Re-reading Atlas Shrugged for the umptieth time (but the first time in 10 years) has inspired that dangerous activity: thinking.
One part of the book that still holds up for me is Francisco’s money speech. That’s despite it being a speech. In the middle of a novel. It’s short, it’s brilliant, and it serves a plot-related purpose. I especially like this part:
“Then you will see the rise of the men of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of disarmed victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.
“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’”
You know that I don’t like spending lots of time on theory. But clearly, we’re already living in the days of “account overdrawn.” It’s not theory that corruption of a country’s money supply goes hand-in-hand with cynicism, political corruption, and a “live for today because tomorrow will never come” mentality.
Most people who think about it at all (other than Paul Krugman and Ben Bernanke) probably understand there’s a connection between debased money and debased values. From what I’ve seen, though, people who think only casually about it make the assumption that the debasement of money is just another symptom of corruption — that corruption comes first and crooked money is just one way that corruption is expressed.
The reality is more complex. Sure, corruption feeds on corruption and a lot of chicken-and-egg goes on. But it’s clear that corruption of a society’s money supply comes before general social corruption. Corrupting money triggers other forms of corruption. Once people realize, even on an unconscious level, that they’re being played for suckers by those who control the money (and the various groups the controllers favor and the various dangerous adventures the controllers want to get into), it only makes sense to either participate in the debasement (“to get my share”) or do whatever it takes (including committing “crimes”) to protect oneself.
Thus corruption of the money supply sets off a cascade of corruption and cynicism.
Francisco doesn’t explain this in his speech, which is a pity. Austrians try, but their messages (often couched in obscure academic language) don’t reach many people. I certainly don’t have the right words or a big enough audience.
But it’s something more people need to understand. Because without that understanding, virtually every attempt at “reform” is merely flailing away at the leaves and twigs of corruption, and doesn’t even get at the branches, let alone strike the root.