Honest Money

In his 9 May 2002 Acceptance speech of the International Charlemagne Prize of Aachen for 2002,
Dr. Willem F. Duisenberg, President of the European Central Bank,
said that
“what Sir THOMAS MORE said of gold five hundred years ago – that it was MADE FOR MEN and that it had its VALUE BY THEM – applies very well to the euro.” (1)

“When THOMAS MORE, for example, endows the criminals in his utopia with golden chains and the ordinary citizens with gold and silver CHAMBER POTS, it is in something of the spirit that leads primitive mankind to wreak vengeance on lifeless images and symbols”,
says Ludwig von Mises in his “The Theory of Money and Credit”, (2)

Thomas More mentions the being-made-for-and-valued by men
and the chamber-pots
in the same Book 2, of his “Utopia”, (3)

Whose interpretation of Thomas More’s “Utopia” is correct?

That of Wim Duisenberg or that of Ludwig von Mises?

Ivo Cerckel
honestmoney@maktoob.com

NOTES

(1)
Acceptance speech of the International Charlemagne Prize of Aachen for 2002
by Dr. Willem F.. Duisenberg, President of the European Central Bank,
Aachen, 9 May 2002
http://www.ecb.int/press/key/date/2002/html/sp020509.en.html
SNIP
A social contract
What is money? Economists know that money is defined by the functions it performs, as a means of exchange, a unit of account and a store of value. But, just as importantly, money is also defined by the community for whom it performs these functions. Because it is an economic instrument for each of its users, it is also a political and cultural bond between them. Consider this simple fact: we engage in an exchange of goods and services everyday by using money as the means of exchange; and we offer our labour in exchange for money, which, in itself, has no value. We only do this because we believe that we will, in turn, be able to exchange that money for more goods or services. This fact tells us much about the confidence that we place in money itself. And it tells us much more about the confidence that we place in each other. Hence, money is, in essence, a social contract.
The euro, probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state. It is not backed by the durability of the metal or by the authority of the state. Indeed, what Sir THOMAS MORE said of gold five hundred years ago – that it was MADE FOR men and that it had its VALUE BY them – applies very well to the euro.
Every currency is a symbol of the community it serves. It is a symbol of the society as a whole, but also represents the political and cultural bonds between the members of that society. Surely this uniting power must have been felt – I am even tempted to say, physically – by those who have travelled from one euro area country to another this year.

(2)
Ludwig von Mises, “The Theory of Money and Credit”, translated in 1934 rom the German by H. E. Batson, Indianapolis, Liberty Classics, 1980. Part 1, Chapter 6, section 2, pp. 111- 112
http://mises..org/books/Theory_Money_Credit/Part1_Ch6.aspx
2 Money Cranks
Superficial critics of the capitalistic economic system are in the habit of directing their attacks principally against money. They are willing to permit the continuance of private ownership of the means of production and consequently, given the present stage of division of labor, of free exchange of goods also; and yet they want this exchange to be achieved without any medium, or at least without a common medium, or money. They obviously regard the use of money as harmful and hope to overcome all social evils by eliminating it. Their doctrine is derived from notions that have always been extraordinarily popular in lay circles during periods in which the use of money has been increasing.
All the processes of our economic life appear in a monetary guise; and those who do not see beneath the surface of things are only aware of monetary phenomena and remain unconscious of deeper relationships. Money is regarded as the cause of theft and murder, of deception and betrayal. Money is blamed when the prostitute sells her body and when the bribed judge perverts the law. It is money against which the moralist declaims when he wishes to oppose excessive materialism. Significantly enough avarice is called the love of money; and all evil is attributed to it.[1]
The confused and vague nature of such notions as these is obvious. It is not so clear whether it is thought that a return to direct exchange by itself will be able to overcome all the disadvantages of the use of money, or whether it is thought that other reforms will be necessary as well. The world makers and world improvers responsible for these notions feel no obligation to follow up their ideas inexorably to their final consequences. They prefer to call a halt at the point where the difficulties of the problem are just beginning. And this, incidentally, accounts for the longevity of their doctrines; so long as they remain nebulous, they offer nothing for criticism to seize upon.
Even less worthy of serious attention are those schemes of social reform which, while not condemning the use of money in general, object to the use of gold and silver In fact, such hostility to the precious metals has something very childish in it. When THOMAS MORE, for example, endows the criminals in his utopia with golden chains and the ordinary citizens with gold and silver CHAMBER POTS, [2] it is in something of the spirit that leads primitive mankind to wreak vengeance on lifeless images and symbols.

(3)
Thomas More, “Utopia”, Book 2.

[UTOPIAN VIEW OF RICHES, GOLD, AND JEWELS]

http://www.luminarium.org/renlit/utopiariches.htm

All things appear incredible to us, as they differ more or less from our own manners. Yet one who can judge aright will not wonder, that since their constitution differeth so materially from ours, their value of gold and silver also, should be measured by a very different standard. Having no use for money among themselves, but keeping it as a provision against events which seldom happen, and between which are generally long intervals, they value it no farther than it deserves, that is, in proportion to its use. Thus it is plain, they must prefer iron to either silver or gold. For we want iron nearly as much as fire and water, but nature hath marked out no use so essential for the other metals, that they may not easily be dispensed with. Man’s folly hath enhanced the value of gold and silver because of their scarcity; whereas nature, like a kind parent, hath freely given us the best things, such as air, earth, and water, but hath hidden from us those which are vain and useless.

Were these metals to be laid-up in a tower, it would give birth to that foolish mistrust into which the people are apt to fall, and create suspicion that the prince and senate designed to sacrifice the public interest to their own advantage. Should they work them into vessels or other articles, they fear that the people might grow too fond of plate, and be unwilling to melt it again, if a war made it necessary. To prevent all these inconveniencies, they have fallen upon a plan, which agrees with their other policy, but is very different from ours; and which will hardly gain belief among us who value gold so much and lay it up so carefully.

They eat and drink from earthen ware or glass, which make an agreeable appearance though they be of little value;

while their CHAMBER-POTS

and close-stools are made of gold and silver; and this not only in their public halls, but in their private houses. Of the same metals they also make chains and fetters for their slaves; on some of whom, as a badge of infamy, they hang an ear-ring of gold, and make others wear a chain or a coronet of the same metal. And thus they take care, by all possible means, to render gold and silver of no esteem. Hence it is, that while other countries part with these metals as though one tore-out their bowels, the Utopians would look upon giving-in all they had of them, when occasion required, as parting only with a trifle, or as we should esteem the loss of a penny.

They find pearls on their coast, and diamonds and carbuncles on their rocks. They seek them not, but if they find them by chance, they polish them and give them to their children for ornaments, who delight in them during their childhood. But when they come to years of discretion, and see that none but children use such baubles, they lay them aside of their own accord; and would be as much ashamed to use them afterward, as grown children among us would be of their toys.

I never saw a more remarkable instance of the opposite impressions which different manners make on people, than I observed in the Anemolian ambassadors, who came to Amaurot when I was there. Coming to treat of affairs of great consequence, the deputies from several cities met to await their coming. The ambassadors of countries lying near Utopia, knowing their manners,—that fine clothes are in no esteem with them, that silk is despised, and gold a badge of infamy,—came very modestly clothed. But the Anemolians, who lie at a greater distance, having had little intercourse with them, understanding they were coarsely clothed and all in one dress, took it for granted that they had none of that finery among them, of which they made no use. Being also themselves a vain-glorious rather than a wise people, they resolved on this occasion to assume their grandest appearance, and astonish the poor Utopians with their splendour..

Thus three ambassadors made their entry with 100 attendants, all clad in garments of different colours, and the greater part in silk. The ambassadors themselves, who were of the nobility of their country, were in clothes of gold, adorned with massy chains and rings of gold. Their caps were covered with bracelets, thickly set with pearls and other gems. In a word, they were decorated in those very things, which, among the Utopians, are either badges of slavery, marks of infamy, or play-things for children.

It was pleasant to behold, on one side, how big they looked in comparing their rich habits with the plain clothes of the Utopians, who came out in great numbers to see them make their entry; and on the other, how much they were mistaken in the impression which they expected this pomp would have made. The sight appeared so ridiculous to those who had not seen the customs of other countries, that, though they respected such as were meanly clad (as if they had been the ambassadors), when they saw the ambassadors themselves, covered with gold and chains, they looked upon them as slaves, and shewed them no respect. You might have heard children, who had thrown away their jewels, cry to their mothers, see that great fool, wearing pearls and gems as if he was yet a child; and the mothers as innocently replying, peace, this must be one of the ambassador’s fools.

Others censured the fashion of their chains, and observed, they were of no use. For their slaves could easily break them; and they hung so loosely, that they thought it easy to throw them away. But when the ambassadors had been a day among them, and had seen the vast quantity of gold in their houses, as much despised by them as esteemed by others; when they beheld more gold and silver in the chains and fetters of one slave, than in all their ornaments; their crests fell, they were ashamed of their glory, and laid it aside; a resolution which they took, in consequence of engaging in free conversation with the Utopians, and discovering their sense of these things, and their other customs.

The Utopians wonder that any man should be so enamoured of the lustre of a jewel, when he can behold a star or the sun; or that he should value himself upon his cloth being made of a finer thread. For, however fine this thread, it was once the fleece of a sheep, which remained a sheep notwithstanding it wore it.

They marvel much to hear, that gold, in itself so useless, should be everywhere so much sought,
that even MEN,

FOR WHOM IT WAS MADE, and by them HATH ITS VALUE,

should be less esteemed. That a stupid fellow, with no more sense than a log, and as base as he is foolish, should have many wise and good men to serve him because he possesseth a heap of it. And that, should an accident, or a law-quirk (which sometimes produceth as great changes as chance herself), pass this wealth from the master to his meanest slave, he would soon become the servant of the other, as if he was an appendage of his wealth, and bound to follow it.

But they much more wonder at and detest the folly of those, who, when they see a rich man, though they owe him nothing, and are not in the least dependent on his bounty, are ready to pay him divine honours because he is rich; even though they know him at the same time to be so covetous and mean-spirited, that notwithstanding all his wealth, he will not part with one farthing of it to them as long as he liveth.

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