Padre Barron e os dois pilares da Doutrina Social da Igreja

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O grande padre Robert Barron, o homem que nos conduziu na grande série Catholicism e que costuma tecer opniões no seu site Word on Fire, escreve um artigo sobre os dois pilares do pensamento social da Igreja Católica: subsidiaridade e solidaridade, para o site Real Clear Religion, relacionando este assunto com a escolha do católico Paul Ryan para candidato a vice-presidente na chapa de Mitt Romney, contra Obama.

Texto abaixo:

The Great Bi-Polar Catholicism

By Father Robert Barron

For many on the left, Paul Ryan is a menace, the very embodiment of cold, indifferent Republicanism, and for many on the right, he is a knight in shining armor, a God-fearing advocate of a principled conservatism.

Mitt Romney's choice of Ryan as running mate has already triggered the worst kind of exaggerated hoo-hah on both sides of the political debate. What is most interesting, from my perspective, is that Ryan, a devout Catholic, has claimed the social doctrine of the Church as the principal inspiration for his policies. Whether you stand with First Things and affirm that such a claim is coherent or with Commonweal and affirm that it is absurd, Ryan's assertion prompts a healthy thinking-through of Catholic social teaching in the present economic and political context.

Ryan himself has correctly identified two principles as foundational for Catholic social thought, namely subsidiarity and solidarity. The first, implied throughout the whole of Catholic social theory but given clearest expression in Pope Pius XI's encyclical Quadragesimo Anno, is that in the adjudication of matters political and economic, a preferential option should be given to the more local level of authority.

For example, when seeking to solve a traffic-flow issue in a suburb, appeal should be made to the municipal authority and not to the governor, even less to the Congress or the President. Only when a satisfactory solution is not achieved by the local government should one move to the next highest level of authority, etc.

This principle by no means calls into question the legitimacy of an over-arching federal power (something you sense in the more extreme advocates of the Tea Party), but it does indeed involve a prejudice in favor of the local. The principle of subsidiarity is implied in much of the "small is beautiful" movement as well as in Tolkien's Lord of the Rings, which exhibits a steady mistrust of imperial power and a steady sympathy for the local, the neighborhood, the small business.

Now in Catholic social theory, subsidiarity is balanced by solidarity, which is to say, a keen sense of the common good, of the natural and supernatural connections that bind us to one another, of our responsibility for each other. I vividly remember former New York Governor Mario Cuomo's speech  before the Democratic National Convention in San Francisco in 1984, in the course of which he effectively lampooned the idea that individual self-interest set utterly free would automatically redound to the general welfare.

Catholic social thought does indeed stand athwart such "invisible hand" theorizing. It also recognizes that, always in accord with subsidiarity, sometimes the federal and state governments are the legitimate vehicles by which social solidarity is achieved. Does anyone today, outside of the most extreme circles, really advocate the repeal of Social Security, unemployment compensation, medical benefits for the elderly, food stamp programs, etc.?

Solidarity without subsidiarity can easily devolve into a kind of totalitarianism whereby "justice" is achieved either through outright manipulation and intimidation or through more subtle forms of social engineering. But subsidiarity without solidarity can result in a society marked by rampant individualism, a Gordon Gekko "greed is good" mentality, and an Ayn Rand/Nietzschean "objectivism" that positively celebrates the powerful person's dominance of the weak.

Catholic social theory involves the subtle balancing of these two great principles so as to avoid these two characteristic pitfalls. It does, for example, consistently advocate the free market, entrepreneurial enterprise, profit-making; and it holds out against all forms of Marxism and extreme socialism. But it also insists that the market be circumscribed by clear moral imperatives and that the wealthy realize their sacred obligation to aid the less advantaged. This last point is worth developing.

Thomas Aquinas teaches that ownership of private property is to be allowed but that the usus (the use) of that privately held wealth must be directed toward the common good. This is because all of the earth and its goods belong, finally, to God and must therefore be used according to God's purpose. Pope Leo XIII made this principle uncomfortably concrete when he specified, in regard to wealth, that once the demands of necessity and propriety have been met, the rest of what one owns belongs to the poor. And in saying that, he was echoing an observation of John Chrysostom: " If you have two shirts in your closet, one belongs to you; the other belongs to the man who has no shirt."

In his wonderful Orthodoxy, written over a hundred years ago but still remarkably relevant today, G.K. Chesterton said that Catholicism is marked  through and through by the great both/and principle. Jesus is both divine and human. He is not one or the other; nor is he some bland mixture of the two; rather, he is emphatically one and emphatically the other. In a similar way, the Church is radically devoted to this world and radically devoted to the world to come. In the celibacy of its priests, it is totally against having children, and in the fruitful marriage of its lay people, it is totally for having children.

In its social teaching, this same sort of "bi-polar extremism" is on display. Solidarity? The Church is all for it. Subsidiarity? The Church couldn't be more enthusiastic about it. Not one or the other, nor some bland compromise between the two, but both, advocated with equal vigor. I think it would be wise for everyone to keep this peculiarly Catholic balance in mind as the debate over Paul Ryan's policies unfolds.

Father Robert Barron is the founder of the global ministry, Word on Fire, and the Rector/President of Mundelein Seminary. 

Hoje é dia do Patrono do Blog

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Hoje comemora-se o dia de São Maximiliano Kolbe, o homem do Bloco 11, Cela 18, que se ofereceu para morrer de fome no lugar de um pai em Auschwitz, há 71 anos (14 de agosto de 1941).

Este blog nasceu no dia que visitei a cela dele, onde João Paulo II colocou flores.

Que São Maximiliano me ajude na minha caminhada e nas caminhadas dos amigos deste pequeno blog dedicado à economia.

Vejam o relato do Rome Reports, abaixo.

August 14, 2012. (Romereports.com) August 14 is the feast day of St. Maximilian Maria Kolbe. His given name was Raymond but upon entering the Franciscan seminary he changed it to Maximilian. He was born in the small Polish village of Zdunska Wola on January 8, 1894.

He is admired for the heroic gesture of offering his life to save the life of a parent. It happened on August 3, 1941 at the Auschwitz concentration camp when a prisoner escaped, ten others were sentenced to death. Seeing that one of those sentenced to die was a father, Maximilian volunteered to take his place. His request was granted and was sentenced to death by starvation. He died on August 14, 1941.

The father that was saved by Maximilian noted that he “not only died a saint, but also lived as a saint”. During his last days spent in prison, Maximilian still found a way to celebrate Mass.

In 1917 he launched the “Militia of the Immaculate,” an association of the faithful dedicated to his return to Poland. He also helped create different magazines as well as two religious communities known as “cities of the Immaculate,” one in Poland and one in Japan.

He was a saint, who as John Paul II once said, “did not suffer in death, but gave the gift of life”.

Standard Chartered e o Irã

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Hoje foi anunciado que o principal órgão regulador do mercado financeiro de Nova York acusou o banco britânico Standard Chartered de administrar de forma inidônia, de ser um "banco pária" (rogue bank). Standard Chartered é acusado de ocultar na sua contabilidade mais de US$ 250 bilhões em transações irregulares com o Irã. O Banco nega, mas caso seja verdade o envolvimento do banco com o Irã, um estado que financia o terrorismo, pode deixar no chão o relacionamento que foi descrito aqui anteriormente entre o HSBC e o terrorismo e os chefões das drogas. Além do Irã, há indícios de relacionamento criminoso entre o Standard Chartered e Líbia, Burma e Sudão.

Vejam o texto da BBC.

Standard Chartered bank 'in $250bn scheme with Iran'

The New York State Department of Financial Services said that the bank hid 60,000 secret transactions for "Iranian financial institutions" that were subject to US economic sanctions.
It labelled UK-based Standard Chartered a "rogue institution".
The bank has been threatened with having its US banking licence revoked.
The allegations are far larger than those involving HSBC, which was recently accused by the US Senate of failing to prevent money laundering from countries around the world including Mexico and Iran. It has set aside $700m to deal with any fines and penalties arising from those allegations.
The bank is ordered to appear before the regulator soon to "explain these apparent violations of law" from 2001 to 2010.
The regulator also said that it would hold a formal hearing over the "assessment of monetary penalties".
"If the allegations are proven true, it does show there was a systematic policy in place to strip these wires of the necessary information," Farhad Alavi, a lawyer at BHFA Law Group in Washington DC, told the BBC.
"Because the transactions have to pass through the US [because they are in US dollars] this is one area where the US can exert its power."

Other schemes found
 
The regulator also said it had uncovered evidence with respect to what are apparently similar schemes to conduct business with other countries under sanctions - Libya, Burma and Sudan.

"Investigation of these additional matters is ongoing," it added.

The regulator said that its nine-month probe, which involved looking through more than 30,000 pages of documents, including internal Standard Chartered Bank (SCB) emails, showed that the bank reaped "hundreds of millions of dollars in fees".
"SCB's actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity," it said.

'Staggering cover-up'
 
The bank was also accused of falsifying SWIFT wire payment directions by stripping the message of unwanted data that showed the clients were Iranian, replacing it with false entries.
Senior management were also said to have codified their illegal procedures in formal operating manuals, including one labelled "Quality Operating Procedure Iranian Bank Processing".
"It provided step-by-step wire stripping instructions for any payment messages containing information that would identify Iranian clients," the complaint said.
In numerous emails going back as far as 1995, the bank's lawyers advised on ways to go about circumventing US sanctions.
In March 2001, Standard Chartered's legal advisor counselled that "our payment instructions [for Iranian clients] should not identify the client or the purpose of the payment".
By 2006, there were concerns raised about the bank's conduct in its New York branch.
The chief executive for the Americas sent an email to London saying the programme needs to "evaluate if its returns and strategic benefits are... still commensurate with the potential to cause very serious or even catastrophic reputational damage to the group".
But those warnings were ignored by senior management in London in what the regulator called a "staggering cover-up".
'Obvious contempt' Iran has been subject to US economic sanctions since 1979, and the laws were toughened by Executive Orders signed by President Bill Clinton in 1995 over US dollar transactions with Iran.
The US-dollar transactions in question originated and terminated in European banks in the UK and the Middle East, and were cleared through its New York branch, the complaint said.

Among the violations of the law, the bank is accused of:

• falsifying business records
• failing to maintain accurate books and records
• failing to report misconduct to the regulator in a timely manner
• evading Federal sanctions

In the 27-page complaint, the New York State Department of Financial Services said that Standard Chartered showed "obvious contempt for US banking regulations" and pointed to an email reply from a bank executive director to a New York branch officer.
"Who are you [Americans] to tell us, the rest of the world, that we're not going to deal with Iranians," the complaint quotes the director as saying.
Standard Chartered said: "The group is conducting a review of its historical US sanctions compliance and is discussing that review with US enforcement agencies and regulators.
"The group cannot predict when this review and these discussions will be completed or what the outcome will be."
The US Treasury, which implements the sanctions, said that it "treats sanctions violations extremely seriously".

Monges que fizeram o Ocidente Rico

 

Um trabalho do Departamento de Economia da Universidade de Copenhague, discute por que alguns países ficarm ricos e outros ficaram pobres. O ponto é formação de uma ética do trabalho, com isso discute-se o trabalho de Max Weber que dizia que o espírito protestante de trabalho duro com reinvestimento dos lucros. Para os autores, na verdade o espírito protestantes foi formado antes do protesntantismo, por uma ordem católica, a Ordem dos Cistercienses.

Os autores do trabalho são Thomas Andersen, Jeanet Bentzen, Carl-Johan Dalgard e Paul Sharp e pode ser lido clicando aqui.

O site Science Nordic fez um comentário sobre o trabalho dos autores

Muito interessante.

HSBC, Terrorismo, Máfia e Drogas

 

Publiquei este post inicialmente no meu outro blog Thyself O, Lord.

O site Business Insider revela hoje uma investigação do senado dos Estados Unidos sobre o HSBC, mostrando o relacionamento do banco com financiamento ao terrorismo, às máfias internacionais, ao tráfico de drogas.No caso do terrorismo, o banco tem histórico de participar do financiamento do Hamas e da Al Qaeda.

A investigação do senado americano pode ser lida, clicando aqui ou  aqui.

O senado americano diz que encontrou as seguintes vulnerabilidade no HSBC:

• Fornecimento de contas de correspondentes norte-americanos para os afiliados do HSBC de alto risco sem a realização da devida análise, incluindo uma filial mexicana com controles não confiáveis de lavagem de dinheiro;
 
•Não evitou conduta enganosa por parte de filiais do HSBC para contornar um dispositivo de rastreio que  bloqueia transações de terroristas, chefões do tráfico e de nações párias como o Irã;

• Fornecimento de contas bancárias para bancos estrangeiros com ligações com o financiamento ao terrorismo;

• Lavar milhões de dólares em cheques de viagem em dólares, apesar de circunstâncias suspeitas, e

• Fornecimento de contas suspeitas que facilitam atividades escusas.

Para ficar em apenas um caso, vou destacar o relacionamento com um banco da Árabia Saudita que financia a rede terrorista al Qaeda. Diz a subcomissão do senado que estuda co caso:

Uma terceira questão envolve o fato de que o HSBC atuar em regiões do mundo com desafios significativos de terrorismo, ao mesmo tempo demonstrando uma vontade preocupante de fazer negócios com os bancos que têm links para o financiamento do terrorismo. Um exemplo envolve Al Rajhi Bank, o maior banco privado na Arábia Saudita. Após o ataque 9/11 terrorista aos Estados Unidos, surgiram evidências de que o fundador do banco era um benfeitor financeiro da al Qaeda e este fundado fornecia contas para clientes suspeitos. 

Em 2005, o Grupo HSBC disse aos seus filiados para cortar os laços com o banco, mas fez uma exceção para o HSBC no Oriente Médio. Quatro meses depois, sem explicar o motivo, o Grupo HSBC voltou atrás e disse todas as suas filiais poderia decidir fazer negócios com o Al Rajhi Bank.  Em 2006, depois de Al Rajhi ameaçar retirar todos os seus negócios com o  HSBC, se a filial americana do HSBC não restabelecesse negócios, o HSBC cedeu Ao longo dos próximos quatro anos, o HSBC dos Estados Unidos forneceu quase US$ 1 bilhão ao Al Rajhi, parando apenas quando o HSBC fez uma decisão global de deixar a negociação de notas bancárias de forma geral, não apenas com o Al Rajhi.

 O site Businesss Insider descreve o relacionamento do banco Al Rajhi com o terrorismo.

O executivo do HSBC, David Bagley, renunciou após o relatório do senado. 

O jornal inglês The Telegraph repercute o caso e chama atenção para o envolvimento de um padre da Igreja Anglicana que foi chefe executivo do HSBC e até escreveu um livro sobre a moralidade das finanças, Lord Green.  


Obviamente, como o relatório deixa claro, o HSBC não é o único caso de facilitar e financiar o terrorismo, o tráfico de drogas e as máfias no mundo. Basicamente, as organizações criminosas mexem com muito dinheiro, muitas vezes financiadas pelos próprios estados, na ânsia do lucro qual banco no mundo recusa a participação no esquema?


(Agradeço a indicação do assunto ao site Jihad Watch)

Um Frei, Pai da Contabilidade, Professor de Leonardo da Vinci

A Bloomberg lembrou hoje do pai da Contabilidade, que foi professor de matemática de Leonardo da Vinci, além de ter escrito a primeira enciclopédia de matemática da Europa, demonstrando a álgebra, o frei franciscano Fra Luca Bartolomeo de Pacioli.

Ficou muito bom o texto.

How a Medieval Friar Forever Changed Finance

Consider some headlines from the past week. China announced its gross domestic product had slowed to a three-year low of 7.6 percent in the latest quarter. The International Monetary Fund cut its global growth forecasts to 3.9 percent for 2013. And Citigroup Inc. announced its net income was down 12 percent.
The system that generates these 21st-century accounting figures -- the numbers that run our nations and corporations -- was first codified by a Renaissance friar named Fra Luca Bartolomeo de Pacioli. He was at one time more famous, as a mathematician, than his collaborator Leonardo da Vinci.
Pacioli is remembered today, if he’s remembered at all, as the father of accounting. He wrote the first mathematical encyclopedia of Europe, which made two critical contributions to modern science and commerce: It was the first printed book to explain Hindu-Arabic arithmetic and its offshoot, algebra, and it contained the first printed treatise on Italian accounting.
Algebra would underpin the Scientific Revolution; Italian accounting, the Industrial Revolution.

Double Entry

As his encyclopedia was going to press in Venice in 1494, Pacioli added a 27-page summary of a new form of accounting that had first emerged in Italy around 1300 and been perfected by the merchants of Venice. He called the addition a “special treatise which is much needed” to help merchants keep their accounts in an orderly way.
Known in the 15th century as accounting “alla Veneziana,” the system is now called double-entry bookkeeping and is standard practice throughout the world. In 1494, it was exceptional -- and in his treatise Pacioli recommended it above all others.
In their ledgers, Venetian merchants separated debits and credits, dividing them into two columns. As Pacioli wrote: “All the creditors must appear in the Ledger at the right-hand side, and all the debtors at the left. All entries made in the Ledger have to be double entries -- that is, if you make one creditor, you must make someone debtor.”
Pacioli’s system was revolutionary because it allowed merchants to calculate increases and decreases in their wealth, recorded in their capital account. In other words, it allowed them to determine that driver of capitalism: profit (or loss). Pacioli wrote that the purpose of every business was to make a lawful and reasonable profit, which could be tallied with Venetian bookkeeping. And thus the seed of capitalism was planted.
Because Pacioli used the recently invented printing press to record and disseminate Venetian double entry, the system swept across Europe during the next two centuries and then to the U.S.
By the 18th century, Italian bookkeeping had become so pervasive that it had spread beyond the realm of commerce and into culture. Daniel Defoe famously applied it in his 1719 novel “Robinson Crusoe” when the shipwrecked Crusoe uses double entry to assess his life, drawing up his “State of Affairs” and comparing “very impartially, like Debtor and Creditor, the Comforts I’d enjoyed, against the Miseries I suffered.”

A New Profession

Fittingly, it was in the economic heart of the Industrial Age -- Great Britain -- that Venetian bookkeeping came into its own. The rise of factories and the flourishing of the joint-stock company transformed double-entry bookkeeping into a brand new profession: accounting.
The huge amounts of capital expenditure required to build railways -- raised from private investors on stock exchanges and managed by joint-stock companies -- brought new issues of accounting and accountability. By the 1860s, accountants were legally required in Britain at every phase of a company’s life: at its formation, during its operation and at its liquidation.
Although financial statements had been an incidental product of a company’s bookkeeping in 1800, they had become its raison d’etre by 1900. Venetian bookkeeping proved to be the perfect mechanism for generating these financial statements. It could accurately record capital and income as required by law and investors, it could distinguish between private expenses and corporate costs, and it could produce data that helped evaluate past investment decisions.
Venetian double entry thus became essential to the modern corporation. In the 20th century, it became equally essential to the nation state. With the crash of the New York Stock Exchange in 1929, and the Great Depression that followed, the laissez-faire principles that had previously informed government approaches to economic affairs suddenly seemed insufficient. At sea in their response to the crisis, the administrations of Herbert Hoover and Franklin D. Roosevelt commissioned comprehensive estimates of the income of the U.S. to guide their policies.
Soon after Roosevelt succeeded Hoover as president and began the New Deal, the British economist John Maynard Keynes travelled to the U.S. to see the policies in action. In Washington, Keynes said: “Here, not in Moscow, is the economic laboratory of the world.”

Theory, Practice

This signified a momentous change in government practice, and in economic theory. If Roosevelt’s response to the Depression was the New Deal, then Keynes’s was his “theory of effective demand.” Published in 1936, it provided a theoretical basis for the measurement of national income, consumption, investment and savings.
Both Roosevelt’s program and Keynes’s theory entailed the creation of national accounting systems, a massive undertaking that was carried out using the principles of double-entry bookkeeping.
At Keynes’s instigation, the first British accounts were made during World War II. Following the war, national accounts were created in countries across Europe as part of the framework of the Marshall Plan. And under the aegis of the newly created United Nations, national accounts were subsequently adopted by almost every nation on Earth.
Today, we depend on the numbers generated by the accounts of nations and corporations to direct our governments, businesses and societies. And so it happened that a medieval Italian accounting system codified by a friar in 1494 now governs the global economy.

A História da Moeda por David Graeber

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Abaixo um excelente texto de John Médaille sobre o livro Debt: The First 5000 Years (Dívida: Os Primeiros 5000 anos) do antropólogo David Graeber. O livro questiona o ensinamento econômico que o homem primeiro trocou mercadorias, depois criou a moeda e depois criou o crédito. O livro mostra que, pelo contrário, o ser humano primeiro criou o crédito, por uma questão social. Além disso, o livro criritca o modelo do sistema bancário moderno.

Friends and Strangers: A Meditation on Money

I start my meditation with a true story that will serve as a parable. On his 21st birthday, the nature writer Francis Thompson was presented by his father with a bill for all the expenses of his upbringing including the costs of his birth and delivery. Francis paid the bill, but he never spoke to his father again. This story is recounted in David Graeber’s Debt: The First Five Thousand Years, an excellent account of the history of money. Yet Graber titled his book “debt”; did he just get it wrong, or did he uncover the essential nature of money?

We are immediately repelled by this story, yet at the same time, we have to concede a strange kind of justice to it. There is no doubt that the father was correct to point out to his son the obligation that he had, but in quantifying that obligation, he converted it into a debt, for that is the difference between an obligation and a debt: an obligation becomes a debt when you can put a number on it. “I owe you one” is an obligation; “I owe somebody $10″ is a debt. Obligations bind people together even after they have been “paid.” But debts bind us only for as long as the debt exists. The relationship dies on payment of the debt. We might say that obligations bind us together, while debts drive us apart. By quantifying the obligation, Thompson’s father offered him the opportunity to dissolve it, to discharge it, and in doing so to end their relationship; his son took the offer and was no longer his son.

The economists tell us a neat story about the development of money. The primitive world, they tell us, begins in barter, develops in money, and matures in credit systems. The problem however, is that the historians and the anthropologists have been telling the economists, and telling them for over 100 years, that they can find no record of this development; in fact, the actual history seems to be just the opposite: first comes credit, then money, and finally barter systems. Widespread barter systems only come about after the collapse of monetary systems, and even then money is still used as a unit of account, as a way of equating dissimilar items.

Economic life begins in the family and the village, and in these structures, there is no accounting for debt. Rather, there are long chains of mutual obligations. In general, people do not barter goods; these are gift economies where each person’s surplus freely circulates throughout the village and the family as gifts. The fisherman, when he wants a pair of shoes, does not, as in the economists’ myth, search out a cobbler who wants some fish. Rather, he freely gives away his surplus fish, an act which gains him honor in the village; he is a man who can contribute to the village, and therefore worthy of honor. Perhaps some woman will notice that he is wearing tatty moccasins, which is not appropriate for a man of honor. She will undertake to make him some moccasins and thereby gain honor for herself. In village life, “honor” is the coin of the realm, and the economic system aims at circulating goods in such a way as to bind the members of the village together in a long chain of mutual obligations.
Barter does not work for two reasons. The first is that natural goods mature in due season. This means that for most of the year, the farmer has nothing to trade with the hunter save his promise to pay when the crop comes in. The second is that even simple production takes place in many steps and stages and over a period of time. Until the work is complete, there are no tradable goods, only a work-in-progress. This cannot be financed by barter, but only by a promise to pay when the work is completed and the product is sold.

Some barter does take place, but only with outsiders, with strangers. With visiting tribes or wandering strangers, there will often be an exchange of gifts that is indistinguishable from barter. The reason for this is obvious: since they will not meet again, or will meet only at odd intervals, the exchange must be immediate, and if honor is to be maintained, the gifts must be of equal value.
Money could not purchase anything because there was nothing to buy; there were no markets. Again, this was not because villagers are ignorant of markets, but rather because they made deliberate efforts to prevent the formation of markets, to bind the village together in long chains of mutual obligations. But such efforts are impossible with the growth of the village into the town and the city. When most of the people you meet are strangers rather than friends, the whole idea of the gift economy becomes impossible. Still, the idea of the obligation never disappears because society can never be anything more than a long chain of mutual obligations.

And herein lies the real power of money: it coordinates the actions of millions of strangers. Our lives are critically dependent on the actions of others; thousands of people contribute daily to our well-being, and all but a tiny fraction of them are strangers to us. How shall we acknowledge our debt to them, and they to us, except by the medium of money? Money then, is not so much a medium of exchange as a record of the obligations we have to each other, a series of debits and credits. A dollar in our pocket is at once the symbol of the labor we have performed for others, and an acknowledgment of the debt they have to us. Our dollar is a visible credit, a claim on that portion of all the goods and services that are being offered for sale. It is a token of exchange only by being the symbol of the debt.

And the history of money bears this out. Money existed as a unit of account for debts for nearly two millennia before it existed as coins and currency. As early as 3500 BC, Babylon developed as a sophisticated society with great cities, and all without the use of money, or at least without the use of currency. Currency would not begin until about 700 B.C. in Greece. In the great temples and palaces of the Babylonians (which served as the banks) we find extensive commercial records preserved in cuneiform tablets. This unit of account was the gur, the measure of barley that constituted the monthly ration, or it was the Shekel, a weight of silver whose value was arbitrarily set to the gur. Domestic debts were computed in gur, while foreign trade was conducted in silver that the temples advanced to the merchants. Debts were paid in real goods, which might be silver or barley or any other worthwhile product.

The use of money introduced something completely new into economic life, namely the invention of interest. Interest most likely began as a way of participating in the profits of the merchants. The Temple advanced silver to the merchants, and received interest as a convenient way of participating in profits. No arguments arose about how much profit was made and what the Temple’s share ought to be; the Temple’s share was fixed in advance. But what likely began as commercial loans, quickly spread to domestic loans; that which proved beneficial for Shekel debts proved disastrous for the barley debts. Farming is a hazardous occupation, and crop failures are inevitable. Debts piled up, and large parts of the population sank into debt peonage and slavery, destabilizing both the economy and the social order. In order to remedy this, the kings would, from time to time, declare a debt amnesty, canceling all the barley debts (but not the Shekel debts) and freeing the slaves. It is noteworthy that the first written use of the word “Freedom” occurs in one of these amnesty proclamations. The cuneiform symbols for “freedom” actually mean “return to mother,” signifying the return of the slave to his family. The famous Rosetta Stone is also a record of one of these amnesties. It became the custom that every king would begin his reign with a debt amnesty, and these amnesties became the “Jubilee” of the Hebrews when they returned from the Babylonian captivity. Ironically, the Jubilee was more favorable to lenders than the older Sabbath codes in Deuteronomy, which mandated a debt amnesty every seven years.

Usury was the bane of the Mesopotamian kingdoms, but in the amnesties they recognized the communal nature of society; while maintaining a strict commercial order, they recognized that debts could not multiply without it being the end of all social order. Usury was also the great social evil of the Roman Empire, as more and more farms disappeared into the great Latifundia, the estates of the aristocrats who were able to seize the land of the citizens who were off fighting Rome’s extensive wars. Daniel Graber notes that the Roman solution was not to declare amnesties, but to throw money at the problem. The wealth of the provinces poured into Rome to create a vast welfare state that demoralized the people while leaving the power of the aristocrats intact.

Rome and Greece were money societies where usury reigned, and the poor became, increasingly, the slaves of the rich. But neither slaves nor state dependents made good soldiers, and the armies became not so much a group of citizens defending their homes, as a group of professionals engaging in a trade. It took vast amounts of coinage to support these armies, and vast amounts of taxes or plunder to support the army; Alexander’s army of 120,000 men required half a ton of silver each day for their pay. Money and militarism went together. Basically, the government issued coins to pay their debts, and then demanded them back in the form of taxes. This set up a circulation of coinage which, as a by-product, set up the kinds of markets that we have today.

With the collapse of the Roman Empire in the West, society reverted to credit systems. There was coinage to be sure, but its value was not fixed, nor its metallic content nor purity. Kings would routinely “cry down” the value of their currency in order to dissolve their debts. This was actually a form of taxation in an era that did not have much in the way of taxes, and worked rather well so long as it was not abused. But much of commerce was carried on simply as credits and debits, often recorded in the form of tally sticks. A tally stick was a bit of hazel wood upon which a debt was recorded in the form of notches; the stick was then split in half. The creditor’s half was called the “stock,” which made him the stockholder, and the debtors half was called the stub. The stock would circulate as money, and as long as the stub remained it was impossible to change the debt.

Tally sticks circulated in England for 500 years. It is worth noting that when the Bank of England was founded, in 1694, one quarter of its capital was in the form of tally sticks. But the bankers wished to monopolize the creation of money, and immediately set out on a long campaign to get the tally sticks outlawed. And they got their wish when the Liberal party came to power in 1832. One of their first acts was to fulfill the agenda of the Bank of England. All of the tally sticks were gathered together and burned in a stove in the House of Lords. However, the fire got out of hand and burned down the Houses of Parliament. When we view Turner’s magnificent paintings of this event, we should keep in mind what it was all about.

Medieval merchants and local markets would also produce tokens or vouchers for their goods. Thus, for example, a baker would issue his own “money” which could be redeemed for his bread, while the butcher or the cobbler would do the same for their meat and shoes. These tokens would circulate as money on market day, and at the end of the day the merchants would settle accounts between them. Note that the baker would not issue more tokens than the bread he could bake nor the cobbler for the shoes he could make; the supply of this market money was always more or less equal to the goods the money could buy.

The banks triumphed in the end, even if it meant that they had to burn down the symbols of democratic order to do so. But a bank is not like a baker; a baker can issue credits only for the bread he can bake; a banker can issue credits in infinite amounts. We have in our mind a picture of the banks as lending out the deposits they receive, as serving as mere financial intermediaries. But this is not the case. A banker will never lend out the money you deposit; this he holds as reserves against losses, and for day-to-day cash transactions. No, the “money” he lends out is simply credits he creates by pressing a few buttons on the computer or by making a few entries in a ledger. The borrower may write checks against these credits, and at the end of the day the bankers settle up the checks between each other; no cash is involved. Now, this would not be a problem if the money was always lent for productive purposes. But insofar as the money is lent for speculation, then the money supply expands faster than the goods and services it is supposed to represent.

New money is injected into the economy, but unlike the baker’s money, that money matches no new goods. The claims on the existing stocks of goods and services are multiplied, but those stocks are not. The power of a small group of citizens is multiplied by the monopoly granted by the government. Compare the situation of the farmer and the banker: the farmer may increase his wealth only by work, the hard work of growing corn; the banker may increase his wealth, or at least his assets, by pressing a few buttons on the computer.

Herein lies the great secret of our money system: before you signed the mortgage to buy your home, or the note to buy your car, or the credit slip to buy a hamburger at McDonald’s, the money to buy the home, the car, or the burger did not exist; it comes into existence in the very act of borrowing it. Henry Ford once said, “If people understood how money was created, there would be a revolution before breakfast.” But Mr. Ford was wrong; there will be no revolution because people will simply not believe that money can be created so easily. But alas, that is indeed the way the system works.
Here we may return to our original parable, the sad tale of how indissoluble obligations were turned into temporary debts; of how the ties that bind are easily dissolved by putting a number on them. We cannot help but be a society of strangers, yet underneath this, we cannot be a society at all unless we recognize our mutual obligations to one another. It is possible that our rude ancestors had it right all along: that obligations are more important than debts, and that amnesties are the key to economic and social order. Surely this question faces us now with a force that cannot be ignored. We are truly in each other’s debt, but it is a debt that extends beyond the mere payment of the sum of money. Money is a useful, even a marvelous tool, but like a fire it can either warm or destroy us. In his latest encyclical, Pope Benedict XVI saw in the root of all financial dealings, a “principle of gratuitousness,” a principle that binds society together in a way that exceeds mere money debts. Money itself is merely the credit we extend to each other, and that “credit” has as its root credo, “I believe.” For along with faith in God we need faith in each other; credo in unum Deo cannot be replaced with credo in unum dollar.