Friday, December 12, 2008

Money, Banks and Free Trade – Common Sense Can Rule

-- by Ardi Keim

What would it be like if we weren't isolated from the real world?
What is real? And what is illusion?

Take the economy, for instance:

I'm not an economic analyst. I'm not even sure how the whole monetary system works. I do understand that money is supposed to be an instrument to make exchanges between people easier. And that banks are sort of the safe-keepers of money. I'm all for easy and safe. And that all would make complete sense to me if money itself had any real value. Like it did when it represented an amount of precious metal in Fort Knox. But, as I understand it now, currency has a somewhat arbitrary value. That value is completely outside the control of most people using it in exchange. If it was backed by gold or silver, or if those metals were still used commonly as legal tender, then I could understand the reason for banks. They would be intermediary (or point of use) forts with guards to protect against loss (theft) of the value therein. And I guess because currency is currently ever-decreasing in value, the fact that it takes so much more to buy what it could have bought when it was backed by gold — well then maybe banks are needed now.

But, since gold or silver isn't used anymore, why do we even need currency at all? Aren't agreements between parties in a trade all that is necessary? If I trade my potatoes for your flowers, or your hours of labor repairing my car (or the nuts and bolts to fix it myself) – a few words and a handshake would be the instrument of trade. If the transaction is to take place over time, then a documented agreement would be that instrument. Need any other party or institution be involved? If one side of the bargain was complete and the other was not, or if it was delayed beyond the agreed upon time, and no resolution was forthcoming, then a trade for legal service might be in order.

Keeping agreements, and respecting other people and their property seems so simple to me. Who is acting under illusion? Those who put their trust in an arbitrary system that devalues the worth of those using it? Or those who know what they want and know others with it, willing to make an exchange. Simple, free trade makes sense to me.

Do we really have an economic crisis? Or a shortage of common sense?

What do you think? How much do we pay in taxes for support of unnecessary government and laws that put us in servitude, instead of our public servants with six-figure incomes? Remember – they work for us. That includes county clerks, governors, senators, representatives ... all the way to the top.