I have been somewhat quiet on the blogging front for some time now as I have been trying to get the basics of a book set down. Recently, this project has drawn me into an area which hasn’t received the due attention it deserves, but which promises to be a field of inquiry where the Jouvenelian model of social organization and conflict can provide a great deal of insight. The issue to which I refer is that of money.
Jouvenel himself didn’t deal greatly with the issue of money in his book, but he did correctly point out at a number of points that the act of currency debasement was a tool used by monarchs as a means to undermine intermediary power centers. The devaluations of the monarchs succeed in rendering the dues made payable in coin by peasants to the barons and lord progressively less valuable. This currency debasement was also an excellent means for the monarch to raise funds though reminting. The problem is that Jouvenel was a liberal and was utterly infested with liberal predjudices in this regard. He refers to this currency debasement as a form of counterfeit which is par for the course for a liberal. The problem with liberals, classical liberals, is that they retain a series of assumptions which are exceptionally partisan. They are not offering a balanced view of events but instead they hold and then promote an extreme form of anarchistic primitivist ontology which we have covered before.
The result of Jouvenel’s political position is that this issue of currency debasement was not followed fully, a problem which occurs repeatedly with his work. To obtain a more rounded view of the matter and to try and approach it without liberal influence, the best thing we can do is to approach historical accounts of this currency issue as neutrally as possible. We cannot consider either debasement good or bad, merely note what it does and why it was done.
An excellent source for beginning this is presented by the work of Pete Spufford and his Money and its use in Medieval Europe, which despite having claim to the most boring title in history is actually a fascinating work. His depth and breadth of research is awe inspiring (he spent the better part of two decades writing it.) The story which comes through supports Jouvenel’s claims, but only in so far as the results, and not the ethical claims. One of the reasons for this is that it is clear Spufford approaches currency without liberal, and there is no nicer way to put this, nonsense.
For the Kings to be engaging in counterfeit as put forward by Jouvenel and as implied by all liberal opponents of inflation, we have to consider money to be of a certain kind. We have to consider money to be a receipt at best for an underlying asset, with the divergence from this record being an act of fraud. This goes hand in hand with the general approach to money as demonstrated by the claim that it is a natural and emergent phenomena which is intrinsic to humans. In the liberal model money has to be a commodity which is independent of power and is quite natural. The reader will be well aware of this whole scheme and if he is not he can go listen to the screams of the closest libertarian.
Historical record shows that money is not natural, it did not emerge spontaneously, it is not a commodity or a receipt for a commodity (it can be partially), and it is not a development independent of power. Money does have continuation with earlier forms of social organization from which it developed from, but these forms of organization were also themselves a constituent part of power relationships. The sacrificial redistribution economies of pre-monetary societies are the sources of money, and not barter, and they were not spontaneous sharing exercises.
The issue of debasement then becomes from this historically accurate angle, one which is not an act of counterfeit by the monarch but instead a perfectly acceptable decision regarding the effects of money on society. A policy of “sound” money is not a neutral natural state of affair but instead a highly political and partisan position based on the demands of a specific class of society. Once you position as if this “sound” money position is neutral then you have to start accounting for the development of money as being natural, as the premise that it isn’t becomes a serious problem. So this is what we see when the barons wrest control of the monetary policy on the basis that it is not the right of the monarch to decide on debasement, as money is of society. Complete fraud.
This is not to say that the monarch were acting correctly, and were not in conflict and using money as a means to attack the barons. They were. But the act of setting up a counter web of ideological lies as a means to shore up the position of those who benefited from the restriction of currency is not something we need to accept. Currency is not a commodity, it doesn’t need to be backed by anything and can be expanded and reduced in volume as necessary, something which is obvious from observing modern monetary developments. Granted the linkage between a commodity and money was maintained for a great time, but this seems clearly to have been nothing more than the need to have an additional guarantee for money whilst the power of the state was not sufficient to control it. Something which has not been the case for sometime.
All of this though, results in the need to approach money from a completely new Jouvenalian angle in a way far more sophisticated than Jouvenel, and if we do this then we can fruitfully follow a number of works of historical exploration of the origin of money in Greek society, which is something I am currently working on for the book. The preliminary conclusions I can draw seem to hint at Power and money being invariably intertwined and best seen as a form of social organization in contrast to the primitivism of liberal accounts.