Part 5 of PEACE
PLAN 11,
Public insurance and compensation
money
by Ulrich
von Beckerath
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part 5
for
the table of contents go to part one
as for this final section:
we are in the middle of concluding
remarks concerning 'seam anew', 'circulatory satisfaction' and the French
Revolution.
The present ruler, Rez Sha Pahlevi, has preferred to dispense
with taxes in kind rather than tolerate any longer the existing abuses.
In China the experiences with taxes paid in rice have not been more satisfactory
than those in Iran with corn. Only the Milhaud system renders it possible
to place the taxpayer monetarily in a po 257
sition
as
if he were allowed to pay in kind and yet for the Government not to be
monetarily worse off than i f i t were paid i n
m o n e y, the settlement procedure being at the same time as s i
m p l e and obvious as if payments were effected in coin.
( An aside: As many asiatics cannot
reed the purchasing certificates should be so assigned that an illiterate
could negotiate them. The coins of which the certificate is the equivalent,
should therefore be imaged on the certificate besides which there should
be as many dots or figures as correspond to the value of the certificate
Thus a certificate for 5 rials or 5 rupees should contain the number five
times - perhaps one figure in each corner and one in the centre- and somewhere
also 5 dots. The people would readily understand this. The dots could be
at a distance of 1 inch or 1 centimetre from one another, This would provide
the peoples with a useful measure. Asiatic households mostly lack such
facilities)
We may remark here that the transition from barser to safe for money should
not beregarded as a transition from s i m p l e economie conditions
calling for no reflection to c o m p l i c a t e d ones requiring
this, To recognise that, the descriptions of bartering provided by travellers
should be reed. Thus H Barth,the African explorer writes in his "Reisen
und Entdeckungen in Nord und Zentral-Afrika von1849 bis 1855", ('Travels
and Discoveries in North and Central Africa from 1849 to1855' :
"A small farmer who brought his corn to the Monday
market at Kukawa (in the Sudan)
refused firmly to accept shells in payment and was seldom satisfied with
thaler, (This is the well-knoen Maria Theresa
thaler). He who wants to buy corn must accordingly,
if he only possesses thaler barter these for shells, or rather he buys
shells and with these, he buys a shirt _ ''kulgu" _ and only after
repeated barter -transactions is he able to get his corn. The inconvenience
experienced by a market frequenter is really so great that I frequently
saw my servants return utterly exhausted,"
Karl
Menger, from whose
"Grundsaetze der Volkswirtschaftslehre' (Principles of Economics, second
edition, p 245) the
quotation is taken, reports even more circuitous, but quite common, barter
operations from East Africa following V L Cameron's work "Across Africa"
( 1877 ). (Readers wishing to consult Menger's
treatise in English, are referred to the translation published in 1934
bv the London School of Economics and Political Science, constituting No.
17 of Reprints of Scarce Tracts in Economic and Political Science. The
work is one of the best ever printed)
The inhabitants of Kukawa, which was then a town of 60 000 inhabitants,
had evidently no conception of what Knapp, in his
"Staatliche theorie des Geldes" (State Theory of Money), called
the "c i r c u l a t o r y s a t i s
f a c t i o n" of a creditor, as against his r e a l satisfaction.
This is the more surprising as the kingdom of Bornu is an old civilized
country and has had for many centuries commercial relations with peoples
to whom the meaninq of a "circulatory satisfaction" has been familiar from
antiquity. Furthermore, in Barth's time both cowry shells and Maria Theresa
thaler circulated in that country, however not as money, but as goods.
It appears that when the majority of a people lacks the sense of "circulatory
satisfaction", this represents an important, although as yet uninvestigated,
r a c i a l mark This racial mark is not to be found in any Asiatic
people.
The lack of an appreciation of the more perfect forms of exchange need
not signalise general i n f e r i o r i t y. Barth's accounts suggest,
for instance, a high state of civilisation in the people of Bornu. The
sense for poetry is strongly developed in them. Any reader interested in
this aspect may be referred to the "Mitteilungen des Seminar" fuer orientalische
Sachen" = "Reports from the Seminar for Oriental
Languages" , published in Berlin 1914, Abt. III , which contains
a translation by R. Prietze of a song of lament of young slave girl from
Bornu, whose fellow slave and lover Hamadu was held by his master to Morocco.
Here is a song that Herder would have gladly placed in his collection.
Attention may also be directed to the collection of 377 proverbs of this
people, published by Prietze in the following year, a people which three
or four generations back had no sense for the circulatory satisfaction
of a creditor. (Now, under French rule, they have
probably learnt it. Prietze quotes a proverb current among the peoples
of Bornu, which certainly must date from recent times. "A man's goodness
resides in his money and he who has no money, deteriorates.")
We must bear in mind such ethnographical accounts in order not to lose
patience when noting that recent money theorists (because
of atavism?) are destitute of any 258 sense
for appreciating circulatory satisfaction through means of payment as where
for example, they dismiss Zander' s railway money (Annals, 1934) with the
remark that everybody does not travel daily by rail. These theorists attribute
the value of paper money exclusively to the o b e d i e n c e of
subjects to a State c o m m a n d, as if the consciousness of having
done one's duty as subjects and the feelinq of being satisfied as creditors
were not two entirely different sentiments. These theorists forget that
the commercial value not only of paper money but even of gold and silver
resides wholly in that 'c i r c u l a t o r y satisfaction'
and in no way in being able to use the old coins received for stopping
a tooth of ours or for plating our watch cover (See
Knapp "Staatliche Theorie des Geldes" chapter 3).
Milhaud's system, although
based on a new and somewhat abstract principle, is yet so simple, clear,
and concrete that already the initial steps in its execution must strongly
influence the prevailing misconceptions of men includinq those of theorists,
about the essence of a means of payment. Although, on the whole, based
on c i r c u l a t o r y satisfaction. Like every system of paper
means of payment, it opens for everybody who does not understand the nature
of this satisfaction, or forgets it for the moment, or becomes suddenly
suspicious, or allows himself to be incited the way to a r e a l
and immediate satisfaction. The shops where he can exchange the means of
payment he dislikes for breed, butler, etc., are indicated by posters.
This advantage of a clearness obvious also to the m a s s e s
of our time with its currency madness which has completely taken the place
of the ancient delusion of witchcraft, cannot be too highly valued.
But the Milhaud system of payment does not represent only a technical imerovement,
after the manner of postage stamps or electricity meters (the
want of which latter retarded for decades the deveLopment of electrical
technique). It is much more than that. More particularly, its application
to insurance leads to the recognition of its significance for the
t h e o r y o f p r o p e r t y. That is, the system renders
nossible (to this we shall return at the close) a quite different type
of property to that with which men particularly in Asia, had to be satisfied,
Thereby lt opens the way for a different and better type of civilisation.
If it be true that i n s u r a n c e is the c o n d i
t i o s i n e q u a n o n for surmounting those
semi-barbarous social conditions that still prevail in Asia in spite of
the high cultivation of its elite and the remarkable intelligence of its
masses; if the sum of suffering in human society cen only be reduced through
insurance to the degree reached here and there in Europe (mortality
of men 30 years old 3 per mil; only 3 days illness per annum; only 1 policeman
for every thousand inhabitants; and scarcely a drunken man on pay-day -
this exists in quiet parts of Switzerland, Denmark and Scotland);
and if, moreover, i n s u r a n c e is simply u n r e
a l i s a b l e in most regions of Asia without the Milhaud payment
system, then this in itself demonstrates the significance of the system
for the c i v i l i z i n g o f t h e A s i a t
i c m a s s e s.
For the populations of the eichteenth century insurance was stiel somethinq
of a novelty, but they nevertheless fully recognised its value.
They esteemed it so highly that they found nothing more laudable to say
in justification of the State than that it is a general i n s u r
a n c e i n s t i t u t i o n for mankind, taxes being
its insurance premiums (Thus in his "Essai
philosophique sur les probabilites", Laplace writes
in the section treating of insurance companies: "A free people may be regarded
as a large association, the members of which mutually guarantee tbeir possessions,
by bearing proportionately the charges of such a guaranty".) This
belief, however, was badly shaken by the French Revolution, particularly
among the profoundest thinkers, - e q., in the -case of Wilhelm von Humboldt,
who accordingly published in 1794 his: "Die Grenzen der Wirksamkeit des
Staates". (It
only circulated in manuscript for some of his friends and was not published
before 1851 in Brestau. The Ed.),- and in that of Joh. Gottl. Fichte
who already in 1793, in his volume on the French Revolution, contended
that men should have the right to resign from States such as the old feudal
State or the Terror State of 1793,a s they do from a church. (secession)
It came to pass
that the Government of France, the greatest of the then existing 259
civilised
States spread in one year more insecurity among its citizens than the lack
of insurance companies had meent for it durinq the preceding century. It
did this by requisitions that were more extensive than haa been previoualy
those of the feudal lords by mess executions (more
especially of State creditors, of whom Robespierre had lists prepared)
which not even Torquemada would have risked; by legalising (already
under the rule of the Gironde) a system of denunciation unknown
before or since (Nicolas, Robespierre's friend,
printed forms for denunciation which the authorities furnished to any applicant;
see Sieburg "Robespierre', n. 61 ), and by an inflation capable
of astonishing us, accompanied by laws on "price profiteering", "foreign
exchange", etc. , such as have been genera lly issued durinq inflationary
periods. Hundreds of thousands were thrown into prison. Such a State could
no longer appear as an i n s u r a n c e i n s t i t u t i
o n to a philosopher and led, especially in Germany to reflections
which were very much opposed to those we have cited from Laplace. By
examining more carefully the idea of insurance Girardin first showed that
whilst States have thus far not been true insurance institutions the State
could be and should be the great insurance institution of mankind. He
further pointed out that the synthesis of compulsion and freedom sought
by philosophers in the lan of nature, end jeered at as a chimera by "practical
men", had been long since realised in insurance- and that the princieles
of the science and the technique of insurance were only waiting to demonstrate
their usefulness in sociology, economics,and public right (See
"la Politique Universelle", second edition, 1854.)
What, then, was the ultimate
cause of the outbreak of the French Revolution in 1789 and its steadily
growinq cruelty which at last shocked the terrorists themselves?
(It happened in July 1794, a few days before the
fall of Robespierre. The Revolutionary Tribunal had condemned 160 accused,
mainly, it appears, owing to soffle remarks concerning the food of Prisoners
- putrid herrings the stench of which caused some to faint away But the
Convention dared not to have the 160 accused executed at the same time,
but spread the "fournte" over three days.)
It is welf worth seeking to discover what was the primary
cause of the horrors of the French Revolution, for it was the same cause
that is now intensively operating in Asia (just one
of the many contributing factors neglected by both sides in Vietnam, The
Ed.) making not only impossible there a broadly based i n
s u r a n c e system, but occasioning in many localities revolutionary
horrors not behind those of the Paris September murders (It
is too often forgotten that there is in China a region much larger and
more densely populated than France, which has been for years, and is still,
ruled by terrorisinq communist governments)
Besides, the means
that would make practicable insurance in Asia in circumstances sunnesting
to most that they are an absolute obstacle to this and, - these means (they,
and they alone), drawn from the arsenal of the Milhaud system,
may represent in a social conflagration like the great French Revolution,
what a carbonic acid extinguisher is in case of fires involving wood, paper,
and even celluloid, namely a means which acts effectively where ordinary
fire appliances fail. If such expedients have already been bied out in
a domein like insurance, a statesman does not have to create them out of
rothing in an emergency. They are a t h a n d, and trained
persons also exist who know how to use them. But should a Government, during
an event such as the storming of the Bastille, lose its head (which
has happened to more robust natures than louis XVI. - read the story of
the Nika rebellion under Justinian by Gibbon) a loca`l authority
would be able to satisfy the rebellious masses namely (since
in rebellions brought about by deflationary emergencies this is mostly
the aim) to provide means of payment and foodstuffs, within one
hour if necessary, if it is conversant with the Milhaud system of purchasing
certificates. And this familiarity with the system, the local authority
will possess if there are public insurance societies where the system is
applied in practice The reverse side of this medal should not be overlooked
The system offers financial facilities to the leaders of a revolution who
know how to manipulate it while most revolutions in the history of the
world miscarried because the revotutionaries did not know how to finance
their sovement, (An extensive manuscript by Ulrich
von Beckerath on the financial history of revolutions and containing a
programme for the sound financing of rightful revolu 260
tion
was alas, destroyed in one of the allied air raids on the civil population
of Berlin. The Ed.) Whether, for instance, the Soviet Government
could maintain itself if the Milhaud system were known throughout the country,
is doubtful. Of course, before the system becomes a menace to a Government,
the latter must have been very reckless. The average man, inclined as he
is to tolerate considerable oppression rather than to run serious risks,
is not easily moved. "It is fear that gives rise to rebellions", says
a Bornu proverb. (See the aforementioned collection) (again:)
What then, was the cause proper of the French Revolution or, more exactly,
of the forms that marked its birth? Was feudalism really, as
commonly thought, the cause? This is impossible, for centuries before that
event feudalism had assumed far more brutal forms than under Louis XYI
and the people remained quiet on the whole, Where the encyclopaedists the
culprits? No; for most Frenchmen were unaware of their existence simply
because they could neither reed nor write, Besides, Robespierre, Saint-Just,
Marat, and the whole Jacobin Club esteemed them lightly and even persecuted
them later. Was it due to the extravagance of the Court? No; for this extravagance
was not so great as a few decades before under Louis XV. when the country
was less developed industrially The upkeep of the Court demanded at most
one-fiftieth of the national output, probably much less. Was the Church
to blame? Was it unable to keep alive the religion of the people? No;for
after the storming of the Bastille, the masses spontaneously organised
processions of gratitude in honour of St. Genevive. They were therefore
decidedly religious. Was it due to revolutionary propaganda? No! In her
memoirs Madame Roland testifies that among the 1.200 deputies of the General
Assembly only about a dozon were Republicans by conviction, Robespierre
himself was long after 1789 no Republican and even published a periodical
called "Le Defenseur de la constitution".
What, then was the cause?
The real cause of the Revolution operated with such force
that no student could overlook it, although most have regarded it as a
simple accompaniment of these phenomena which made m o r e
n o i s e thee, The cause was the catastrophic shortage of coins in the
country due - as the sudden reappearance of thecoins after the Reign of
Terror proves- in large measure to hoarding and not a little to export,
Why so many coins should have been suddenly hoarded, we shall not examine
here but hitherto e v e r y revolution in the history of mankind, even
every local rebellion, has resulted in the masses holding fast to their
ready money. (Here one has to keep in mind that
the French Revolution consisted out of a series of risings. While a currency
famine existed already before it began, each successive rising tended to
make it worse The Ed.) This happened, for instance' during the
inflation in Germany in 1918 and 1919,when, as a result, in many localities
in December 1918 the war loan interest coupons were officially declared
means of payment for the time being. In France it also happened that some
time before the Revolution the notes of the Caisse d'Escompte had their
exchange rate fixed,even if only for Paris, and that at the time the nature
of a forced currency was known even to the man in the street. Modest shopkeepers
also were then aware that such measures were almost always harbingers of
a coming inflation.
In any event, already in 1788 there were abundant signs in France of deflationary
phenomena taxpayers lacked the means wherewith to pay their taxes. To aggravate
the situation, many taxes were f a r m e d o u t and
the tax farmers proceeded in the case of any delay in payments as they
have ever done, with utter ruthlessness. "The "publicans" so often mentioned
in the New Testament, were tax farmers That Christ did not keep this class
of men at a distance and that he considered them even capable of being
saved, aroused no less amazement and indignation than does to-day Gandhi's
assertion that the pariahs are men just like the Brahmins. (See Matthew,
ctr. 9, 11, Luke, ctr. 3, 12)
Landlords
were not paid and "debtors' morals" reached an "unprecedentedly low level",
i e, it was as it always has been in times of disturbed monetary circulation.
In turn, landlords were pressed by their mortgage creditors and ran the
risk of losing their houses, indeed the whole creditor class appeared to
consist of anti-social individuals - also as it has always been in times
of disturbed monetary circulation, Manufacturers were unable to collect
the amounts long due to them from shopkeepers, They
261 there fore decided on reducing the sages of their men and
knes how to enforce their decision Frequently enough, they postponed wage
payments for a time, and all that whilst food prices remained almost unchanged,
( The quantity theory teaches that a change in the price level corresponds
to the quantity of money. This is quite correct but change within what
time? A difference in time of o n e month cen give birth to the gravest
social revolutions )
The number of beggars in france soared while almsgiving declined. Public
workshops were established, precisely as later in 1848 and as in many countries
after the depression of 1930. Of the 600.000 inhabitants of Paris, 200.000
became unemployed directly or indirectly (as dependents) and, with
a passion that alarmed the propertied classes, clamoured for bread and
work, The Church which usually knew how to meet emergencies and which maintained-at
the time a quarter of the population in Spain, could not give because its
own revenues were rapidly ebbing. Priests had to listen to harsh invectives
and were convinced that these could only have been larnt from Voltaire
and Diderot. The Minister of war was in arrear with the soldiers' pay in
many regiments and the soldiers revolted, refusing to fire at the people
storming the bekers' shons The Government imposed n e w taxes and the population
called for a reduction of the old. Many priests did not receive their stipends
and sympathised with the masses. Even a considerable proportion of the
feudal lords, hard pressed by their creditors, also came to feel sympathy
for the people.
Parliamentary government, and even many useful reforms were introduced
Only money became more and more scarce. The party in power was at a loss
what to do. The first assignats were being printed, the issue being manipulated
as ineptly as possible, e.g. as already remarked no. assignats under 200
livres were issued i n o r d e r not to drive out the
metallic money circulating amang the masses - strangely missing the fact
that it was just from here that it had long been removed and that it should
have been therefore, on the contrary, a question of providing the masses
with new means of payment. However, the Ministers, the National Assembly,
the experts, public opinion, all shared the general prejudice which shortly
before had induced the then much admi red Eng'lish Parliament to pass legislation
in 1765 in Scotland and in 1775 in England prohibitinq the issue of banknotes
under 1 pound - the same prejudice which induced an Adam Smith to state
that metallic currency has a natural tendency to apeear in sufficient amounts
whereever paper money is kept away, (In his "Free
Banking, Henry Meulen describes the highly interesting events associated
with the publication of the Acts of 1765 and 1775. His is among the few
descriptions based on a personal and careful study of sources) From this
it undoubtedly transpires that the English and Scotch bank of issue system
eas the outcome of a d e f l a t i o n and for a time - and
up to a certain point, actually removed it). France's metallic
currency did not, as was hoped confirm the general prejudice. It had definitely
vanished and the masses, who could not pay Church estates, were confiscated.
A pity 'tis, however, that soldiers cannot be paid with estates.
Having come to power, the Girondists proceeded like so many other people's
governments have done when in money diffculties. They incited to war with
other countries, countries that, it was said conspired with the nobility
and kept on depressing the exchange rate of the assignats by a bourse manoeuvre
difticult for us to conceive Robespierre, without
an inkling of-insight into economics, but no dolt, and at heart a Rousseauite
pacifist, struggled desperately with the Jacobin's against war',
thereby naturally placing the weakling still further at the mercy of the
Girondists, wholly dependent financially as he was on his Parliament. On
20 April 1792, wifh a heavy heart the king, in the name of France: -nine-tenths
of which was for peace- declared war. (How
different would have been the course of history if Louis had had
some "rasp of monetary matters; if he had in good time made appropriate
decisions; and if he had in this way become strong enough to defy the warmongers!)
Financial difficulties became, of course, intensified. No Girondist had
the faintest notion how to finance a war. Despite the multiptication of
assignats, the shortage of ready money was not less acute, not did the
tax revenue rise. The feudal lords were in the sane predicament as the
Exchequer. They, and their stewards more particularly brought correspondingly
greater pressure to beer on any of the peasantry suspected of still possessing
something, perhaps ready money, No talk now of respites such as were frequently
granted before the 262 Revolution in cases
of emergency, or of temporary transformations of money payments into payments
in kind, and of course no assistance in hard cases, as was formerly often
rendered by many feudal lords. There was a prompt reply to this. Hundreds
of local peasant revolts drove a large proportion of the nobility across
the frontier, its estates were confiscated and sold; and for a few days
this helped to fill the coffers of the State.
The
authorities, pressed by soldiers demanding their pay, by starving unemployed
workers by State creditors who feit themselves defrauded, a by taxpayers
sinking under their burdens "payable in ready money, be it understood"
were at their wits end. Frequently, there were among the authorities humanely
inclined individuals sharing the views of the encyclodaedists,who imperilled
their own life rather than order the crowds to be fired at, The king, perhaps
the noblest representative of the Bourbon dynasty, was wholly of the same
mind. But the soldiers cried for food and demanded their pay. A decision
had to be reached, and eventually this could only be to seize relentlessly
money whereever it might be found.
Would Turgot, who was justly
admired have been a b l e to act differently than d i d his successors?
It may be emphatically asserted that he would have acted just as they did
and this indeed maybe based on a remark of his,a remark that in his daywas
generally approved and greatly increased men' s confidence in him. "It
is therefore," wrote Turgot in a letter to Abbi cici, "a point both of
theory and experience that the masses cen never receive papers as (Editor's
addition: "otherwise than") representing money and consequently
as convertible into money". (See "Das Geld" ( Money
), by Prof. Robert Eisler, p. 240).
A statesman holding s
u c h a view cannot, even if he be a genius, proceed differently
than did every French Finance minister down to Napoleon's time. Turgot
not otherwise than Terray, Calonne not otherwise than Cambon. Faced by
a sharp deflation, in fact by an inflation created by him as an emergency
measure such a statesman would be helpless. Daily, disturbed monetary conditions
will cause him unaccustomed difficulties in every official step he takes
to overcome which the ordinary experience of Governments is of little assistance
to him. Inevitably he will look upon this resistance, which he finds amongst
almost all with whom he has dealings,as the very cause of his deficits.
(Similarly, in 1911, the New York Water Supply Board
charged the city's inhabitants with being incorrigble water wastrels who
did not respect the collective good and were indifferent to all appeals-
until, by accident, it discovered a huge hole in a water main.)
If, in addition, a statesman has sprung from the people, has had no experience
in governing, and belongs to a family who were always the o b j e
c t s, never the s u b j e c t s, of administrative activity, in
whom therefore certain qualities of temperament and character indispensable
in "dealings with subordinates" could not be inherited,then even from the
first day this statesman will misjudge the special influences affecting
every large administration, influences entirely independent of the individuality
of the various subordinates. He will be lost in personalities. Every inevitable
friction in the State machine, he will at once ascribe to opposition and
corruption. He will not even, as did the statesmen of the "ancien regime",
know how to distinguish the new ''monetary" disturbances from the purely
administrative ones, which are also of daily occurrence in normal times.
Quite novel phenomena, such as the depreciation of just issued State paper
money, despite its being ''over-covered" by "the wealth of the whole nation'',
only unfortunately with an insufficient fiscal basis (which
often already appears when the State paper money is only equal to half
of the annual tax revenue) - such a phenomenon is simply regarded
as the work of "speculators", for the nature of stock exchange speculation
is naturally unknown to him, and also to public opinion, which supports
him. If the new ruler has once made some victims (perhaps
punished with death a few official irregularities, where in normal times
a reprimand would have sufficed) he ceases to be capable of straightforward
thinking and if only to justify his conduct in his.own eyes he discovers
continually fresh conspiracies and "punishes" these. The more evident the
futility of his deep devotion to the public welfare appears, the more he
seeks for p e r s o n s who cross his plans, for his failure, he
thinks, could not be due to anything but individuals p e r s o n
a l l y antagonistic to him (Any one whose
ancestors had renarded for thousands of vears thunder and lingtning as
the work of 263 p
e r s o n s, although super-terrestrial ones, as also epidemics, bad harvests,
conflagrations, and accidents of every kind, has without knowing it. to
struggle against a special type of inherited defect) He will
only apply the category of causality. when the application of the category
"persona" is opposed to his personal interests. The excuses of the French
terrorists a f t e r the Reign of Terror offer in this connection
an interestinq illustration Attempts were even made to explain the September
murders "causally". Robespierre was in any event completely incapable of
thinking "causally". He had already sacrificed his co-rulers who were too
humane to be as consistent as he was. Danton, Camille, Desmoulins none
was spared.
Robespierre
is the type of the 'incorruptible and virtuous' ruler never absent in any
great revolution. He risks his life daily in order to save the State by
the application of his principles. In private life he proves to be accessible,
cultured, urbane, and modest. He does not understand, however, that providing
the state and its citizens with m e a n s o f p a y m
e n t does not represent an a c t o f d e v o t
i o n of these citizens to the well-being of the State, It is rather
a t e c h n i c a l problem ( and
that not on the plane of P r o d u c t i o n, as Lenin
thought, who closely resembled
his predecessor Robespierre,
but on that of p a y m e n t, which cannot be solved with ten million dynamos).
hfter a ruler like Robespierre has sacrificed his friends he sacrifices
his health, his sleep, his family happiness, and anything else there remains
to sacrifice. But m o n e y he cannot procure his soldiers
suffer want, townsmen are starving and freezing, peasants are being plundered,
and only the inflation profiteers find ways and means not only to revel
in luxury, but to live in quiet and unharmed. Cursed money! Is is not possible
to live w i t h o u t money? Did not the Spartans live without
ft? And Robespierre was not the only one who reached this conclusion. Everywhere
projects for "rejuvenating society" were discussed. Towns were to disappear.
Officials were to be paid in kind. Factories were to be abolished. Farming!
Rural bliss in a people returned to nature. Money requirements replaced
by virtue, and if necessary held down by terrorism! In fact, how many of
the reform programmes of the last fifty, and particularly of the last twenty,years
do not reed like this, too.
Meanwhile the country
overwhelmed Robespierre with manifestations of the deepest submissiveness.
The coffers of the local authorities were, that is, as empty as his, They
must requisition everything, as the taxation screw no longer squeezed out
anything, and for this they must have the permission of the Committee of
Public Welfare. Although in Paris 800 workers were busy day and night printing
assignats, the shortage of means of payment (as in
every inflation) remained unaffected.Bands of forgers assisted uninvited
the Paris printers, some economists- probably rightly- estimating that
a third of the circulating assignats were forged Cautiously, every requisition
was made "in the name of the people and with reference to Government legislation,
at least with reference to utterances by Robespierre and sometimes by Marat.
A report was also forthwith sent to the capital, the local authority explaining
how scrupulously it had carried out the Government's principles. At the
same time a request was made for national guards because "the patriots,
despite their zeal to transfer the possessions of the nobility to the people,
are still in want" (If a few years previoualy
public insurance societies or even private ones, had been organized and
if they had been operated by a system of payment like that of the old scottish
banks, every village would have possessed an instrument for collecting
cues despite any money shortage. Everywhere recourse would have been had
to this instrument instead of to requisitioning, if only because,at a low
estimate, it would have yielded threefold).
However Robespierre
was fully aware that the requisitions of the local authorities diminishes
his own resources. Accordingly, although unsuccessfully he asked that the
system of requisitioninq should be cen'tralized in Paris, even that all
executions should be concentrated there. One thinq is certain, namely that
the general financial stringency, despite the apparent submissiveness of
the tocal authorities, rapidly gave rise to a sharp opposition between
the Committee of Public welfareaend the Provinces, as has been the case
similarly, in all revolutions of all times among every people, when the
revolution has spread to the population as a whole but Robespierre saw
clearly that the Government could only carry through a decision to prohibit
requi 264
sitioning on the part of the 'patriots'
in the provinces, if it could obtain revenue for the local authorities.
Who was responsible for the dsappearance daily of the daily stream of newly
printed assignats? The stock exchange was closed (26/6/1793); then the
joint stock companies (28/8/1793 ), including the insurance companies;
a, lastly, the banks (8/9/1793 ) - all to no purpose. Money remained scarce,
(Sieburg, "Robespierre", p. 103,) Eventually,
Robespierre feit convinced that under a monetary system, "corruption" cannot
be excluded and hence he resolved to introduce the social programme of
the 27-year old Saint Just, a sort of moneyless economy, end to guillotine
every opponent of this programma. On 7 Thermidor, two days before his fall,
Robespierre attacked Cambon, the Finance Minister, end accused him also
of "corruption" Cambon defended himself vigorously end with success. He
was the first man, for months who had dared to contradict Robespierre.
On 9 Thermidor, a few hours before the fall of the Triumvirate, Saint-Just
commenced his great programmatic speech (the manuscript
of which has been fortunately preserved), but he was soon interrupted
by the events recorded in all history books.
It
may be said, what meaning have these long-passed events f o r
u s ? The answer is they are not passed.
The forces- one might almost say: the events-
of those times have always existed and will always exist. They are chained
demons who from time to time, when the intellectual aristocracy fails mankind
or is entangled in prejudices, regain their freedom and then rage until
they are exhausted or until some superior spirit binds and imprisons them
again.
Whenover there is a deflation, like that which occurred in revolutionary
France the masses and their leaders do not look for the causes of the prevailing
evils, but for c u l p r i t s. It is too late then to e x
p l a i n to the masses that it is not a question of who is guilty.
Every outstanding person - the wealthy man, the official of high and middle
rank the artist, the scholar above all - will then be exposed to the same
danger as in the period from 1792 to 1794, Just as at that time, there
will be no lack of a Marat who persecutes the scholarly because they have
killed with their silence some indifferent utterance of his (By
the way, Goethe quotes a few such in his "Farbenlehre", similarly Gehler's
oid encyclopaedia of physics under "Licht" ( light ) und."Waerme" ( heat
).) But there might be no Charlotte Corday to save science by sacrificing
her own life end stabbing the monster before he could tering down the intellectual
level of his country to that of the Spain of the Middle Ages.
At the next revolution generated by the exigencies of a deflation, the
Terror will dispose of a much more alluring terminology than under Marat
end Robespierre, and it will be correspondingly more difficult to resist
it. Since Trotzky for the first time represented the solution of our economie
problems -which however, like most communists,
he could not distinguish from social problems- in terms of a
w a r to be won, speaking-e.g. of a production b a t t l e,
this form of expression, since it appeals directly to the inmost instincts
of the average man, has already been widely adopted. In non-communistic
countries dependent much less on p r o d u c t i o n than on
m a r k e t s, such as Japan, it serves to fill the posts of the ministry
of Trade with h e r o e s. Trotzky's terminology has certainly led the
masses -even more than formerly- to conceive the solution of economie problems:
as a task -which like war, calls for: P e r s o n a l d a r i n g,
and not, as the older socialists believed, for men e x e r t i n
g their c o n s t r u c t i v e p o w e r s. These
powers, which terrorists, just because they are destructive, only very
exceptionally possess, appertain to the p e r s o n a l i t y of
a man, not to his p e r s o n. Already in Saint Just's programma,
but even more in all Robespierre's speeches, is this want of constructive
detail - exactly as in the declarations- modern terrorists ( reed Lenin's
writings!) - this sharply marked inclinatjon to deal only in
g e n er a l i t i e s, noticeable. (Asiatic
readers will here think of the great social reformer: Buddha, who abolished
suttee, the caste system the lying on nailed planks, in order to attain
to religious illumination, end did muc else for which pious Brahmins drove
his disciples from India with fire end sword - Buddha, the one among all
religious founders who declared sinful- the use of generalities in speech
when important matters are under consideration. Once he surprised some
of his disciples addressing a crowd in g e n e r a l t e r
m s end was very indignant. He called them 265
together and gave them a model sermon: "the chain of suffering", which
is to be found in every collection of his speeches and deals exclusively
with concrete matter containinq not a single generality.) Speeches
such as Robespierre was accustomed to deliver (scarcely
one of these but rouses a feeling of tedium in reading) reveal also
a want of what a statesman must possess even should he have no adminstrative
experience namely true leadership. A true leader knows in veriest detail
what he desires a,nd is able to convey this knowledge to others.
A terrorist considers
the first essential for solving the social problem to be c o u r
a g e possesses some, and seeks for opportunities to display it.
Without wishing to betittle courage (Schopenhauer
says that next to sagacity, courage is a quality very important for our
happiness"), we should remember that many animals excel man
in this (see Schopenhauer' s Aphorisms). Perhaps during the whole Reign
of Terror no Jacobin showed more courage in any fight than does a hen defending
her chicks against a hawk. Of course, the higher type of terrorist also
hazards his life, the life he has in common with every earthworm, and in
fidelity, devotion, end incorruptibility many a brave sheep-dog has outdone
a Couthon, Saint-Just, and Robespierre.
Intellectualism, then?
By no means. "Great thoughts spring from the heart", says Vauvenargues,
end the masses feel that this is truc, In the end, they turn away from
terrorism, perhaps even whilst the abuses that brought it about continue,
as happened in Thermidor of the year 2 of the Republic.
Let economists meanwhile bear in mind that in 1793 and 1794 a regulator
of public opinion was silently at work which to-day is wanting but was
then the cause that the ideas of the masses about value, prices (particularly
maximum prices), money,buying and selling, could not widely depart from
reality - that is, a little sound metallic currency circulated, although
prohibited, beside the paper money. But to-day at least a thousand million
people have never seen metallic money of full value and fewer people than
a thousand years ago are accustomed to use it as a means of payment. It
may not be inappropriate at this point to expose a mistake made by many
of Milhaud's critics. His purchasing certificate is not intended to replace
metallic money in all circumstances, but only to deal with or prevent a
s h o r t a g e thereof, otherwise expressed, to function where coins
are not available, The currency laws of a country should therefore, even
where they favour the Milhaud system, expressly declare gold coins of full
weight to be legal tender if presented as payment in the customary way.
That is what jurists even to-day when Milhaud's writings are known, overlook.
It is something quite different from the right that existed practically
everywhere in 1913, of creditors to insist on being paid in gold coins
( Editor's note: With regard to the fanaticism
exhibited by some enemies of a gold coin circulation and free dealings
in gold, von Beckerath no longer advocates legal tender for gold coins
but a general freedom to select for all private contracts a standerd of
value of one's choice. He is convinced that a gold-reckoning standard based
on actual coin circulation and the valuations of a free gold market, will
ai last prove to be the least evil or most convenient and will thus be
almost generally accepted voluntarily.) The general means of
payment of the largest part of mankind is to-day, what it had n e
v e r before been in the world's history a kind of paper money whose
value end quantilv depend primarily on the opinions end the decisions of
a very few men- perhaps not more than a hundred. Not many have insight
into these relations and the masses are of course entirely without it.
Hence in the case of monetary perturbations, public opinion never thinks
of demanding, end it is not likely to think of demandina in the neer future,
what it had demanded after the Reign of Terror in France and what would
actually suffice in v e r y many cases in order to reestablish
at least such monetary conditions as might enable people to remain alive
This demand would include repeal of any legislation restricting the private
possession of precious metals, access to the mint for those who desire
to turn ingots into coins, and a Government declaration that it will not
issue forced currency Public opinion demanded t h i s after
the reign of the Jacobins was over and Napoleon granted it, we know with
what success. That, however was the effect of the continued circulation,
however restricted and illegal of metallic coins side by side with paper
money. Today the masses would not think of making such demands, nor would
Governments 266 think of beginning their reform
activities h e r e. The masses are not thinking to-day of metallic
money, they only ask that their Government should run to earth the economic
"mischief-makers". The Government of course, consisting to-day in almost
all countries of energetic and talented personalities, who seem to know
no theory of payment transactions, beats up the mischief makers,
identifies these as is inevitable, with those denounced by general opinion
- with the middle class in Russia, with the importers in China, and with
the shopkeepers almost everywhere, just as in 1793 and 1794 in France.
The next revolution produced by deflationary exigencies can only intensify
this attitude. Precisely as then and with less opposition, that which is
really a problem of l i q u i d i t y will be regarded asone
of performance, and that which is a problem of t r a n s f e r
from individualto individual as one of d i s t r i b u t i o n
of the social product (which naturally a l s o exists alongside
it). The solution will not be soucht in the sphere of e x c h a n
g e, but in that of v a l u e s (Bastiats "De la valeur"
should be consulted here.) in the main the money circulation will consist
again of standardised requisition warrants issued by the Government then
in power and its acceptance will be once more, an act of obedience to the
Government, not an equitable arrangement between debtor and creditor.
The economic world, weary of its Commoduses,
who do not know how to speed better the labour product of the peoples entrusted
to them than on (of course, well organized) c i r c u s
p e r f o r m a n c e s (The Olympic Games took
place in Berlin in 1936 and the Nazi government spared no costs The Ed.),
even showing, like their illustrious ancestor, every kind of h e
r o i s m (granted!) - weary also of its censors who call upon us
to be s t o i c a l in m o n e t a r y s t a n
d a r d q u e s t i o n s to agree to s a c r i f i c
e s as the essential condition for increasing the sale of bread and
cheese, to d i s c i p l i n e ourselves, so that walking sticks
and opera glasses might be held to practice the v i r t u e s of
our forefathers in order to be able to bear the crushing burden a
little longer; this economic world is now awaiting
its Pertinax. (Bth
waxes gospelly.) He is perhaps no
hero, and in any case his head is not laurel-crowned; nor is he a scholar,
for he is unable as much as to calculate trade cycles
nor is he a genius
apparently, for everybody understands him at once.
He also seems to
lack certain C a t o n i c v i r t u e s. But he is a
m a n who is t r u s t e d, a r u l e r who can r u l
e, and who ands the madness of his age simply by not participating in
it. Perhaps a man who is a c c o m o d a t i n g; who readily
refrains from ordering everybodv about and from mixing himself in everything;
and who prefers to teach his subjects how to help themselves and thereby
bestows on his country more liberty than all the storm bells of the Great
Revolution rang in. A man like all of us we hope; b u t who has made his
own the new system of payment; t h i s places him above his people
and above his foreign colleagues.
He does not ask
his subjects for gold if they are without any, nor does he expect from
Caius the banknotes that Titus has hoarded. He demands purchasing certificates,
pays with these, and is at any time ready to sell his goods -that is tax
receipts- for certificates accepted at par. Only under h i s Government
does real property become possible, for h e alone permits proprietors
to pay with what they h a v e, not obliging them, that is, to pay
with what only a happy chance can provide them, nor taking their property
if chance should be a g a i n s t them. This is his new conception
of governing. Silently, without blood or iron, without triumphal arches
and processions without a new calender end without introducing new fashions,
he opens a new age. Is this statesman already among us? Ulrich
von Beckerath, Berlin, 1937/8