A petition of great import
By Daniel M. Ryan
In the spirit of Frédéric Bastiat, the man who penned the petition which, if nineteenth-century France had possessed modern antitrust laws would have prompted the French government to launch an antitrust lawsuit against the price-undercutting of the Sun, I offer this petition of my own, one that holds the cure to many an economic ill. I contend that the developed economies are suffering under the weight of too much money.
Yes, there is too much money around, and its perfidious consequences haunt the land. How are we to prosper, if the prices of goods and services are so dear? We cannot blame any purveyor of a specific one; if one price is shoved up, then surely others would be lowered, unless there was demand to meet such price hikes. Where else would that demand come from, if not from too much money?
The dearness of even necessaries is mute evidence that the root cause is too much money. We are choking in our own paper.
How can we sell dear and buy cheap if we have too much money? Thanks to there being a surfeit of money, we cannot buy cheap. This clearly puts a crimp on our balance of trade. We can sell dear, this is true, but at what rate? How can "dear" be truly dear if the said dearness is dissolved away by – too much money? If dearness is universal, then dearness means naught.
Look at the United States. Is there any other country so awash in money that its money slides away to function as a medium of exchange in other countries? What is the trade position of this mighty country? Is it a surplus? I think not!
The United States is clearly choking in its own green. Dearness is everywhere there; money is everywhere there; deficits are everywhere there. Through free printing of money, all deficits keep growing, do they not? If only as a tendency?
Think of the humble creditor, at the mercy of big debtors. Do they not tremble in silent fear, knowing that the political power of Big Debt is impossible to overcome? Many huge mega-corporations borrow vast sums without two blinks of their comptrollers' eyes. Is this not a mighty, frightening and stifling power? What chance does the small, innocent creditor have against the bargaining power of these economic monstrosities?
It is said that shrinking the supply of money will bring much unemployment. To that, I say, what is so wrong with leisure? Unemployment – it is an extended vacation. In fact, it's better than a vacation for society because it is an unpaid one. Well, mostly unpaid. We do think of the unemployed.
I fail to see why such a grand mass vacation would be harmful. Besides, if the unemployed are truly in want, they can work or exchange on the sly. Many of them do so anyway, and have done so over the course of the last ninety or so years.
It is also said that many debtors are small. Here, I fail to find evidence of the small debtor's preponderance, though. Bonds are sold in the marketplace. They represent the debt obligation of one entity – most likely, a big corporation. There are many buyers. This adds up to: one borrower, many creditors. Is this not – monopoly?
Even if some debt securities are packages of many small debts, the buyers of them are often numerous too. We must not forget that these supposedly small borrowers have one big agent – the seller of them – to look after their interest. We must also never forget that banks earn money from debtors, and pay money to creditors. Debtors mean profits to them; creditors mean losses. Surely, the banks have an interest in fostering and promoting debt, an obvious one. They also have an interest in keeping the cost-bringing creditor underfoot, do they not?
Evidence abounds of the true beneficiaries of a surfeit of money: the big old boys of the economy. Here, we have a true, if neglected, example of the economically strong pitted against the economically weak. Is this not obvious? What else can economic strength be?
Given the overwhelming, if hidden, misery that the surfeit of money has caused, I propose, for the sake of moderateness, a new monetary rule. Henceforth, central banks shall be obligated to shrink the money supply by 3 to 5 per cent per annum. This is truly more conservative than a radical measure to nearly abolish the money supply.
It is said that many debtors will lose through no fault of their own as a result of any measure such as this one – even if the growth in the money supply is halted, not shrunk. The above list of bignesses should put a swift end to this plaint.
It is also said that the creditors of the nation will gain undeservedly if such a measure is implemented. Why would this not be a restoration of parity? Have they not suffered over the course of the last several decades? What could be wrong with a "parity rate" for the small, long-suffering creditor? I need hardly mention that the posted rate of borrowing will go down considerably, so the already-much-shrunken creditors will not exactly be free of setbacks. They will hardly make out like bandits; instead, they will enjoy a must-needed respite of parity earnings. What just person could be against parity pricings?
In the name of the long-suffering creditor, I make this demand: shrinking the money supply, according to the above-mentioned monetary rule, until long-term parity between debtor and creditor has been achieved. Parity should be easy to define; it is a simple concept. If it is said not to be, is this not evidence of the hidden hand of - Debtor's Interest?
Why should the interests prevail? Should the government not step in to relieve the quiet suffering of the long-suffering creditor? I have not been so extreme as to propose the "euthanasia of the debtor," have I