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“Market Fundamentalism” and the
Tyranny of Money Recommendations for Reform of the US Monetary System
By Richard C. Cook |
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Global Research, November 25, 2007 |
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We hold these truths
to be self-evident, that all men are created equal,
I.
What We Must Do
Today “Life, liberty, and the pursuit of happiness” are,
or should be, the fruits of democracy. But the political democracy defined by
the Declaration of Independence and the Constitution has not been achieved
because economic democracy has not been achieved. The attainment of real
economic democracy is the next task for the American people. In the midst of the most productive economy in
history, the U.S. and much of the world today are in crisis, with stagnant or
falling incomes, rising prices, and skyrocketing debt. Many experts are
predicting an economic collapse, and people with money are scrambling for
safe places to protect it. No one in an official capacity has provided a
convincing explanation; few have even tried. We are taught that economics is a “science” and that
it operates under unchangeable laws that are understandable only to
specialists. People speak with reverence of “market forces” as existing
beyond the reach of human intelligence and will. None of this is true. There is no such thing as “laws”
in economics. Of course there are plenty of habits and
conventions, myths and prejudices. But the “laws” are the ones created by
governments, usually under the control of powerful people who work the levers
of power to acquire greater wealth through legislative favor. These laws are
man-made. In some cases the laws may provide benefits to those who work for a
living, but in many cases not. What we forget is that any of these laws can
be changed and that many of them should be changed. Besides, haven’t we learned by now that what has
aptly been called “market fundamentalism” is really shorthand for the tyranny
of money? It is a fact that control of economic life, at least in most of the
Western nations, has been turned over to the monetary elite who control the
world’s industry and resources through the private issuance of credit that
originates from the privilege of fractional reserve banking. This vestige of the financial systems of the Middle
Ages allows the banks to produce credit “out of thin air” and lend it at a
profit. They lend to consumers, businesses, investors, speculators (such as
hedge funds), and to federal, state, and local governments. Under the banking
laws, they generate this credit against a small “reserve base” consisting of
customer deposits, government debt, overnight deposits from corporations and
government agencies, and even—as has been well-documented—by laundering the
proceeds of drug dealing and other types of crime. The dependence of economic life on debt has assured
that there has been a steady flow of wealth from the producing economy of
goods and services into the financial web which surrounds it. Debt from
lending at interest grows at an exponential rate. Further, every period of economic growth in the last
generation has been largely a bank-created bubble. Each time a bubble bursts,
the financiers gain more wealth by buying assets at bankruptcy prices. The
latest is the housing bubble. Control of wealth by high finance is the main reason
the bounty of science and technology has not assured a better life to the majority
of the people of the world. Politicians stand by and do nothing. In fact their
campaigns are financed by the monetary elite. Should any of them mention
economic themes that are even remotely “populist,” they are immediately
denounced by the financier-controlled press. Despite the power of industrial processes which have
the capability of providing a decent living to everyone in the world—contrary
to the myth of global overpopulation—the world still lives under an illusion
of scarcity. This tends to justify the senseless struggle for wealth and
control of resources. But it’s one of the most glaring examples of the
condition of mass hypnotism that has weighed humanity down throughout the
ages. Ethically, the illusion of scarcity leads
to the law of the jungle, survival of the fittest, the fight for dominance
and supremacy. “Economic man” still lives at the animal level. The higher
laws of human ethics, including the injunction to “love our neighbors as
ourselves,” have been ignored. But they need not be ignored if we wake up to
the fact that we have it in our power to live in a much different and better
world. The present situation is just as harmful to the
wealthy who hold their fellow human beings in bondage as it is to the debtors
they oppress, for the rich as well are deprived of the benefits of living in
a world where human beings are free, happy, generous, and productive. One answer to the problem is monetary reform,
combined with the realization that science and technology have removed the
need for everyone to work all the time just to survive. We have earned the
“leisure” and “peace” dividends that are often mentioned but have yet to be
realized. For the last eight months I have been publishing
essays on these themes on Global Research and other internet sites. I was
inspired to write and publish these essays after I retired from the U.S.
Treasury Department following thirty-two years of working for the federal
government. Then Congress gave away its constitutional authority
over money through the Federal Reserve Act of 1913. The Sixteenth Amendment
to the Constitution which was enacted the same year, created an income tax to
pay the interest on the national debt. Throughout history, government debt
and excessive military spending have gone hand-in-hand. Not accidentally, the
Federal Reserve Act marked the beginning of the century of world war that
still afflicts us. We now need to reclaim our monetary system before
our government makes the fatal error of engaging in more useless foreign
wars, besides the travesty in Iraq, because they continue to think that the
way to solve our internal monetary problems is taking other people’s land and
resources. This is another effect of the illusion of scarcity. A lifetime of involvement in public finance with the
federal government has led me to call for one basic reform. We should abolish the privately-controlled Federal
Reserve as a bank of issue and re-establish constitutional control of credit
as a public utility. Public creation of credit would be reflected in two
basic policies: 1) direct issuance of credit to citizens through a basic
income guarantee, a periodic National Dividend, and low-interest bank
lending; and 2) direct spending by government for essential services—i.e.,
restoring the Greenback—combined with public low-interest financing of
infrastructure investment. Taking these steps would also allow us to reduce
much of the onerous burden of taxation at the federal, state, and municipal
levels. Also, people who advocate a gold standard are often
confused about the definition of “fiat money,” which they deride. There are
actually different types of “fiat money.” The debt-based credit created by
the Federal Reserve, often called “fiat money,” is not money at all. It is
simply temporary credit with a lien against it for repayment with interest. But
real “fiat money,” like the Civil War Greenbacks or the American colonial
paper currency, was true democratic money that was spent into circulation by
government and was never inflationary. Rather it allowed commerce to expand
and people to prosper. This type of fiat money is actually the key to
economic democracy. II. Monetary Reform Recommendations The articles compiled in the essays referenced above
contain numerous recommendations for actions that would restore the issuance
and management of credit as a public utility under the Commonwealth of
American citizens as established by the U.S. Constitution. Following is a
comprehensive list of reforms. The immediate purpose of this program would be to
correct the conditions that have brought us to the brink of economic
catastrophe due to the cession of control over credit by Congress to the
private financier elite through the Federal Reserve Act of 1913. The unconstitutional abdication of monetary
responsibility by Congress has contributed directly to a century of world
war, the near-destruction of the U.S. as a constitutional republic, and the
transfer of much of the nation’s wealth into the hands of the monetary
controllers who have acquired it through inflating and deflating financial
bubbles, by mis-using their fractional reserve banking privileges. The recommendations which follow would be a start in
bringing about change. A few of them have been suggested by some of the 2008
presidential candidates, though none of the candidates from either party has
presented anything close to a program this comprehensive. The recommendations
are divided into immediate, near-term, and long-term actions. Note that monetary
reform will make possible a large number of additional economic and political
changes, including a transformation of the military posture of the U.S.,
since we no longer will have to fight the rest of the world to compensate for
our monetary weaknesses. Immediate
Near-Term
Long-Term
III. Conclusion One final recommendation could be made, which would
be to restore to our citizens the money they have been forced to borrow
during their lifetimes rather than enjoy the benefit of a National Dividend
which could have been implemented decades ago. At a current estimated value
of over $12,000 per year, the lifetime amount would average around $500,000
per adult. This figure represents the amount of debt we have had to incur,
not including interest, due to a financial system that benefits the monetary
controllers, not the people of the nation. As monetary reformers of the past have affirmed, a
program like this represents a spiritual vision. It cannot be achieved by
moving pieces around on an economic or political chessboard. It requires a
new way of looking at humanity—as individuals, who, like oneself or one’s
family or one’s nation or those of one’s religion, also have a right to a
life of abundance and security on the planet earth. This abundance and security are both available, not
by accumulating money, power, or influence, but by looking to the spirit
within and allowing the splendor of that vision to manifest in the outer
world. This vision was reflected in ideals of our republic expressed in the
Declaration of Independence and the Constitution, and is now reflected in the
program of reform described by monetary reformers both past and present. Of course no one can say how much more time must
pass before such a program can be implemented. The illusion of scarcity has
society in a stranglehold. Will it take a nuclear war to get us to wake up? A
worldwide revolution? Catastrophes from pollution or global warming? For now, enlightened individuals must do the best
they can to acquire and maintain a spiritual perspective and be prepared for
the time when conditions ripen. Measures such as getting out of debt,
creating local currency/barter systems, forming conscious communities, and
acquiring manual skills are some of the economic actions people can take to
protect themselves. Also, people can take action through their state and
local governments. Before the Civil War we had state-owned banks. During the
Depression, cities experimented with their own currencies. The states could
even initiate a constitutional convention to amend the Constitution to
restore citizens’ monetary control. Finally, don’t feel badly about being in debt and
wanting to get out. Almost everyone is in debt to some extent, millions of
people are over their heads in debt, and the situation is going to get worse.
But remember that before long, monetary reform based
on public control and issuance of credit will be recognized as the most
fundamental requirement of economic democracy and will be implemented. It’s
been said that the tyranny of money “is the last tyranny.” Eventually the
time may come when we will be more developed spiritually and perhaps won’t
even need money anymore. Then people will be
able to walk into any store and take what they need, free for the asking. We’ll
do what work is required just for the enjoyment and adventure of it. No one
will desire what another has because we finally will have understood that the
bounty of God’s universe is infinite. That will be the ultimate monetary
reform. Richard C. Cook is a retired federal
analyst, whose career included service with the U.S. Civil Service
Commission, the Food and Drug Administration, the Carter White House, and
NASA, followed by twenty-one years with the U.S. Treasury Department. His
articles on economics, politics, and space policy have appeared on numerous
websites. He is the author of Challenger
Revealed: An Insider’s Account of How the Reagan Administration Caused the
Greatest Tragedy of the Space Age, called by one reviewer, “the most
important spaceflight book of the last twenty years.” His website is at www.richardccook.com. |
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