Creating a Great Culture - Part 2
By Richard Kieninger
While it is important to preserve technology, establish a highly cultured Lemurian Civilization, and preserve those aspects of contemporary and past cultures which are known to be conducive to civilized relationships it is also important to selectively eliminat those things that are useless and disintegrative. One of the aspects critical to a sound culture is its economic system. A culture’s economic system can allow for great freedom of its citizens or it can quickly lead to tyranny. The present issue will explore this aspect of culture. We will include what must be present in order for a society to have a sound economic system, examples of civilizations which enjoyed prosperity (including the Lemurian), what our founding fathers endeavored to protect the united States against, how we currently operate in the US and how the economic system in the Nation of God will operate.
Having a sound economic system instills a sense of security and allows people to devote more time to developing themselves and to spend time with their families. For the past 20,000 years, the Brotherhoods have studied and maintained records of the factors leading to the rise and fall of civilizations. Dr. White explained to Richard, “All money transactions involve the exchange of karmic credits and must be handled with great respect and care. Everyone must eventually realize that all business is divine activity; and because government is business, it too falls under the same classification and deserves conscientious attention to moral considerations and economic efficiency” (TUF 9th ed. 142).
What is Money?
A faulty economic system can break a culture in less than a generation. To better understand economic systems, we need first to understand what money is. Money originally meant coins, especially the coins made by a government-owned mint The word money included gold, silver and base-metal coins. As time passed, gold and silver certificates and bank notes were issued and were redeemable in gold or silver coins. Because the paper certificates and notes were interchangeable with coins and served the same purpose as coins (money), people began to call them paper money, and in recent years, just money. Items that serve as media of exchange can mean any of many documents, such as gold or silver certificates, Federal Reserve notes, United States notes or other bank notes. All of these are paper documents, but there is a great deal of difference between these documents, even though they may all serve as media of exchange.
Our founding fathers experienced the tyrannical abuses of international bankers firsthand and sought to instill in our system safeguards against such abuses. Article I, sect. 8 of the United States Constitution provides for the Congress to have the power to coin money and to emit bills of credit (government-issued unredeemable notes which were intended to be used as currency).
Legal Tender and Lawful Money
Just because Congress later declared United States notes to be lawful money, the notes did not become lawful money, i.e., they did not become lawfully made coins. Further, the Constitution did not give Congress the power to declare anything to be a legal tender as opposed to lawful money. In 1933 Congress, without the authority from the U.S. Constitution, applied legal tender qualities to Federal Reserve notes which were not lawful money, although they circulated as currency.
The writers of the Constitution knew that inflations of the currency occurred because the Continental Congress and the States had declared the continental currency and State-issued bills of credit to be legal tender. The changeable and unpredictable legal-tender laws in the USA by government officials make people who sign contracts for future payments in legal tender to be unsure of the exchange value of that future payment. It may or may not be a just payment. The members of Congress did not receive from the Constitution the right to pass laws to legalize unjust settlement of debts.
The Coinage Act of 1965 made token coins of copper and nickel alloy legal tender. It also made the United States notes legal tender even after the phrases “at its face value” and “Will pay to the bearer on demand” were removed. The same act made the Federal Reserve notes legal tender even after removing the phrases “and is redeemable in lawful Money at the United States Treasury or at any Federal Reserve Bank” and “Will pay to the bearer on demand.”
Undesirable Media of Exchange
Experience has taught us that when we use as media of exchange token coins, notes, certificates, bills and demand deposits with undesirable qualities, the people are burdened at times with deflations, inflations, general unemployment, poverty, and always with economic uncertainty and ever-increasing interest-bearing debts.
Federal Reserve Notes have no desirable qualities. They are loaned into circulation. An interest-bearing debt is incurred to bring them into circulation. They are not redeemable for anything. They are not bona fide notes since a note is written evidence of a promise to pay. Federal Reserve Notes give no such evidence.
Desirable Media of Exchange
When coins, notes, or certificates are redeemable for goods or services, no inflation of the media of exchange will occur and no governmental body is needed to control the amount issued. When those who issue the media of exchange do so in good faith, no one will obtain an unearned gain and no one will incur an undeserved loss from such issues. The following are the desirable qualities in the items that serve as media of exchange:
1. They are to be paid into circulation (rather than borrowed);
2. They are to be redeemable for goods and services or as payment for taxes;
3. When demand deposits are used as media of exchange, they are to have 100% cash reserves on deposit in the bank.
Fractional Reserve System
In the USA, we currently operate under the fractional reserve system. let us suppose that the First City Bank opens up for business with $50,000 worth of currency in its vault.
Now let us have 25 borrowers come in, one at a time, each one borrowing $10,000 in the form of demand deposits (i.e., checking accounts). The bank now has made $250,000 worth of loans, but it still has the $50,000 in cash in its vault. The $50,000 is the fraction which the bank holds in cash as the reserve for the $250,000 loans made in the form of demand deposits. When we divide the $250,000 into the $50,000, it equals 20%. So this bank would say that it held 20% cash reserves for its demand deposit accounts.
By levying more taxes and passing an ever-greater number of laws which increase manufacturers’ costs, it takes an increasing number of hours a laborer must work in order to live. All of the thousands of laws which are passed every year in our country further serve to hold us hostage. By creating innumerable restrictions and requirements on manufacturers, they are hard pressed to make a profit; hence, most of our major companies have gone to other countries, where they can operate at much lower cost. By piling as many as 50 taxes on every good we purchase, our lives are consumed with earning wages rather than learning and growing, being effective parents, focusing on health, or perhaps donating our skills to society.
Spend Money into Circulation
When money is borrowed into circulation (as is the case in the U.S.) rather than spent into circulation, the system is losing from the very beginning. When a governmental body borrows the media of exchange it needs from private citizens and corporations and banks by way of bonds and Treasury Bills, it incurs interest-bearing debts whether the media borrowed are coins, notes, certificates, or bank credit Such a governmental body is not a free, sovereign body. A sovereign governmental body does not have to borrow from anyone. Also, when private corporations and individuals who produce and distribute goods and services depend entirely on governmental bodies for the media of exchange they need, they are not a free people. Their economic activities are controlled by the actions or lack of actions of government officials or bankers.
For example, contrary to what our educational system teaches us about the Middle Ages in Europe, it was a prosperous, productive period in history. In the Middle Ages (the four centuries lasting from the 1200s through the 1500s), life was good. A laborer could provide all the necessities for his family for a year by working 14 weeks. The rest of the time he could do as he pleased. Great cathedrals were built all over Germany, France and England during that period. People volunteered their labor to build these massive structures. When they worked, they were very well paid. Every working man was clothed in good woolen cloth and had plenty of food. A prime reason for their lasting prosperity was that people neither took usury nor gave it. There was no pressure of “due bills.” The municipal banks, the creation of the people, fought usury banks tooth and nail. It was not until the advent of Napoleon, the hatchet man of the usury bankers, that municipal banks were shut down permanently. All wealth ultimately is created by human labor and, as such, labor can be used as a basis for a currency. For example, during the Great Depression of the 1930s, the mayor of Worgl, Austria, decided that he would print notes, which he called “tickets for services rendered,” with which he paid people working on a bridge and a drainage project The town council then made a decree that the townspeople could use the same script to pay local taxes. Every note changed hands twenty or more times in the first month of the new monetary process.
So successful was the scheme that other towns began to use it, and entire areas of Austria were lifted out of poverty inside of three months and boosted to prosperity in one year.
The prosperity was too much for bankers since they were being bypassed. When 200 mayors proposed to adopt the system, the central bank in Austria cracked down by appealing to the courts, who promptly declared the local currencies unconstitutional.
Lemuria and the Nation of God
In Lemuria, prices of goods remained essentially the same for thousands of years because inflation did not occur. Savings still had the same purchasing power fifty years after being deposited. Homes were built to last many generations, and an automobile, for instance, was made to last at least the lifetime of its owner. When Philadelphia is declared to be the Nation of God after October AA 2001, a new economic system will begin there. Instead of banks, the nation will have a central treasury. Money will be backed by all the capital goods and physical wealth rather than gold. As homes, hard goods, factories and commodities depreciate with age or are destroyed, then an equivalent amount in labor credits (money) are removed from circulation. The amount of money vis-à-vis the value of all the physical items in the commonwealth thus remains equal; so no inflation occurs. When an automobile is built, the value of human labor to produce the construction materials and its assembly are paid into the economy by wages. This is about the same as the money needed to buy it (there is a 12% profit added). As the car is used up over its projected life or is scrapped, its declining value is reflected in reduced availability of money in circulation by being withheld by the treasury.
A Commerce Tithe will be paid by corporations to build and maintain manufacturing plants, buy machinery, provide transportation equipment, pay distribution costs, and maintain marts—all of these being owned by the commonwealth. Capital items are to be owned by the commonwealth to be made available to profit-making corporations and individual tradesmen and farmers. Two individual tithes (each 10% of income) will be donated by all Citizens: one tithe to operate educational facilities in accord with God’s law, the other to pay costs of municipal services received and for defense. By practicing the law of Tithes from its inception, the nation will be assured of prosperity. Usury and taxes will not exist. By having a central mart system of distribution, shoddy goods will be eliminated due to the absence of competition. “Only companies who produce superior goods at a reasonable price will be permitted to sell their goods in the mart. The mart will be operated by a producers’ co-operative which will sell all items at a markup of 12 percent” (TUF. 9th ed. 145).
Peace and Security Are Essential to Prosperity
Criminals, terrorists and warlords are well aware of the coercive power of violence. Law-abiding citizens often don’t understand that laws are merely wishes on a piece of paper unless there is sufficient power to enforce them. Violence can only be bettered by superior force, not by good intentions. What is yours by man-made rights and justice is yours only as long as you or someone else can protect it for you. There are no property rights in Nature.
The chief deterrent to predatory violence is the threat of even greater force. To achieve peace, a society must find ways to muster enough force to curtail the incentives to use violence to take whatever one wants from whoever has it. To police predation effectively, some group must exclusively control the physical means to overpower anyone. Superior weapons are the primary tools that determine the effectiveness of civilian police or an army to employ superior violence for the protection of a populace. If criminals become armed with the superior weapons, they soon become the government; and you would have to apply to them for loans or for permission to park your car. This has to a great extent happened in Columbia, where the drug cartel has more firepower than the government. In some urban neighborhoods of the USA, the police have lost control and dare not even enter.
Democracy and equality are primitive, matriarchal realities. They were not ideas thought up by the ancient Greeks. The Greeks merely codified such concepts in their laws. Hunting-gathering societies are made up of individuals who are equally armed with primitive hunting weapons and so have equal power. That was also the case among the Greek hoplites—the soldiers who were independent land owners that could afford to buy their own weapons, which were very expensive. Because he was heavily armed, and because defense of the nation depended on close cooperation with his equals, he could not be ignored. Greek notions of liberty and a democratic vote were not extended to everybody. Women, slaves and the poor had no voice in politics. Power was held only by the men who had the military means to enforce their claim to it. They all stood in defense of fair property rights since that was the source of their individual political and military strength. Even in the USA, liberty depends on the citizens having modem arms in their homes. The stability of democratic systems has always rested on an underlying military equality of the citizen electorate.
In most of the world’s history, only a king or warlord had soldiers and weapons. Everyone else was a serf or slave owned by the man who controlled the army. As agriculture became established around the world, people abandoned the nomadic way of life and grew grain in plots of land that took much effort to prepare for crops. People settled permanently in one place; and since it took half a year of hard work to sow, cultivate and harvest their crop, they wanted to protect the fruits of their labor from those who preferred to steal food rather than work for it. The stores of grain were always a temptation to pillage—not only by locals but also by outside raiders. The solution to their problem was either to mount a cooperative defense among all the local farmers when there was a raid or else to feed and equip a permanent armed force that better guaranteed full-time protection.
The latter option proved more effective, but it usually didn’t take long for the leader of the armed force to realize that the army could rule the unarmed farmers and that he could levy taxes and obtain personal privileges for himself and become king. In a generation or two, this became so institutionalized that the king owned everything and everybody. This eventually became the case in almost the whole world.
The temptation was always there for a warlord to use his army to expand the territory he ruled by making war on weaker neighbors and smaller armies, for it was self-evident that more serfs meant more riches to support a larger, more powerful army. Thus empires in the Middle East and Far East and then Europe came about. A side benefit of this trend was that the larger the empire, the more secure the public safety. The resources for large public works like irrigation in Mesopotamia and Egypt benefited the farmer, and cities became feasible. However, there was no freedom for anyone and no democratic or republican forms of government. The ruler could do anything he wanted with anyone.
These empires could last for centuries, but innovations of superior weaponry in the hands of other kings could bring empires down. If an empire disintegrated simply because of internal corruption and dissention, a number of smaller sovereign governments would follow. But then trade would suffer because the confusion of many different rules and imposts in crossing many borders makes a snarl of everything. The more and smaller the units that exercise sovereign power, the greater the number of transactions that will be hung up, stifling economic growth.
Historically, the breakdown of a large political entity has led to criminal violence and economic decline in its smaller successors. Generally speaking, the larger the scale over which order can be exercised, the more conducive it is to progress. This is not to say that small systems can’t outperform large ones, but they need to have safe avenues for outside trade in order to obtain internally unavailable raw materials and to have markets for their products to earn the money to buy those raw materials.
Prosperity can occur only where the negative effects of violence can be minimized. An important element in the growth of prosperity in Western Civilization since the 15th Century was the evolution of institutions that reduced the risks of trade: among which are a legal system designed to give predictable rather than arbitrary decisions, bills of exchange which facilitate the transfer of money and credit for commercial transactions, an insurance market, and the change of governmental revenue systems from discretionary expropriation to systematic taxation. These institutions all depend on internal and international legal and court systems to enforce them and also upon the threat of force of arms or embargo against a nation that doesn’t keep its traders in line. The principal reason poor countries are poor is because they lack a crucial element required for economic development—a stable government that reliably provides law and order, impartially protects private property, and enforces contracts. But this is not to say that the poor countries don’t have laws to accomplish these things; it’s that they can’t or don’t enforce them.
Another major factor in a nation’s prosperity is partly cultural and partly economic. A people who have come to eschew violence makes them more fit for commerce, and the long success of commerce tends to reinforce this taboo on violence. When a person’s life is secure by having sufficient wealth to provide all his needs, he is prone to protect the system that provides it. The more stable a society, the greater will be its store of liquid monetary assets relative to its tangible assets. These money assets can be in the form of cash, stocks, bonds and other investments. Confidence in the safety of funds when invested outside the owner’s hands depends on long-standing stability and the reliability of the courts enforcing contracts so one can be reasonably assured that money entrusted to others will be repaid. The richest countries are those that have the highest percentage of liquid monetary assets.
A sound constitution has great economic value. A constitution will be honored in broad measure as long as the rules continue to pay off for those who have the power to change them. Economic decline is destabilizing because then the incentive to abide by the rules of society falls as well. Although physical force is the ultimate determinant of the rules by which a society operates, the goodwill and strength of ethics of its citizens will do more to preserve economic and political stability than armed force.
A man will invest his money in his personal future only if he judges that the future will be essentially the same as or better than the soundness of monetary conditions in the present. If he perceives that stability is on a long-range decline, he will spend now before money loses its purchasing power and not invest, or he will try to emigrate to a place that is more secure.
For security, we rely on sound money, following God’s law of Tithes, a just and effective legal system dedicated to upholding a good constitution, a strong police force, and a moral citizenry keeping arms. If any of these is missing, there can be no lasting prosperity.
I place economy among the first and most important virtues, and public debt as the greatest of dangers... We must make our choice between economy and liberty, or profession and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.