Banks vs Barter

The art of propaganda is to formulate an argument that leads the target audience to the desired conclusion.  The strategy is to create a tunnel perspective for the audience and to shut out information or thinking that would lead the audience to see or seek a different solution.  I can think of no better example of that, than the “End the Fed” movement.  As best I can determine, the promoters of this propaganda have an objective of returning to a monetary system of gold and silver.  I don’t necessarily disagree with the objective but there are problems with it that I’ll save for another time.  What I want to discuss here is the propaganda against banks and in particular, the Federal Reserve. 


The End-the-Fed (EF) propaganda tunnel for the target audience is to always use person-to-person barter.  I can trade you my potatoes for your wheat – or in the case of services, I can trade you my eggs for a doctor’s visit.  This is a simplistic view of the world that is so irrational that it amazes me that so many people on the Internet seem to buy it.  But then it is hard to tell the real people from the propagandists who must have no conscience and a philosophy of “the end justifies the means” in order to put forth such tripe.


There is no question that the Federal Reserve and the banks have become criminal organizations.    That is not an issue.  The issue is the solution.  This is a logical problem that can be solved, but not from the inside of a tunnel.   


The obvious problems with the simplistic solution of person-to-person barter are production (commodity), time, distance and need.  You may need a doctor’s visit but he doesn’t need any eggs because he has so many eggs they are coming out his ears.  A possible solution for that is a chit (check) system with a chit being a promise from the egg farmer to deliver to the doctor at some future time, eggs to pay for the visit.  The doctor of course would be free to trade his egg chit to the wheat farmer if the wheat farmer is interested, but the egg farmer has already traded with the wheat farmer so the wheat farmer doesn’t want the chit.   The solution to that problem is to have a central location for chit exchange so that the egg farmer, the wheat farmer and the doctor can trade chits.  But then, that doesn’t solve the problem when the doctor needs to buy a stethoscope but nobody in Barterville sells stethoscopes. 


When the logical problems with Barterville are exposed, then the tunnel widens enough to allow for the concept of chit exchange at the state level.  State banks are the solution they say, using North Dakota as the example because apparently North Dakota has their own state bank.   So if all states had their own banks, then that would solve the problem and the Federal Reserve could be eliminated.  Wrong.  What they are missing is that the North Dakota State bank is participating in the Federal Reserve system and they are dealing in Federal Reserve notes and not state issued chits.  So the only difference between the North Dakota State bank and the Bank of Commerce in Idaho is that the North Dakota bank is a public institution running as a non-profit (probably) to serve the people of the state, whereas the Idaho Bank of Commerce is a privately held bank and is profit-making.  If all states established their own banks and we eliminated the Federal Reserve and went to a state chit system, we would just be expanding the borders of Barterville to be the borders of the state and all of the exchange problems of Barterville would apply statewide.


Let’s go back now to the example of the Barterville doctor who needs a stethoscope.  A stethoscope is a relatively simple device but the materials used and the production processes are quite sophisticated.  So let’s say that Barterville is in Nevada.  They don’t have the materials,  the production capacity or expertise to make stethoscopes.   The doctor must go outside of Nevada to buy a stethoscope.   But whenever you cross a “Barterville” boundary, you have a problem of the medium of exchange so even if you have a Nevada State Bank and a Massachusetts State Bank, they still need a common medium of exchange. 


The idea that a state could produce everything that is needed for the people within the state is absurd – unless your idea is to completely devolve the United States back to a level of primitivism that modern man would find intolerable and I don’t even think workable.  Even if you get rid of your car and go back to horse transportation, the horse needs shoes – and shoes require iron and to make iron, you need iron ore.   And if you’re still not convinced, then do this… look through your house and garage and make a list of all the items that you think are essential.  And then break down those items into their component parts and then further breakdown the components into the materials that are needed for the manufacture of those components.   If you do that, and you do it honestly, you’ll find that the complexity of a barter system explodes exponentially and wouldn’t be workable with a chit system.  You will find that there is not enough capacity either in materials, production capacity or expertise within your state to supply all of the essentials.  Because a state cannot be self-contained, you need a common medium of exchange across borders.  And once you do that, you have defined the reasons why central banking was established.  And if you tear down the Federal Reserve, you would just end up rebuilding it because it’s necessary for commerce. 


At this point, we have arrived at a dead end of this logical thought trail.  We need a central banking system to facilitate commerce because commerce supplies us with the essentials that we need to live.  So the real problem is that one of our essential institutions, central banking, has turned into a criminal enterprise.  And even if you argue that it started out as a criminal enterprise, that doesn’t negate the fact that we need it.  So the solution is to make the central banking system honest and working in the interest of the people of this nation.  And why isn’t that already true since it is an indisputable fact that we need it?   The reason why the banking system is corrupt is because the Congress of the United States is corrupt.  Before you can have an honest banking system, you must have an honest government.  To pretend that you can fix the banking system by any means, without fixing the corruption of government and the Congress, is an intellectual fraud.   We would be a lot farther along in cleaning up that corruption if the ‘End the Fed’ propagandists actually were doing research and exposing the corruption of Congress and the Fascist takeover of our government rather than daily harping on the arcane aspects of banking and commerce that most people obviously don’t understand anyway. 


Today when I was on Darren Weeks program Govern America, I mentioned the building of the Railroads and the Credit Mobilier scandal of the 1800’s.  The following are links to information about it so that you can begin to draw the parallels between that corruption and the corruption of today because it is history repeating.  We should be calling out by name and by deed, all of the politicians who have been in bed with corporations that have led us down this path of destruction. 


The Credit Mobilier Jobbery.


(note:  if you don't remember Global Crossing it is probably because of the media firestorm about Enron.  That probably wasn't a mistake by the MSM.  Enron was a domestic story of corruption.  Global Crossing involved politicians, payoffs, COMMUNIST China and treason.) 


Global Crossing Refresher 


Global Crossing Tossed More Cash Around Town Than Enron


Global Crossing Development Corporation


Vicky Davis
December 4, 2010