London, 22 April, 1949
My dear von Beckerath
I hope much that you have been able to find a new post. Financial worry is a sad deterrent to thinking on comparatively academic subjects.
(J.Z.: From 1947 onwards B. was already entitled to an old age pension, but until the currency reform that would have had very little purchasing power and even afterwards. I believe that his pension came only to about 130 - 150 DM a month, which would not have left him much after paying normal rent. Luckily, he lived in rooms of a house owned by friend and so, probably, got a very favourable deal from his landlady, probably a former sweetheart, with whom and her sister he remained on friendly terms to the end, except during his last days, when they deprived him of his revolver, he had kept for the day when pain would become unbearable for him, the handgun that came close to putting an end to Hitler. - Our world is still of a kind that does not offer men like him sufficient financial sponsorship to allow them to work full time, in healthy conditions, on their main and self-chosen task. He does not have masses of fans, like the pop heroes have, although he offers the whole of mankind so much more, objectively. He, too, needed an Ideas Archive and Talent Centre - still not existing today. - J.Z., 9.5.03.)
Thank you for your letters. I am much interested in your proposals for dealing with German inflation. I must have time to think them over.
Yes - Greene said a lot of good things; but I doubt if they had not been said before him. So far as I know Bishop Berkeley preceded him in 1710 when he asked in "The Querist" many fundamental monetary questions.
(I have not yet seen that text, either! - J.Z., 9.5.03.)
I will not enumerate his questions: you will find them quoted in "Free Banking" when you receive it.
John Gray, in his "Lectures on "The Nature and Use of Money" (Edinburgh, 1848), developed James Mill's principle that production is the cause of demand. Gray pointed out that the compulsion to use gold in exchange contradicted this principle, since it compelled demand (the possession of gold) to be the sole cause of production. Gray proposed a sort of mutual bank system in which a bank should issue to the producer money equal to the value of the goods he had produced. When the goods were sold, the money should be paid by the buyer to the bank, which should then issue a delivery note to the producer, authorising him to deliver the goods. Any goods remaining unsold after a certain period must be bought by the producer at his original price. I have mentioned Gray in "Free Banking" on p. 196 et seq.
In your letter of April 14 you argue that in times of crisis the public would use your notes to buy goods. It seems to me, however, that you overlook the necessity of the shops to replenish their stores from the wholesalers. The main reason for the breakdown of trust in a crisis is the fear of general bankruptcy. Consider the 1929 crisis in New York. The cause was an epidemic of speculation. The ordinary public had bought shares in every sort of industry, and had greatly inflated the price of those shares. Then suddenly they began to fear that prices had become too high, and they began to sell. Prices fell, and a panic ensued, in which everybody tried to sell. Many were unable to meet their obligations, and there was widespread bankruptcy. It seems to me, that at such times, lending will be diminished. Even sound buyers will hold back, in the hope that prices will fall still further. Hence although your notes would be used to buy the goods in the shops, few fresh notes would be issued until mutual trust were re-established.
(J.Z.: He describes this crisis as if it had not also and mainly been a means of payment crisis, one of monetary despotism, with its numerous false banking practices, with all too many bank accounts being frozen and unavailable for turn-over credits. Precisely shop foundation money would have been able to pay wages for unemployed to employ them again. And their spending in the shops would have led to orders for new goods, and these new goods required additional workers. All the stocks of ready for sale goods and services, or a large enough part of them, could have been turned into short term loans for wage payments [gradually, not all at once!] and thereby the sale of these goods and services would have been assured. The money shortage could have been very rapidly turned into a quite sufficient currency supply. Normal production and consumption could have gone on. That would have also restored the capital market. Only on the capital market some speculative investors would have suffered great losses, while others, still able to pay, would have gained enormous bargains. So what? That would merely mean that titles to capital assets would largely have changed hands. Whether a factory, a worker works in, is owned by company A or B is of little interest to him. His continued job is, and that he is paid for it in a useful enough means of exchange. When the ownership changes this has usually little effect on his life. But when neither company A nor company B know any longer how to continue to achieve orders and sales and to assure them, and to pay for all expenses, including profits, and thus keep the whole production machinery going, then the worker has good reasons to get worried - and to take up the study of the money question and of monetary and value standard alternatives. Like hell he will! Neither will the company directors. Both will rather scream for subsidies or handouts. It would not have meant that the businesses and factories and shops would have to close down because they could no longer sell enough. No business would have had to shut down, except those of e.g. some bad financial advisors and some bankers and brokers would no longer be trusted. On the contrary, the previous boom could have been extended into a still greater and permanent one, but unsound businesses and unsound business and banking practices would have been discontinued, as soon as possible, instead of being wrongfully supported with funds that should have been available for short-term turnover-credit [objectively they do not need any capital funds!] or that were wrongfully taken from taxpayers. The Central Banking system almost totally failed to supply sufficient and sound currency to keep normal production and sales going. It was itself all too much involved in flawed capital investments and speculations and based on the fallacies of "capital asset currency". The monetary freedom solution was not technically impossible. It was merely outlawed, also largely unknown and unappreciated. The vast majority of the monetary experiments, that did take place were very flawed. And the same flawed ideas on monetary matters still spook in most heads. Later, somewhere in "The Individualist", Meulen pointed out the existence of a list of about 150 different crisis theories, I believe in the "Zeitschrift fuer das gesamte Kreditwesen". I have never seen that list yet and it should be permanently published, together with all the pro and con of each of these theories, most of them ignoring most others, and with all the additional theories that have been advanced since then. The economists have not yet provided us with this service. They rather ride, each of them, or schools of them, their own crisis-theory hobby horse. No systematic scientific approach to the matter seems to exist, as far as I know. I do admit to very limited knowledge of economics! Only when this has been done, can one finally come to decide whether e.g., both of the above hinted at theories contains some truth and how much and to what extent they are still incomplete or flawed. - J.Z., 9.5.03.)
2.
In your letter of April 1 you recommend the greater use of options, or contract buying. This system is now extensively used among persons of credit, wholesalers and the larger shops. The ordinary wage-earner, however, has little credit, since he can provide little security that he will fulfil his contract to buy. I doubt if the system could be extended much among wage-earners.
(J.Z.: That's M.'s way of misunderstanding B.'s "order-system" for coming-up consumer requirements, to be paid for, at least by workers, usually in some form of currency or the other, when the time comes, not by credit. I have my own doubts on the system but would not call it an "options" system, rather a personal obligation or, as B. said, personal "commitment" system. Contracts are involved, as in every buying. But the decisive aspect here is the ordering in advance, of goods and services wanted in the future, in instalments, over a period, which would allow the providers to make sounder calculations on their possible and already contracted sales, instead of merely speculatively producing for the general market, without knowing whether and to what extent this market would actually buy the goods or services offered then. As I already hinted at, in notes to B.'s letters, a commitment to certain shops or shopping centres, to spend weekly or monthly a certain minimum amount there, could already be a pretty good substitute for an ordering system. Maybe employees would change their favourite and regular supplier, for a good fraction of their consumer spending, for the next 3 months to, say, even 3 years, occasionally or at every chance, changing over e.g., from Woolworths to Coles or vice versa. That would keep e.g. these stores even more on their toes. I suppose that several alternatives to this are possible. Use your own imagination. And insist upon full freedom of contract in this sphere, too. Naturally, as contractual favourite shopper, committed to a store or other supplier, you could negotiate e.g. a discount. - J.Z., 9.5.03.)
A German correspondent of mine, Dr. Fritz Winther, of Neckargemuend, sends me the enclosed cutting. In the penultimate paragraph you will notice that the writer says that lack of capital wherewith to set up in business is the main difficulty in setting up in business the refugees from the East. Does not this point to a need for long-date loans rather than for mere short accommodation?
(J.Z.: Possibly. But it does not have to be either - or. All credit spheres should be well supplied with their particular media, e.g., the short-term and turn-over credit sphere as well as the medium and long-term capital investment spheres. The mere that 4 or 5 of new business enterprises do go broke or that retailers have only an average life-span of 5 years, may also indicate that under present conditions they are unable to sell enough to stay in business, although they got the capital for their business enterprises and equipment etc. - If, under present sales conditions, even more enterprises got the capital for a start-up, this might merely lead to an even larger percentage of them would be going broke, because they cannot sell enough. This does not deny that something is also wrong with the supply of medium and long term capital but merely, that there is another and very important factor that is also involved. Under an insufficient currency supply or when only one and an unsound currency is supplied, then every employer and employee is more or less in trouble, almost independently of his capital situation. Then even vast firms, amply supplied with their own capital and with capital on credit, can easily go bankrupt - and the banking system ends up with billions in bad debts to be written off. - J.Z., 9.5.03
Of course Germany's difficulty today is an exaggerated form of the world shortage of wealth.
(J.Z.: There is no shortage of wealth in the form of ready for sale goods and services. Take a walk through any shopping centre and really look at the abundance ready for sale there - to those supplied with suitable exchange media - and then ponder the conversion of this ready wealth into exchange media, by the owners, for the own benefit and that of their customers, who would just have to offer their goods, labour and services in exchange, mostly indirectly! - Nor is there a shortage of production capacities. They could, almost everywhere, be greatly expanded, if only the additional goods and services could be easily sold. That is not possible under the monetary despotism of centralised note-issue. There lies to the major difficulty, as B. pointed out again and again - and usually quite in vain. - The "Euro" is the preparation or conditio sine qua non for the greatest European economic crisis ever! - J.Z., 9.5.03.)
But there seems little doubt that if the lending of existing wealth could be performed more cheaply, and more flexibly by better competition among banks, Germany would greatly benefit.
Duty The search for pleasure does not consist only in the preference for greater pleasures, but also in the choice of the lesser pain. A man in whom the gregarious sense is well developed may well judge death to be a smaller pain that the pain which life offers him in the circumstances before him.
Some men prefer a sudden death to a lingering illness. Surely the developed altruist may prefer death to causing pain to his fellow-men, or losing their respect. Please understand that I am Agnostic on the subject of hedonism. I cannot be certain why a man does any action; but just as I doubt if the Christian god exists, although I cannot deny his existence, so I suspect the hedonist view to be correct.
Your English is remarkably good. Just one small point. You often use "than" when you should use "then". "Then" is generally a translation of "dann"; but "than" is confined to comparative sentences, such as "better than", and is, I think, generally rendered by "als". Also you often use "any" when you should say "some". "Einige Maenner" is "some men"; but "any man" is "Irgend ein Mann".
I am glad that the warmer sun is coming to make your life a little more tolerable.
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
1st May, 1949
My dear von Beckerath
Thank you for your letters. I am glad you received the books safely
I agree with your condemnation of index money. The main object of its promoters was, of course, the same as ours, namely to ensure that the supply of money be made equal to the demand. The chief point of difference between them and us is that they think the level of prices is the best test of the need for money. When prices fall, they will they will issue more money; when prices rise, they will issue less, or withdraw money by taxation. We think it is fatal to try to keep prices steady by these means. They assume that all fluctuations of prices have a monetary cause. This is certainly untrue. We think that the demand of credit-worthy borrowers, and the supply of capital, is the only true test of the need for money. And we reject the proposal to keep commodity prices steady. Prices should represent the relation of demand and supply.
My only difference with you on the subject of mutual banking is the question of which type of bank is the easiest to get started. We agree that the first thing to do is to convince people of the fundamental contention that the most important reform needed today is that the supply of money shall be adequate to the demand, and that they can get cheaper and safer loans under freedom than under restriction. Both you and I must eventually appeal to the man in the street, since he must accept and circulate our notes.
You will get the butcher, the baker and the tailor to organise a bank; and the willingness of the ordinary man to accept these notes will depend on his trust in these small shopkeepers.
I rather think, on the contrary, that he will have more trust in notes issued by the larger employers of labour. Shopkeepers will be more ready to accept these notes if they know that the issuer is ready to exchange them for either State notes, or notes issued by well-known banks. It is to the interest of the large employers to pay their wages and local purchases in their own notes. They need to form no organisation or arrangements with other employers or shop-keepers: all they need do is to issue the notes, relying on their reputation and willingness to redeem the notes. Later, some of these employers would give up their own business and become bankers.
(J.Z.: What will happen, to the notes of employers, when the local shopkeepers and their association say to themselves and to the public: Why should we accept the notes of the employers at all? Why should we trust them more than we trust ourselves as issuers? We will rather issue our own shop foundation notes and offer them to our suppliers, our employees and to wholesalers and factories that want to supply us. We are even ready to grant them short-term loans for wage payments, in our own means of payment. But, most of us, will simply refuse to accept notes of e.g. car dealers or farmers producing wheat for export, or of a local umbrella manufacturer, who supplies all of the country or local subcontracting firms, that produce some parts for other manufacturers, somewhere in the country or the world. We have only very limited use for their notes. But, almost all local people and almost all their employees could use our local currency very well and will find it locally much more acceptable than the notes of their employers, based mainly on trust, and not on ready-for-sale goods and services, that are in daily and local demand. Thus our notes do have the potential to become easily "current", i.e., a local currency, while most of their notes do not have this capacity, no matter how large their enterprise may be. They may be even firms that are known world-wide and trade world-wide. Thus they should issue, e.g., instead of trying to issue wage-payment means and local currency, international clearing certificates, based on the goods they supply world-wide, and sell them to importers, to pay imports with them, while the foreign exporters, receiving these clearing certificates, will directly or indirectly use them to pay for the exports of the firms that issued them. Their sphere of circulation for their kind of exchange media is quite different from ours. To each his own! - J.Z., 9.5.03.)
I agree with your opposition to the idea of low interest. The interest charged on loans should represent the state of demand and supply in loans. In this connection the old Scottish system of cash credits is interesting. The banker put an amount, say £1000, at the disposal of the borrower; but he charged interest only on that part of the loan which was actually being used by the borrower. This was an inducement to the borrower to repay as soon as possible.
2.
You quote your friend Dr. Unger as stating that he did not believe in trust as bank security. Well - if he had been so often deceived, he was justified in not trusting himself as a judge of character; but he was not justified in preventing other men from taking this risk. The early note-issuing banks did a good deal of this business. The main requirement is freedom for experiment. No rules can be laid down to decide when and how much one man may trust another.
(J.Z.: Can no man decide when and how much he can trust, e.g., any totalitarian system, compared with any democratic system or any quite free society? But he should have free choice of either - but only for himself! Are all note-issue banking system equally reliable and trustworthy or do they have different qualities and defects? Are there no flawed, absurd, wrongful and self-defeating rules or unnecessarily restrictive ones? No sound and rightful ones at all? No standard or model contracts to be offered? No clearly expressed options? No good business and management practices. No rules for issues and reflux? No rules for sound and unsound covers? All just trust and confidence? Hitler wanted that, too, of his followers and of his victims, in German and in the world. However good or bad the money and banking and credit or clearing system are, and their rules, even if they are altogether absent: freedom to experiment for all systems and their supporters, at their risk and expense! Panarchy in the monetary sphere as well. In this sphere, too, there will be no shortage of confidence tricksters. Death penalty for them, or life imprisonment? Why not rather take ordinary and common sense precautions? - J.Z., 9.5.03.)
Some of the old Scottish banks used the system of requiring two guarantors for a borrower without security. In other cases they were willing to dispense with guarantees. The matter should be one for arrangement between lender and borrower; and this is another argument against attempting to run a bank by a committee.
(J.Z.: There are some sound rules even for committee work and other work teams. If they are unknown or not practised, then all hell can and often will break loose. - J.Z., 9.5.03.)
Moratorium. On the whole I incline to the opinion that in the case of a national break-down of trust, such as
occurs at the outbreak of war, a moratorium is justified. Your shopkeepers might be unable to get their usual supplies. If they were given time, they might be able to get supplies elsewhere; but if they were made bankrupt when they were unable to take notes in exchange for goods, the whole organisation would break down.
(J.Z.: Hardly, if one of the rules for issues were: Only a fraction of the total ready for sale stock may at any time be issued in form of notes. Attempts to issue a higher percentage would, in normal times, lead to discounts and refusals. And in abnormal times the stores would have no reason to make large loans in their own notes, than they can immediately cover with their own goods and services. Again, M. did not check his premises sufficiently. He assumed that the shops would have issued notes for goods not yet supplied by their wholesalers. - J.Z. 9.5.03.)
Similarly, my banks would have in circulation a larger volume of their notes than their reserves of State or other notes. But many people would rush to convert these notes either into goods or State notes, and the action of quite a few people would destroy the whole organisation. I agree that the lesson would teach a good deal of currency theory; but we have stomachs that urgently need filling, and we cannot wait for the ideal system of banking.
(J.Z.: So, since we have to get somewhere, we try to drive there with flawed or no brakes or insufficient petrol and none obtainable on the way or with flat tyres? - J.Z., 9.5.03.)
I have thought over your proposals for meeting inflation. The need was too pressing for Germany to be able to wait until people had been convinced of the need for free banking. Your proposal therefore is reduced to that of exchanging existing currency for one of increased value, with the proviso (which is very important) that mortgages should be converted at prices equal to those on the date on which they were made. I suppose you would extend this privilege also to people who had put savings into banks, although this would involve a good deal of calculation. Also people who had bought securities might be similarly treated.
This would leave as victims only those people who had saved their money in stockings, and I see no way of avoiding injustice to them, and also to all people who bought fixed capital goods at high prices.
You do not say if you have been able to get another post. I am afraid this means that you have not yet succeeded. I earnestly hope I am wrong.
I will write to Sanyal.
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
London, 5th May, 1949
My dear von Beckerath
Thank you for your letter of 25th April.
It is hard to discuss crises, since in the past they have sprung from such different causes. The 1929 USA crisis arose from over-speculation; but for us, and for Germany it came as a drain of gold and lack of buying by USA without over-speculation. All I wanted to point out was that a crisis involves a fear of bankruptcy, and this tends to make people prefer goods to money. Goods tend to rise in price (During a depression or deflation or credit restriction the fall! - J.Z.) and men tend to prefer barter. In a crisis the "mutual" shops will be rapidly sold out, and the wholesalers will be reluctant to sell their goods for money.
I do not think that the sole cause of the world shortage of wealth is the gold standard (distinguished from the gold basis). You must remember that we have destroyed a vast amount of wealth. (J.Z.: "We"? Neither M. nor B. nor I did!) We owe payment for this wealth, and we must produce more and consume less to repay it. Of course, however, I agree that we could repay quicker if free, banking on a gold basis were allowed. Since no country (not even USA) is today on a gold standard, the difficulty is not shortage of money, but rather, that the money is not lent to those who could use it productively. Even if the gold basis were allowed, agriculture would not be granted long-term credit freely so long as bank monopoly persists.
(J.Z.: One suspect statement after the other! - J.Z., 9.5.03.)
Duty. Your remarks are most interesting. Your wealth of classical examples remind we of Montaigne's style. A standard English dictionary, the "New English" (1932), defines duty as "That which is bound or ought to be paid, done or performed." Thus duty binds a man to do certain acts whether he thinks them desirable or not. This is the essence of slavery.
When Kant wants to describe acts which a man can do or not as he thinks fit, he should invent another word. But perhaps he means that a man should decide once and for all what acts he should do. I think this unwise. Acts should be decided according to circumstances. And what will decide his acts? Obviously his satisfaction. Towards the end of your letter you write that an egoist will always prefer his personal interest to social interests. I wonder why you think this. Surely thousands of men would prefer to institute a change which would bring happiness to society rather than buy themselves a new house. The first course will gratify their altruist sense, and earn the respect of their fellow men. I certainly agree that pleasures are not capable of analysis; but that should not prevent us from calling them pleasures.
As I see it, primitive matter exhibits the two qualities of attraction and repulsion. One may hazard (but not assert) the idea that the attraction is the pleasure of matter and repulsion pain. I think that from these two qualities all life and morals are developed, and I see no place for a feeling of duty, defined as not being a pleasure.
2.
I rather think that the fundamental point of difference between us is your reluctance to call certain altruist acts "pleasure". You write that pride is the basis of duty. But is not pride a pleasure? I am inclined to think that the
desire to be thought well of by a small or large group of people is a fundamental pleasure of nearly all men; and this is the oasis of pride - a pleasure in one's reputation. Robinson Crusoe may also be proud of himself in the absence of society; but he is a man, and gregarious, and I think his pride has a gregarious basis.
You write that "Selbstzufriedenheit" (self-satisfaction - J.Z.) is different from pleasure, and you instance the drinker of spirits. This is, of course, a common experience. I think the reason is that we so soon forget a desire when it is satisfied, and we think only of our present desires. The spirit drinker forgets his strong desire to drink after he has drunk, and he thinks only of the bad head he now has. He now thinks that the bad head outweighs the pleasure of drinking. He did not think so before he drank, although he may have been quite sure that he would get a bad head. I think that Selbstzufriedenheit is the gregarious pleasure in one's reputation. Of course it differs from the pleasure of drinking; but it is none the less a pleasure. You dislike using the same term for both. I think the classification a scientific advance. Wheat and oats are different; but it is useful in economics to call them both grain. 7 apples + 5 apples are certainly 12 apples to the arithmetician, although the fruiterer who sells the 7 apples at 1d. each, and the 5 at 1 1/2 d. each, may object if he is asked to sell the 12 for 1s.
You quote Darwin on acts of altruism done without reflection. But when one has long found pleasure in certain acts, one tends to do them without reflection.
Arithmetic is certainly derived from experience. We teach the operation of addition to children by showing them the result of adding two balls to two balls. Only when they have the difference between two and four balls firmly in their minds can they grasp that 2+ 2 = 4.
Time and space are, I think, simply the conditions under which we perceive successive or simultaneous phenomena. There is nothing metaphysical about them.
Your experience over the purchase of the Darwin book is interesting. You will find many cases of prevision detailed in Camille Flammarion's book on the subject. Prevision does not "annihilate" time; it demonstrates foretelling, and its cause is still obscure.
I rejoice that the Berlin blockade is to be lifted. This will certainly make life easier for you. The result is a triumph for the Allied policy of restraint. A hot-headed government might so easily have started a war with Russia.
What is the meaning of "Konjunktur"?
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
London, 30 May, 1949
Dear von Beckerath,
Thank you for your letters, the last dated May 16.
I should have replied sooner; but, alas, for the last week I have has a sharp recurrence of stomach trouble with another ulcer, and have not had energy to think. I am now better (without hospital treatment), the proof whereof is that I am writing you.
Thank you for the trouble you have gone to in defining "Konjunktur". The meaning seems vague; but I think I understand.
I tick the letters in the Economist to the writers of which I send copies of "The Individualist" and the pamphlet "Free Banking" - not because I agree with the views.
Many many years ago I bought in Parts six volumes of Montaigne in the original French. I am sending them to you. Medieval French is not hard to read. I already have both the Cotton and Florio English translations of Montaigne, which accounts for the fact that the edition which I send you is largely uncut.
You will notice from "Instead of a book" that Tucker thought highly of Bilgram's writings on money although Bilgram opposed free banking. I am adding a small copy of one of Bilgram's books which I hope will interest you.
Banking. During the XIXth century economists here ascribed every financial crisis to overproduction. In "Free Banking" I went to some trouble to analyse the different crises, and to point out that the economists had generally overlooked the effect of the Gold Standard and the 1844 Act in causing these crises. The trouble was that under the Gold Standard, as soon as a production revival caused prices to rise, foreigners sent in cheaper goods in exchange, not for goods, but for the legally-cheapened gold, which caused acute shortage here in the means of payment. But under Free Banking men would still be subject to occasional "herd-waves" of optimism. Some would over-produce, and prices would rise. The 1929 New York Stock Exchange boom is a good example of this herd optimism. It was a crisis of lack of confidence in commodity values, not of money shortage. At a certain point doubt seizes a few people that values have risen too high. You must have noticed sheep who all run together in one direction; when suddenly one sheep starts off in a different direction, and all the rest follow. The effect of this doubt among buyers is to stop the rise of prices. The others begin to think that a fall is imminent, and they postpone buying. If this movement proceeds, a crisis will arise which, it seems to me no free system can prevent, since freedom implies liberty to make mistakes. Your mutual shops would suffer with all other shops. But I think that under freedom such crises would be few.
(J.Z.: I rather hold, that there is no end to rationalisations, myths, imaginations, excuses, pretences and hypothesis constructions on events that people noticed, think to be important enough for their attention, but do not sufficiently comprehend. They feel the urge to try to explain them. Then they construct their more or less plausible hypotheses and, from them on, tend to adhere to them almost with fanaticism, ignoring other hypotheses, theories and contrary facts, just like a mother loves her child without reservations and tends to ignore most of its flaws. - J.Z., 10.5.03.)
In crises caused by monetary shortage, whilst I admit that the obligation of mutual shops to redeem their notes at par would support retail sale, the manufacturer needs raw material, he would not ordinarily be able to use mutual notes for this.
(J.Z.: Indeed, for trade in these another kind of "shop foundation money" is to be issued - by the providers of raw materials, namely, international clearing certificates, that are redeemed in the raw materials which they are ready and willing to supply to the world. Among international traders these will be as useful as are local shop currencies among local consumers, retailers and producers (for wage payments). B. never asserted that notes of e.g. local bakers, greengrocers, butchers and barbers and their combined issuing centres, are to be used as means of payment in international trade. Either M. never read B.'s books or he had forgotten all too much about them. For each sphere its optimal means of payment, competitively issued - and also discountable and refusable. The same for capital values and their certificates: shares, bonds, mortgage letters etc. - J.Z., 10.5.03.)
2.
You remark that since it is unlikely that people should be found in Germany to start private issue banks, mutual banks are the only alternative. I do not know why you think modern Germany so different from the England before 1844. I imagine that mutual trust is more highly organised in Germany today (or will be as soon as she has a settled government) (says an individualist anarchist! - J.Z.) than in England then. In England before 1844 new banks were constantly being started by business men of reputation beginning to issue their own notes in wages to their employees and in local purchases. It was to their interest to do this; and they did do it until they were stopped by law. This interest persists in Germany today.
(It did not! The ideas and practices of monetary freedom were largely forgotten and, if raised, not only M.'s but numerous other prejudices were raised against them, so that such ideas were generally not taken serious and thus not practised or proposed for practical experiments. There were only B. and Rittershausen advocating monetary freedom and R.'s freedom of expression was in this respect curbed through his academic positions. R. could freely write and publish on central banking and other banking legally permitted and insert some criticism and other ideas there, but he could not get anything published explicitly favouring free banking. His last chance for this passed when the 1948 currency reform came, just before he had got his manuscript into print, which was a revised version of his "Das andere System", of the thirties. I microfiched that manuscript many years later and I cannot remember even a single order for it from Germany or anywhere else! Apart from these two most important monetary freedom advocates in post-war Germany, I found only one monetary freedom article in Germany in the years after WW II, written 1949 and published in a German economics journal, overlooked by most later writers on monetary freedom. It was written by a friend of R., I forgot his name, but I reproduced his text and listed it in my still incomplete bibliography on free banking. Some other writers, e.g. Gerding, arose only after Klein and Hayek had written on the subject in 1974-1976. By the way, once the free banking bibliography is complete, then it would be interesting, at least for the history of ideas, if all these titles were also ordered by year of appearance and by countries and languages. If this were done, and this list published, then I could, in this case, rapidly point out this other German author, of which I presently remember only the year of the relevant article. Also, the paucity of published literature of this kind in post-war Germany, would be made quite obvious. In this respect B. and R., were, in Germany, also for most of the rest of the world, for a long time, rather voices in the wilderness. Even today there may be no others who have as much explored the details and techniques of monetary freedom as these two did. Professor E. Milhaud, of Switzerland, had at least developed the theory of international clearing certificates in a special book, which I microfiched. Zander had left Germany in time to survive - but he seems to have left most of his monetary freedom interests behind as well and was more concerned with the other following catastrophic events in the world - and did not sufficiently trace them back, any longer, to monetary despotism. Likewise, for most other Jews the wrongs and catastrophes of pogroms, and mass extermination camps and the re-establishment of a territorial Jewish State, have driven out of their mind the memory of and awareness of the significance of the extent and frequency as well as duration of exterritorial autonomy of some Jewish communities in some countries in the past and of the potential of such communities for the future, not only for Jews, if only they are no longer outlawed. Like even Meulen, the "free" banking advocate, came largely to think of free banking in terms of a forced and exclusive legal tender paper money and of a legislated "gold standard" and its impositions - with Meulen's variations, so Jewish people and all other religious, ethnic, ideological, reformist and revolutionary groups, have largely come to think only in terms of the wrongful and imposed territorial institutions and practices, rather than of the rightful and voluntaristic alternatives to them. The employer-employee relationship, so common today, has also induced all too many people to think only in terms of class warfare and labour legislation and jurisdiction, rather than in terms of the numerous self-management options. However, a revival of such ideas has taken place in recent decades - but, as in the monetary, panarchistic and peace research sphere, militia, self-defence, liberation-technology and revolution sphere, as well as that of human rights declarations, all the alternatives proposed and all the experiences with alternatives in the past and present, are not yet scientifically and systematically compiled, compared and published.
We haven't even bothered to compile and publish as yet a comprehensive libertarian encyclopaedia, bibliography, abstracts and review compilation or a single comprehensive libertarian library, which could be so easy and cheaply done on CD-ROMs, if many of the readers, writers, editors and publishers of these texts collaborated in using this medium. Furthermore, an international Ideas and Talent Archive for Libertarians has still not been set up. Thus most of the most important ideas, facts, opinions, experiments and talents in this sphere remain still widely unknown, even to those who would be most interested in them. And thus people like M. came to wrong conclusions like the above. - But then: Who knows, how many unpublished manuscripts on such important topics do still exist somewhere, often after their writers have long died, in the possession of heirs, who do not care about them? - J.Z., 10.5.03.)
Duty. I think Badcock's description of duty as slavery is to some extent justified by the fact that slavery implies that a man must do certain actions whether or not he wants to do them, or thinks them desirable. A duty cannot be brought before the court of reason. Duty leads to the performance of countless absurd actions. The really useful altruist actions would survive the abolition of the idea of duty, because they are based on the gregarious pleasure. Two old sayings come to mind: "The harm done by the good in the world has far outweighed that done by the evil." And: "None so cruel as he that is cruel on principle." The "good" act out of duty - the evil out of hedonism.
The fact that habits are continued unreflectingly does not prove that they were not started for good pleasure-seeking-seeking reasons (remember always that in the search for pleasure is to be included the avoidance of pain). All day long in imagination we see ourselves in certain circumstances, and we decide what we would do. If our character is settled enough, it is not surprising that when occasion arises we act almost automatically. And a very large part of our imaginings on such situations consists of "What would so-and-so say if he or she knew I had done this?" The desire for the good opinion of smaller or larger groups of people is, I think, much more widespread than the "Will to power" which has been so much talked up.
Agnosticism. If Schopenhauer thinks, he can absolutely prove a negative, I will cheerfully leave it to him; but I will have to be short of reading before I will read him. Karl Pearson demonstrated beautifully that nothing can be proved absolutely: our senses are fallible, and our knowledge limited. He points out that science is content with a high degree of probability. When A is followed by B in a sufficient number of cases and conditions, science says that A in the cause of B; although the capable scientist realises that there may be an unobserved X between A and B which is a more proximate cause of B. The probability that the addition of H2 to O causes water is high; but the probability the back of the moon is made of cheese - that is the only difference between the scientific value of the two contentions.
Your cases of the immorality of God will be countered by the Christian with a list of his blessings, and by the injunction that we cannot fathom the purposes of God. I am content to say that we cannot affirm that the universe is benevolently ruled until we can compare it with an unruled universe, which, since the word universe comprises the totality of things, is impossible.
Therefore, I am agnostic. But it seems to me that there is so little evidence that the universe has any regard for man's welfare that I think, although I cannot prove it, that the Christian assertion is nonsense.
Yet - it is nicely German, although quite inconsistent for me, to conclude by saying
"Gruess Gott"! - signed: Henry Meulen
(J.Z.: "Ja, wenn ich ihn sehe!" - Yes, if I see him! - is one of the standard atheist replies to such a greeting. - J.Z., 10.5.03.)
3.
Arithmetic. I rather think that this also is subject to the Pearson objection to absolute truth. That 2 apples added to 2 apples make 4 apples in subject to the fallibility of our senses. A drunk or hypnotised man seen two apples where the ordinary man sees one. When we withdraw the concrete illustration and say that 2 + 2 = 4, we can prove it to the doubter only by reintroducing concrete objects, which again involves sense fallibility.
It is convenient to eliminate the concrete illustration, just an it is convenient to go further and represent numbers by algebraic symbols; but the fundamental proof rests always on concrete objects.
____________________________________________________________________________________________
London, 9 June, 1949
My dear von Beckerath,
Thank you for your letters of 17 May and 2 June.
Your letters are a great pleasure to me. I count myself lucky to have found a man who is so keenly interested in both currency and philosophy - my two darling subjects - the combination in a man with so lucid a mind was almost too much to be hoped for.
I am glad to report that on Tuesday last my stomach made a dramatic recovery, and for two days I have been without pain. But please do not tempt me to talk of my illness. One's complaints are not a fit subject for civilised conversation.
You will remember the old joke: "He is the sort of man who, when you ask him how he is, tells you."
It was amusing to me to find in hospital, where fully half the men in my ward (a general - not a specialised ward) suffered from duodenal trouble, the first sympathetic audience I have ever found on duodenal trouble!
By the way, is it not interesting that for every woman duodenal case there are 20 or 30 men?
Your letter of 17 May is mostly concerned with Malthusianism. But you do not answer the point I raised in the note on population in the April "Individualist", in which I gave the output per worker in various countries. You write that neither Malthus nor Darwin give examples of people suffering from food shortage on account of population. I am sending you a copy of the December 1945 "Individualist" in which a table is given.
I freely admit that the danger of war is the one argument for a large population which has weight.
(J.Z.: With a fully libertarian defence and liberation, revolution and military insurrection program, even a small libertarian society would not have to be afraid of a large and populous country, governed by a tyrant or dictator but could and would make that regime afraid of it and rightly so. Its mere example already, sufficiently publicised, could already lead to the overthrow of that regime and to the liberation of its subject. One should cease to think in terms of territorial statism and consistently explore the alternatives to it. - J.Z., 10.5.03.)
Banking. Do you not think that there are many firms in Germany who would issue their own notes in payment of wages and local purchases if they were allowed? It is to their interest. It is in this direction that I look for the establishment of fresh banks, rather than to individual clever men.
(J.Z.: How many people are there, who always and consistently pursue their most rational and rightful interests in any sphere of the social sciences and their practice? At least as thought-experiments or games? They rather hang on, tenaciously, just like M. did, to flawed ideas, myths, practices, customs, laws, judicial opinions and traditions, regardless of the high prices they have to pay for upholding them. Innovation is all too much monopolised by territorial governments and the result is no better than is to be expected from them. - However, if there were, finally, full experimental freedom introduced, for all who are, for instance, somewhat or much in advance for their countrymen, while, at the same time, those who are with their views even behind the level of the majority of their countrymen were free to harm and wrong themselves within their own voluntary communities, and others remain free to adhere to their beloved status quo, then and only then could we expect to advance fast and almost everywhere, through the successful experiments that are, at first, only undertaken by a few, the pioneers, innovators and successful reformers and revolutionaries, practising their one-man-revolutions and reforms by joining or establishing corresponding volunteer communities or experiments, or practices of minority autonomy, that are, exterritorially, quite autonomous and have personal constitutions, laws and jurisdictions for them. The masses would not rush into monetary freedom but a few would and outsiders and even the mass media would observe their efforts with at least some interest, and be it only with the curiosity of tourists or people who like a good laugh when they see something they did not expect to see. - Consider my growing encyclopaedia "On Panarchy", which attempts to promote a complete alternative to current politics, economics and social sphere systems, practices, beliefs and institutions. May the old kind of politics and its "scientific" literature become discarded as quite outdated and based on wrongful premises and conclusions, as soon as possible. Likewise, that of monetary despotism, the employer-employee relationship, that on defence, on war and peace, on jurisdiction, that on governmental bills of "rights" and one the "protection" of genuine human rights by territorial governments or their UN. - And how many governmental librarians and all too limited libraries and how much "library science" will we still need - once sufficient readers become aware that they, too, could become, quite extensively, publishers, editors, writers, commentators and contributors to numerous encyclopaedias, catalogues, surveys, bibliographies, abstracts and indexes, once they come to use the powerful, cheap, lasting and affordable media in their particular strengths? - The mass media and the Internet and its websites and e-mail are far from being our only and our most promising options. With all the alternative media, in their strengths, and all other rightful options, including suitable alternative institutions, especially exterritorial ones, we could rapidly advance towards liberty, rather than vainly relying on too few conventional or widely accepted ones, which have already failed us for all too long. - Can you list genuine successes for territorial States, or many of them? I am not sorry but glad that I cannot find them, for I am not willing to pay their prices. Can you even list genuine and large-scale advances of enlightenment that can only be ascribed to the Internet? It, too, has still its technical limits, and those in the ways in which it is presently being used - or abused. - J.Z., 10.5.03.)
I note your remark that the Bali fishermen will sell his shark leather for Manchester notes which are accepted in 1000 shops in Manchester. This would already be quite a big mutual bank. Yet these notes would certainly be at a discount in Bali compared with notes convertible into gold. And at what price would a manufacturer in Solingen take mutual notes accepted only by minority of shops in Freiburg-Breisgau? You will of course reply (how like is all discussion to the pleasant anticipation and thrust of a game of chess!) that in times of crisis Solingen must choose between the mutual notes and no purchasers at all. Agreed. But a system designed to stand the stress of crisis may not be the best for peace times, just as the institutions of military society
do not promote trade and prosperity as effectively as those of an industrial society.
( J.Z.: "Military society"? A contradiction in terms, unless one means, hereby, an ideal militia force, as I have described it in my first peace book. - In peace and during large and long wars - if there are still any under full freedom, which I deny - in boom times and during crises - the latter most likely disappearing entirely, for local exchanges and for international ones, for capital exchanges and for consumer goods exchanges, quite different means of exchange and, possibly, also value standards, are likely to be developed and used and prove themselves in practice. The small examples here chosen by B. should not be assumed to be the only possibilities for a genuinely free economy, but rather simple examples which, once understood, can then be sufficiently extended and multiplied. Naturally, all of them would have to prove themselves in world-wide and local free competition. And none of them will be generally suitable for more than their natural niche. For all rare exchange media and the ones which do go astray, we will have exchange offices, like in tourist centres, a money market and clearing centres, which will lead them back to their issuers. No one has to fully comprehend the automatic workings of a truly free market in order for this market to work pretty well, in spite of a few scoundrels being also active in it. Even international trade was, when somewhat free, largely carried out not by rare metal transfers but by clearing arrangements. But it was and is disturbed by creditors having the right to be paid in certain exclusive currencies. - J.Z., 101.5.03.)
Banking is a fine development of mutual trust. If that trust is lacking, we will turn to more primitive methods of exchange; but those
2.
methods are not to be recommended for a community wherein mutual trust is more developed.
(J.Z.: Rather, the "trust theory" prevented the development of banking to its full potential! In the absence of that "trust", we will proceed to more advanced methods of free banking! - J.Z., 9.5.03.)
Duty. What a. remarkable story of the 300 Japanese who committed suicide! It seems incredible. Do you think Paul Morand a trustworthy writer? I think that one important ethical principle emerges from the rejection of the notion of absolute certainty, namely, an increase of toleration. I recall to you the famous words of Cromwell to his opponents in the House of Commons:
"I implore you, gentlemen, by the bowels of Christ, to believe in the possibility that you may be mistaken."
(J.Z.: Where are or were the bowels of Christ? Did this God or Son of God need any? The man, who, supposedly, could create thousands of loaves of bread out of thin air? However, as a call for tolerance Cromwell's expression was very timely but not sufficient. Nor did he himself practise tolerance widely enough or was he even aware of its full possibilities. If he had been, his civil and international wars would have ended very soon, to the satisfaction of all the different parties and movements. - J.Z., 10.5.03.)
Since you are so interested in philosophy, I send you a copy of a letter that I sent recently to our chief Rationalist journal "The Literary Guide". Also another on a similar subject to the "Freethought News".
I agree with you that the Allies should take a stronger line with regard to Russia. I do not think that Russia would risk war at present; and there is every hope that if the Western Powers can set up a really effective organisation to provide a permanent international force to prevent war, it will deter Russia from risking war in the future.
You must use a stronger envelope when you enclose so much. Your two last letters arrived burst at the side.
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
4 June 1949
The Editor of
"The Literary Guide".
I am jealous of the fair name of Reason. Permit me therefore to remark that Mr. Marlow makes some doubtful points in his attack on reason in the course of his controversy with Professor Heath in the June Literary Guide. (*) He defines a metaphysical theory as one incapable of being proved by experience, and asserts that the inductive principle is such a theory. Now Hume demonstrated beautifully that our ideas of cause and effect spring from habit. If we have long noticed that A is followed by B, we eventually come to expect B when A appears. This expectation is certainly based on experience, and should hardly be called metaphysical. But now comes Bertrand Russell, and declares that induction is metaphysical in the above-mentioned sense because experience affords no proof that A will always be followed by B, or that we have examined all possible cases.
I think Bertrand Russell sometimes raises unnecessary difficulties; and this is one. There is no doubt that science today would accept the principle laid down by Karl Pearson in "The Grammar of Science" that the search for absolute proof is vain. Science is content with a high degree of probability. If A has been observed to follow B
in a sufficient number of cases, and in sufficiently varying conditions, science then declares, not that A is an absolute cause of B, but that it is highly probable that B always follows A, and a scientific "law" is erected. In other words, science limits its assertion to the range of its experience, and no metaphysical assumption is made.
Henry Meulen
(*) (J.Z.: Only the unreasonable would attack reason! And even that he could not do without some reasoning, however flawed. Perhaps only the most unreasonable takes such arguments serious. - J.Z., 10.5.03.)
____________________________________________________________________________________________
The Editor of "Freethought News" (B. noted on it: June 1949?)
Sir,
I also hope that Mr. Throup'ss theory of the genesis of thought will be adequately discussed. Mr. Throup traces thought to the development of the sense of awareness in simple forms of living things. I would take the process further back and connect it with the qualities of attraction and repulsion exhibited by primitive
matter. These qualities most probably represent awareness in some form. It is usual to call such reactions in "non-living" matter automatic. I submit that we have no grounds for such a distinction. We have no direct evidence of thought in any other beings beyond ourselves: we infer thought in others because of the similarity between their actions and our own. But mere dissimilarity of action is no proof of absence of thought.
To trace thought back in this way to the qualities of attraction and repulsion in primitive matter, settles the long-discussed problem of the origin of life. If the theory is true, there remains no such thing as "dead" matter, and life becomes a universal quality. What we call the development of thought becomes simply the development of means of providing satisfaction for attraction, and of defence against, or avoidance of, repulsion.
Henry Meulen
____________________________________________________________________________________________
Dear von Beckerath London, 25 June, 1949
Thank you for your letters of the 11th and 12th June. I hope you have received the Montaigne by now. I have received all the letters you mention: the post seems quite good. I note that "American Section" is to be added to your address. I can't think how I got the idea that you were in the British Section.
Malthusianism. Your criticism is good. I have sent your table to the editor of the "New Generation", and will let you know his reply.
I think the expression "real income" means the goods that the income will buy before deduction of taxes etc. But there seems considerable difference in the estimates of different statisticians. In the Aug. 1948 issue
of the "Individualist" I quoted Lewis Ord's figures. They are different in some respects, and he does not give his sources.
Colin Clarke is a statistician of considerable reputation here.
Your argument that the producer may receive very little after the payment of taxes etc. is a good criticism of the "New Generation's" statement that the Australians eat more than 200 lbs. of meat yearly, while the Japanese eat only 2 lbs. When I write to Kerr again, I will put your point to him. But of course it does not affect his argument from comparative real income if this excludes taxes. Furthermore your argument that scientific methods and
land and banking reform could increase the food output, omits to notice that hitherto most scientific improvement has consisted in labour-saving methods. I believe the Chinese farmer still gets bigger crops per acre by hand labour than does the Westerner.
It is possible that improved methods may be invented; but meanwhile it seems important to point out that population is at present increasing faster than food production. I am inclined to doubt if 6/7 ths of the fertile ground in China is not cultivated. China has so large a population and the poverty of farmers there is so great.
Banking. It may be that the notes of individual firms will not circulate unless there is a supervisory committee; only freedom for experiment can decide this point. But I would urge that
(1) Control by committees always slows down experiment and variation;
(2) the history of banking in England and Scotland shows that individual firms were able to circulate notes redeemable in gold on demand without such supervision.
The notes rarely fell to a discount locally in Scotland. They occasionally depreciated in relation to gold; but that was when England set up a sudden demand for gold.
On the question of the acceptability of Freiburg notes in Solingen, I cannot think that notes acceptable only in the Freiburg shop Mueller, or even in several Freiburg shops, will be accented by a Solingen bank at only a 3 % discount. Here in Wimbledon there are, for instance, many grocers. Yet, for various
2.
reasons, we buy at one particular grocer. We would not like to take notes that compelled us to change our grocer. Hence people will find it hard to pass on such notes and I should think there will be unwillingness on the part of wholesalers to accept such notes in payment for their sales to the shop, unless they themselves deal with the shop - which is unlikely.
You will reply that the wholesaler can take the notes to a bank. But since the bank can find only a few people who will accept the notes, such notes will lack liquidity, and the bank will accept them only at a discount, which discount would discourage the wholesaler from accepting more of the notes.
It seems to me that you exaggerate the importance of the Rueckstrom (reflux - J.Z.) principle. Scotland got an adequate Rueckstrom of its notes without any regulations on the subject.
Convertibility into gold. It is not necessary for a country to have gold coins for the banker to be able to promise convertibility into gold. All that is necessary is that there should be a free market price for gold. People who want to convert their notes will then receive the gold value of their notes in whatever paper money and coin they are willing to accept. They will probably demand either State notes, or the notes of some well-known bank.
Letter to "Freethought News". You write that it is possible to consider the fundamental forces of matter as derived from "the vital forces of the universe". But whereas there is evidence of the forces of attraction and repulsion in matter, I have seen no plausible evidence of the existence of vital forces in the universe apart from matter. Whether the sum of events in the world is a revolving one or not does not seem to me to affect the argument that thought is developed from the forces of attraction and repulsion. This argument concerns the cause of the development - not its direction.
Enclosed is an amusing cutting from "Truth" on the subject of modern painting. Sir Alfred Munnings is the President of the Royal Academy, and at this year's Academy banquet he made a slashing attack on modernist painters.
My stomach is still improving.
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
London 25 June, 1949
My dear von Beckerath,
I find that I omitted to thank you for your interesting criticism of the last "Individualist". I have extracted some of your notes for the next issue.
I have had correspondence with Kenneth de Courcy. He seems impervious to banking argument.
I have no belief in a tax-payers' strike as long as there is freedom of writing and speaking. The government has too strong a weapon in the confiscation of the strikers' property.
If Germany pays so much for the book education of her children, she is crazy. But then I have always felt that Germany locked on book education as other nations look on religion.
Kitson paid the market price for men with diplomas in languages. The remedy is not that he should pay more than the market price, but that men should not enter a profession where there is so much competition. They should have learnt engineering rather than languages.
Unless the State is foolish enough to insist on the fact of artificial insemination being inserted on the birth certificate, nobody need ever know how a child was conceived. The prejudice against "illegitimate" children is fast disappearing.
In 1913 people thought (see Bloch and Angell) that there would never be another major war. Hence international commercial trust was great, and the pound sterling was generally accepted. It is the disturbed political state of the modern world which causes men to insist on payment in their own currencies.
I do not believe that Chinese children learn to write Chinese as quickly as Europeans learn to write their languages. I suspect that few Chinese can write at all.
After spelling reform people will know that the sound of the word, not its spelling, gives the clue to its meaning, and most people will be able to dispense with a dictionary. The really useful old books will be republished in modern dress, just as France publishes Montaigne in modern French. Those who are interested in less useful books (or less popular books) - a small minority - can study the older language. They should not compel others to share their curiosity.
The real urge. I should say that the "displeasure produced by inactivity" is quite a modern disease. There is no sign of it in primitive people. Where the urge to activity is strong, they do something. Otherwise they just sit - and are happy.
I had some correspondence with our Post Office over sending newspapers to Berlin. They now tell me that newspapers are allowed to be sent only to the British Sector of Berlin.
This is amusing, since for a long time I sent you papers without specifying the section, and you received them. Then I started addressing them wrongly to the British Section, and you received them. I think I had better omit the name of the section. I am sending you the "Economist" by this post.
Tell me if you receive it (Issue of June 16).
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
July 12, 1949
My dear von Beckerath
Thank you for your letter of the 29th June, enclosing letters of the 25., 27. and 26th. In the case of most of my correspondents I generally regret that I am not talking to them instead of writing - it would save a lot of time. In your case I am glad to be writing. I am a slow thinker, and although I have done a lot of lecturing and answering questions on banking, I am glad to be able to give myself time to consider your very fundamental criticisms.
I am glad you received the Montaigne safely. It would have been a real misfortune if the volumes had been pulped by the Russians to produce extra copies of Pravda.
I agree with you on the subject of interest. It has often been urged against me that even if Free Banking did result in lower interest rates, this would hardly produce the beneficial effects on industry for which I hope. I have always replied that a much more serious defect of the present system is that lack of competition between banks excludes all but the most valuable security from the benefits of cheap long-date loans; and that this exclusion hits precisely those smaller producers to whom we must look to increase and cheapen production. Nearly all our long-date loan business for small industry is forced by the law into the hands of money-lenders, where the rate may be anything between 20 and 40 %. And I suppose you would agree that this rate is a strong deterrent to industry. For short-term loans, or long-date loans on valuable security, our banks are more generous.
As I have often remarked in the Individualist, our banks' nervousness in regard to long-date loans was justified so long as we were on the gold standard, and were exposed to unforeseen drains of gold to foreign countries. Since 1931, however, it is mainly lack of competition which enables banks to continue to avoid the extra risk involved in long-date loans.
Ruecktrom. Yes - yes - I agree that a fundamental of sound banking is the due repayment of loans. But surely a bank can remain in business only so long as this Rueckstrom proceeds steadily, and it is to the banker's interest to see to this.
But I think that the business of different banks varies so much that it is unwise for either the State or local communities to lay down fixed rules. (*) If the banker finds it advantageous, he will be ready to publish details of his business. If some people are so nervous of banks that they want rules and more details, let them deal only with banks that provide these conditions; but they should not compel uniformity in all banks. You write that the public
2.
trusts in committees today, and therefore such committees should be encouraged. But my point is that committees are clumsy, and tend to prevent experiment. The same is true of State industry: people today tend to trust to State control and planning of industry. You do not therefore recommend nationalisation.
(*) (J.Z.: Far from it: He merely recommended abiding by sound economic rules for the issue and reflux of currencies, applied by private and competing bodies and publishing their sound practices sufficiently. - J.Z., 10.5.03.)
You write that the Solingen banks will find a way of sending Freiburg notes back to Freiburg, and will therefore accept Freiburg notes at par or at a very small discount.
But my point was that since the Freiburg notes may be acceptable only to the small minority of people in Freiburg who deal at the shops at which the notes are accepted, few Freiburg banks would be ready to take any large quantity of these notes. Hence Solingen banks would be unlikely to accept the notes at only a small
discount. Bills of exchange are different. A bill is issued on the personal guarantee of the industrialist, and is accepted by a banker only if he approves the reputation of the depositor. Such a bill, issued in Freiburg, would generally be accepted in Solingen only if it were guaranteed either by a Solingen industrialist or by a Freiburg bank.
I have not recommended the use of gold coins because it is vexatious to business to have to use a token which is subject to almost daily fluctuations in value (from changes in the world bullion market). If notes are used, their value will change only with changes in local trust in the issuer, which changes will, one hopes, be relatively far fewer than changes in the market value of gold.
Malthus. I have not yet had a reply from Kerr (editor of the New Generation). Perhaps he will deal with your criticism in the next issue of his journal. As you remark, your figures of total area compared with arable area do not show what proportion of the total area is cultivable. You write that you know from the reports of travellers in China that the amount of land cultivated could be considerably increased. The reports I have seen are different. Both in China and Japan every square yard of cultivable land is said to be worked to the utmost advantage.
I agree with you that the extreme poverty of the farmer in both countries is largely due to bad government, and also to land monopoly and money scarcity. Yet I think it remains true that with agricultural science at its present stage, the population is increasing faster than the possibility of food supply. The burning of coffee and wheat which you mention occurred before the war, in the days when glut was always with us. Since the war there has been no serious glut of any food.
I can only honourably cry "Touché" at your keen thrust in quoting p. 342 of "Free Banking" at me. Yet - I must be allowed to say in my defence that the paragraph in question was not intended to deal with the question of over-population, but only with cheap labour. Cheap labour does not result only from
3.
over-population. (J.Z.: My scanner read this as "over-copulation". Even it can crack a joke!)
In Germany, for instance, before 1870 the whole population lived at a lower standard than the English, due mainly to our rapid progress in industrialisation during the 19th century.
(J.Z.: Also due to relatively free trade in England, while in Germany protectionism prevailed, until 1966 even between dozens of German small States. - J.Z., 10.5.03.)
Between 1860 and 1890 there were frequent complaints here that Germans came here and were willing to work for much lower wages than the Englishman. Germany was certainly not over-populated then: it was simply that England was a richer country. I think that this was also the main cause of Japanese emigration to Western America at the same period. By 1900 Germany's progress in industry had been so great that emigration from Germany had practically stopped, and immigration from Poland increased greatly. I rather think that today the need for food is so great that countries like Argentina, South Africa. Australia and Canada will find it advantageous to concentrate on farming rather than on manufacturing industry.
Education. You will remember that I conceded that it was useful for a child to learn the three R's (reading, writing and 'rithmetic). With a knowledge of these any child can, in these days of abundant libraries, teach itself if it wants to. I can honestly say that all the really useful things that I know today I taught myself.
Spelling reform. Agreed that age impairs memory. But if the spelling approximated more closely to the sound of the spoken word, there would not be so great a need of memory.
To return to Malthus. You quote the case of herrings, and I remember that a few months back herrings were made into manure. But this catch was quite exceptionally large, and I suppose the fishermen might well have judged that they could not sell them at any price for food. After all the salting of herrings, and packing them into barrels, takes considerable organisation, and in the present state of the world it might be hard to work up a fresh market for just one consignment. Free Banking would, of course, help much.
(J.Z.: Weren't freezers already invented then? Couldn't the fish products factories have introduced 2 extra shifts for a few days, at extra high wages? Couldn't fish shops have sold them very cheap, together with self-pickling kits? Couldn't the fishermen have done their catches in instalments, as required, by wireless in touch with their potential customers? Free enterprise often is not very enterprising! - J.Z., 10.5.03.)
Glad you like Truth. It hits hard at the Socialists. For myself, however, I much prefer the Economist.
(J.Z.: Was there really that much truth to be found in either? - J.Z., 10.5.03?
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
My dear von Beckerath London, 23 July, 1949
Thank you for your letters of the 2, 14, 15 and 16 July.
I note Dr. Friedensburger's remarks: "Fuer das humanistiche Gymnasium"; but I cannot agree with him. When a man has tasted Western culture, and has liked it, he will defend it against an attempt to impose alien cultures by force, whether he has studied the classic and Christian origins of Western culture or not.
My school teacher friends here also assure me that nowadays children like to go to school. Personally I doubt if it applies to more than a small minority. If it applied to the majority, there would be no reason for compulsory school attendance laws all over the civilised world. Educationalists reply that parents are eager to cut short their children's education in order that the children may earn money or work. I do not think that more than a tiny proportion of parents are so lacking in parental feeling if they think that a child can benefit by more schooling - that is, presuming that the family is not faced with starvation.
Let school attendance be voluntary, and then let the people who are worried about the unsatisfied thirst for education establish libraries and evening schools for those children in whom the thirst arises in later years. If children forget their 3 R's after leavings school, it is a sure sign that money spent on their education was wasted: they are not interested in book knowledge.
I was a young Civil Servant, 19 years of age, just beginning to be interested in State Socialism, Tolstoy and Kropotkin, when Tucker's book fell into my hands. For the next ten years I spent nearly the whole of my leisure (and the whole of two summer holiday periods) in the British Museum Reading Room, reading everything on banking and currency that seemed useful. You and I had to do this reading in order to understand how the present mistakes in banking policy arose. But I think that some day the ordinary man will vote for Free Banking simply because it offers him a more attractive way of life than State Socialism - he will not trouble to read the 1844 debates on the Bank Charter Act.
Malthusianism. I fully agree with all you write about the part that Free Banking could play in increasing world production. The point on which we differ is as to whether, with agricultural science at its present or possible future development, population is not likely shortly to press hard on food supplies. I have met so many people who have lived in India, and there has, of course, been an enormous amount written in English on India; but I have never met one who did not remark on the terrible poverty of the average Indian farmer, due, they all say, to the very small size of the farm out of which he tries to earn a living. This is the crux of the matter.
2.
I, grant that the moneylender fattens on the farmer; but I am not quite sure how much Free Banking would prevent this. India suffers from periodical droughts and pestilences. The risk arising from these must raise the rate of interest in any system. And so long as these miserably poor people continue to have such large families, their
farms must remain small. I am not aware that land monopoly is a serious evil in either India, China or Japan: I rather think that small ownership is the rule, the land being divided among the children at the father's death.
But I agree with your criticism of Kerr's tables of the comparative amount of meat eaten per head in the various countries, in so far as it applies to the East. I rather think, however, that France could not develop her African possessions for meat-producing without enormous expenditure in irrigation, and this is the chief reason why it is not done today. Free Banking would help; but the available capital is limited today, and the demands on capital are great. Neither you nor I know how long it will be before we are able to get Free Banking introduced. Would it not be better in the meantime to recommend these people to have smaller families?
And are you not unduly apprehensive about Russia's potential military strength? I think that a free people, trained in self-reliance (*), has enormous military advantages today over a slave population. You have surely not forgotten how Germany rolled up the vast Russian armies with one hand, whilst holding off the British and French with the other. Had it not been for American intervention, Germany would have subdued Russia.
(*) (J.Z.: "…free people trained in self-reliance"? Where are they? Does self-reliance need training or merely the right to be practised, i.e., freedom of action, rather than laws and regulations, licensing, controls, compulsion and public inspectors? - J.Z.)
Rueckstrom. It seems to me to place an unnecessary burden on the borrower to insist that he repay by notes from the same bank as made the loan. What is the reason for this condition on loans?
Freiburg notes. You reply that it will be necessary to organise several Freiburg issuers into a larger concern. This however, raises my former objection that it is harder to get many shops to unite to form a note-issuing business than for a local firm of repute to start issuing its own notes.
Bertrand Russell. I have often criticised him; but I should not accuse him of superficiality. I think he has a most subtle and acute mind. In 1940 I bought his "Inquiry into Meaning and Truth" as soon as it appeared. It deals with what we really mean when we use quite ordinary words such as dog or cat. But the argument is so subtle and condensed that at the end of every page had to go back and read it more carefully in order to grasp his meaning. Yet he is not metaphysical or slipshod. It is simply that every sentence is necessary for the building up of his argument, and unless one reads every sentence until one understands it thoroughly, one is lost. I was much occupied with banking discussion at the time, and after a few months I had to put the book down. At intervals of one or two years since I have taken it up again; but I see that I have still only read about a quarter of it. Yet I am interested in the subject.
Vegetarianism. I too became Vegetarian in my 19th year, and
3.
kept up the diet for 9 years. Then I gave it up on a doctor's advice because I was fast slipping into serious nervous trouble. My nerves became much better after I returned to meat, and I have never since suffered seriously from nerves. It was not that I did not get the right foods: I studied the question carefully. I think it is simply that meat is more digestible than the vegetarian substitutes and some people are so made that their stomachs cannot extract the nourishment from vegetarian foods, although chemically the nourishment is there. Contrary to the opinion of most meat-eaters, I should say that vegetarianism is more suitable for a peasant than for a sedentary head-worker. But I agree that a vegetarian diet is superior aesthetically, and I always liked the food.
Sincerely yours -signed: Henry Meulen
____________________________________________________________________________________________
My dear von Beckerath 29 July, 1949
Thank you for your letter of the 20th. I am glad the parcel was welcome. Two of the three people in our household are now on diet, and we drink little tea and no coffee. Hence most of our ration is saved.
Three days ago I sent you "The New Generation" containing a long reply by Kerr to your letter. But I am afraid you will not get it for about a fortnight. Meanwhile he has sent me another copy. I enclose his reply. If you care to reply to him (about a column), and will send your reply to me, I will put it into shape and send it on to him. You might return the enclosed cutting to me.
It is fashionable here to put part of the blame for our trouble on the fall in US prices. But surely the less we pay for imports from US roughly balances the less we receive for our exports. The volume of goods exchanged should be about the same. If competition were really active here, we should be able to reduce the price of our exports by the amount saved on imports, and both parties would benefit by the fall in prices. But if US produces x goods for £1, whilst we expect £1 for (x - y) goods, either because we are lazier or less efficient than Americans, no amount of exchange control will stop the balance of trade turning against us. I am writing the "Economist" on the subject.
The same argument applies to devaluation. After devaluation, the extra money we must pay for imports should about balance the extra we receive for exports. The trouble lies rather in the circumstance that competition is generally not active enough to spread the results of such changes quickly through the whole community. This is an argument for Free Banking, not for exchange control.
I want to get this letter away - so I will reply to your interesting letter later.
You ask why more revenue cannot be got from the rich. On incomes of about £50,000 per an. the tax is at present 19s. 6d. in the £, and the rise is gradual from about incomes of L 2,000, which pays 9s. in the Pound. I think Sir Stafford argues that any further rise will simply destroy incentive.
Even if we paid for imports in pounds, it would not help us. The US exporter can use only dollars, and must change the pounds at some US bank. As the pound falls in value, he will ask more pounds, which will turn the exchanges against us as before. Before 1914 our exports, visible and invisible, roughly balanced our imports. This is the reason why there was no dollar scarcity then.
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
The Editor of 8 August 1949
"The Times".
Sir,
in the course of a letter received today, Ulrich von Beckerath, a Berlin economist writes me as follows:
"Thank you for the cutting, from "The Times" of July 22nd, reporting the debate on Germany in the British Parliament.
What was not emphasised enough in the debate is the deep change in German opinion resulting from the dismantling of factories. Everywhere one hears: 'Oh, the British, there are very good people among them - remember the early days of the occupation, when British soldiers protected us against the Russians. But these British are of no influence. The influential people are the British industrialists. They fear German competition; and therefore they dismantle German factories. If they could, they would exterminate us. Our only hope of protection now is the Americans.'
I report only what I hear in trains, buses and shops. I wrote you some time back that in my opinion the best course, both for Germany and your country, would have been for Germany to have been given Dominion
status within the British Commonwealth. Two years, even one year ago the idea would have been welcomed by very many Germans. Today the project is impossible, owing to the effect of dismantling."
I am, Sir, Faithfully yours
(Henry Meulen)
____________________________________________________________________________________________
London, 11 Aug. 1949
My dear von Beckerath
Thank you for your letters of l8-29 July.
Malthusianism. I think you make a good case for giving Free Banking priority over Malthusianism as a reform. I shall be interested to see what Kerr has to say to your reply which I have forwarded to him. The arguments you give in your letters to me are stronger than those in your reply to Kerr; but I expect you were being diplomatic to him. I enclose a cutting from Boyd-Orr which supports you (please tell me it is noble of me to supply you with arguments against myself). Also I read somewhere this week that the French govt. has made a start on a very big scheme to bore for wells in the Northern Sahara. A French scientist declares that there is a practically inexhaustible lake beneath the Sahara. Furthermore in a radio debate on population here last night Professor Roy Harrod, Editor of "The Economic Journal", made the excellent point that labour employed in factories here can produce five times the value of the same labour employed on the land. If therefore we reduce our population, we will reduce factory and land labour equally, and will actually be poorer.
I would, however, point out that when Kerr says that the agricultural productivity per worker is far greater in thinly than in densely populated countries, he means productivity per man not per hour. If a man owns only so much land that he can cultivate it all in a week, he will obviously not produce as much as a man with more land.
I agree that it looks as though Colin Clark were wrong about the relative average incomes of Ireland and Norway.
Restriction of wheat planting in USA. I rather think that the inability of US to sell is due to the rest of the world not having enough to sell to her. We cannot sell to her because our labour (employers and wage-earners) demand a higher price than the US; and the continent generally has not yet recovered from war devastation. Still - I cordially agree that Free Banking and Free Trade are the remedies.
You did not reply to my little note on devaluation in my letter of 29.7. I grant that if the pound falls, our exports to US will be cheaper; but it is imports from US that we want, and these will be dearer. We cannot export today because our prices are too high. The remedy is to produce cheaper, which entails a certain austerity here, which we are not yet ready to face. It will not help this difficulty to pay in pounds. You write that in the old days a fall in the exchange value of the pound would have been followed in a few hours by an increase of exports, and the normal state was restored. No - the normal state was not restored if by "normal state" you mean the same level of prosperity as was the case before the pound fell. Where previously we exchanged X goods against X goods, we can, after the fall, get only X-Y goods for X goods. The trouble was that under the gold standard, unless the fall
2.
was rapidly followed by more production here, we lost gold, which stopped our production. The proper remedy was to allow prices to rise here. This discourages consumption and encourages production; which is precisely what is needed. Devaluation is only an indication of an unhealthy state; it does not remedy that state; the remedy must be increased production. You write (19.7) that gold currency does not come back, whereas paper must return home and buy goods. But paper will not be acceptable abroad unless the foreigner can get the right goods at the right price here.
(J.Z.: People fall too easily into the traps set by their own words, misconceptions, ideas, systems and world views and do not easily work themselves out of them again. Sometimes they get enchained in them for the rest of their lives and continue to love and uphold their flawed views at every occasion and against all sound criticism. An unreasonable love is involved for the children of the own brain. - J.Z., 10.5.03.)
Rueckstrom. I agree that if the bank gets due repayment of its loans, confidence in it will grow; but my point is that no rules are needed to induce a banker to insist on due repayment: his interest impels him to this course. And rules can only hinder the flexibility and variety of his loans.
(J.Z.: The basic economic law for ticket money is that the tickets must regularly and rapidly stream back to the issuer, to be redeemed in his performances. His performances must likewise be regular and sufficient and exert a demand for the tickets. Without that demand, sufficient and regular, the tickets will depreciate. The reflux should be as fast and regular as the issue and the amount of the reflux determines how many tickets can be issued and kept at par. Trust is irrelevant here. Readiness to accept the tickets is all-important and knowledge of that readiness. The goods and service offer must be all the time kept in balance with the monetary circulation or, rather oscillation. Continuous issues over a short time period and each only for a short term period on the one hand must have the corresponding continuous reflux over that period for the same amounts. Only sufficient reflux makes sufficient issues possible and can keep them acceptable not only at the issuer but among other local people. The reflux must be seen as a powerful and necessary DEMAND for the issued exchange media, a demand that gives them their value. - M. has still not realised the differences between short-term ticket or turn-over or clearing money and the issue and redemption of medium and long-term securities. With the latter two there is some of his "trust" involved. Naturally, all loans ought to be repaid. But within what time period and with what regularity is also very important here, not merely that some time in the future they will be repaid. That is not good enough to exert a sufficient demand for a currency, even if, after a medium or long-term it will be honestly redeemed. The in-between and quite necessary reflux is missing to keep up the value of a currency. Probably his notions of the need for and possibility to give them some kind of gold redemption, even if only at reduced gold weight values, prevented him from seriously looking on the need for and usefulness of a regular and sufficient Rueckstrom. Asset-"currency" hasn't got enough reflux. No shopkeeper is obliged or especially or sufficiently interested to accept these small bonds, shares, mortgages and other securities, instead of soundly based currencies they issued themselves and are obliged to accept. - J.Z., 10.5.03.)
Education. You write (25.7) that since children like other things more than school, school attendance must be compulsory. This contradicts the entire philosophy of freedom. A clever woman artist friend of mine used to say that the aim of education should be to give a child a love of knowledge.
A child cannot really be taught anything: it can only teach itself. Now it is only the exceptional child that has any interest in book-learning before adolescence. The effect of forcing book-learning on the average child before adolescence is not only a waste of time and money, but it gives the child a deep, often unconscious, dislike of all getting of knowledge from books. My brother and I both liked music; but my father sent us when I was 10 and my
brother 12 to learn piano, and he insisted on our practising every day. We both hated it; and as soon as we started to go out to work, we both gave up the piano. My brother never took it up again; but when I was 19 I fell in with a set of musical young men, and then taught myself piano, which has been a pleasure to me ever since. If children like going to school today, it is not, I think for the learning, but because they have more games, and learning is made interesting by stories and object lessons. It is the stories they like - not the learning. Actually they do not learn as much as we did. When my daughter had passed her Matriculation examination at 16, she did not know as much geography, arithmetic or history as I knew at 11; but I hated school. (J.Z.: I am closer to M.'s than B.'s views on school education, also on conscription and postal services. - J.Z., 10.5.03.)
Beatrice Webb. I heard her speak once or twice. As a woman she did not attract me - too dry.
King-Hall. I send him a copy of each issue of "The Individualist"; but it seems to have no effect in interesting him in Free Banking. I will write him, and try to get to talk to him.
I send you herewith a cutting of a letter by Lord Vansittart. - I think his opinion is shared by the majority of people here. For myself I think him wrong. Both we and Germany would profit more by allowing Germany to get on her feet as soon as possible. She should then be admitted to UNO; and UNO should see to it that there is no revival of militarism either in Germany or any other member state.
Sincerely yours - signed: Henry Meulen
(J.Z.: In other words, this individualist anarchist had faith in international statism! - J.Z., 29.5.03.)
____________________________________________________________________________________________
31, Parkside Gardens, S. W. 19. 25th August 1949.
HM/ED
Ulrich von Beckerath Esq.
Dear von Beckerath,
Your letter of 4-13 Aug. Your ethic is very Christian: "Let Justice (with a capital J) prevail, though it kill me." You make me feel like an old man discussing with an impulsive youth. There will always be injustice.
Long after men are enjoying all the benefits of Free Banking some young men will grow hot about other injustices; but most men will live comparatively happily without a thought for von Beckerath who sacrificed so much that they might live more comfortably. For myself, I look on my altruist pleasure as one among other pleasures. I am ready to pay a certain price to indulge it, as I am ready to pay for my other pleasures; but I will not willingly ruin myself to indulge my love for music, or my love for my follow man. I will measure my brains against those of my fellowman, and devise a way of following my pleasure at the least cost to myself.
"An inglorious life" you will say - I agree; but many glories are too highly-priced for me. There are thousands of things I love in this world, as well as the welfare of my fellow man, or his good opinion of me.
I am not sure about your definition of notes as clearing certificates. The latter arise when two parties clear debts between then. If I owe B £10 and he owes me £10, it were obviously foolish for us both to pay over £ 10 to the other. But a bank note loan is different. The note gives the borrower the right to consume goods produced by the community before the community has received goods produced by the borrower. Hence the note does actually give the borrower the right to raise loans from the public.
(J.Z: Wrong on both points! Neither the community nor the shops are obliged to satisfy the owner of M.'s notes. If he granted his notes in long-term notes to others that is no business of theirs and of no concern or obligation for them, no more so than shares or mortgage letters would be that M. had issued as "notes", intended for circulation by him, based largely on "trust" towards him. He might be a nice guy and otherwise quite honest and sensible - but that would not give his notes a current value. And they would be quite right to distrust these notes and to reject them altogether, rather than merely discount them, unless they are interested in the fractional gold cover that he offers with them, immediately or some time in the future. - J.Z., 10.5.03.)
I agree that both the community and the borrower may have produced desirable goods; but neither is ready to give up his goods until he receives a ticket enabling him to buy what he wants. To sell his goods for such a note still involves trust on his part, trust that he will actually get the goods he wants, and in the interval between selling and buying he is making a loan to the buyer of his goods.
You write that if a promise to redeem notes on demand cannot in every case be fulfilled, the promise is a swindle. Are you not too severe? A company may insure me against fire, although we both know that if all the buildings insured in this company are burned down together, the company may be unable to pay me.
2.
But our differences over the meaning of W. R. Greene's words are not of immediate importance. I am content to leave you to your opinion that Mutual Banking is easier to establish than what I call Free Banking.
I do not agree; but if we are both prepared to allow free experiment, the most suitable type will emerge.
(Bold type chosen by J.Z.)
Cooperation. I do not know a single woman among my friends who deals in a Cooperative store. They all say that either the goods are slightly dearer or the quality not so good. Nevertheless, there are many small towns in England, especially in the Midlands, where Cooperative stores have practically monopolised the retail trade.
I think that the reason in that the dividends repaid to shoppers provide the women with pin-money over and above what their husbands allow them for housekeeping. (B. was mainly interested in productive coops, not consumer coops. - J.Z.)
Scarcity of dollars. I agree that there would be no scarcity if the exchanges were freed. The objection of the planners, however, to this course is that free exchanges would permit our importers to import here (un- - J.Z.)
necessary goods, to the exclusion of necessities. The rich here would buy luxuries and the poor would lack necessities. I think that a free price system would, by stimulating production, remedy this quicker and more discriminatingly than can State control.
Unemployment. If we want to buy from abroad, we must be able to export. But if US produces more cheaply than we, our producers must accept less. This means lower wages and/or lower profits. Our wage-earners
are however so strongly organised that they can threaten complete strikes. It is for this reason that I suggested that the only way out is to permit unemployment.
You write that the effective check to extravagant wages is the impossibility for employers to pay such wages. You are then, in effect saying the same as I. If the employer cannot pay the wages asked, he cannot employ. Therefore there will be unemployment. Our government proposes to remedy this unemployment by large scale State works. (Public works. J.Z.) I think this would make the evil worse. Of course the best remedy is Free Banking; but since this is unlikely to be adopted, it is, I think, better to allow wages to be reduced by unemployment than to tax people further to undertake public works. Does this lessen your indignation with me?
3.
Don't believe what the "Reader's Digest' may say about the miserable standards of life (living - J.Z.) of our wage-
earners. Our people are quite comfortable, even if not so comfortable as in USA. Just consider the amount our people spend annually on tobacco, alcohol and entertainment. The mount they spend on other luxuries (television, holidays, etc) is in proportion.
I sent a letter, of which I enclose a copy, both to the "Times" and the "Telegraph". Neither printed it. But the "Times" printed a letter from Gollancz covering practically the same ground. I commend to you this Atheist Jew who is an example to all Christians in spending so much time and energy in advocating forgiveness of your people who ill-treated his people so fiendishly.
(J.Z.: Those directly involved in these crimes should certainly not have been forgiven. But those who weren't shouldn't have been blamed in the first time! For instance, in my home-town, Berlin, about 5,000 Jews survived by being hidden by their friends, who shared their rations with them. - J.Z., 11.5.03.)
I live with my two sisters, 2 both older than I. The younger is dieting for cataract and rheumatism.
Sincerely yours - signed: Henry Meulen
enc.
P.S. I printed your note on the colour bar; but I do not altogether agree with it. I cannot forget the bad treatment of the Hereros in German South West Africa; nor the indignant protests of Germans against the "indignity" of the use of Senegalese as occupation troops - long before there were any complaints about raping etc. It is of course easy for a nation that has no colonies, and is not up against a large coloured population, to see the inhumanity of a colour bar. But the problem is not too easy. Are you quite reconciled to general intermarriage? (*) I suppose it is inevitable but I cannot say I like it.
I am sending this letter by ordinary post, since ordinary communication appears to have been restored. Let me know when you receive it.
(*) (What does an individualist mean by "general intermarriage"? Does he assume it to be compulsory or optional for individuals? What doesn't he like about the individual option for everybody, even if he himself would not have adopted it or would not have wished it for his daughter or granddaughter? - J.Z., 11.5.03.)
____________________________________________________________________________________________
London, 6 Sep. 1949
My dear von Beckerath,
Thank you for your letters dated 9-w2 Aug. Did you receive my letter in reply to yours of the 4-13 Aug.? I sent it by ordinary post, but I have not kept a record of the date when it was sent.
I am sending you under separate cover the last New Generation. You will see that Kerr has not printed your letter. If you care to send me an article embodying your chief objections to Malhusianism, I will print it in the Dec. Individualist (which goes to press on Nov. 6), unless Kerr prints your letter in the next New Generation. I will give you one page of the Individualist.
I note your suggestion that industry and agriculture should be turned into cooperative undertakings. We have many firms which practise profit-sharing. The results are varied. Some firms praise it; others have given it up. My main objection is that it is unfair to give the wage-earner a share of the profits unless he has subscribed to the firm as a shareholder, so that he shares the risk. And it will be more difficult to start new firms if the profits are lessened in this way. Furthermore, it is undiscriminating. Both good and bad workers share in the benefit. Altogether I would much prefer a system of private ownership under Free Banking.
(J.Z.: There are great differences between various forms of productive cooperatives and the one side and various forms of bonus or profit sharing systems on the other. These coops are also private and propertarian enterprises, but with many proprietors, all of them working in the business. Then there are the various organisation development schemes or work coops or autonomous work groups or gang work systems and various leasing systems for productive capital, many of them within the best meaning of capitalism and free enterprise, propertarianism and competition. It is absurd to equate all of them only with various profit sharing systems. - J.Z., 11.5.03.)
You may say that there is no hope of Free Banking before a Communist Revolution makes slaves of us all. This may be. But there are many societies here who are propagating cooperative industry. I prefer to spend my time urging Free Banking. Who knows? - it may catch on from one year to the next.
You quote from your friend Prof. Vierkandt that the extermination of life by the atomic comb may be an act of nature by which it corrects the blunder it committed by creating man.
Why do you suppose that "Nature" (say rather the universe) thinks at all? Is it conscious of the presence of man? Does it think the creation of man a blunder?
On the contrary I think man a most remarkably developed animal. I criticise some of his failings; but on the whole I like him well, and am not at all disposed to call his creation a blunder.
Sincerely yours - signed: Henry Meulen
____________________________________________________________________________________________
London, 12 Sep. 1949
My dear von Beckerath,
It was kind of you to send me the note about Cassia with your letters of 28. Aug. - 7 Sep. I have passed it on to my sister. She is remarkably experimental, and has tried a great number of cures, orthodox and unorthodox. At present she is under a German Jewish doctor in Brighton who has treated her with radiant heat, diet and medicines. She is fairly optimistic about him.
Jews. Yes - I can well imagine that that Jews are not well disposed towards the Germans. It comes back to the doctrine of collective responsibility, and I am not satisfied with your refutal (refutation - J.Z.) of that doctrine. After all, Germans well knew that Hitler was bitterly anti-Semite long before he first stood for the Reichstag.
(J.Z.: Was he actually ever elected into it as a representative? - J.Z., 11.5.03.)
My Black Forest friends showed me a violently anti-Semite pamphlet by him when I was there in 1931. Yet he was elected. After he was a elected he violently attacked the Jews (J.Z.: By proxy only, through his storm-troopers. He himself did not expose himself to such risks! - J.Z., 11.4.03.), and yet Germans supported him in increasing numbers.
(J.Z.: We do not have reliable voting records after he was installed in power. Even those in democracies like the US are often suspect. Public beatings, looting of Jewish shops, secret mass executions, concentration camps and mass extermination camps were not on his platform presented to voters. He engaged in such actions only after he was settled in power and he tried to keep these actions secret, so that even the Jews in the Warsaw Ghetto took a while to become convinced about the fate of those deported from there to the extermination camps. - J.Z., 11.5.03.).
Had enough Germans been outraged by his anti-Semitism they could have prevented his coming to power. History is full of records of great movements that sprung from small beginnings.
(J.Z.: Already during the last years of the Weimar republic there was no longer full freedom of speech, assembly, association and press. Both were largely suppressed by gangs of brown and red totalitarians. As soon as he was granted power by an all too flawed representative and presidential power system, these freedoms vanished completely. - J.Z., 11.5.03.)
"Consider the postage stamp, my son", says the Yankee character Josh Billings, "its virtue consists in sticking to one thing until it gets there."
A few thousand stood up for the Jews. If they had started earlier, and had emulated the postage stamp, they might have saved the Jews from the horrors of the camps.
(J.Z.: The first 300 000 inmates of the concentration camps were not Jews but other opponents of the Nazis. Those who survived their treatment there were mostly cowed for years afterwards. M. was unaware of the daily practice of totalitarian terror for every German who did not want to toe the Nazi line. - J.Z., 11.5.03.)
Anti-Semitism in any violent form is sternly repressed here. The Germans acquiesced in it, and I think they must all share the blame.
(J.Z.: Thus writes a radical individualist! "The" Germans never existed. Their 80 million were and still are all more or less flawed and responsible or irresponsible individuals. Obviously, M. did not hold B. individually responsible for the atrocities of the Nazis. - J.Z., 11. 5. 03.)
Dismantling. The next time that any German complains to you about dismantling, tell him that everybody in England, myself included, is quite certain that what punishment is being imposed on Germany for the terrific suffering that Hitler brought on Europe is a form of Christian brotherly love compared with what Hitler would have done to us, with the full approval, I am sure, of the majority of Germans, had he won the war.
(J.Z.: Are such matters ever submitted to a referendum, even in the best of democracies? - J.Z., 11.5.03.)
If the majority of our people had their way, Germany's punishment would be much harsher. But we happen to be guided by statesmen wiser than Hitler.
(J.Z.: Where they? They approved of bombing civilians, thus murdering about 3 1/2 million non-combatants, babies, women, sick and old people included - and that strengthened the will of Hitler's soldiers to fight for him, because they came to fear the extermination of all Germans, as envisioned by the Morgenthau Plan.
The Allies did not destroy the furnaces, ball bearing plants etc. They did not engage in tyrannicide promotion. They did not support a military insurrection. They did not recognise a German government in exile or recognised and supported the German resistance and for all too long they tolerated Hitler building up his terror and military machine. They did not make ethical and rational separate peace offers to deserters from the German armed forces. Against all historical experiences with it, they insisted upon unconditional surrender and did not liberate those German POW's that wanted to be liberated and deserved to be. Thereby the strengthened Hitler's position, prolonged the war and got also on their side hundred-thousands of their soldiers quite unnecessarily killed. After the war they handed hundred-thousands of opponents of Stalin over to his "tender mercies". They did not act against Hitler in time, when they could and should have and only relatively few lives would have been lost then, on both sides, for their victory. In some respects they were almost as foolish, ignorant, prejudiced and brutal as Hitler. After the war several books appeared which described how a regime like Hitler's could also have come to power in England. - J.Z., 11.5.03.)
As you know, I personally think that it was the European, or rather world slump, caused by the return to the gold standard, which caused Germans to turn in despair to Hitler.
(J.Z.: There was no return to "the gold standard", in M.'s meaning, after the German inflation of 1914-1923. Monetary despotism with its Central Banking remained. Only for a short time was the "Rentenmark" not legal tender or a fiat currency. The Reichsmark was, since 1909, the DM is still. - J.Z., 11.5.03.)
Nevertheless, I cannot easily forgive them for having turned to such a monster.
(J.Z.: The only ones who tried to execute him were Germans! The leader of the Allies rather sent their conscript armies against Hitler's conscript armies, for mutual bloodbaths. Great statesmen, indeed! - And then they built nuclear bombs: small, scientific, cheap mass extermination camp packages, and used them twice - and prepared ten-thousands more of them, obviously, not against despotic governments but against their victims. And for their tyrannicide attempt against Saddam Hussein, in Iraq, they sent, recently, an army of 200,000, hundreds of rockets and thousands of bombs - and still haven't managed to kill the bastard. They killed more Iraq civilians, conscripts and own soldiers, in "friendly fire" incidents and accidents than leaders of the Iraq dictatorships! Experts, indeed! - J.Z., 11.5.03.)
And I cannot forgive them at all (I am not in the least Christian!) for having allowed the bestial cruelties of the concentration camps.
(J.Z.: Did these depend upon permissions from all ordinary Germans? Where e.g. the brutalities in concentration camps of the Soviets of Red China or of the English government during the Boer War made dependent upon permission being granted by a referendum? Where the starvation blockades of whole countries submitted to referendum? In Iraq, before the second Golf War, they are supposed to have led to the death of 500,000 to 1 million innocent people. The Iraq government and its supporters remained well enough supplied. - J.Z., 11.5.03.)
Of course the majority of Germans are resentful. They would be just as resentful if we forgave them entirely. They would find much to hate in the knowledge that we are now more ready to lick our own wounds than to help them to lick theirs.
(Did he really imagine that he still spoke here as an individualist? - J.Z., 11.5.03.)
And, more fundamentally, they would be resentful just because they lost the war.
(J.Z.: Most of the decent and more enlightened Germans did not think that "they" lost the war but that the Nazis lost it while they themselves were somewhat liberated and personally saved. - J.Z., 11.5.03.)
2.
Most people are like that - even that very civilised nation, the French.
(Did their rule and wars in North Africa and in Vietnam show them as so much more civilised? Were they civilised towards French women who had affairs with German soldiers? Are their nuclear bombs more civilised than those of others? Was their fighting in WW I & II and their treatment of prisoners of war very civilised? - J.Z., 11.5.03.)
After 1870 what rankled in France was not so much the loss of Alsace-Lorraine, but the fact that she was beaten so quickly and decisively by Germany. This it was which gave rise to the "Revanche" feeling. The idea of revanche was gradually decaying as the generation of people who were alive in 1870 died out. It was a major calamity for Europe that this feeling had not disappeared before 1914. The majority of people resent punishment, however just.
But this does not prove punishment to be unwise; it merely teaches that the power that punishes must be strong enough to protect itself against the resentment of the punished. It is an argument for a strong League of Nations - not for Christian forgiveness.
(J.Z.: Rather, one for the panarchistic liberation of everyone, so that no one, who was not a criminal with victims, will have cause to resent any punishment. Once they experience exterritorial autonomy for the governments and societies of their dreams - they will rather be grateful and joyful than resentful. But M. could not think himself through to that liberty, either. See his last letter. - J.Z., 11.5.03.)
Which brings me to your Christian ethic. However Kant may have interpreted the Roman "Fiat Justitia" (and I think that our ordinary translation of that saying is truer than Kant's), the essence of the Christian doctrine was that Christians should follow Christ's teaching, and leave the result to God. This of course was a logical result of their belief that the world was coming to an end within their own lifetime. What did it matter if carrying out Christ's teaching (turn the other cheek, resist not evil, give all thou hast to the poor, etc.) caused misery and suffering in this world - it would all be redressed very shortly when Christ returned to judge this wicked world. Now you are ready to buy your altruist pleasure in attacking your intellectual enemies, not only at a very high price, but if needs be, at the cost of life itself. Admitted you do not leave the result to God; but I think that the idea of doing "Right", no matter what the results, is the basis of the Christian doctrine.
(Offhand, I cannot even think of a single Christian, now or in the past, who had comprehensive notions of what individual rights are and who was in favour of all of them. Can you? - J.Z., 11.5.03.)
And it is a bad doctrine. If everybody were strong enough to do what he thought (J.Z.: As if the "thinking" of the ignorant, foolish and prejudiced were here or equal value and consideration as that of the enlightened! - The old "chaos" objection to anarchism, in terms of this "individualist anarchist"! - J.Z., 11. 5. 03.) was right, even though it led to his death, living in society would be impossible, since society has no stronger deterrent to action that it thinks wrong than death. It seems also illogical to me to destroy the source of all my pleasures because I cannot satisfy one