Separation of Bank and State

by Mark Matthews

On July 30, 2013 several hundred entrepreneurs gathered in midtown Manhattan for the “Inside Bitcoins” one-day conference.

Image credit: Flickr

Image credit: Flickr

“This country was founded on a separation of church and state,” said Alan Safahi, founder of the bitcoin start-up ZipZap, “I think we should add separation of bank and state.” This line drew an enthusiastic round of applause. – the Wall Street Journal

Over four decades ago, F.A. Hayek made the same proposal but, at the time, it seemed to have little chance of  becoming a reality. He argued for the denationalization of money, an abolition of the government monopoly over the money supply, and the institution of a regime of competitive private issuers of currency. [1]

Hayek wanted to make it increasingly impossible for governments to restrict the international movement of individuals, money and capital, and thereby to safeguard the ability of dissidents to escape oppression. Another reason was stop the recurring bouts of acute inflation and deflation that result in banks foreclosing on family farms and homes. In addition to that, Hayek wanted to bring a full stop to inflation spending that robs the individual of their labor in order to finance unnecessary wars.

In 1987, James Orlin Grabbe put pen to paper and described “The End of Ordinary Money.” In that two part essay JOG quotes from Hayek and foreshadowed the coming of Bitcoin twenty years before it arrives.

A Brief History of Money

Why did kings issue gold coins with their likeness embossed on them? Some might say this was purely narcissistic. However,  Professor David Graeber explains this was done for two main reasons. One reason was a practical matter, the King needed to pay his occupying armies in a foreign land and gold coin was a good way to do that. Secondly, as these coins began to circulate it allowed the King to tax his subjects and maintain control over these new occupied territories.

Ask yourself, is the money we use today so different?

Money has always been the ubiquitous control architecture for every political system. It works best when people under such false authority remain ignorant of how they are being manipulated.

This is true of every a political structure, including the religious variety. In much of monotheism, sin has always been equated with a debt to God. Under the surface of faith the real fiat currency of the church is guilt, and so the fear of hell became every priest’s stock and trade.

The priestly class of the American Empire are those mysterious families who own and operate the Federal Reserve Bank and control the Exchange Stabilization Fund. Leveraging the military might of the United States (and their own huge pools of capital), this unseen hand replaced the gold standard with a digital currency over 40 years ago.

Today every nation of the world now pays for oil in US dollars; however, times are changing. The unseen hand has used the IMF and World Bank to enslave third-world nations with debt, the same way easy-to-obtain credit cards entrap American consumers. It is written, “The rich rule over the poor, and the borrower is slave to the lender.”

When people begin to wake up and ask questions, the control that these political structures have over them begins to weaken. The old system of kings and kingdoms gave way to Republics and Democracies, but as long as monetarism continued so did the oligarchical control. What we are witnessing today is a massive paradigm shift taking place away from fiat currency and this could spell an end for monetarism.

While we don’t think about it, money functions as an artificial intelligence ruling almost every human enterprise, belief and behavior. Money provides control over people, and that is what political structures expect and demand. Indeed, they could not function without their ability to control and manipulate the money supply.

A Look Back at Recent History

In 2008 two significant events took place. A crypto-currency was described in a paper by Satoshi Nakamoto, but at the time this was a non-event. However, what no one failed to notice was the epic failure of the American Empire’s money system. The ubiquitous control architecture of the world’s last superpower was in crisis. At least, that is what we were lead to believe.

People thought the sky was falling and they freaked out.

Senators were even told in a closed section of Congress that without a “blank check” bailout there would be martial law in American. President George Bush told the world our financial structure was in such desperate shape that if Congress did not hand over $700 billion to parties unknown, immediately, the whole structure would collapse.

Looking back at this event five years after the fact, we now know that this “blank check” was actually written out for well over 10 times the amount the American people were originally told. The ubiquitous control architecture by which government maintains power over people was effectively handed over to a few banking elites. Was this the result of poor management on the part of our political leaders or was this simply the consolidation of power by true rulers of the world?

What did they do with all that money? No one seems to know, but one thing this is clear, the ubiquitous control architecture is less ubiquitous and the established money system is now facing a crisis of confidence. People are losing their faith in the system and turning to any alternatives they can find.

When we think about Earth without money it seems as alien to us as a world that knows nothing of poverty and warfare. In the Star Trek universe created by Gene Roddenberry, money stopped being a negative force in the world, poverty ended and nations stop waging war against each other. While most people dream of a peaceful world, the concept of doing away with money altogether is too much for most people to comprehend. It is dismissed as a mere entertainment.

Ironically, it is hard to see how humanity can ever rise above our warlike culture unless and until we rise above what passes for money, namely the ubiquitous control architecture of political structures. That means if we want to see world peace, then we have to be the change we want to see in the world. It must start with our money habits. Mankind must learn to vote with their money–but one that is free from political control.

Forward Thinking

How might we reinvent money so that 1) it has value like gold, and 2) would not be controlled by political structures that could use it to wage war? This two-fold question is one that few people have ever bothered to ask, much less attempted to answer. While others were still trying reform a failing system, a mysterious hacker actually came up with the answer.  From Wikipedia:

Bitcoin (BTC) is a cryptocurrency first described in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system. Bitcoin creation and transfer is based on an open source cryptographic protocol and is not managed by any central authority.

Buckminster Fuller once said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” This is exactly what Satoshi has done. Calling Bitcoin a “disruptive technology” is an understatement. Money unmoored from any central authority is the new model. As the old money that political structures depend on becomes obsolete so will the political structures themselves.

Don’t worry- this isn’t going to happen overnight, but I believe it is the trend moving forward. While most people don’t think about it very much, we could say money makes us slaves to the system. That may sounds rather negative, and even melodramatic, but when we re-frame the problem in terms of computer technology, solutions begin to emerge and bitcoin is one very positive answer.

What we are seeing unfold is a world in which political structures of control are collapsing. With Bitcoin, pyramids of power are becoming as flat as a pancake. People are reclaiming their power from false authorities, and individuals are taking back their own sovereign birth-rights.

The bailout of Wall Street initiated in September 2008 was premised on the dire prediction that if major counterparties in the massive edifice of derivative contracts were allowed to fall, the whole interlocking house of cards would collapse and take the economy with it. What if we faced the same banking crisis next year or ten years from now? Just look at the yield on 10 year U.S. Treasuries and you can see we are heading for troubled waters.

In such a case, would an alternative currency like Bitcoin be allowed to fill the void?

The short answer is no. As long as we keep using words like “allowed” that answer will always be no, absolutely not. The system wants to keep on living, growing and controlling. As long as we are it’s subjects, it is our master. In order to secure our freedom, we must change our minds and the words we use. Stop asking for permission.

Is Bitcoin Money?

What makes bitcoin so different is that it is not political. If one government were to adopt bitcoin as their national currency, then you might called it political, but in such a case people could simply drop bitcoin for another crypto-currency. That is not to say they would a have a reason to do so, but the point is this: even with official endorsements, Bitcoin would not become just another means of political control.

Simply stated, money provides control over people and that is what political structures require. Therefore, non-political systems of exchange are not money, at least not money as the world has always know it. Perhaps it is more correct to say peer-to-peer systems of exchange that make property conveyance possible outside of any political system are the greatest form of money ever invented.

The Open Money Revolution

Yes, the time has come to demand honest government and that means we must demand honest money. Bitcoin didn’t ask for permission to exist, and in the same way we need not look to any false authority for permission to spend it. Make no mistake about it, open source money is a revolution. The only death will be the false authority of fiat money, and the rebellion is being financed by your spending.

This is an important point, so allow me to repeat it. We need government and we need money, we just don’t need one controlling the other. When money controls government then the oligarchy and corporations have undue influence. When government controls money, then the political system can control the citizens. The idea of a Republic is the idea that people control the government, but in order for this to work we need to separate money and state just like we separate church and state.

Those of you who followed the Occupy Movement will remember one predominant theme that emerged was this idea that we need to get money out of political process. This meme was one that resonated with a lot of people. It was thought that, if we could stop Wall Street from buying our politicians, they might reform themselves and become better representatives of WE THE PEOPLE.

When you think deeply about it, you begin to realize the problem is more fundamental. While it is true that K street lobbies have undue influence in our political system, that is not the root of the problem. The large pools of Capital that sit above government is the root of the problem. With the rise of Bitcoin, people like myself have begun to ask new questions and formulate new solutions. Perhaps we need government, but do we need government issued money?

Talking about removing the money from the political process is one thing, but to separate government from money altogether is something quite different–indeed, it is revolutionary. The separation of church and State is a rather new idea in human history, and most people agree it was a step forward. With the rise of financial instruments that are both autonomous and anonymous, the question must be asked: Are we now ready for the separation of money from the State?

The separation of church and State was very controversial but it brought greater pluralism for all. America had a big role to play in that evolutionary process. After the Magna Carta was signed, men of the Enlightenment were no longer content to be ruled by Kings. Today the old oligarchs that once sat behind the king’s throne are still asserting themselves by appointing bankers into political positions once held by elected officials. What we see today is neo-feudalism where the kings have been replaced by few powerful families, each with large pools of capital. They control the political process because the control the money.

What I’m describing is called “the New World Order” and those invested in this corrupt system are pushing a Globalist agenda that forces working people the world over to comply and submit to its all-powerful will without regard to their individual rights. Yes, people complain about this open conspiracy, but they are at a loss to know what can be done about it. Perhaps the answer is a simple one: stop using State issued money.

If people the world over were to adopt various forms of crypto-currency, this would seriously reduce the power of the Super-State to control them and in time it would also render the oligarchy powerless to control the state. Then, and only then, would free people have a chance to reclaim their government and restore a Constitutional Republic that is both accountable and representative of their the best interests.

———————————–

 Check Out Mark’s Previous Article:  Free Speech, ZeroCoin, and the Fourth Amendment

[1] Hayek, Friedrich A. von, Denationalisation of Money: An Analysis of the Theory and Practice of Concurrent Currencies, The Institute of Economic Affairs, Lancing, 1976.

By Mark Matthews
Mark Matthews

15 tips so far
0.43378977 BTC
(avg tip 0.02892 BTC)
1547BaeBBdQbaKH7vRDZ5m95V8B6VfjM5C

Why You Should Tip Our Writers

Let's Talk Bitcoin is powered by volunteers doing good work through the Cryptocurrency ecosystem, and sharing their experiences with the community as a whole. If you found this article to be valuable, please send a bitcoin tip which will go straight from your wallet directly to the wallet of the writer. No middle men. No payment processor. Pure Value for Value. Thank you for supporting our model!


6 Pingbacks
Date Source Name URL
24 August 2013 at 6:08pm[…] by gamerandy [link] ...Do We Need a Separation of Bank and State? | Bitcoin Buzz – Bitcoin Forum Talk
25 August 2013 at 1:08am[…] by gamerandy [link] ...Do We Need a Separation of Bank and State? | NewsBitcoin.com
25 August 2013 at 11:08am[…] Read the full story here. ...Separation of Bank and State | Cryptocurrency News, Cryptocoins News
25 August 2013 at 10:08pm[…] Source ...Do We Need A Separation of Bank and State? « Economics Info
26 August 2013 at 7:08pm[…] http://www.thebitcoinchannel.com/archives/21719 READ MORE ...Separation of Bank and State, The wealth transfer effect of bitcoins / Syria false flag, again | paulthepaperbear
20 November 2013 at 5:11am[…] http://www.thebitcoinchannel.com/archives/21719 READ MORE ...BTC ‘what a genius’ solution | paulthepaperbear
  • Pingback: Do We Need a Separation of Bank and State? | Bitcoin Buzz – Bitcoin Forum Talk

  • Matthew Jones

    Brilliant article!

  • Pingback: Do We Need a Separation of Bank and State? | NewsBitcoin.com

  • John

    Should Separate everything from the State. Great article!

  • 8fold

    Thank you for the article! Just sent you a tip!

  • Pingback: Separation of Bank and State | Cryptocurrency News, Cryptocoins News

  • Rod

    The intro said that “neither government nor money are inherently evil” and I don’t know if the author wrote that or if the editor did. All monopolies promote abuse, so legal tender and the nation states that create that legal tender, are both inherently evil. If you can’t fire your police department, it’s evil. If you can’t fire your socialized medicine, it’s evil because all monopolies lead to abuse.

  • Guest

    The current system of money works pretty well economically. It even has benefits over the bitcoin systems such as stabilizing economies against each other when one nation is weaker than another.

    The real issue is other people interfering, such as banks and speculators. The introduction of Bitcoin doesn’t prevent these things. These problems need to be combated first by overhauling things like financial regulation and political incentives to cut down on encourage instability in the financial system.

  • Pingback: Do We Need A Separation of Bank and State? « Economics Info

  • http://unSpy.info/ Mark Matthews

    @Rod, in my article I used the term “false authority” but I did not use the “E” word (yes, that was the editors note). My view is more in-line with your own. I define evil with two words, “false” and “authority.” People are not born evil, but they often do learn to act that way.

    True authority flows from the autonomous individual. When anyone (or any thing) attempts to coarse or otherwise manipulate others with a threat of violence (or undue influence), then their actions become evil. Why are their actions evil? Because they have set themselves up as a “false authority” which denies the rights of the individual.

    What we need most is self-government and individual responsibility. Failing that, one might argue that false authority become a necessary evil (in order to punish evil). However, in such a case it is understood that in order for government to be “legitimate” it must get it’s authority from the people.

    The right to withdraw consent if fundamental. If you can’t say “no” then you are not free. Do you know anyone who consents to be lied too? I don’t. And yet we are being lied on a regular basis by our government. This begs the question, is it still “our” government or has it become a false authority?

    “Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”
    ― Frédéric Bastiat, The Law

  • Let’s Talk Bitcoin!

    Government is not the same thing as Monopoly. A Government could be a structure too, a framework on which to build society. We just don’t have any governments like that yet.

  • The Three A’s

    Enjoyed the comments to this article and the further discussion in Reddit on this topic. You certainly hit a discussion point nerve on this one. Very well done.

  • Pingback: Separation of Bank and State, The wealth transfer effect of bitcoins / Syria false flag, again | paulthepaperbear

  • Rod

    They are monopolies in their present state. But you are right, the government in my local chess club is not a monopoly because 1) I am not forced to be a part of the chess club 2) I am not forced to pay for the chess club 3) the chess club does not have exclusive jurisdiction over a geographical area. However, local governments do have all of these characteristics. When you say “a framework to build a society” this reminds me of the way the most abusive and authoritarian regimes began, the power to create such a “framework” is the stuff that tyrants are made of.

  • http://unSpy.info/ Mark Matthews

    > Government is not the same thing as Monopoly

    Perhaps, but they do print Monopoly money as a ploy to control and dominate the entire world, er, I mean the entire board game…. but have you ever noticed in this game the bankers never go to jail? Ask yourself this, who has a monopoly on force? The government, that’s who. And who is running the top-secret “Q-Group” that has chasing Edward Snowden since he disappeared in May? Never mind that… who set up the Exchange Stabilization Fund and why?

    If some “Satoshi Nakamoto” of the future were to create self-government code for honest and righteous authority it should change the rules so the money junkies are the one have to work their way around the board and risk going to jail and losing 200 bitcoins. Banks would have to take a risk with the people they loan money too. But how does one do this? Who can write a code that will take false authority out of existence?

    If government were a programmed structure, subject to a mathematical formula it ought to do at least one thing first, bring an end to usury (like Freicoin is trying to do). Tax on money sounds like a good idea if it can be enforced. Freicoin’s parameters are carefully chosen to eliminate the basic interest component of investments, called the “liquidity premium” by economists. The supporters of this ALT-COIN claim usurious non-zero basic interest distorts the free market, incentivises poisonous greed, excess, and short-term thinking, and perpetuates a vicious cycle of boom/bust recessions. Their answer: tax money.

    A friend wrote me: “I’m not sure that you can separate banks from state without killing the state. And once you kill the state, the banks can have their way with what was once the public. I know it’s hard to imagine anything worse than public government owned by private banks. But once you take public government out of the equation, the banks become the government. Try to form your own alternatives, and the private banks will just hire thugs to sabotage your plans. Out of the frying pan, into the fire.”

    My response: Too late! We’re there already.

    “Sure,” he writes back, “bitcoin is more decentralized than the Fed. But that doesn’t mean it can’t centralized very quickly. There’s nothing stopping most of the bitcoin from falling into too few hands. And it can happen even faster if it’s anonymous. Anonymity is not the way. Transparency is the way.”

    I’d say compeateing currency is the way, but if you think transparency is the answer, then write the code. I just want to get out from under the current ruling elite and their Fabian socialist puppets who currently have a monopoly on power in all the Western so-called democracies. Enough already. Full stop to the globalist tyranny. I want my freedom back, I want my sovereignty as a citizen.

  • Pingback: BTC ‘what a genius’ solution | paulthepaperbear