Yet, there are forces at work that are in reality plundering the nation - and these are the forces of inflationism. Speaking of inflationism, one writer made a powerful comment the other day:
Never in the history of Man has so much been stolen from so many by so few.
He was referring to the US Fed. Gold was $20 an ounce when the US Fed was established in 1913. It is over $1300 an ounce now. It is not that the value of gold has risen; rather, it is the value of the US Fed's paper dollar that has depreciated. All those who saved in dollars have lost. The US Fed has, because of its privileged position as the issuer of the world's reserve currency, "exported inflation" all over the world. Plunder of the World! So, let's play it again, Sam:
Never in the history of Man has so much been stolen from so many by so few.
The USSA also has a Supreme Court. But theirs too is a "committed judiciary" - committed, that is, to the notion of "legal tender." The idea of legal tender is an idea of "State money" that is FORCED upon the people, to be used in each and every transaction. It is legal tender that enables universal plunder. If State force is not used, everyone would refuse the depreciating currency and use others of stable value. Like gold. Or silver.
Below is a very brief history of how the Supreme Court of the USSA committed itself to State money and legal tender. This is from Hans Sennholz's Money and Freedom, a monograph published in 1985. Sennholz was another of the many gems to emerge from Ludwig von Mises' New York seminars. Here is Sennholz on legal tender in the USSA and the dubious role played by their Supreme Court:
The legal tender evil has come to the United States in periods of, and in the name of, national emergencies. Between 1775 and 1779 the Continental Congress issued some $241 million of currency to finance the Revolution. It did not itself declare the bills legal tender, but urged the states to give them legal tender standing. The states complied without demurring.
Depreciation of the Continental paper dollar set in as early as 1776. To derive any purchasing power from its issuance, the Congress printed Continental dollars faster and faster. Its first issuance amounted to a mere $2 million of bills of credit; in 1779, government printing presses turned out $140 million. By 1780 the specie value of the Continental dollar had fallen to three cents, and was still declining. Congress resolved to print no more money, and to finance its expenditures by other means, only when the cost of printing notes was almost higher than their value. By that time, the people refused to accept any Continental dollars, which in the end forced the states to repeal their legal tender laws.
During the Civil War, the Lincoln administration issued some $450 million of Treasury notes and granted them the quality of legal tender. A series of legal cases reached the Supreme Court between 1868 and 1870. The Court promptly ruled that legal tender provisions were unconstitutional. While more cases were pending, Congress raised the membership of the Supreme Court from seven to nine; President Grant, making the appointments, selected only those justices known to favour the constitutionality of legal tender, thereby creating a preestablished majority for legal tender. It was a foregone conclusion therefore that the Court would uphold legal tender legislation.
In 1933, the federal government expropriated the people's gold coins and bestowed legal tender force on all Federal Reserve notes and US Treasury currency. In every case brought before the Supreme Court, the justices confirmed the money powers claimed by the government.
On June 5, 1933, a Joint Congressional Resolution voided gold clauses in all contracts, public and private. In 1935, the Supreme Court acclaimed and approved the Resolution. In the words of Chief Justice Hughes, "Parties cannot remove their transactions from the reach of dominant constitutional power by making contracts about them." With a stroke of a pen, the Court permitted every debtor to defraud his creditors, and granted government the privilege of robbing its creditors under the pretext of paying them - all in the name of the Constitution.
Sennholz concludes with the fond hope that some day in the future "five other justices will read the Constitution and arrive at a different conclusion."
Legal tender allows The State to issue paper notes monopolistically and force them upon the people. This permits inflationism - which is "legal plunder," for it allows The State to appropriate private wealth without the consent, or even the knowledge, of those who are plundered. Through the issue of more and more currency notes fresh off its presses, The State can buy up all the goods and services it needs, and finance all its political schemes, from war to welfare. This funny money is the "root of all evil" - for it finances The State. Hence, the tax dodger does well to preserve his own Capital. Black money is good money - preserved from The State. On the other hand, it is funny money that is bad money - produced by The State, and forced upon us as "legal tender": monopoly.
Every single monopoly - of the past as well as the present - has been imposed on the people through the misuse of State force. Free markets can never ever result in monopoly. Tell your Economics professor that - and point to the funny money as evidence.
There is only one way out of this: The spending of The State must be drastically slashed. No more subsidies. No more doles. No more bailouts of "misproductive" PSUs like Air India. No more "re-capitalisation" of banks. No more "overstaffing" in the bureaucracy.
And, most certainly, no more "welfare."
Niranjan Rajadhyaksha, editor of Mint, seems to have finally arrived at this conclusion. He has just written that all this is welfare championed by Sonia and cha(m)cha manmohan is backfiring - because it is being financed by inflationary means:
The motives behind the schemes to provide guaranteed jobs and food cannot be questioned. But the road to hell is often paved with good intentions. These schemes will push up food prices and also harm public finances.
I completely disagree with Rajadhyaksha's assertion that the motives behind all these welfare schemes like NREGA "cannot be questioned." They can - and they must. If the motive is to win votes, it is backfiring because of inflation. But should politicians be allowed to spend so recklessly, jeopardising the future, in order to purchase votes?
Rajadhyaksha writes of the "Rangarajan panel" that has tendered advice on the matter: the advice being to "water down" all the welfare. It turns out that C Rangarajan chairs the Economic Advisory Council to the Government of India - and, like chacha himself, this Rangarajan is a former Governor of the Reserve Bank of India. Funny money men to the rescue of The State!
The inflation currently raging also shows that the "cabinet reshuffle" of today is total and complete nonsense. What is required is slashing the number of ministers down to three or four, and no more. What chacha manmohan has done is to INCREASE the number of ministers!
Our chacha is a peculiar "economist" in that he has no desire to "economise." He wants to go on increasing State expenditure. He wants to employ more and more "tax parasites." The more the merrier. All aboard The State. No inflationist has ever cared about the limitations of the Budget. This is the evil of legal tender, which is nothing but legal plunder.
As for our Supreme Court - we have just seen how in the USSA, the Montesquieu doctrine of "separation of powers" between the executive, the legislature and the judiciary was rendered meaningless. The same holds true in our case. When justices are appointed by politicians, no separation of powers is possible, and everything is politicised. Our Supreme Court and all the High Courts "play politics" regularly - socialistic politics, that is - as in the recent case pertaining to the Representation of People Act, which disallows all non-socialist parties from the fray. In my post on that biased and unjust decision, I wrote that the Supreme Court was being "patriotic" - that it too was being "loyal" to the CONgress, its hoary dynasty, and its "socialism."
As far as funny money is concerned, our Supreme Court has been an accomplice. Recall the Foreign Exchange Regulation Act (FERA) - and the Enforcement Directorate, the "delegated despotism" it established, the vicious Rottweiler of The State? FERA was never struck down as unconstitutional. But then, everything about socialism is "legal plunder" - like nationalisation, land acquisition, and, of course, inflation.
Judges are supposed to be "learned." But no socialist has ever been learned. The Supreme Court's blindness to real plunder, and its patently false accusation against the tax dodger, finds an echo in this column by the Communist Party politburo member and Rajya Sabha MP, Sitaram Yechury, a product of Delhi's Jawaharlal Nehru University. Writing on inflation, this communist (who is ideologically trained to despise Private Property) writes:
It is this speculative trading that is relentlessly pushing up the prices of all essential commodities, particularly food prices.
He wants to ban all forward markets. He sees traders and businessmen as evil - the cause of inflation. He sees State power as the solution. He wants Parliament to pass another nasty piece of legislation banning voluntary trades. In reality, speculation lessens volatility and fluctuations in prices; it does not exacerbate them.
Yechury is a Marxist - but, unlike Marx, he is also a Keynesian. He wants to "represent the workers" - but he also wants to cheat them, through inflationism and "legal tender."
The judges of our Supreme Court are of similar "thinking." Unlearned.
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