Ben Franklin Invented Fiat Money That Worked

Okay. The title of today’s post is more than a little misleading. I am going to link an article that does explain how Franklin created a fiat monetary syten for the Pennsylvania Colony whereby, Pennsylvania lent money into their economy at interest rate of 5% and the government-funded itself on that 5% and didn’t need to tax its citizens. I think you will find the article and quotes very interesting. But, what I really want to talk about is the group behind the author of the article.

While reading an article at the Washinton´s Blog yesterday on an entirely different subject, there was a link to an article at the about Benjamin Franklin and the use of fiat money in Pennsylvania. I thought it might be interesting and it was. The Examiner article is a reprint of an article by Carl Herman that he wrote for the The Center of Process Studies’ conference, Money-Creation in a Finite World. It is explained that there are eleven parts to his treatise and there are links to each part.

Upon scanning the titles of each part, some alarm bells went of and I decided I had better find out who or what is The Center of Process Studies.  It turns out that the Center is operated by the Claremont Lincoln University´s School of Theology, which is located in Claremont, California. A little digging turned up no surprise that they   are focused on promoting the common good. A nobel cause. From my reading, if I were to try to classify where they fit in the political spectrum, I would say they could be the intellegensia fo the Occupy Wall Street crowd. They  are very down on the big banks and corportist that they believe are abusing our goverment system for their own gain (we are talking about the 1% here). They think the 1% and the rich nations of the world should be   saving al the poor people of the world. They, in other words, would fit in nicely with the wealth redistribution crowd at the UN.

One of the eleven parts of Mr. Herman linked has the title My personal history of the 1% choosing to kill a million children each month.  Killing a million children a month? Well, I had to click on that to see what dastardly deeds the 1% were up to. In that article, Mr. Herman linked a two-minute animated video he said explained everything. The video demonstrated how mega-corporations go into poor countries and rape their natural resources and of course the money they do pay to the governments never goes to help the poor. Okay. What is wrong with this picture? Do companies go into poor countries and cut themselves a good deal? Of course they do. Do they hold a gun to the heads of government to get those deals No they do not. Does the money that is paid to the governments ever reach the poor people? Not enough to notice. Whose fault is that; the companies or the governments?

Let’s look at an example. Back in the 1930’s the big oil companies discovered huge oil deposits in places like Venezuela and Saudi Arabia. They made their sweet deals with the heads of states and soon were producing oil for the world like never before. As a result the people of Europe and the US had cheap gasoline for their automobiles. In time the governments of Venezuela and Saudi Arabia got smart. They took over their oil firlds giving some compensation to the oil companies and then turned around and contracted the oil companies to manage the facilities they had built. Gasoline prices went up in Europe but not so much in the US because we, also, are a large oil-producing country. Venezuela would eventually throw all the foreign oil companies out, which hasn’t worked out all that well, but, if my memory serves ne correctly, Saudi still has the oil companies working on contract. So, the governments of Venezuela and Saudi Arabia have huge incomes from their oil sales. Do the poor in those countries see much benefit from all this oil wealth? Not that you can notice.?

In my opinion, the lofty goals of groups like Claremont’s Center of Process Studies can never be met in the real world. Short of taking over these countries with armed forces and dictating the terms of contracts and giving the governments a detailed plan on how they will spend their income. Their leverage would come from the threat of death if the heads of state didn’t cooperate.

The problem of the poor in under developed countries is a many faceted problem, but high on the list is culture. How are groups like The Center of Process going to change cultures?

It seems to me that groups like The Center of Process are missing an important point if they are serious about wanting to protect the poor of the poorest countries. Well, I didn’t read all eleven of Mr. Herman’s articles so maybe he hasn’t missed my point.  The thing I think they should be investigating and exposing is this. Are the powerful countries of the world bullying the  poorer and weaker countries into giving their corporatist companies access to their natural resources (think energy) instead of the companies of the other powerful countries who are their…shall we say completion on the world stage. I think they would find that it has been true in the past and it is true today.

If they  were to do such an investigation, I think they could tell us what our unclear foreign policy in the Middle East and in the Something-stan countries is all about.

I apologize for the misleading title. I do hope you read about Franklin’s fiat monetary system in Pennsylvania. It is quite interesting. Franklin was a very astute man. And, do tell me if you think I have been too hard on the good folks at Claremont University.

Well, now you know what I’m thinking. What are your thoughts?


7 thoughts on “Ben Franklin Invented Fiat Money That Worked

  1. In the end, a benign dictator is the government of choice. Hard to find these days. One would think of all of the wonderful things a leader could do for others would be a draw, but corruption and greed rule.

  2. Lincolns greenback also worked. Fiat can work but you must control the quantity. That’s why the gold standard always worked. It stopped bankers from counterfeiting and fractional reserve ending.

    Not sure about the rest of this piece Jim.
    Barely know where Claremont is. The rich have been exploiting the poor since time began- it seems.

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