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© 2012 Sanjeev Sabhlok's revolutionary blog
A friend recommended a book, The Creature from Jekyll Island by G. Edward Griffin. I didn't remember hearing about this man before, but on checking my website I found that last year I had recommended one of his Youtube videos (an interview with a Soviet spy in India – see this). The spy admitted to extensive ideological subversion in India (as a result of which virtually no one in India is willing to listen to a condemnation of socialism).
Griffin turns out to be both a proponent of liberty and a friend of India. That's a good start, as far as I'm concerned.
Not having the time to read every book I "should" read (I've now got a huge backlog, despite trying my best), I searched the web and found this talk by Griffin about his book. I listened to the talk while taking a break, and it was well worth the time spent.
I thoroughly commend this talk (There a few things at the end which deviate from the key issue of central banking and fiat money, but most of the talk is extremely sensible). And time permitting, will read his book/s.
The basic point Griffin is making is simple: that there is a DELIBERATE attempt by governments everywhere to confiscate citizens' property through central banking. By controlling the "production" of money FROM THIN AIR, governments have mastered the method of divesting you of your wealth – without your knowing it.
Central banking is magical in its power. You feel that you are being "looked after" (after all, a central bank "stabilises" the economy – not!) even as YOU ARE CHLOROFORMED AND MUGGED.
If you were a FOOL to save your "rupees" inside a container in 1950 (or even in 2005), you will know what I mean: your savings have been made ENTIRELY WORTHLESS – BY THE CLEVER TRICK OF CENTRAL BANKING.
Griffin explains the money creation process under this central banking (fractional reserve) system.
Note that money is ALWAYS created by central banks from NOTHING. Yes, ALWAYS. From NOTHING.
This new money then mingles with old money, and STEALS some of its "power".
As Griffin says, new money is like water that dilutes soup. You can't distinguish new "water" from old "soup". The soup is simply more diluted now. You are successfully taxed in this manner without even knowing it! How very clever!
Griffin also shows that this can't happen if money creation is pegged to ANYTHING REAL (not necessarily gold).
For instance, the real value of gold has remained the same for 2,000 years. You can still get virtually the same REAL things today from an ounce of gold (e.g. a good suit and a belt) that you got 2,000 years ago.
But don't rely on your rupees (or your dollars, or euros) 2000 years from now!!
This REDISTRIBUTION, whereby money is STOLEN FROM THE HARD WORKING and TRANSFERRED TO (a) governments and (b) big banks, has been going on since the Federal Reserve was created in USA. Today, the US dollar is worth LESS THAN FIVE CENTS of its 1910 value.
ALL THAT EXTRA 95 CENTS OF YOUR HARD WORK HAS BEEN TRANSFERRED TO THE GOVERNMENT AND TO BIG BANKS. In other words, the average American would have been 20 times wealthier today than he is, without the Federal Reserve "bank". [OK, things might be a bit more complex than this, but the broad point holds.]
As we speak, the value of the Indian rupee is being degraded at an alarming rate by the Indian government (India's central bank is unambiguously a branch of government) (inflation rate in India today is greater than 10 per cent) – and yet, all that the media and people can talk about is Anna Hazare and his irrelevant (ineffective) "movement", which offers, to use Griffin's word, a NON-SOLUTION to the problem of corruption.
FREEDOM FORCE
I explored Griffin's work some more, and came across this website that he runs: Freedom Force. A key document from that is this THE CREED OF FREEDOM that he has authored, and which I'm reproducing below. It is an excellent short document, worth understanding carefully.
CREED OF FREEDOMINTRINSIC NATURE OF RIGHTSI believe that only individuals have rights, not the collective group; that these rights are intrinsic to each individual, not granted by the state; for if the state has the power to grant them, it also has the power to deny them, and that is incompatible with personal liberty.I believe that a just state derives its power solely from its citizens. Therefore, the state must never presume to do anything beyond what individual citizens also have the right to do. Otherwise, the state is a power unto itself and becomes the master instead of the servant of society.SUPREMACY OF THE INDIVIDUAL
I believe that one of the greatest threats to freedom is to allow any group, no matter its numeric superiority, to deny the rights of the minority; and that one of the primary functions of a just state is to protect each individual from the greed and passion of the majority.FREEDOM OF CHOICE
I believe that desirable social and economic objectives are better achieved by voluntary action than by coercion of law. I believe that social tranquility and brotherhood are better achieved by tolerance, persuasion, and the power of good example than by coercion of law. I believe that those in need are better served by charity, which is the giving of one's own money, than by welfare, which is the giving of other people's money through coercion of law.EQUALITY UNDER LAW
I believe that all citizens should be equal under law, regardless of their national origin, race, religion, gender, education, economic status, life style, or political opinion. Likewise, no class should be given preferential treatment, regardless of the merit or popularity of its cause. To favor one class over another is not equality under law.PROPER ROLE OF THE STATE
I believe that the proper role of the state is negative, not positive; defensive, not aggressive. It is to protect, not to provide; for if the state is granted the power to provide for some, it must also be able to take from others, and that always leads to legalized plunder and loss of freedom. If the state is powerful enough to give us everything we want, it also will be powerful enough to take from us everything we have. Therefore, the proper function of the state is to protect the lives, liberty, and property of its citizens, nothing more. That state is best which governs least.THE THREE COMMANDMENTS OF FREEDOM
The Creed of Freedom is based on five principles. However, in day-to-day application, they can be reduced to just three codes of conduct. These are The Three Commandments of Freedom:ADDENDUM INDIVIDUAL RIGHTS
Only individuals have rights, not groups. Therefore, do not sacrifice the rights of any individual or minority for the alleged rights of groups.EQUALITY UNDER LAW
To favor one class of citizens over others is not equality under law. Therefore, do not endorse any law that does not apply to all citizens equally.FREEDOM OF CHOICE
The proper function of the state is to protect, not to provide. Therefore, do not approve coercion for any purpose except to protect human life, liberty, or property.THE THREE PILLARS OF FREEDOM
Another way of viewing these principles is to consider them as the three pillars of freedom. They are concepts that underlie the ideology of individualism, and individualism is the indispensable foundation of freedom.
Addendum
The claim that average Americans would become 20 times wealthier should read the median American, not average. How does this happen?
A) Transfer of existing wealth from the middle class to the rich and to the poor
The middle class is most affected by inflation, since it keeps most of its savings in banks. Its savings loses value close to the rate of devaluation of the dollar through inflation (a tiny bit of value is chipped off each dollar saved, each year). Where does this stolen value go to?
i) The rich get most of it. They pay out low-value dollars to their creditors (as business owners). Alternatively, they own shares, which benefit likewise from inflation.
ii) The poor initially lose from inflation but earned income tax credit and other welfare programs return all of this back, plus more. Therefore they gain the rest of the value stolen from the middle class.
The hard working middle class is therefore the clear loser.
B) Reduction in the total wealth of America
But not just this impoverishment, there is also another impoverishment taking place – due to the misallocation of resources arising from system of administering interest rates. The interest rate manipulation compels the middle class to invest in real estate as protection against inflation. But, as Griffin pointed out, it is the middle class whose houses or cars are “stolen” by banks when their value falls due to inevitable recessions. Middle class savings are also lost as cheap interest rates attract low cost foreign producers and importers, displacing American jobs.
This process of misallocation of resources impoverishes America, and adds to the loss of wealth experienced by the median American.
C) The surreptitious way of stealing creates incentives to steal
You might argue that in the absence of inflation, the middle class would have paid the same amount of tax in some other way. That’s not true. The middle class would have rebelled openly if the amount by which they are (surreptitiously) being looted each year by government were openly taxed. The theft would then become more obvious, the redistribution would become more blatant, and so the thief would be shot (i.e. the median voter would boot out the party that taxes them so heavily).
In sum, it is reasonable to argue that the middle class's (or median voter's) impoverishment AT THE EXPENSE OF the rich and the poor – AND at at the expense of a bloated bureaucracy funded by these taxes which would not have otherwise existed – has been very significant, if not 20 times, over the course of the last century.
I won't hold on to the 20 times figure as a sacrament, but the concept is right.
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