Gold's Future as Money - Q&A
Nelson Hultberg
hultberg@afr.org
February 28, 2005
The response to my recent article
analyzing Antal Fekete's plan for a parallel Gold-Coin Standard
was quite substantial. Many questions and commentaries poured
in from readers -- both positive and negative, which is to be
expected, of course, since the subject is such a controversial
one. Keynesian establishment types are always horrified at the
thought of restoring gold and silver to the monetary system.
But even among the hard money community, there are numerous hotly-disputed
points about how exactly to implement a gold monetary system
for America.
Following are some of the more important questions and objections
from readers about the Fekete plan and its advocacy of "bills
of exchange" to enhance the elasticity of gold and silver
coinage throughout the economy.
* * * *
Question
#1 -- Why does government have to be involved in our restoration
of a gold/silver money system? There are plenty of free-market
outfits that provide people with commodity money -- such as GoldMoney.com,
libertydollar.org, e-gold.com, and several others. All we need
to do is let the market work, and a new money system will spring
up.
Answer. I fully realize that an alternative
monetary system exists with companies such as GoldMoney, libertydollar,
and e-gold, etc. I support these companies wholeheartedly. They
are the wave of the future. But I'm afraid that just implementation
via this kind of marketplace methodology will not be sufficient
to win the battle for sound money. We need to promote the idea
of an alternate money through legislative reform as well
as market entrepreneurship. This is very much a two-pronged
fight if we are to succeed.
The act of politicizing the issue will bring dramatic and nationwide
attention to the need for an alternate money, which will bring
about legislation to foment policy changes that will take such
a new money into the mainstream rather than just the margins
of society.
Money is not like other products in the marketplace. Hats, houses,
automobiles, energy sources, etc. need nothing more than proper
entrepreneurial vision and promotion to fulfill demand and become
mainstream. But money is a different breed of cat; it needs to
be sanctioned legally and constitutionally if people are going
to gain enough confidence to embrace it pervasively. At least
if they are going to embrace it in a matter of decades. Now if
one is willing to wait two or three centuries, then acceptance
of a new money could be done without political proselytization.
As I read history, people's use of money is a deeply ingrained
habit acquired over vast stretches of time; it is not something
that shifts casually or speedily. It progresses like a glacier
moving across a continent.
Thus, an alternate money system will not be able to grab people's
attention to the point of widespread usage through marketplace
efforts alone. An alternate money system needs legal reform
to accompany its entrepreneurial promotion.
Moreover, the Constitution mandates that we use gold and silver
coins as money, which makes it very much a government issue.
This is one of the reasons why the constitutional scholar, Edwin
Vieira, has given his life to such magisterial works as Pieces of Eight.
He realizes that we can never have a free, nor an economically
sound, country without adhering to the constitutional mandates
on this issue, and that widespread political action is necessary
to bring about constitutional adherence. In other words, without
political action, no monetary reform will be able to overcome
the powerful Washington-Wall Street cartel that has corrupted
the system. For more on this point, see Vieira's monograph, The Federal
Reserve System: A Fatal Parasite on the American Body Politic.
In conclusion, we need both marketplace and legislative promotion
of an alternate gold/silver monetary system. Private money entrepreneurs
and political monetary reformers are climbing the same mountain
here -- which is the ABOLITION OF POLITICAL BANKING and a restoration
of free-market banking. It's just that we are taking different
paths to the top of the mountain.
Important Note: In order to coincide totally with the
goal of abolition of political banking, the Fekete plan for a
parallel gold-coin standard is being revised slightly. The "state
chartering" of credit unions is being dropped; instead,
they will remain as private institutions. In this way, there
will be a total separation of banking and government.
The goal must be to bring about free-market banking that is strictly
constitutional.
* * * *
Question #2 -- What section in the Constitution says the Federal
Government must use only gold and silver?
Answer. The best way to handle this question is to refer
to Edwin Vieira, seeing that he is the nation's foremost scholar
in regards to monetary issues and the Constitution. In a paper
titled, How
to Restore Constitutional Money, that he presented to the
Conservative Caucus Foundation in Washington, D.C. on January
13, 1997, he states:
"In Article I, Section 8, Clause 2 and Article I, Section
10, Clause 1, the Constitution prohibits explicitly or implicitly
the emission of any form of what was called in those days 'bills
of credit'. Today we would call that paper money.
"Article I, Section 10, Clause 1 also disables the states
from imposing on unwilling creditors anything but gold and silver
coin as a tender in payment of debts -- which, of course, reflects
the inherent disability of Congress to declare anything other
than gold and silver coin a legal tender."
Vieira goes on in his paper to say that, "Article I, Section
8, Clause 3; Article IV, Section 2, and the Fifth, Ninth, Tenth,
and Fourteenth Amendments... guarantee individuals free entry
into private banking." They also guarantee that private
banks can, if they choose, "issue their own non-fraudulent
notes and securities, and deal in deposits of silver, gold, foreign
currencies, or any other monetary medium." In other words,
these sections of the Constitution "grant a complete free
market to money."
Thus the federal and state governments CANNOT issue paper notes,
but private banks CAN as long as such paper instruments do not
breach the laws of fraud, i.e., as long as the issuing banks
provide in Vieira's words, "complete disclosure of their
operations and are fully responsible civilly (and a fortiori
criminally) for the same." [Email to this writer,
February 3, 2005.]
"The Constitution," states Vieira, adopted "the
very unit of money that the American market at that time was
using -- the silver dollar -- and it left the ultimate supply
of money to the market too, by implicitly incorporating the system
of free coinage that had been used throughout Anglo-American
law -- and, in fact, it first occurs in the first Coinage Act
of 1792." [Op.cit., How to Restore Constitutional
Money.]
"So, it is fairly clear from that history that the Constitution
integrated market and state with respect to official money --
silver and gold coinage -- and it separated bank and state with
respect to everything else. The government is not to be a player
with respect to the private market in terms of privileging banks
or other financial institutions." [Ibid.]
Therefore, if the government is "not to be a player"
in the private marketplace of banking and not to become involved
in "privileging banks," then the Federal Reserve is
unconstitutional because it is not only heavily involved in these
two policies, but it has replaced gold and silver with irredeemable
paper notes. All this is strictly forbidden under the Constitution.
Dr. Vieira's book, Pieces
of Eight, goes into much greater detail about these points
and many others in analyzing the constitutional system of money
and banking espoused by the Founders and what their "original
intent" was. It goes into how the system was corrupted and
how it can be reformed. He irrefutably demonstrates that our
official money (i.e., the money that all levels of government
must deal in) is to be only gold and silver.
Unfortunately, however, the courts have, over the past century,
allowed the Feds to get away with all kinds of monetary chicanery.
They have ignored the Constitution and the Founders' intent while
winking at the egregious fraud and debasement of the government's
banking cartel as it destroys the currency and robs us of our
life savings.
The only solution is that we as a people must work to restore
a government that will abide by what the intent of the Founders
was in the Constitution. This will necessitate the enactment
of legislation that gets the government out of "creating"
money altogether and restores free-market banking with constitutional
money, i.e., gold and silver.
The government's role is not to "create" money, but
as the Constitution says, only to "coin and regulate"
it. This means Congress is not to determine what money is; it
is simply to provide for the manufacturing of it in a standardized
form according to what the Constitution has declared it to
be, which is gold and silver.
In essence, the role of creating money belongs to the people.
This is as it should be. The people's representatives wrote the
Constitution, which the people ratified; and they chose to make
gold and silver their money. Government's role is to abide by
their wishes, which it was empowered in the Coinage Act of 1792
to do. This Act established the U.S. Mint to form the people's
gold and silver into money. Thus government's role is merely
to assure the uniformity of coins in accord with standard weights
and measures, and to adjudicate in the courts those cases where
fraudulent banking practices take place.
As long as our government provides the means to these two policies
-- proper adjudication of fraud and the free circulation of gold
and silver coins -- then we will have a stable monetary system.
As I pointed out in my previous article (and as Vieira verifies
above), in such a system it is perfectly permissible for PRIVATE
banks and credit unions to engage in the issuance of credit and
paper notes -- as long as they engage in such endeavors legally,
i.e., non-fraudulently. This means that there must be full disclosure
on the part of banks and no government conveyance of privileges
to the banks. This would limit their credit issuance to benign,
non-inflationary forms (e.g., time deposit loans, real bills,
etc.). This would be a legitimate monetary system under our Constitution,
and it would function very nicely.
If, over the course of time, we find we need to change the system,
then it must be done by the amendment process to the Constitution.
Our 58-year transfer to fiat money (via the Federal Reserve from
1913 to 1971) was clearly not authorized by the Constitution.
The Founders intended that official money for all forms of government
was to be gold and silver, and that the people in the marketplace
should have access to the U.S. Mint to coin whatever they choose
to be their money (which will naturally be gold and silver also).
This cannot be altered by legislative whim, only by amending
the Constitution.
This is the crux of the monetary issue. Without such a strict
constitutional approach, money becomes whatever the politicians
and bankers would like it to be. And history tells us quite clearly
what happens when people allow their government rulers to determine
whatever they as rulers wish money to be. If not "tied down
by the chains of the Constitution," politicians and their
bank cronies will always conspire to monopolize fraudulent forms
of paper as money in order to increase their own power and wealth
at the people's expense.
* * * *
Question
#3 -- Since the U.S. has no gold or silver in its vaults, and
since real bills would all have different denominations, how
would this work?
Answer. Real Bills will be
handled through discount houses as they were done in London prior
to 1914. They can be carried to maturity by a bank or a credit
union in their portfolios, or they can be discounted for immediate
payment, whichever the respective institution prefers. Granted
the concept is a little strange to us today, but they would be
endorsed over to any prospective
payee (with appropriate change being made in gold coins or currency
backed by gold). The receiver can then endorse them over to his
supplier, and on down the line. The different denominations would
be irrelevant because change is extracted in the process. The
marketplace will handle the logistics and the implementation,
which is what it's very good at doing.
Real Bills sprang up spontaneously in the 14th century, and they
were used for over 500 years. They will spring up again spontaneously
once the Federal Reserve's monopoly power is curtailed. It was
the Fed and the Treasury Department that sabotaged the usage
of Real Bills in the decade after the Fed's formation.
According to Dr. Fekete, the Federal Reserve Act of 1913 originally
stipulated a banking system with assets confined strictly to
commercial paper, i.e., "real bills." U.S. government
debt was prohibited. But very quickly the Washington-Wall Street
elites circumvented the law because they wanted to push long
term paper, they wanted to have an open road to massive monetization
of government debt so as to fight wars and buy votes, and they
wanted to establish a lender of last resort that would let all
banks inflate at will. Real Bills are short-term and self-liquidating.
This was not an exciting form of debt to the mega-bankers and
Treasury honchos. They had much more grandiose plans, which called
for the capacity to massively inflate the money supply permanently.
Real Bills would not allow this. Thus, they had to be sabotaged.
How all this sabotaging took place is a convoluted scam of sophistry,
deception, and power lust of many hues on the part of government
and the mega-banks. Perhaps Dr. Fekete will write on it in detail
some day.
 As for the so called "dearth"
of gold the reader speaks of, it is also irrelevant. The gold
exists in many places, and it is held by many hands, both private
and public. The point is that Fekete's plan calls for opening
up the U.S. Mint for coinage of both gold and silver coins as
the Founders intended. Once this is done, then gold and silver
will pour out of hiding and into circulation. It will pour into
the U.S. from all around the world. The government owns no silver
anymore, but whatever gold the government and its various agencies
still hold will be phased into circulation through the Rehabilitation
Fund part of the plan. This is explained in more detail in the
complete version of the plan that is in my book, Breaking
the Demopublican Monopoly. For those interested in furthering
their grasp of the concept of Real Bills and their use, they
should read the lectures in Professor Fekete's Monetary
Economics 101 course.
If we as Americans want to get serious about restoring gold to
our monetary system, then Real Bills must be part of any restoration
plan. This is the only way to provide for the necessary elasticity
of credit in a non-inflationary manner. This is what has been
overlooked by so many monetary reformers -- both layman and scholar.
But Fekete saw this theoretical gap that stemmed from modern
economists' misunderstanding of Adam Smith's Real Bills Doctrine.
Sadly to this day, almost all economists (even many of the Austrians)
still remain close minded on the issue. But despite this stubbornness,
eventually all scholars will be compelled to reevaluate their
interpretation of the Real Bills Doctrine. Truth is a mighty
powerful force; it usually wins in the long run even though it
has to fight long excruciating battles to do so.
* * * *
Question #4. Can we really bring back the use of Real Bills?
They were credit instruments that were popular in centuries past;
but times and finance have changed. How could they possibly be
revived in our modern world?
Answer. This is a misguided concern. Real Bills are
something that would just spring up spontaneously among people
in the market if the government and the Fed do not get in their
way. The major reason why they disappeared from the scene after
1913 was because the elite bankers and bureaucrats that made
up the Federal Reserve cartel sabotaged their use with their
monetary machinations in the aftermath of the Fed's establishment.
The elites' justification was the fallacious interpretation of
Smith's Real Bills Doctrine among academics, while their motive
was, of course, the desire to expand the power and wealth of
their cartel. Once gold coins were sufficiently replaced in the
American economy by Federal Reserve notes, then any use of Real
Bills was dead. They will only flourish as long as gold and silver
coins circulate.
But restore a constitutional banking system, and Real Bills would
very quickly spring up again. They are a natural marketplace
phenomenon that human action would turn to if left free. And
this is the whole idea of an alternate money system; it will
be FREE from the Fed and the Machiavellians in Washington.
So we must not think of this as a problem of "what's in
fashion." Real bills are instruments that transcend time.
All they need in order to flourish is for government to stop
conveying special privileges to banks, start objectively enforcing
the laws on fraud, and open the U.S. Mint to coin gold and silver
to circulate as the Constitution requires. Once this is done,
the marketplace will provide Real Bills again because they serve
a very needed purpose -- the act of clearing the goods
being produced and distributed to consumers.
* * * *
Question #5. The crux of your protest to us Rothbardians is
flawed. What Rothbard saliently argues is that it is wrong, legally
or illegally, to counterfeit money. This is why all forms of
paper money must be abolished. They are legalized forms of counterfeiting,
and thus morally wrong.
Answer. The key here is to arrive at a clear conception
of fraud and how it applies to our banking system and credit
issuance. As long as banks do not operate via misrepresentation
(such as when they loan out demand deposits rather than warehouse
them), or operate by means of special legal privileges conveyed
by government (such as when banks are allowed to suspend redemption
of notes in specie), then their issuance of credit is not fraudulent
and thus not a crime.
Issuance of bank credit is certainly a legitimate venture as
long as the bank's power to loan is not gained by false pretenses
(which it is when it uses "demand" deposits, i.e.,
when it borrows short to loan long). But if the bank loans out
only "time" deposits of proportionate length, then
it is not misleading the public, and thus it is not engaging
in fraudulent credit practices. This type of lending would be
kosher in the Rothbardian scheme of things. It is, as I said
in my previous article, a benign form of credit as opposed
to the fraudulent forms so in use today.
The key to making it kosher is that there be full and open
disclosure between the participants. What makes present banking
practices fraudulent is that there is not this full disclosure
on the part of the banks to their depositors. Depositors are
led to believe that their money is going to be there upon "demand,"
when, of course, it has been lent out. Other instances of fraud
occur when the government allows banks to overstate their assets
and understate their liabilities with impunity, and when government
allows banks to suspend note redemption in specie and still stay
in business. These and other fraudulent policies are practiced
by banks while our court system tolerates the entire charade.
If the reader will keep this in mind, I think he will then be
able to see why Rothbardians are wrong on the issue of real bills.
Real bills are examples of benign credit. They are not
instances of borrowing short to loan long. They mislead no one.
They practice full and open disclosure and are freely entered
into agreements. They state in the bill the amount of credit
being issued and the time frame that is involved (91 days, 60
days, 30 days, etc.). If loaning of time deposits by a banker
is legitimate under the Rothbardian scheme (and I presume it
is), then why are not 91-day bills of exchange legitimate?
A Rothbardian 100% gold standard is not against benign
credit; it's just against the widely used inflationary and fraudulent
credit of our contemporary banking system. Whatever credit arises
from human action that does not breach the laws of fraud and
does not depend upon special privileges conveyed by government
is benign and thus legitimate. Rothbard's mistake, however,
is that he considered Real Bills to be inflationary, when they
clearly are not.
If, as Rothbard maintained, Real Bills are inflationary, why
did both consumer and wholesale prices lower considerably during
the 19th century -- a period when Real Bills were widely used?
From 1800 to 1913, there was a 40% decrease in an index of consumer
prices from 51 to 30, and a 23% decrease in a composite of wholesale
prices from 133 to 102. [Historical Statistics of the
United States, Colonial Times to 1970, U.S. Department of
Commerce, 1975, p. 211. Also Warren and Pearson, Gold and
Prices, Wiley & Sons, 1935, pp. 19-20.]
Real Bills are "self-liquidating" as Fekete shows.
They are backed by "real goods." They are not long
term Treasury debt to be monetized via the printing press and
constantly rolled over, nor are they loans created out of thin
air and multiplied ten times upon paper notes in a banker's reserve
deposit in his Fed regional bank. They do not hang around permanently
adding to the aggregate supply of purchasing media. They expire
and go out of existence in 91 days or less when the goods clear
the market from producer to consumer. They spring up momentarily
to grease the production-distribution channels between manufacturers
and consumers.
Thus, credit issuance per se is not an evil; it must be
categorized into good and bad forms. Credit can be fraudulent
and inflationary at times. And when it is so, it must be outlawed,
which I call for vehemently in my article. But there is a benign
form of credit that is very necessary to a growing healthy economy.
Rothbard and Mises both realized this, of course. It's just that
they were mistaken in their belief that Real Bills were inflationary.
Perhaps Rothbard also thought of them as fraudulent; I don't
know. But the point is that they are neither fraudulent, nor
inflationary as Fekete shows. Thus they come under the category
of benign credit and are permissible.
* * * *
Question #6. Throughout your article you say that "Austrian
economists" subscribe to a 100% gold dollar. This should
be stated as "some Austrian economists." There are
many of us who do not agree with Rothbard on this issue.
Answer. My thanks for pointing out the error. I hope
this reader is right and the Austrians are not as monolithic
as I perceive them. I have been a life-long fan of Mises and
Rothbard. Both were intellectual giants. But these two great
thinkers were not gods; they were humans. They made some mistakes
that need to be corrected and clarified where necessary if we
are to truly advance the cause of freedom. We must read them
for their wisdom and dismiss their folly. This is the way we
must treat all great thinkers of history. They all make mistakes.
Those Austrians who do subscribe, however, to the Rothbardian
100% gold dollar (and thus its animus toward Real Bills) would
be taking a step out of darkness into sunlight if they were to
read Professor Fekete's Monetary
Economics 101 lectures. They are scintillating eye-openers
that rigorously dispel the derisive interpretations of Smith's
Real Bills Doctrine propagated by modern economists.
The usual denunciation one hears bandied about is that Real Bills
are inflationary because they are "autocatalytic,"
i.e., they feed upon themselves. But if Real Bills disappear
when the goods are cleared, they hardly can "feed upon themsleves."
Thus, they cannot be inflationary. The other slur that one hears
is sort of a perfunctory claim that Real Bills were "discredited
long ago." What is autocatalytic is this kind of thinking.
It feeds upon itself because unfortunately economists are all
too human and often find it easier to just go along with the
accepted wisdom of their peers, rather than investigate the history
of an issue such as Real Bills, which would reveal the deceptions
and misunderstandings that led to their demise.
* * * *
Question #7. What about international trade? Wouldn't Federal
Reserve notes go to zero almost instantly once the real money
started? And what about people who already own bullion coins?
Wouldn't they possess an unfair advantage?
Answer. International trade will be performed very
nicely by means of "bills of exchange." As Professor
Fekete points out:
"Prior to the outbreak of World War I in 1914 world trade
was financed through real bill circulation with London acting
as the discount house on a remarkably small gold base. The system
worked smoothly and efficiently, showing that there is no limit
on the amount of credit that could be built on a given gold basis.
World trade was completely self-financing, and producers as well
as consumers prospered. The volume of world trade before 1914
was so great that it took more than 75 years before it was surpassed
in the 1990's, in spite of a much faster population-growth. We
may conjecture that if the international gold standard and the
trading system of the world financed by real bills had not been
destroyed by World War I, then the volume of world trade would
have increased to a level several times higher than what it is
today, and the resulting prosperity would have by and large eliminated
poverty from the face of the earth." [Monetary
Economics 101, Lecture 2]
As for what value Federal Reserve notes would acquire in the
market once real money started, this is an unknown. History has
shown that people do not give up their customary habits very
easily, and the conduct of business in paper dollars is a very
entrenched habit of modern day Americans. My guess is that the
evolution of choice as to what money to use will proceed slowly
as people adjust their preferences over time. Eventually Federal
Reserve notes will sink in the people's estimation, and all citizens
will trade in real money again. But it is doubtful that this
will happen overnight.
As for people who already own gold coins having an advantage,
what are we supposed to do, punish them for their foresight,
their wisdom, their lack of gullibility in buying into the Federal
Reserve scam that was perpetrated upon us throughout the 20th
century? What kind of social system do we have that would penalize
Americans for their foresight and contrarian courage? This is
the kind of excuse that collectivist mentalities throughout history
have always used to level down their fellowmen who are more industrious.
This is what stultifies growth and decimates freedom. It is what
has entrapped us in today's hideous welfare-state hell. If we
are to rebuild a free and just country, then it must be structured
upon objectively protecting men's rights to their property.
This would certainly deny any redistribution scheme dreamed up
by the "coercive humanitarians" of the collectivist
establishment to account for the fact that gold coins are not
evenly distributed among all Americans.
* * * *
Question #8. What you are saying is that our history has been
stolen from us by elite bankers who have hijacked the process
of commerce since 1913, thus enabling themselves to live parasitically
off the process ever since. You will have to substantiate such
a claim with documentation about trade being "smooth as
a whistle" before 1913. The average business guy is going
to reject all this as unbelievable.
 Answer.
Indeed our history has been stolen from us. But it's not the
elite bankers and politicians that are the source of this; they
are the concomitants, the instruments. It all begins in the school
system as early as grade school, but reaches quite venomous degrees
in the universities. Read my article, Invasion
of the Mind Snatchers. It will show you how the process is
orchestrated down from the super minds of history, to the super
academics of our universities, to the best and the brightest
of the students by conveying to them that freedom is unworkable,
that capitalism leads to exploitation, poverty, racism and war,
and must be abandoned in favor of a centralized one-world government.
These best and brightest then go out and rise up in the various
power positions of society (political, financial, media, religious,
publishing, artistic, etc.) to try and smuggle our country into
a centralized one-world government. So the root cause of all
these "conspiracies" is in the ideological arena, not
the financial world. Elite bankers and politicians have been
taught a warped ideal of how the world should be constructed.
This is the nature of men; they will always work to move their
society toward what they conceive as the ideal. Sadly the worldview
that has been instilled into them is precisely the opposite of
the truth; and any objective investigation into the history of
the 19th century will document such. To those who doubt, see
Ayn Rand's Capitalism: The Unknown Ideal, Ludwig von Mises'
Human Action, and George Reisman's Capitalism: A Treatise
on Economics. As for how the banker and political elites
have conspired to bring this about, see G. Edward Griffin's The
Creature from Jekyl Island.
Dr. Fekete and I are not saying that business used to "run
smooth as a whistle." Business in the days prior to 1913
was tough, just as it is today and will be tomorrow. There has
never been a "golden age" where things were idyllic.
There was, however, an age where our lives were much freer --
where there was a better system of justice and rights, where
government was limited and objective, not gargantuan and arbitrary.
That is what we at AFR wish to restore. Life will never be a
picnic, but it can be FREE and JUST if we will regain our reason.
* * * *
Question #9. Any system that uses paper promises (such as
real bills) to be turned into gold eventually is asking for trouble
down the road. The Byzantine society functioned very successfully
economically for a thousand years using the pure bezant gold
coin.
Answer. This reader is missing the point about "elasticity."
Without the added elasticity that stems from Real Bills, there
would be economic activity, but it wouldn't be the dynamic, sophisticated
activity we have known since the Renaissance and its ushering
in of the Industrial Revolution. Byzantine society is hardly
an "ideal" to hitch our wagons to. Yes, the Byzantine
Empire survived in the East after the fall of Rome for a thousand
years (from the 5th century to the 15th), after which it was
overrun by the Ottoman Turks when Constantinople fell in 1453.
But it did not survive for those thousand years as any kind of
dynamically growing economy. It was primitive by 19th and 20th
century standards.
It's a fair conclusion to say that our choice is between a 100%
gold dollar with its rigidity of medieval style commerce, and
a gold dollar accompanied by Real Bills that led to the expansive
commerce of the modern era. A 100% gold dollar, would send us
back to a much more primitive form of trade -- that which the
Middle Ages endured. I would hope that Americans opt for the
Renaissance and the Industrial Revolution as our "ideal."
Real Bills do not deserve the "discredited" status
extended to them by today's laissez-faire economists. They are
credit instruments of the very free-market that Rothbardians,
Misesians and Friedmanites claim to champion. They do not spring
from fraudulent motives and government manipulations. They comply
with full disclosure between market participants. They are the
result of entrepreneurs being left alone to freely supply
the demand for something that is needed. To deny them is to deny
freedom to produce and distribute according to an openly disclosed
contract. Such a denial is hardly in the spirit of free enterprise
that followers of Rothbard, Mises and Friedman claim to espouse.
* * * *
Question #10. One small problem with your proposed plan to
establish a gold/silver oriented monetary system. It will result
in the end of the massive profits of fractional reserve banking
to those who currently own the system. The power elites will
never allow anyone to end their monopoly. You are wasting your
time.
Answer. This is the type of thinking that ushers in
all the dictatorships of history and allows them to prevail.
It is what Ayn Rand meant when she wrote about the "sanction
of the victim" in Atlas Shrugged. It is the mindset
that all dictatorial elites try to inculcate. Once they have
convinced the populace that reform is impossible, then they have
won the day for their tyrannical rule. The Pharaohs, the Caesars,
the Monarchies, the 20th century fascist and communist dictators
all worked to cultivate a servile populace that would give up
and sanction their own enslavement. Regrettably there are a number
of Americans today who are willing to do so. They have let the
Mind Snatchers brainwash them into believing that to rebel and
reform is pointless.
As I point out in Breaking
the Demopublican Monopoly, "I fully realize the strength
of the ruling establishment and the odds that a challenge like
this is up against. But I see overwhelming challenge as rampant
throughout history. I see that all progress in forming better,
freer societies only comes about because there are certain people
in this world (the Thomas Jeffersons and Aleksandr Solzhenitsyns)
who just don't allow immense power structures to bother them
or dissuade them."
When Jefferson and Paine rallied the American colonists to rise
up and resist King George's tyrannical rule, they were appealing
to those humans whose nature is to fight for truth and freedom
even though one's opposition seems insurmountable. They were
calling out to those stalwart souls who believe life to be a
crucible, rather than a banquet, who believe that men were not
meant to meekly comply with would be usurpers, that men must
stand and be counted on the side of "right principle,"
or their lives are naught but a meander in meaninglessness.
When Solzhenitsyn and Walesa rallied their fellow countrymen
against the Soviet Gargantua, they were calling out for the same
breed of men that Jefferson and Paine appealed to. It is this
breed that has always been willing to challenge the dictatorial
authorities of history no matter how intimidating they appear.
Because of the coming economic maelstrom, the people will soon
be clamoring for some radical voices to lead them. You the reader
can ignore this crisis and choose to accept the establishment
dogma about the "impossibility of ever changing the system."
Or you can choose the contrarian fight that the Jeffersons and
Solzhenitsyns of history have so gallantly exemplified.
If a free America is to survive, she needs radical monetary reform,
not timorous complicity to the Darth Vaders of Washington and
Wall Street. This will require a large measure of courage and
determination on the part of all of us; but our only alternative
is to give up and allow the forces of evil to win by default.
How can we Americans, scions of Jefferson and Paine that we are,
ever rest easy if we allow such a capitulation to take place?
February 28, 2005
Nelson Hultberg
Americans for a Free Republic
website: www.afr.org
email: nhultberg@afr.org
Hultberg Archives
Copyright ©2005-2008 Americans
for a Free Republic www.afr.org.
 Nelson Hultberg is a freelance writer
in Dallas, Texas and the Executive Director of Americans for a
Free Republic www.afr.org. His
articles have appeared in such publications as The Dallas Morning
News, the San Antonio Express-News, Insight, The
Freeman, Liberty, and The Social Critic, as well as
on numerous Internet sites.
He is the author of Breaking
the Demopublican Monopoly (2004). and he has a forthcoming
book on political philosophy entitled The Golden Mean: The
Case for Libertarian Politics and Conservative Values.
Recent Gold/Silver/$$$ essays at 321gold:
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