America Has the Currency It Deserves
Today we advance a hypothesis:
A high and ascending culture merits a currency equal to its excellences. For example: The gold solidus of the Byzantine Empire endured some 700 non-debased years — seven centuries.
Meantime, a low and declining culture suffers the currency it deserves. That is, a low-culture currency is worth scarcely the “paper” upon which it is printed.
Examples — infinite examples — crowd the annals.
Now take in hand the United States dollar. Does it reflect a high and ascending culture… or a low and descending culture?
We are a proud citizen of the United States. Thus we loathe to concede the possibility…
Yet today we propose that America’s is a low and descending culture, an increasingly degenerate culture.
It is only proper that this degenerating culture merits a degenerating currency — the degenerating dollar.
We recently took in the rebroadcast of a 1950s baseball contest. The battle occurred in daytime, in high summer, New York City’s season of heat and humidity.
Nearly all male spectators turned out in sport jackets, ties and fedoras. Women donned elegant dresses and fashionable headwear.
Both men and women dressed, in one word — tastefully — despite insufferable conditions.
To our knowledge, these were not men and women hanging from society’s higher rungs. And this was not the opera but a blue-collared affair of the laboring classes.
Yet their turnout shames much of today’s “higher” society.
Now come home. Today’s spectator often arrives at the ballyard with half a shirt upon his back. Flip-flopped shoewear adorns his feet and a backward-facing cap crowns his head.
Tattoos often festoon his features — or hers.
He is better girded for the torturing heats of summer than his 1950s predecessor, it is true.
Yet what he gains in comfort he loses in dignity. Contrast this downdressed fellow with his updressed predecessor.
The Golden Age of Flying
Likewise, air travel. In the golden age of air travel, both men and women boarded airplanes in high sartorial style. Stewardesses (pardon — flight attendants) were images of grand and gracious elegance.
The Stone Age of Flying
Is this progress? Many would argue it is progress. And perhaps it is progress… of a sort. It is certainly more “democratic.”
What Would Rockefeller Think of Today’s Titans?
Even our supposed elites appear hostile to elitism:
All Signs of a Degenerating Culture
In dress, in manner, in speech, in ways large and small, we have come to conclude that ours is a degenerating culture.
Please understand: It is not our purpose to call anyone or any group into contempt or ridicule. We do not judge, we merely evaluate.
And let it go into the record: Your editor does not sport spats to baseball contests. Nor does he wear ascots on airplanes.
As well wear a tuxedo to the beach.
He likewise employs foul language should circumstances warrant. What is more, he swills beer. He even neglects at times — because he has been rebuked for it in the past — to hold the door for a lady.
No, your editor is in many ways as degenerate as the times he inhabits… by his own admission.
Let us now turn to our degenerate paper dollar. How does it influence our culture?
Money and Culture
“It has a very important impact on our culture,” writes economist Jörg Guido Hülsmann.
Mr. Hülsmann contrasts paper money with “natural money” — gold. Unlike the casual paper dollar, gold dresses in style. It is all class.
Natural money encourages the virtues of saving… thrift… deferred gratification. It sets the mind to the future. Hülsmann:
In a free economy with a natural monetary system, there is a strong incentive to save money… Investments in savings accounts or other relatively safe investments also play a certain role, but cash hoarding is paramount.
Before the 20th century, explains Hülsmann, debt was a cultural taboo… a scarlet “D” emblazoned across the chest.
“Credit for households… was virtually unknown,” he says. Only the poorest households resorted to debt-financed consumption.
Then the 20th century came along with its wars. Its social movements. And its cranks…
Gold Has Class
As we have argued previously, gold is a famously uncooperative agent of change.
It resists social uplift, in the same way an old man resists a new pair of shoes. It turns from the sound of trumpets.
“You go over there,” gold says. “I’ll stay here.”
“The trouble with gold is that it turns its back on world improvers, empire builders and do-gooders,” wrote Bill Bonner and our leader Addison Wiggin in Empire of Debt.
“The nice thing about gold is that it is so unresponsive,” they continued. “It neither laughs nor applauds.”
And that is precisely why it could not endure…
“Hurry, Hurry, Hurry. More, More, More”
Only a debt-backed system of paper money could finance the great wars, the social improvements and the fevered dreams of the 20th century.
But the same debt-based money also seeped its way into the cultural bloodstream, got into the marrows… and worked its mischiefs.
The slow grind of saving yielded to the lure of the fast buck. Hülsmann says it all encouraged a short-term perspective.
“Fiat-money systems tend to make people insatiable in their quest for ever higher monetary returns on their investments,” Hülsmann notes.
Hurry, hurry, hurry. More, more, more.
Hülsmann argues affairs work differently under a natural monetary system.
The Virtue of Savings
As savings increase under such a system, the return on investments of all sorts tends to diminish.
And instead of chasing rainbows, people direct their monies in pursuit of other worthwhile interests — including philanthropy:
It becomes ever less interesting to invest one’s savings in order to earn a return, and thus other motivations shift into the foreground. Savings will be used increasingly to finance personal projects including the acquisition of durable consumers’ goods, but also philanthropic activity. This is exactly what we saw in the West during the 19th century.
“By contrast,” Hülsmann adds, “in a fiat money society you are more likely to increase your returns by remaining in debt and continuing to chase monetary revenue indefinitely by leveraging more and more funds.”
The debt-soaked society loses something of the human face perhaps. He concludes:
You can imagine, then, how this inflation- and debt-based system, over time, will begin to change the culture of a society and its behavior.
We become more materialistic than under a natural monetary system. We can’t just sit on our savings anymore, and we have to watch our investments constantly, and think about revenue constantly, because if it is not earning enough, we are actively getting poorer.
A point to ponder of an April day…
Yet perhaps we stretch the facts to fit our case. It is possible we sketch illusory connections where none truly exists.
Perhaps we are arguing — mistakenly — that the rooster is responsible for the dawn.
And we do not argue that the restoration of sound money would equal the restoration of culture, of manners, of civility.
Nor do we argue that American culture was high and glorious before monetary debasement tugged it down.
But it seems this Hülsmann has hooked onto something.
Perhaps our paper money system has not only debased our economy and our politics — but also our culture.
Thus we suffer the degraded currency worthy of a degraded culture.
And maybe our socially inclined money has somehow made us less… social.
Managing Editor, The Daily Reckoning