The Secret of Oz? Value from Nothing.
So the Secret of OZ is money from nothing? Ever heard the term “not worth a Continental”? Supporters of value-from-nothing monetary schemes like Alex Jones and Bill Still can’t answer the obvious query: how do you get it into circulation? Their answer? Price and wage controls, and barrels of Continentals on street corners, free for the taking. This is supposedly an improvement on the current scheme: the issuance of credit by banks based on loans from the government. The U.S. monetary problem does not orginate in the means of issuance of currency, but in the creation of currency via Federal debt and in the fractional reserve regulations on banks that permit them to create “value” ex nihilo through the issuance of credit, which creates a systemic liquidity problem by creating more debt than can be repaid, thereby putting pressure on quantitative controls and concentrating money in banks, rather than in productive enterprises.
If the government spends money into circulation, then only rising government expenditures can inject enough liquidity into the economy. Result? A gargantuan state, and the concomitant statism. If you place it on street corners in barrels, you will require an enormous increase of government control over the economy (i.e. the central planning that libertarians say they oppose) needed to stifle spiraling inflation. Jones verbally opposes the “Weimar Republic” inflationary scheme of the Federal Reserves monetization, and yet then supports a monetary policy as a solution which proposes to end parity to metals altogether and simply issue currency “directly to the people.” And how is this supposed to cure inflation, pray tell? What it accomplishes is the sans-culottes dream of taking fake wealth from the banks and redistributing it to “the people.” But we knew that this is what Jones’s populism would eventually amount to: “Money for nothing and your kicks for free.” Money as mere symbol does not work. Money must have a function, that is, be valuable in and of itself. But this in itself shed light on the essential problems with monetary systems in general, that is, systems of abstraction by which all products are made symbolically universally fungible: the symbol detaches from the substance of the value that underlies it. When it does, it functions merely as scrip, and you have the essence of socialism without the name. The symbolic nature of money detached from any substantive value is required for the industrial capitalist economy, based as it is on abstract interchangeability, and it necessitates the eventual adoption of creatio ex nihilo of value to support its expansionist telos. The term capitalism was created to indicate a system in which “the few” who own the means of production, hire the many, who work for wages in an ever expanding economy based on consumption -an economy that enriches the few and eventually impoverishes the many. This is a very different idea from the market economy, in which all men (ideally) become not sellers of labor or skills on a market of buyers, but producers of value, for themselves and their families -owners of the means of production, reapers of profit.
So, with this brief thoguht exercise, we can easily see that Social Credit monetary policy (which is precisely what the Secret of OZ suggests we adopt) is either an inflationary spiral or a statist utopia. It is not a wonder that all Fascist economies (such as Nazi Germany and Italy under Mussollini) eventually adopt this policy, since they are statist in nature. And neither statism nor destructive inflation is God’s plan for money, which is gold and silver.
