Last week, I introduced ten "master principles" that help us make sense of what is happening in the world. I hope you took some time to reflect on the impact of those principles in your life. It will help highlight the reality of their importance in creating a stable society, and a stable monetary system.
By way of review, the principle of transcendence says that there is a hierarchy of ideas and beliefs that if applied, will properly define and place limits on behavior. If these principles apply to all areas of life, it would be foolish to ignore them as we design the systems around which society orders itself. Yet, examine the major systems in place today, including the government, education, and yes - money. You will quickly see that they lack inclusion of many if not most of these principles.
Is it any wonder that the nation is adrift?
Money touches every one of the seven major systems around which society orders itself (religion, family, education, government, media, arts and entertainment, and business). Therefore, the principles applied to the social construct that defines money are critical. This article highlights the transcendent/primary principles that must apply to money if it is to remain stable and sustainable as it serves society.
Three Primary Monetary Principles
First of all, understand that what follows is a brief overview. Chapters need to be written, and hours of discussion conducted to fully explain the importance of applying these principles to money. For now, this introduction will lay the foundation for for those discussions.
The first primary monetary principle is Trust. You cannot sustain a monetary system unless the people trust it. Period. Full stop. The key is how you create and sustain trust. One of the primary ways that this has been accomplished throughout history is to ensure that money is an honest weight and measure.
Our nation's founders codified this principle both in the Constitution, and the Coinage Act of 1792. Article 1 Section 8 of the Constitution states: "The Congress shall have Power To... coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." We'll set aside the reality of how this very clause has been twisted in order to turn the idea of honest money on its head. Just understand that the principle was codified at our nation's founding.
The intent to enforce this principle was clearly stated in the Coinage Act of 1792. Section 19 says, "every such officer or person [those in charge of creating the nation's coins] who shall commit any or either of the said offenses [embezzlement, fraud, or debasement], shall be deemed guilty of felony, and shall suffer death." Apply that to Wall St. today and that area of New York city would be like an abandon ghost town. But I digress...
The second primary monetary principle is Jurisdiction. There are five jurisdictional authorities in society. Self, family, church (moral authority), government, and business. Notice that one is internal (self) and the others are external. As such, this principle has two applications when it comes to money.
The first is jurisdiction over money as it applies to self. The value you create and store in money is the expression of your gifts and talents (nested principle of engiftment at play here...). You should have full control over the stewardship of that value. This principle is violated by any monetary system that gives another jurisdiction unauthorized access to your stored labor.
The second is application of jurisdiction to external authorities. Care must be taken to empower the proper authorities/jurisdictions to define the social construct of what will be used as money, and how that system will be governed. For centuries we have been taught that the highest level of government (King, Congress, Dictators) are given nearly unilateral authority to define money and control the system through which it flows. Apply all ten master principles to money, and this view is severely challenged.
The third primary monetary principle is Localism. The vast majority of people work (create value) and spend (allocate value) within their local communities. The quantity and type of value created and allocated determines the health of the local community. It makes sense then, that a local community should have a say in defining the social construct (money) that determines the means by which the value created by its citizens is stored and allocated.
The application of localism to money automatically brings into the discussion other principles such as limits, separation of power, service based power, justice, and results based reality. That is why it rises to its place as one of the three primary monetary principles.
Applying the principle of localism to money raises the concerns of efficiency and standards. These are valid points and certainly deserve a much deeper discussion than is able to be undertaken in this article. However, let me just say this. What would it mean if these concerns could be largely mitigated, or solved entirely, by using the technology we have available today? (Hint: They can)
History is clear. The existence of the three primary principles in a monetary system has produced undeniable positive results. Likewise, their absence has produced undeniable negative results. What about our present system? Several things become clear:
- The money we have today does not apply these principles.
- We have the ability to make major changes in the years ahead.
- The money we create can change the world for better in ways that are hard to comprehend.
And changing the world for the better is what this is all about.
If this article stimulated your thinking, I invite you to leave a comment. Also, forward it on to a friend. We're only just beginning.