And they that shall be of thee shall build the old waste places: thou shalt raise up the foundations of many generations; an thou shalt be called, the repairer of the breach, the restorer of paths to dwell in.
— Isaiah 58:12
By Franklin Sanders
In my library you will find books by very smart people from the 1930s that predicted the imminent collapse of the American economy — and the 1940s, 1950s, 1960s and 1970s, 1980s, 1990s, etc. People have never been able to conceive how rich that economy was, how flexible its people, and how much abuse it could absorb.
Two ghosts haunt and distract us from building a new economy. The first is that government action or money is necessary. The second is that the present economy must collapse before we build a replacement.
And a monster
Because we live with it, we grew up with it, we witness it every day, we cannot realize what a monster and aberration our economy is. Its fundamental presupposition — that the state must run the economy — was only born with the communists and socialists 160 years ago. It was never practiced until World War I commandeered economies, and never thoroughly in this country until the fascist takeover of the U.S. economy was completed by Roosevelt’s New Deal in the 1930s. (That takeover took place in two steps, the 1913 establishment of the Federal Reserve System which surrendered monetary control to the fascists. The 1933 New Deal then seized operational control. Fascism, I remind you, is a Big Business-government partnership where government runs the nation and the economy for the benefit of Big Business.)
The second head of this monster is its reliance on debt. Throughout history men have understood that you can build prosperity on production only, not on debt and speculation. Our economy substitutes debt for production and monetizes the evanescent future, not the solid past and present. Until 1980 our laws forbade usury, defining that as interest greater than 10%. Those laws have been swept away before the all-powerful banks and usurers and now credit card issuers charge 28% interest for using their private, self-created money, and no one blanches. Worse yet, at check discounters and title loan companies the poor pay up to 800% interest [sic] a year. Nobody bats an eyelid, but the Scripture denounces a person who takes usury from the poor as the same as one who takes a bribe to denounce an innocent person.
Debt actually chokes off economic growth, since every dollar born in debt today must be Fed a dollar of interest tomorrow, and all our money is borrowed into existence. The debt burden just keeps on growing, and if the money supply ever stops growing, the baby quickly starves. That is the lunatic economy we live under, but we are blind to it.
Well, until it begins to creak and crumble and lurch and its running sores and cancers are revealed, as it is today, leaving us to wonder whether it really can survive.
The ghost of collapse
We seem to believe that first the economy must collapse before we can build a replacement. But why? Why do I have to wait for 300 million other people to come to their senses? Is that the way of nature, or does the next generation come up alongside the first, and gradually take over from them?
Why can’t I start living free right now? Why can’t I start building the future today? I can’t find a reason.
Seems to me that if I have something somebody else wants, and he’s willing to pay me for it, we’ve got a deal, assuming I’m not selling dope or nuclear weapons.
There’s no reason I have to wait until everybody wants what I sell and every condition is perfect. Look around you: The U.S. economy may be in trouble, but it isn’t collapsing yet. Government is still supporting over half the people, and as long as government makes good on that promise, they have no reason to change the way they do business. A crowd of facts argues that largesse cannot continue.
The question that jumps out at us is: At what point can the producers no longer support the non-producers?
Right now less than half produce for the whole. Can 30% producers support the nation? Twenty percent? Ten percent? At what point does that setup break down? Face it: many people do not want to be free. They don’t want to take responsibility for feeding themselves, let alone competing and running a business. They don’t even want to make their own decisions. Freedom scares them. I understand that, but wonder still. Maybe they have simply never known the great pleasure of working and preparing something that another person sees, recognizes the value of, and buys. Maybe they have never heard that heartfelt “Thank you.” Maybe they’ve been told so many times in so many ways, including public education, that they are not capable of taking of themselves, that they have finally come to believe it. Maybe they really aren’t capable.
But in the end almost all those folks are passive. They don’t stand in the way. They are not going to fight the old economy or the new economy, they’re just going to eat whatever’s on their plate.In the end, there’s no reason we have to wait for the economy to collapse before beginning to build the new.
In fact, our circumstances would be much worse if we did. Better to start building today, spinning together that web of relations and contacts that make an economy work, getting that experience, solving the problems before hyperinflation or transportation disruptions or violence make any economy impossible.
We simply start to work now, whether the economy collapses or not, and little by little the old economy simply fades away, because we will build a better, more just, and durable economy.
The ghost of government
The biggest hurdle we face in building a new economy is governent, not just how to sidestep all the regulations, but how to help folks to understand that we don’t need government to run the economy. We don’t need government as the partner of every transaction and business. Fact is, unless the knives & guns come out and the shooting starts, we don’t need government at all.
The lure of government money
The lure of government money hypnotizes every one: “think of all the good things we can do with that government money. Why, it’s free money in our pocket!” Sorry, it’s not. It is pure poison. Since I began talking to the late Charles Walters of Acres USA about it years ago, I have been trying to find the mechanism behind the axiom that “government money always decapitalizes the taker.” Beyond all doubt I know that is true, but I have been struggling to understand the mechanism.
Maybe it’s this: Those who accept government money are refusing to grow up and make their business work as a free-standing, profitable undertaking. They appear to make a profit, but when you subtract the government money, they have a loss.
Therefore they never learn how to make their business work. Over time government money-takers become weaker and weaker, less & less able to stir themselves up to the exertion, the accurate thinking, & the diligent labor needed to serve their neighbours and make a profit. Their own capital is being steadily consumed, but the government money stealthily hides the loss.
Eventually their capital is all eaten away, and the government-money-taker goes bankrupt, wondering what happened to him. He didn’t become unprofitable the year he went bankrupt. He was unprofitable all along, but the government money hid that & sapped his will to learn & his will to fight until it was too late to cure. He became unprofitable the day he took that government money.
The lure of the government savior
Taking government “help” is as deadly an error as taking government money. Whenever government is called in, it takes over the industry and makes its original purpose impossible.
Take the government “organic” label. As Charlie Walters once told me, “I told those d—-d hippies not to go to the government, but they wouldn’t listen!” All of the necessary standards could have been set up and enforced by a private, voluntary operation, but NO! The naïve actually believed that having government set organic standards would solve all the problems.” Instead, it worked as government regulation always does: Before the laws had even been proposed, let alone enacted, big coporations had seized control to write laws benefiting themselves and shutting out the competition.
So today we have milk raised in confinement animal feeding operations (CAFOs) where the cows eat little or no fresh grass and spend their lives on concrete, but the milk still qualifies as organic. Same goes for “free range organic eggs,” where 25,000 chickens are “free range” because their house has a door to a 12’ x 12’ fenced yard. This is an agricultural example, but government control results in the same mess across the spectrum of economic activity. Government “help” always gets it wrong, and always favours big corporations and shuts out and eventually destroys smaller competitors.
The interests benefiting from government regulation are alert, powerful, wealthy, and already have plenty of politicians in their bed. Those opposed or robbed by government regulation are weak, scattered, distracted, and difficult to organize and concentrate for opposition. Like it or not, the axiom always holds: government “help” always destroys those who need help most — and then everybody else.
The only cure
The only cure I can find for our wretchedness is simply to live free or die, not years from now when everything collapses or the atmosphere is perfect, but today, insisting on sanity in an insane world.
• We begin doing all the work we know will be profitable and fruitful and good for ourselves and others, whatever that is, building a new economy side by side with the old and dying.
• We operate on equity, not debt. That is, we finance ourselves or if we must, we borrow money from individuals who have it but never from banks who create it out of thin air.
• We operate with equity, giving full measure for full measure and even more, to make sure we give our customer his full due.
• We operate with integrity, giving and requiring justice always. No running & whining to lawyers and courts and government agencies when someone does wrong and refuses to repent, simply writing off his defalcation and shunning him until he makes good and does right. Making good ourselves whenever we are charged with error.
• We operate in reality, producing a physical good or necessary service, not financial speculating or uselessly churning and trading.
• We operate locally, seeking out our neighbours first as economic partners for every day’s transactions.
• We operate with charity, recalling always that we cannot prosper unless our neighbors prosper, so we help them as much as we can.
• We operate without government help or money, mindful always that government help destroys those who take it.
The impossible isn’t
By now you may be thinking that I am crazy and this is all impossible. The government economy is too big, too well entrenched, too cruel and vindictive and tyrannical. It’s impossible to build anything beside it.
Well, I may be crazy, but that is the way I intend to live. More than that, I have looked into the future. I have a vision of what I want the world to look like for my children and grandchildren and great-grandchildren one hundred years hence. No eye will ever see that vision unless I myself begin making it happen today. Today I am building for 100 years. Who in the world wouldn’t want to take that trip?
Franklin Sanders is publisher of The Moneychanger, a privately circulated monthly newsletter that focus on gold and silver and the application of Christianity to economics, culture and family life. We have subscribed to this newsletter for more than 20 years, and consider it a must read. F$99 a year. Franklin is an active trader in gold and silver (he’ll swap your green Federal Reserve rectangles and give you real money in return). He trades with savers and investors outside Tennessee. Subscribe to his daily price report and market commentary on the website.