Individual Liberty - Evernote

Mutual banking might or might not cause gold to lose its pre-eminence as the most
thoroughly constituted value. If it should do so, then some other commodity more
constantly demanded and uniformly supplied would take the place of gold as a
standard of value. It certainly is unscientific to impart a factitious monopoly value to a
commodity in order to make its value steady.
Other things being equal, the rate of interest is inversely proportional to the residual
increment of wealth, for the reason that a low rate of interest (except when offered to
an already bankrupted people) makes business active, causes a more universal
employment of labor, and thereby adds to productive capacity. The residual increment
is less in the United Kingdom, where interest is low, than in the United States,, where
interest is high, because other things are not equal. But in either country this
increment would be greater than it now is if the rate of interest were to fall.
If gold became as abundant as copper, legislation, if it chose, could maintain its value
by decreeing that we should drink only from gold goblets. If the value were
maintained,, the volume of money would be greater on account of the abundance of
gold. This increase of volume would lower the rate of interest.
A voluntary custom of selling preferentially for gold would not be a monopoly, but
there is no such voluntary custom. Where cattle are used voluntarily as a medium of
exchange, they are not a monopoly; but where there is a law that only cattle shall be
so used, they are a monopoly.
It is not incumbent on Anarchists to show an analogy between a law to require the
exclusive consumption of handmade bricks and any law specifying that the word
Dollar in a bond shall imply a certain quantity of gold. But they are bound and ready
to show an analogy between the first-named law and any laws prohibiting or taxing
the issue of notes, of whatever description, intended for circulation as. currency.
Governments force people to consume gold, in the sense that they give people no
alternative but that of abandoning the use of money. When government swaps off gold
for other commodities, it thereby consumes it in the economic sense. The United
States government purchases its gold and silver. It can hardly be said, however, that it
purchases silver in an open market, because, being obliged by law to buy so many
millions each month, it thereby creates an artificial market.
Again Mr. Fisher came back, in his characteristic style, to which Mr. Tucker replied in
the following manner:
Mr. Fisher's article is nothing but a string of assertions, most of which, as matters of
fact, are untrue. The chief of these untruths is the statement that in exchanging gold
we do not consume it. What is consumption? It is the act of destroying by use or
waste. One of the uses of gold - and under the existing financial system its chief use -
is to act as a medium of exchange, or else as the basis of such a medium. In
performing this function it wears out; in other words, it is consumed. Being given a
monopoly of this use or function, it has an artificial value, - a value which it would
not have if other articles, normally capable of this f unction, were not forbidden to
compete with it. And these articles suffer from this restriction of competition in very
much the same way that a theatre forbidden to give Sunday performances suffers if its
rival is allowed the privilege. Mr. Fisher may deny the analogy as stoutly as he