. I see an
orderly transition from the old order to the new. But an orderly
transition will require the leadership of businessmen and bankers
in organizing an operating system to which everyone may turn.
While such a program will require the separation of money
and state, and the restoration of the monetary system to the sphere
of personal enterprise, it also will offer the greatest protection
for the state from violent revolution and the attendant hazard
of its capture by non-democratic forces. Inflation to the point
of panic is a confession by the state of its inability to maintain
order. It is a clear call for help from the citizenry.
Scholars have never understood the social service of money.
There has never been, therefore, an adequate appraisal of the
contribution made by money in the revival of civilization's march
after the stagnation of the thousand years of the Dark Ages. The
Renaissance, a great shifting forward in that march, coincided
approximately with the liberation of money from its embodiment
in things of intrinsic value, such as gold and silver, to intrinsically
valueless paper carrying only a promise of value to the bearer.
This transformation was, I believe, a fulcrum upon which the incentive
to advance lifted society forward and made it more mobile than
at any previous time.
Coincident with its liberation from tangible materials, however,
the monetary medium was thrust into captivity by the state under
the false belief that, to assure credibility for a medium of no
intrinsic value, the state had to sponsor and control it. This
unnatural association has limited the good that might have flowed
from a free monetary system, and has magnified the evils that
afflict the economy. For the regulation of money is inherent in
the competitive trading process, and politics is alien to it.
Yet the state has continuously distorted exchange by its attempts
to substitute synthetic controls for natural. It has brought the
political monetary system to its certain doom by employing it,
through the process of inflation, as a tax-collecting device.
What effect the envisioned second and final liberation of
money—this time from bondage to the state—may have upon human
behavior is possibly beyond imagination. With the passing of nationalistic
monetary units, there will remain no reason for the polyglot monetary
system that exists in the world today. A single, world wide monetary
language will unify the world's peoples on the economic plane.
New vistas of human advancement will open under the new order
that will surely arise following the separation of money and state
and the abandonment of the false political means in favor of the
economic means of realizing social objectives.