The Debasement Of Money Overthrows The Social Order
And Governments
By Ralph Benko
The United States Senate moves toward the confirmation of Janet Yellen, now posited for
next January 6th, as chair of the Federal Reserve System. Let us in this
moment of recess reflect on eerily similar observations by two of history’s
most transformational figures: John Maynard Keynes and Nicolas
Copernicus.
One of Keynes’s most often-cited observations, from his 1919 The Economic Consequences of the Peace, chapter VI,
contains an indictment of policies very like those which the Federal Reserve
System has been implementing for the past dozen, and more, years. These
policies in slow motion are, in the opinion of this columnist, at the root
of the very political, social, and cultural dysphoria — uneasiness or
generalized dissatisfaction — predicted by Kaynes:
“Lenin is said
to have declared that the best way to destroy the capitalist system was to
debauch the currency. By a continuing process of inflation, governments can
confiscate, secretly and unobserved, an important part of the wealth of their
citizens. By this method they not only confiscate, but they confiscate
arbitrarily; and, while the process impoverishes many, it actually enriches
some. The sight of this arbitrary rearrangement of riches strikes not only at
security, but at confidence in the equity of the existing distribution of
wealth. Those to whom the system brings windfalls, beyond their deserts and
even beyond their expectations or desires, become ‘profiteers,’ who are the
object of the hatred of the bourgeoisie, whom the inflationism has
impoverished, not less than of the proletariat. As the inflation proceeds and
the real value of the currency fluctuates wildly from month to month, all
permanent relations between debtors and creditors, which form the ultimate
foundation of capitalism, become so utterly disordered as to be almost
meaningless; and the process of wealth-getting degenerates into a gamble and a
lottery.
Lenin was
certainly right. There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process engages all
the hidden forces of economic law on the side of destruction, and does it in a
manner which not one man in a million is able to diagnose.”
An almost identical point was made almost four centuries before Keynes by
iconic savant and polymath Nicolas Copernicus.
Copernicus commenced a study composed for the Prussian and Polish
governments around 1525, On the Minting of Money,
with these words:
“ALTHOUGH THERE
ARE COUNTLESS MALADIES that are forever causing the decline of kingdoms,
princedoms, and republics, the following four (in my judgment) are the most
serious: civil discord, a high death rate, sterility of the soil, and the
debasement of coinage. The first three are so obvious that everybody recognizes
the damage they cause; but the fourth one, which has to do with money, is
noticed by only a few very thoughtful people, since it does not operate all at
once and at a single blow, but gradually overthrows governments, and in a
hidden, insidious way.”
This does not imply plagiarism by Keynes. The coincidence between
Keynes’s “[To debauch the currency] engages all the hidden forces of economic
law on the side of destruction, and does it in a manner which not one man in a
million is able to diagnose” and Copernicus’s “[The debasement of coinage] … is
noticed by only a few very thoughtful people, since it does not operate all at
once and at a single blow, but gradually overthrows governments, and in a
hidden, insidious way” is, however, striking.
Keynes, like Copernicus a paradigm-shifter, was himself extraordinarily
erudite. It is not impossible the young Keynes came across Copernicus’s
work (which reportedly was first actually published in 1826). The
question as to whether Copernicus’s Essay may have
inspired Keynes’s observation must be left to authentic scholars such as Lord
Skidelsky.
The similarity may be merely that of “great minds working alike.”
This columnist has found but one direct reference by Keynes to Copernicus.
Keynes (whose thinking was mostly, although not exclusively, opposed to the
gold standard) was fascinated by one of Copernicus’s most accomplished
scientific successors, Sir Isaac Newton. Newton, also, achieved iconic
status, both for his contributions to physics and, as Master of the Mint of
Great Britain, as the architect of the modern classical gold standard. Newton’s
gold standard was designed along Copernican principles of close correlation
toward nominal and intrinsic value. It served the world very well for
almost 200 years.
Keynes was to have addressed the Royal Society of London’s gathering to
celebrate the tercentenary of Newton’s birth, an event delayed by the
war. Keynes died a few months before he could present his remarks.
Maynard’s remarks, Newton, the Man, were presented
by his brother Geoffrey (and thus might even be characterized as Keynes’s last
words). A brief excerpt:
Why do I call
[Newton] a magician? Because he looked on the whole universe and all that is in
it as a riddle, as a secret which could be read by applying pure thought to
certain evidence, certain mystic clues which God had laid about the world to
allow a sort of philosopher’s treasure hunt to the esoteric brotherhood.
…
[H]e became one
of the greatest and most efficient of our civil servants. He was a very
successful investor of funds, surmounting the crisis of the South Sea Bubble,
and died a rich man. He possessed in exceptional degree almost every kind of
intellectual aptitude – lawyer, historian, theologian, not less than
mathematician, physicist, astronomer.
…
As one broods
over these queer collections [of Newton's alchemical writings, which Keynes
collected], it seems easier to understand – with an understanding which is not,
I hope, distorted in the other direction – this strange spirit, who was tempted
by the Devil to believe at the time when within these walls he was solving so
much, that he could reach all the secrets of God and Nature by the pure power
of mind Copernicus and Faustus in one.
As for Copernicus, On the Minting of Money has
been translated into English several times yet those translations remained
difficult to obtain for students of the monetary arts and sciences. It
has remained mostly the property of elite historians. Scant and
intriguing references were limited to all-too-brief articles such as “Treatise On the Minting of Coin and
Copernicus views on economics”by Leszek Zygner
of Nicolaus Copernicus University.
The full text of Copernicus’s fascinating and invaluable essay remained
elusive, that is, until last month.
Laissez Faire Books published a meticulous and fresh English translation from the Latin, with prefatory
remarks, bibliography, and invaluable critical apparatus by classicist Prof.
Gerald Malsbary. (The volume was co-edited by this columnist and by his
fellow Forbes.com columnist Charles Kadlec, with a foreword by Reagan Gold
Commissioner Lewis E. Lehrman, whose eponymous Institute this columnist
professionally serves).
Read the rest at:
No comments:
Post a Comment