Peace and Socialism

The power to create money is equivalent to splitting the atom.

John Law (1671--1729) is a forgotten prophet of economic theory, though everything we do today is based on his Money and Trade Considered: with a Proposal for Supplying the Nation with Money (1705). Schumpeter described him as “in a class by himself … in the front ranks of monetary theorists of all time.”

But it was Marx that really understood Law, “the pleasant character mixture of swindler and prophet.” Law’s misuse of his own theory exposed in embryo, spectacularly (and disastrously), how the stock market and speculation would lead to “a new mode of production”, where “enrichment through exploitation of the labour of others [becomes] the purest and most colossal form of gambling and swindling,” reducing “more and more the number of the few who exploit the social wealth.”

1893, 1929, 2008, anyone? Law was dismissed as a charlan and murderer,* the confidence man behind the Mississippi bubble in 1720. A Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself, and that national wealth depended on trade. Did I hear ‘banking is theft’ and ‘globalization’?

Gold as money: misplaced concreteness

So are the banksters all right after all?

Nope. All there is to show after 400 years is a kind of Pax Hamstera, or better, Pax Lemmus. The horrors of the 19th--20th centuries, now going off the horror chart in the 21st century. We run faster and faster, inventing and marketing ever new gadgets, and the standard of living, we now realize, is plummeting, not so much in dollar terms (that, yes) but in terms of all the ‘external economies’ which come along with those gadgets, and the lifestyle of homo hamsterus.

Keynes gave us a banker’s version of the basic income -- government debt in order to stimulate demand, but to be financed based on taxation and government deficit, not on government-created money, as C.D. Douglas wanted. Bankers do not want to give up their power, and Keynes was their boy. Probably it will take another 1917 to do that, and the prospects are poor, given the fact that the bankers defeated the Bolsheviks in the end.

Reinventing the wheel

But this is intuited by smart politicians, even if they do little to fight back. America was created out of fiat money created by the colonists.

Banks are behind our boom-and-bust economy, creating money in the form of loans (mostly to industry, but also mortgages), conducting our industrial policy behind our backs.  Why? Are they really so omniscient, so capable of steering us into a bright future? Shouldn’t they have public policy shaping their lending? Isn’t charging interest on money they create a scam? Just rubbing salt in the wound? Stealing based on their original theft from the public?

C.D. Douglas saw through the scam. But then so did simple colonists in British North America, far from London, with no gold handy for trading. Just as isolated groups with different native languages (e.g., slaves, POWs), develop a pigeon language to communicate and survive, colonists were forced by circumstance to issue money to ‘communicate’ and survive.

What is money? Yes, a measure of value, means of exchange, and store of value. Money can be created in many ways. Land speculation/ smuggling uses goods as collateral for action. Voila, money.

Seventeen years on, there is little that remains of 9/11 as physical evidence. The site of the tragedy was quickly cleaned up, too quickly in the view of many. Was that to hide incriminating evidence that exposes the real perpetrators, or just the instinctual reaction to a messy scene of destruction that you prefer to forget about?

No smoking gun has been found, though lots of strange leads, most of which point the finger at
*Israel (the ‘dancing Israelis’, Odigo text messages minutes before the planes hit the towers, Netanyahu’s ‘9/11 was good for Israel.’),
*Saudi Arabia (the 15 (of 19) Saudi hijackers were assisted by Saudi officials, Saudi funds financed al-Qaeda, the Taliban, and now ISIS; Saudi leaders make veiled threats of future terrorism), and
*Pakistan (conspirators Ahmed Omar Sheikh, Ramzi Yousef, Khaled Sheikh Mohammed, Inter-Services Intelligence Director General Mahmud Ahmed).

The US and world economy did not collapse; no more such major terrorist attacks occurred. But the world changed.


The recent interest in a basic income (BI) parallels the suddenly growing acceptance of marijuana. Could this be more than a coincidence? In the 1920s--30s, the idea of government intervention to regulate the economy was right down there with frivolous use of stimulants as the devil’s work.

Before WWI, the pious moralizing in the face of increased drunkenness had even achieved a ban on all alcohol (more or less), which continued (more or less) till 1927 in Canada (in the US 1933). Marijuana was suddenly ‘discovered’ and was banned in 1923 (in the US 1937), and unlike alcohol, remained that way, though the ban was flouted even as consumption grew rapidly in the heady post-WWII years, when the youth briefly took control of culture, if only in the explosion of energy that the baby boomers brought en masse.


Now, in the space of a few years, since the election of Trudeau jr, both bits of the devil’s work are now widely accepted, and government programs are/were tentatively being put together to make them part of our daily lives. This article deals with the basic income campaign and its radical implications for the way we think about the economy. The marijuana trip comes later. But you can bet they are two sides of one coin, marijuana the yin to BI’s yang.

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Canadian Eric Walberg is known worldwide as a journalist specializing in the Middle East, Central Asia and Russia. A graduate of University of Toronto and Cambridge in economics, he has been writing on East-West relations since the 1980s.

He has lived in both the Soviet Union and Russia, and then Uzbekistan, as a UN adviser, writer, translator and lecturer. Presently a writer for the foremost Cairo newspaper, Al Ahram, he is also a regular contributor to Counterpunch, Dissident Voice, Global Research, Al-Jazeerah and Turkish Weekly, and is a commentator on Voice of the Cape radio.

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