Thursday, 12 May 2011

Frederick Soddy: The Role of Money

Some selections from the early chapters of Frederick Soddy, The Role of Money: What it Should be, Contrasted with what it has Become (London: George Routledge and Sons, 1934). Read/download the rest of the book here.

Energy Theory of Wealth

One of the main contributions of these doctrines is a consistent energy theory of wealth and the sharp distinction that results between wealth and the ownership of a debt. This reveals much that is incontrovertible regarding the threatened collapse of the modern scientific civilization, to give it its proper name, though it is usually miscalled the capitalistic civilization. True, “Capital,” in its proper physical sense, is its most distinctive superficial feature. But in that sense Capital is the unconsumable product of the irrevocable consumption or expenditure of wealth necessary to prepare for and make possible the new methods of production. Owing to modern methods of power production, much more of it is necessary than with the old methods. Moreover, it may be exchangeable for fresh wealth, but it is not changeable into it. From the community’s standpoint capital appears as debt rather than wealth.


Orthodox economics has never yet been anything but the class economics of the owners of debts. If its writers ever attempted any wider social applications, they made themselves simply ridiculous, as when one solemnly looked forward to the millennium arriving through the accumulation of so much capital that everyone would be well off and comfortable, presumably by living on the interest of their mutual indebtednesses. Whilst in the sphere of international trade, till long after the War, the dictum that a continued favourable balance of trade was essential for the existence of the strong nations implied the continuation of unfavourable balances for the weak. It was stated that this country was threatened with disaster unless it contrived to maintain the previous rate of foreign investments returning abroad all that it received in the way of interest and sinking funds in respect of past investments, and if possible more than this. These are good illustrations of the debt-view of wealth and the substitution of social and legal conventions for physical reality.


It is convenient to give a name to the group of interconnected but more or less independent doctrines comprised under such terms as Cartesian, Physical or New Economics, Social Energetics, the Age of Plenty, and Technocracy, including the implications of these doctrines, in regard to the problems of distribution and the new philosophy of money, with which this book


is more particularly concerned. A new word Ergosophy will be employed for this purpose. It means the wisdom of work, energy, or power, in the purely physical sense. Mental or intellectual activities, to which these three terms are often loosely applied, are better referred to, rather, as effort, diligence, or attention.

There are many reasons that render such a new word or term desirable. So far there has been no real social philosophy arising wholly out of the universally obeyed laws of the physical world. On the other hand, from the remotest times, technology has been too apt to be considered merely a sort of slave or menial servant to verbose, pretentious, and impressionistic humane philosophies and religions. Indeed it would hardly be a caricature of civilization, as it has evolved up to now, to describe it as having been attempting to compound for the injustice of ascribing unto God the things that are of Science by rendering unto Caesar the things that are of God. Technocracy, in one at least of its sources of inspiration, the suggestion of Thorstein Veblen for the establishment of a Soviet of technicians to take over the control of the world, is probably one of the first collective dawnings of this malversation. So long as we have simple folk displaying a pathetic acquiescence in the piety that renders thanks for all the good things of life and ascribes them to the bounty of Providence, along with anything but simple folk who


totally disbelieve anything of the kind but nevertheless do still believe implicitly in practising much more forceful methods of obtaining them, so long will civilization be a happy hunting ground for the predatory and acquisitive and a wilderness for the original and creative. The new philosophy, by claiming for mechanical science its rightful position as an equal in the trinity of wisdom, should make it easier to render unto Caesar the things that are of Caesar and to God the things that are of God.

Wealth and Calories

In the first place ergosophy rehabilitates with a precise meaning that old-fashioned and indispensable word Wealth, which the orthodox economist, knowing even less of the alleged subject-matter of his studies than the original founders of the subject, the French Physiocrats, took too much for granted. Originating, to him, ultimately somehow through divine agency, he came to regard the acquisition of wealth as tantamount to its creation. He became obsessed with commerce and mercantile exchange to the neglect of the technical principles underlying all new production of wealth. To this day we are in the grip of a mercantile system that fritters away in distribution most of the advantage gained in lightening the labour of producing wealth.


Marxism Obsolete

It ought never to be forgotten that Victorian economics was essentially class economics, in which only gradually and tardily the actual producers of wealth as distinct from employers and property owners were considered at all. But we find things worse and not better among the accepted doctrines of leftwing and revolutionary movements. With a clearer recognition of the social implications of energy our political controversies appear mainly as due to economic confusions. In an age when men are more and more being displaced from their function as physical labourers by purely inanimate sources of power, and are in danger of being largely by-passed out of the cycle of production and distribution by automatic mechanisms, it would be incredible, if it were not true, that so large a part of the world should be misrepresented as dominated by the doctrines of Karl Marx as to wealth originating in human


labour. Every artisan must know that this is not now true. The views of Marx on money were even more out of date, relatively to his age, than his views on wealth, and it was significant in the evidence before the Macmillan Committee that Marxists seem to have been the last to abandon their primitive belief in gold as a currency medium and in the gold standard.

The Doctrine of Struggle

Unpleasant and shattering to many cherished illusions as this may seem, it is, nevertheless, the key that best fits our age, and none know it better than those who have tried to spread the new evangel. As an Australian writer recently well put it there are many who cling to (for others not themselves) poverty, insecurity, hard work, scanty living, wars, starvation, and disease, as blessings in disguise, necessary to goad and subdue this lazy


and unruly animal, man, and to protect him from softness and decadence. This is the doctrine of existence for struggle, rather than of struggle for existence, and it is probably the oldest doctrine in the world. It stinks of the East not the West.

[...] Men, it is true, in those [past] ages may have been goaded on by starvation to successful robbery and theft of their neighbours, but, in this power-age, progress has been due to the conquest of nature and the by-passing of men. Whatever may be the ultimate genic effect of the Great War, it is generally admitted that the French


Revolution and the Napoleonic Wars have perceptibly reduced the average physique of the French nation, and that now wars, since superior courage and valour are much more likely to lead to swift personal annihilation than ultimate survival, are definitely and necessarily dysgenic. While on the positive side, where courage and stamina are essential to survival, in exploration of land, sea, and sky, and in trying out and taming still imperfectly understood new processes and appliances to the use of men, science has provided and is providing both opportunities and unavoidable necessities for facing and overcoming dangers that would have blenched the cheek of the legendary heroes of olden time. [...]

Modern Wars and National Debts

In point of fact, again, are wars now merely for sustenance? Are they not waged to secure markets wherein to dispose of the surplus wealth arising from scientific production operating along with the old practical law of wages? (By “practical law of wages” is meant the system that ensures to the worker just sufficient to maintain him in a mental and physical condition to allow of his efficient conduct of his trade, craft, or vocation. This is, of course, a direct inheritance of the age


of scarcity.) To put it quite bluntly, the purpose of wars is to compel weaker nations to take this surplus off the hands of the stronger, running up debts, if need be, in order to pay for it. Then, the threat of further war is necessary to ensure that the debts and the interest on them shall not be repudiated.

The Real Struggles

The struggle for existence is now revealed as fundamentally a struggle for physical energy, and the conquest of nature has made available supplies vastly exceeding what can be extracted from the unwilling bodies of draught cattle and slaves. It is not the struggle but the energy that is essential to human life. The doctrine of existence for struggle, on the other hand, is the oldest religion in the world.

It has never been anything but a religion of the ambitious, dominating, and unscrupulous, with either a race or a caste arrogation of superiority over the races without or the herd within, an assumption of licence to act treacherously and injuriously towards aliens and those it deems of inferior breed and to confine its standards of honour and decency to those of its own blood or order. It is a code that Christianity has actively and passively resisted for two thousand years. That fact is not unimportant. For between the progress that has culminated in ergosophy and the Christian religion there is an intimate connection. Indeed the former is in origin wholly the product of the Christian nations of the West.


The Taboo on Scientific Economics

After the War, a cry went up for scientific men to cooperate with the financial, industrial, and political authorities in solving the social evils that brought on the War and which have since made Peace nothing but a misnomer. But the strange and unconventional conclusions of the few who had brought to social problems the same searching and original thought that they were accustomed to apply in their own inquiries, frightened, not the public, but those whose interest in such problems is to keep them reconciled with things as they are. Those who persisted in shedding light on social evils and anomalies were deemed impious, and the conclusions tabooed. [...] The public is expected to believe that the misfortunes that beset us are acts of God and that, though


we have the science and the necessary equipment and organization to produce wealth in abundance, it is beyond the wit of man to learn how to distribute it. The problem, it is true, is new, and the approach to it obscured, often intentionally, by a mass of half-truths and once-truths. But its solution has not been rendered any nearer or clearer by the puerile effort of the post-War era to suppress free public discussion of the new doctrines, an issue that was fought out and won in physical science in the time of Galileo.


Wars and Revolutions Result from Wealth

[I]n our day it is not the agitator fomenting class-hatred who can start, nor the airmen raining down bombs that


can stop, a revolution. But empty milk into the Potomac; import pests to destroy the cotton crop; burn wheat and coffee as fuel; restrict the production of rubber; set up tariff-barriers; permit trusts, federations, cartels, and lock-outs; allow trade unions to develop ca’canny methods to reduce output; maintain in misery, insecurity, and idleness masses of unemployed who are not allowed to better their lot by making the very things of which they stand in need; and revolution in some form is not probable, but certain. The ideas that govern men are outraged. Instead of a few striking illustrations of incompetence or worse they begin to see universal chaos instead of order. Their institutions, so far from protecting them in their peaceful avocations on which they rely for their livelihood, appear leagued together to keep them in traditional and unnecessary servitude and dependence. The army begins to realize that it is officered by the enemy.

The Monetary System Impedes the Flow

Nor will any means avail to terminate or defeat such a revolution, whether it is sudden or long-drawn-out, violent or chronic, unless and until the barriers that oppose the free and full distribution of wealth from the producer to the ultimate user and consumer are broken down and the flow of wealth again fulfils the purpose for which men have striven to create it. Since, in all monetary civilizations, it is money that alone


can effect the exchange of wealth and the continuous flow of goods and services throughout the nation, money has become the life-blood of the community, and for each individual a veritable licence to live at all. The monetary system is the distributory mechanism, and this reading of history therefore supports up to the hilt the conclusions of those who have made a special study of what our monetary system has become. It is the primary and infinitely most important source of all our present social and international unrest and for the failure, hitherto, of democracy.

A very slight knowledge of our actual existing monetary system makes it abundantly clear that, without democracy knowing or allowing it, and without the matter ever being before the electorate even as a secondary or minor political issue, the power of uttering money has been taken out of national hands and usurped as a perquisite by the moneylender. Practically every genuine monetary reformer is unanimous that the only hope of safety and peace lies in the nation instantly resuming its prerogative over the issue of all forms of money, which, legally, it has never surrendered at all.


The Private Issue of Money

By allowing private mints to spring up Parliament has fundamentally and perhaps irretrievably betrayed democracy. Before the War shed a penetrating light into the nature of money systems in general it was customary even in the works of apparently respectable economists to find absolutely dishonest


hair-splitting distinctions between the invisible money so created and paper notes. The latter were really money and the former was not! In fact, the reader can always tell in such standard works on the subject when he is approaching the fishy part of the business. The essential fact, the creation of new money, becomes obscured in a cloud of anticipatory justification and elaborate special pleading. This is no longer even possible, and one may be thankful to find nowadays some technical writers on this malodorous subject who are content to state the facts unequivocably and to leave the reader to draw his own conclusion.

True, the old credit system “based on gold” kept the currency from being progressively and permanently debased relatively to the exchange value of gold by forcibly bringing it back again after it had been debased by compounding for the robbing of Peter to pay Paul by the subsequent ruination of Paul to pay the bank. Simple, and in many ways good, as real gold and silver currencies are, they involve a vast amount of futile human effort in the search for the precious metals, which are then instantly rendered unavailing for any legitimate aesthetic or industrial application. But it is mere pretence to ascribe such solid advantages, as they may have, to modern systems pretending to be based on them, but really using them brutally to restore the value to money after it has been diluted, to the hurt of the innocent and profit of the guilty.


Saturday, 30 April 2011

Pot Calling White Kettle Black

The first two paragraphs of the Introduction to Kathleen M. Blee, Women and the Klan: Racism and Gender in the 1920s:

An elderly white Protestant woman from rural northern Indiana described her time in the Ku Klux Klan movement of the 1920s with remarkable nonchalance, as ‘just a celebration . . . a way of growing up.’ The Klan fit easily into her daily life, as it did for many white Protestants in Indiana. At most, it was an exceptional chapter in an otherwise ordinary life. Even in hindsight, she showed little remorse over the devastation left in the wake of the Klan’s crusade against Catholics, Jews, immigrants, and blacks. What she remembered with pride, not regret, was the social and cultural life of the Klan; the Klan as ‘a way to get together and enjoy.’

For thousands of native-born white Protestant women like this informant, the women’s Klan of the 1920s was not only a way to promote racist, intolerant, and xenophobic policies but also a social setting in which to enjoy their own racial and religious privileges. These women recall their membership in one of U.S. history’s most vicious campaigns of prejudice and hatred primarily as a time of friendship and solidarity among like-minded women.

Tuesday, 19 April 2011

Secrecy, esp. Religious: a Scholarly Definition

In Kocku von Stuckrad (Ed.), The Brill Dictionary of Religion [Revised edition of Metzler Lexikon Religion edited by Christoph Auffarth, Jutta Bernard and Hubert Mohr, translated from the German by Robert R. Barr] (Leiden and Boston: Brill, 2006)

1. Secrecy as an Evolutionary Strategy
Secrecy is a strategy developed by evolution, in the case of beast and human alike within the biological food chain, that attains an elevated degree of individual opportunities and possibilities for survival and reproduction by way of the accumulation of various informational prospects. The person or animal with a successful disguise does not become prey, the one that hides his/her/its food survives times of want, the creature of restrained impulses and hidden intents can secretly dodge competitors for nourishment, sexual partners, and territory, and the one that protects progeny to the third generation ensures the safe transport of her/his/its genes. The greater the concealment and silence vis-à-vis the competing side (‘information reduction’), or the more that that side is deceived and ‘tricked’ (‘disinformation’), the greater the chances of reproduction on one’s own side. A shortcoming with regard to secrecy can mean death. Fear and triumph, therefore, are the constant companions of secrecy. The invisibility of one is the insecurity of the other.

2. Human Secrecy: Intelligence
Explicit pleasure in the generation of secrecy that can become a craving or addiction appears only with the human being. Discovery in a game of hide-and-seek arouses squeals of delight in a child, even a very young one, the dissolution of the state of tension between hiding and showing oneself is enjoyed in all merriment, stubborn silence out of spite signs a new stage of development, and re-interpreting reality with words is the lovely ruse of others, not only for Huckleberry Finn.

a) Double-Coded Secret Signs
The basis of all of these phenomena is that, through cultural evolution, the human brain has become specialized in the practice of signs, and in intelligent, secretive ways of dealing with reality. Signs stand for something that, in itself, is invisible, insensible, and inaudible. Olfactory, optical, and acoustical behavior, in the sense of positing markers, here forms the evolutionary basis, but is the prisoner of the materiality of things. Only the achievement of a transformation from the openly communicative marking to the exclusive secret sign sparks the evolutionary breakthrough. In order to introduce the sign durably and reliably, a practice of secrecy, by means of a positing of signs, must represent the absent, secret thing in the present sign in such wise that it is double-coded — coded as an ‘open secret sign.’ All see or hear the sign; however, only some recognize, know, and take charge of that which the sign indicates (wild game depicted on rocks, the early Christian fish symbol, the Zen garden).

b) Co-Evolution of Secrecy and Revelation
Simultaneous esoteric and exoteric secrecy arouses not only the curiosity and craving of the excluded, but also the temptation of a profitable betrayal. The dynamic co-evolution of secrecy and revelation, thus launched, has today produced several tamper-resistant strategies of secrecy:
Semantic double-coding, in word and image, divides reality into a visible-and-real world and an invisible-and-virtual one. (→ masks, whizzing-sticks, bread and wine in cults of life-renewal; allegories and the narration of parables in speech and writing).
Performative initiation and introduction that make the individual a member of a closed chain (years-long rites of initiation in men’s associations and brotherhoods; exclusive teacher-pupil and master-disciple relations; trials of courage).
Unexaminable vehicles of information, such as ancestors, dreams, visions, divination, omens, oracles, miracles, and charms (→ Esotericism; Occultism).
Unverifiable histories (narratives of → origin, ascensions to heaven, after-death reports and near-death experiences, eschatological histories and → apocalypses).
Magical secret rituals that can be successful only when held without witnesses (→ Voodoo cults, spiritual alchemy, black → magic).
Secret cults that render secrecy an immediate, ecstatic, and extraordinary experience of wholeness (ancient → mystery cults, Australian → Aborigines’ corroborees).
Hierarchical structures, in which the organization’s secret can be known and used only by the invisible master-superior (certain Rosicrucian groups, the “Esoteric Section” of the → Theosophical Society, Opus Dei, → Scientology).
Transformation of the—as yet—unknown or unknowable to the status of the ‘secret’ (mysteries of faith; promises of revelation; speculations on cosmology or on the theory of evolution; TV cult-series “The X-Files”).
Self-reliance and independence, which keep nothing secret except this fact (traffic in secrets; esoteric mania for betraying secrets; many secret societies after the abandonment of their original purpose of their organization, e.g., German Masonic Lodges in the nineteenth century).

These forms of secrecy are characteristic of all religions. They function on the principle that the whole is more than the sum of its parts. Only those in control of the whole are in charge of the secret. Individual participants in the secret, integrated but subordinate, cannot destroy the operational force of the secrecy. In the extreme case, the secret becomes a mystery of faith, and of self-bewitching imagination, impenetrable to all.

c) Secret Knowledge by Reflection
On the other hand, self-reflexive secrecy knows and understands what it does. It successfully shifts the dynamics of concealment and revelation to the level of reflexive knowledge in the area of individual cognition. A self-aware, self-controlled, attentive ability to remain silent is characteristic here. In creative play, and secret, confidential experiment with the possibilities of representing sign and signal, limits and boundaries fall from around the respective axiomatic conceptions of world and self (→ shamanism, scholarly → Daoism, → mysticism, alchemy).

3. Of such elements, religious acts build up a world invisible and out of reach, a world of the spiritual and believed, an ‘otherwise world,’ a ‘world behind,’ behind the world of outward facts and conditions. Secrecy protects and immunizes this second world, which determines life here and hereafter, together with the well-being of those who deal with the world of secrecy. The unequal chances for life and well-being, presented this way in gerontocracies, caste societies, patriarchates, or other forms of government has, as a rule, very stable credibility. It makes religions the connective tissue of human socialization. A self-reflexive piety of silence, and falling silent, can, on the contrary, become the catalyst and motor of cultural evolution, or make survival possible in an environment of deadly enemies (Jewish and Christian → gnosticism; Taquia and Sufi brotherhoods [→ Sufism]; ‘Marranos’).

4. The world’s retransformation into an enchanted garden of occultism and esotericism, parliamentarily uncontrollable bank secrets, and new enchantment at the hands of the media, is at full speed. In this situation, secrecy still deserves the self-reflexive elucidation of who it is who produces which secrets, in what situation and against whom, for what reason and to what end, and how and by means of what procedure or operation.