Once upon a time there was a young prince who was deeply concerned that his father, the king, was in failing health and was rapidly deteriorating. Worried about the heavy burden that would fall upon him, he soon became obsessed with the magnitude of his tasks.Not much later the king passed away and the young prince was proclaimed king. Preparations began for the coronation, which, the new king decided, should be of such splendor and magnificence as to reach the outermost parts of the world. He would invite all the foreign princes and make the coronation the most luxurious and elegant they had ever seen. All who came would learn to respect and honor his kingdom.
Soon enough all the royal advisers were upon him, but his eye and mind were fixed on the keeper of the royal vault. "May I have a word with you?" he signalled to the royal keeper of the vault and thereafter the two disappeared into the basement.
"Tell me," said the prince to the royal keeper, "how much do we have in the royal vault?"
"I cannot tell you exactly at the moment, but I can show you something of interest in planning the coronation. This small vault," he pointed to one, "was full when your father ascended to the throne. Now it is empty. With your divine wisdom and youthful mind you will, I'm sure, succeed in refilling it."
Astonished, the prince became pensive. Then suddenly the prince picked up a coin from the stack of gold coins and asked, "How much gold is in this coin?"
Again the royal keeper of the vault said, "I do not know. My eyesight is not what it used to be and my hands are no longer as sensitive, either. But I will call in the royal goldsmith who has travelled far and wide throughout the world and understands the mysteries and magical qualities of this precious metal."
When the goldsmith came in, the prince asked him, holding up the coin: "How do you assess it?"
"Your Highness, this is about a troy ounce and should have 480 grains of gold in it," the goldsmith answered.
"Tell me, goldsmith, can you replace a mere 40 or 50 grains of gold from this coin with lead?"
"Oh certainly, your royal Highness," said the goldsmith.
"And can anybody, besides you, tell the difference?"
"I dare say no," said the goldsmith, "not if it is skillfully and correctly done."
"You see this empty vault?" said the prince. "I hope to fill it in the early period of my reign. And I do not wish even so much as to touch the royal vault. But what I want most of all is a splendid coronation for all the world to see. And it shall be an inspiration to all in our realm. How can this be done? We shall purchase all our needs for the coronation with the debased metal and, as you say, no one shall know except the three of us. The secret we shall take to our graves."
Thus the deal was struck and the most elegant and most luxurious of coronations in the ancient world took place.
The prince bought the best and finest of what was available for the coronation and a great time was had by all. None of the merchants from whom so much was bought showed the slightest suspicion that the gold was indeed debased. It was not until months and months later that the keeper of the royal vault called in his royal Highness, the king, and advised him that all the debased coins he had used to pay for purchases had now been returned in the form of taxes.
Appalled, the king exclaimed, "We have thereby gained nothing?"
"No," replied the keeper of the gold, "we have not. We have much to make up for. We cannot raise taxes; our nobles will not stand for it. We cannot squeeze the peasants; they are already burning the estates of the landlords. We are in a time of trouble. And the merchants and traders are becoming more arrogant and rude every day. There is talk in the marketplace that the peasants will soon march on the palace."
Descendants of the vault keeper
It is not quite a century and a half since Karl Marx dealt precisely with the point of this story. He did so in a book called "The Poverty of Philosophy," a celebrated polemic against Pierre Joseph Proudhon (1809-1865), a French anarchist economist.
Proudhon wrote: "Money is born of sovereign consecration: the sovereigns took possession of gold and silver and affixed their seal to them."
Marx asked in reply: "Was it the sovereign who took possession of gold and silver to make them the universal agents of exchange by affixing his seal to them? Or was it not, rather, these universal agents of exchange [the gold and silver] which took possession of the sovereign and forced him to affix his seal to them and thus give them a political consecration?"
Marx continued: "It has been proved times without number, that if a prince takes into his head to debase the currency, it is he who loses. What he gains once at the first issue he loses every time the falsified coinage returns to him in the form of taxes, etc."
The worldwide financial crisis that has been wracking Europe should have brought this point forward for honest public discussion. Such is not the case. Instead, there was a well-hidden meeting of 172 central bankers and finance ministers in Washington on Sept. 24. It would be generous of us to merely describe them as the descendants of the keeper of the vault and the goldsmith. In truth, they are among the most ruthless and predatory exploiters the world has known. There is no crime they will not commit to uphold the social system whose creatures they are.
Apparently the point made by Marx and the experience of the prince had not the slightest effect on them. Yet this is not altogether true.
These bankers and finance ministers included Alan Greenspan, chairperson of the U.S. Federal Reserve Bank, and Nicholas Brady, Secretary of the Treasury. Their hurried, nervous meeting, without the fanfare and glare of big-time television, speaks volumes.
After meeting secretly and issuing no report, these keepers of the vault have "gone their 172 separate ways," as a New York Times report on Sept. 25 aptly remarks. There was no meeting of the minds, there was no agreement. Why? Because each is concerned with debasing their coins in their own way, for the salvation of their own ruling class.
The capitalist currency crisis reflects the inability of the central bankers and finance ministers to do more than the ancient keepers of the vault. Today's goldsmiths have the unhappy task of advising them that the clipping of the coins has become a world capitalist scandal.
No longer `good as gold'
There was a time when anybody who had paper money in some quantity could go to the U.S. Treasury, for instance, and get gold in return, as it said on the paper money. But today all the U.S. paper money, which used to say "Exchangeable for gold," now merely says "In God We Trust."
Governments throughout the capitalist world no longer pay in gold except by specific special agreement. The currencies in the capitalist world today reflect not so much the amount of gold a government has in its treasury as the economic stability of the social system. Of course, it's the Gross National Product that is the main determining factor over a period of time. But that in turn is dependent on the stability of capitalist relations--the stability of the relationship between the exploiter and the exploited.
In times of capitalist overproduction, instability has become so excessive that even artificial stimulants, like military expenditures and imperialist wars, are unable to lift the depressed economy out of its morass.
The keepers of the vault, their goldsmiths and their politicians have proven their utter inability to master the situation. If the current crisis demonstrates anything, it is the correctness of the Marxist analysis of the capitalist mode of production. The bankers and politicians do not manage the economy; the capitalist nature of the economy manages them.
It has been almost a century and a half since Marx explained to leading anarchist economists that it is not the will of the king that determines the value of his coins, but rather it is the coins that determine the will of the king.
If one thinks, for instance, that a meeting of the 172 bankers and ministers is perhaps too clumsy and too large to determine such delicate matters as the value of the dollar, the mark or the franc, let us remember that only last week that tiny little club of the seven largest imperialist robbers--the United States, Japan, Germany, France, Britain, Italy and Canada--also met in private and were unable to accomplish anything. If they did anything at all to dam the flood of economic "bad news," they have kept it secret. Any overt manifestation that the deepening of the financial crisis has been arrested is utterly lacking.
Agreement on the franc
The agreement between Paris and Bonn to prevent a free fall of the franc is actually designed to be a weapon in the psychological war between these two larger imperialist powers and the smaller ones. It is an attempt to club the latter into a European straitjacket where French and German capital will be able to dominate them. The effort to unify capitalist Europe can only create a mechanism for boxing in the capitalist contradictions.
The inevitable inter-imperialist rivalries are due not to some misunderstandings, not to a lack of technical knowledge of market conditions, nor to the productive forces having stopped growing. No, the fundamental obstacle to a coordinated, cooperative union of the European states is the preservation of private property in the means of production.
That means the only solution is socialism. All the maneuvers, all the hurried meetings, all the arming and talk of disarming, cannot obviate the fact that the means of production are owned by ever-growing predatory monopolies. This private ownership stands as the fundamental, insurmountable obstacle to a stable solution of the current crisis.
Apparently standing aloof are the Wall Street bankers and their top politicians. They are engaged, one would say completely consumed, by the presidential elections. It's not because the elections will cause one wing of the capitalist class to be battered or lose its control over the finances of the capitalist state to another capitalist group. The electoral struggle is over which group of politicians should manage the capitalist state on behalf of the whole ruling class. What's involved is the substitution of one managerial group by another, but both serve the common good and welfare of the exploiters and the oppressors.
As far as the masses are concerned, their view must be to look beyond the elections. Once aroused, the invincible might of the working class is the only force capable of dealing with the monstrous growth of poverty, hunger, unemployment and all the other ills of capitalist imperialism.