What is the origin of money? What are the conditions under which nations
always have money, and under what circumstances need nations not use
money?
There are small tribes in Africa, and one in Australia, who live as the
Sknepies and the Drevlyans lived in olden times. These tribes lived by
breeding cattle and cultivating gardens. We become acquainted with them
at the dawn of history, and history begins by recording the fact that
some invaders appear on the scene. And invaders always do the same
thing: they take away from the aborigines everything they can
take,--cattle, corn, and cloth; they even make prisoners, male and
female, and carry them away.
In a few years the invaders appear again, but the people have not yet
got over the consequences of their first misfortunes, and there is
scarcely anything to take from them; so the invaders invent new and
better means of making use of their victims.
These methods are very simple, and present themselves naturally to the
mind of all men. The _first_ is personal slavery. There is a drawback to
this, because the invaders must take over the entire control and
administration of the tribe, and feed all the slaves; hence, naturally,
there appears the _second_. The people are left on their own land, but
this becomes the recognized property of the invaders, who portion it out
among the leading military men, by whose means the labour of the tribe
is utilized and transferred to the conquerors.
But this, too, has its drawback. It is inconvenient to have to oversee
all the production of the conquered people, and thus the _third_ means
is introduced, as primitive as the two former; this is, the levying of a
certain obligatory tax to be paid by the conquered at stated periods.
The object of conquest is to take from the conquered the greatest
possible amount of the product of their labour. It is evident, that, in
order to do this, the conquerors must take the articles which are the
most valuable to the conquered, and which at the same time are not
cumbersome, and are convenient for keeping,--skins of animals, and gold.
So the conquerors lay upon the family or the tribe a tax in these skins
or gold, to be paid at fixed times; and thus, by means of this tribute,
they utilize the labour of the conquered people in the most convenient
way.
When the skins and the gold have been taken from the original owners,
they are compelled to sell all they have amongst themselves to obtain
more gold and skins for their masters; that is, they have to sell their
property and their labour.
So it was in ancient times, in the Middle Ages, and so it occurs now. In
the ancient world, where the subjugation of one people by another was
frequent, personal slavery was the most widespread method of
subjugation, and the centre of gravity in this compulsion, owing to the
non-recognition of the equality of men. In the Middle Ages,
feudalism--land-ownership and the servitude connected with it--partly
takes the place of personal slavery, and the centre of compulsion is
transferred from persons to land. In modern times, since the discovery
of America, the development of commerce, and the influx of gold (which
is accepted as a universal medium of exchange), the money tribute has
become, with the increase of state power, the chief instrument for
enslaving men, and upon this all economic relations are now based.
In "The Literary Miscellany" there is an article by Professor Yanjoul in
which he describes the recent history of the Fiji Islands. If I were
trying to find the most pointed illustration of how in our day the
compulsory money payment became the chief instrument in enslaving some
men by others, I could not imagine anything more striking and convincing
than this trustworthy history,--history based upon documents of facts
which are of recent occurrence.
In the South-Sea Islands, in Polynesia, lives a race called the Fiji.
The group on which they live, says Professor Yanjoul, is composed of
small islands, which altogether comprise about forty thousand square
miles. Only half of these islands are inhabited, by a hundred and fifty
thousand natives and fifteen hundred white men. The natives were
reclaimed from savagery a long time ago, and were distinguished among
the other natives of Polynesia by their intellectual capacities. They
appear to be capable of labour and development, which they proved by the
fact that within a short period they became good workmen and cattle
breeders.
The inhabitants were well-to-do, but in the year 1859 the condition of
their state became desperate: the nation and its representative, Kakabo,
were in need of money. This money, forty-five thousand dollars, was
wanted as compensation or indemnification demanded of them by the United
States of America for violence said to have been done by Fijis to some
citizens of the American Republic.
To collect this, the Americans sent a squadron, which unexpectedly
seized some of the best islands under the pretext of guaranty, and
threatened to bombard and ruin the towns if the indemnification were not
paid over on a certain date to the representatives of America.
The Americans were among the first colonists who came to the Fiji
Islands with the missionaries. They chose and (under one pretext or
another) took possession of the best pieces of land on the islands, and
established there cotton and coffee plantations. They hired whole crowds
of natives, binding them by contracts unknown to this half-civilized
race, or they acted through special contractors and dealers of human
merchandise.
Misunderstandings between these master planters and the natives, whom
they considered almost as slaves, were unavoidable, and it was some of
these quarrels which served as a pretext for the American
indemnification.
Notwithstanding their prosperity the Fijis had preserved almost up to
that time the forms of the so-called natural economy which existed in
Europe during the Middle Ages: money was scarcely in circulation among
them, and their trade was almost exclusively on the barter basis,--one
merchandise being exchanged for another, and the few social taxes and
those of the state being paid in rural products. What could the Fijis
and their King Kakabo do, when the Americans demanded forty-five
thousand dollars under terrible threats in the event of nonpayment? To
the Fijis the very figures seemed inconceivable, to say nothing of the
money itself, which they had never seen in such large quantities. After
deliberating with other chiefs, Kakabo made up his mind to apply to the
Queen of England, at first merely asking her to take the islands under
her protection, but afterwards requesting definite annexation.
But the English regarded this request cautiously, and were in no hurry
to assist the half-savage monarch out of his difficulty. Instead of
giving a direct answer, they sent special commissioners to make
inquiries about the Fiji Islands in 1860, in order to be able to decide
whether it was worth while to annex them to the British Possessions, and
to lay out money to satisfy the American claims.
Meanwhile the American Government continued to insist upon payment, and
as a pledge held in their _de facto_ dominion some of the best parts,
and, having looked closely into the national wealth, raised their former
claim to ninety thousand dollars, threatening to increase it still more
if Kakabo did not pay at once.
Being thus pushed on every side, and knowing nothing of European means
of credit accommodation, the poor king, acting on the advice of European
colonists, began to try to raise money in Melbourne among the merchants,
cost what it might, if even he should be obliged to yield his kingdom
into private hands.
So in consequence of his application a commercial society was formed in
Melbourne. This joint-stock company, which took the name of the
"Polynesian Company," formed a treaty with the chiefs of the
Fiji-Islanders on the most advantageous terms. It took over the debt to
the American Government, pledging itself to pay it by several
instalments; and for this the company received, according to the first
treaty, one, and then two hundred thousand acres of the best land,
selected by itself; perpetual immunity from all taxes and dues for all
its factories, operations, and colonies, and the exclusive right for a
long period to establish banks in the Fiji Islands, with the privilege
of issuing unlimited notes.
This treaty was definitely concluded in the year 1868, and there has
appeared in the Fiji Islands, side by side with the local government, of
which Kakabo is the head, another powerful authority,--a commercial
organization, with large estates over all the islands, exercising a
powerful influence upon the government.
Up to this time the wants of the government of Kakabo had been satisfied
with a payment in local products, and a small custom tax on goods
imported. But with the conclusion of the treaty and the formation of the
influential "Polynesian Company," the king's financial circumstances had
changed.
A considerable part of the best land in his dominion having passed into
the hands of the company, his income from the land had therefore
diminished; on the other hand the income from the custom taxes also
diminished, because the company had obtained for itself the right to
import and export all kinds of goods free of duties.
The natives--ninety-nine per cent. of the population--had never paid
much in custom duties, as they bought scarcely any of the European
productions except some stuffs and hardware; and now, from the freeing
of custom duties of many well-to-do Europeans along with the Polynesian
Company, the income of King Kakabo was reduced to _nil_, and he was
obliged to take steps to resuscitate it if possible.
He began to consult his white friends as to the best way to remedy the
trouble, and they advised him to create the first direct tax in the
country; and, in order, I suppose, to have less trouble about it, to
make it in money. The tax was established in the form of a general
poll-tax, amounting to one pound for every man, and to four shillings
for every woman, throughout the islands.
As I have already said, there still exists on the Fiji Islands a natural
economy and a trade by barter. Very few natives possess money. Their
wealth consists chiefly of raw products and cattle; whilst the new tax
required the possession of considerable sums of money at fixed times.
Up to that date a native had not been accustomed to any individual
burden in the interests of his government, except personal obligations;
all the taxes which had to be paid, were paid by the community or
village to which he belonged, and from the common fields from which he
received his principal income.
One alternative was left to him,--to try to raise money from the
European colonists; that is, to address himself either to the merchant
or to the planter.
To the first he was obliged to sell his productions on the merchant's
own terms (because the tax-collector required money at a certain fixed
date), or even to raise money by the sale of his expected harvest, which
enabled the merchant to take iniquitous interest. Or he had to address
himself to the planter, and sell him his labour; that is, to become his
workman: but the wages on the Fiji Islands were very low (owing, I
suppose, to the exceptionally great supply of labour); not exceeding a
shilling a week for a grown-up man, or two pounds twelve shillings a
year; and therefore, merely to be able to get the money necessary to pay
his own tax, to say nothing of his family, a Fiji had to leave his
house, his family, and his own land, often to go far away to another
island, and enslave himself to the planter for at least half a year;
even then there was the payment for his family, which he must provide by
some other means.
We can understand the result of such a state of affairs. From his
hundred and fifty thousand subjects, Kakabo collected only six thousand
pounds; and so there began a forcible extortion of taxes, unknown till
then, and a whole series of coercive measures.
The local administration, formerly incorruptible, soon made common cause
with the European planters, who began to have their own way with the
country. For nonpayment of the taxes the Fijis were summoned to the
court, and sentenced not only to pay the expenses but also to
imprisonment for not less than six months. The prison really meant the
plantations of the first white man who chose to pay the tax-money and
the legal expenses of the offender. Thus the white settlers received
cheap labour to any amount.
At first this compulsory labour was fixed for not longer than half a
year; but afterwards the bribed judges found it possible to pass
sentence for eighteen months, and even then to renew the sentence.
Very quickly, in the course of a few years, the picture of the social
condition of the inhabitants of Fiji was quite changed.
Whole districts, formerly flourishing, lost half of their population,
and were greatly impoverished. All the male population, except the old
and infirm, worked far away from their homes for European planters, to
get money necessary for the taxes, or in consequence of the law court.
The women on the Fiji Islands had scarcely ever worked in the fields, so
that in the absence of the men, all the local farming was neglected and
went to ruin. And in the course of a few years, half the population of
Fiji had become the slaves of the colonists.
To relieve their position the Fiji-Islanders again appealed to England.
A new petition was got up, subscribed by many eminent persons and
chiefs, praying to be annexed to England; and this was handed to the
British consul. Meanwhile, England, thanks to her scientific
expeditions, had time not only to investigate the affairs of the
islands, but even to survey them, and duly to appreciate the natural
riches of this fine corner of the globe.
Owing to all these circumstances, the negotiations this time were
crowned with full success; and in 1874, to the great dissatisfaction of
the American planters, England officially took possession of the Fiji
Islands, and added them to its colonies. Kakabo died, his heirs had a
small pension assigned to them, and the administration of the islands
was intrusted to Sir Hercules Robinson, the Governor of New South Wales.
In the first year of its annexation the Fiji-Islanders had no
self-government, but were under the direction of Sir Hercules Robinson,
who appointed an administrator.
Taking the islands into their hands, the English Government had to
undertake the difficult task of gratifying various expectations raised
by them. The natives, of course, first of all expected the abolition of
the hated poll-tax; one part of the white colonists (the Americans)
looked with suspicion upon the British rule; and another part (those of
English origin) expected all kinds of confirmations of their power over
the natives,--permission to enclose the land, and so on. The English
Government, however, proved itself equal to the task; and its first act
was to abolish for ever the poll-tax, which had created the slavery of
the natives in the interest of a few colonists.
But here Sir Hercules Robinson had at once to face a difficult dilemma.
It was necessary to abolish the poll-tax, which had made the Fijis seek
the help of the English Government; but, at the same time, according to
English colonial policy, the colonies had to support themselves; they
had to find their own means for covering the expenses of the government.
With the abolition of the poll-tax, all the incomes of the Fijis (from
custom duties) did not amount to more than six thousand pounds, while
the government expenses required at least seventy thousand a year.
Having abolished the money tax, Sir Hercules Robinson now thought of a
labour tax; but this did not yield the sum necessary to feed him and his
assistants. Matters did not mend until a new governor had been
appointed,--Gordon,--who, to get out of the inhabitants the money
necessary to keep him and his officials, resolved not to demand money
until it had come sufficiently into general circulation on the islands,
but to take from the natives their products, and to sell them himself.
This tragical episode in the lives of the Fijis is the clearest and best
proof of the nature and true meaning of money in our time.
In this illustration every essential is represented. The first
fundamental condition of slavery,--the guns, threats, murders, and
plunder,--and lastly, money, the means of subjugation which has
supplanted all the others. That which in an historical sketch of
economical development, has to be investigated during centuries, we have
here, where all the forms of monetary violence have fully developed
themselves, concentrated in a space of ten years.
The drama begins thus: the American Government sends ships with loaded
guns to the shores of the islands, whose inhabitants they want to
enslave. The pretext of this threat is monetary; but the beginning of
the tragedy is the levelling of guns against all the inhabitants,--women,
children, old people, and men,--though innocent of any crime.
"Your money or your life,"--forty-five thousand dollars, then
ninety thousand or slaughter. But the ninety thousand are not to be had.
So now begins the second act: it is the postponement of a measure which
would be bloody, terrible, and concentrated in a short period; and the
substitution of a suffering less perceptible, which can be laid upon
all, and will last longer. And the natives, with their representative,
seek to substitute for the massacre a slavery of money. They borrow
money, and the method at once begins to operate like a disciplined army.
In five years the thing is done,--the men have not only lost their right
to utilize their own land and their property, but also their
liberty,--they have become slaves.
Here begins act three. The situation is too painful, and the unfortunate
ones are told they may change their master and become the slaves of
another. Of freedom from the slavery brought about by the means of money
there is not one thought. And the people call for another master, to
whom they give themselves up, asking him to improve their condition. The
English come, see that dominion over these islanders will give them the
possibility of feeding their already too greatly multiplied parasites,
and take possession of the islands and their inhabitants.
But it does not take them in the form of personal slaves, it does not
take even the land, nor distribute it among its assistants. These old
ways are not necessary now: only one thing is necessary,--taxes which
must be large enough on the one hand to prevent the workingmen from
freeing themselves from virtual slavery, and on the other hand, to feed
luxuriously a great number of parasites. The inhabitants must pay
seventy thousand pounds sterling annually,--that is the fundamental
condition upon which England consents to free the Fijis from the
American despotism, and this is just what was wanting for the final
enslaving of the inhabitants. But it turns out that the Fiji-Islanders
cannot under any circumstances pay these seventy thousand pounds in
their present state. The claim is too great.
The English temporarily modify it, and take a part of it out in natural
products in order that in time, when money has come into circulation,
they may receive the full sum. They do not behave like the former
company, whose conduct we may liken to the first coming of savage
invaders into an uncivilized land, when they want only to take as much
as possible and then decamp; but England behaves like a more
clear-sighted enslaver; she does not kill at one blow the goose with the
golden eggs, but feeds her in order that she may continue to lay them.
England at first relaxes the reins for her own interest that she may
hold them tight forever afterwards, and so has brought the
Fiji-Islanders into that state of permanent monetary thraldom in which
all civilized European people now exist, and from which their chance of
escape is not apparent.
This phenomenon repeats itself in America, in China, in Central Asia;
and it is the same in the history of the conquest of all nations.
Money is an inoffensive means of exchange when it is not collected while
loaded guns are directed from the sea-shore against the defenceless
inhabitants. As soon as it is taken by the force of guns, the same thing
must inevitably take place which occurred on the Fiji Islands, and has
always and everywhere repeated itself.
Men who consider it their lawful right to utilize the labour of others,
will achieve their ends by the means of a forcible demand of a sum of
money which will compel the oppressed to become the slaves of the
oppressors.
Moreover, that will happen which occurred between the English and the
Fijis,--the extortioners will always, in their demand for money, rather
exceed the limit to which the amount of the sum required must rise, so
that the enslaving may be earlier. They will respect this limit only
while they have moral sense and sufficient money for themselves: they
will overstep it when they lose their moral sense or even do not require
funds.
As for governments, they will always exceed this limit,--first, because
for a government there exists no moral sense of justice; and secondly,
because, as everyone knows, every government is always in the greatest
want of money, through wars and the necessity of giving gratuities to
their allies. All governments are insolvent, and involuntarily follow a
maxim expressed by a Russian statesman of the eighteenth century,--that
the peasant must be sheared of his wool lest it grow too long. All
governments are hopelessly in debt, and this debt on an average (not
taking in consideration its occasional diminution in England and
America) is growing at a terrible rate. So also grow the budgets; that
is, the necessity of struggling with other extortioners, and of giving
presents to those who assist in extortion, and because of that grows the
land rent.
Wages do not increase, not because of the law of rent, but because
taxes, collected with violence, exist, with the object of taking away
from men their superfluities, so that they may be compelled to sell
their labour to satisfy them,--utilizing their labour being the aim of
raising the taxes.
And their labour can only be utilized when, on a general average, the
taxes required are more than the labourers are able to give without
depriving themselves of all means of subsistence. The increase of wages
would put an end to the possibility of slavery; and therefore, as long
as violence exists, wages can never be increased. The simple and plain
mode of action of some men towards others, political economists term
_the iron law_; the instrument by which such action is performed, they
call a medium of exchange; and money is this inoffensive medium of
exchange necessary for men in their transactions with each other.
Why is it, then, that, whenever there is no violent demand for money
taxes, money in its true signification has never existed, and never can
exist; but, as among the Fiji-Islanders, the Phoenicians, the Kirghis,
and generally among men who do not pay taxes, such as the Africans,
there is either a direct exchange of produce, sheep, hides, skins, or
accidental standards of value, such as shells?
A definite kind of money, whatever it may be, always becomes not a means
of exchange, but a means of ransoming from violence; and it begins to
circulate among men only when a definite standard is compulsorily
required from all.
It is only then that everybody wants it equally, and only then does it
receive any value.
And further, it is not the thing that is most convenient for exchange
that receives exchange value, but that which is required by the
government. If gold is demanded, gold becomes valuable: if knuckle-bones
were demanded, they, too, would become valuable. If it were not so, why,
then, has the issue of this means of exchange always been the
prerogative of the government? The Fiji-Islanders, for instance, have
arranged among themselves their own means of exchange; well, then, let
them be free to exchange what and how they like, and you, men possessing
power, or the means of violence, do not interfere with this exchange.
But instead of this you coin money, and do not allow anyone else to coin
it; or, as is the case with us, you merely print some notes, engraving
upon them the heads of the tsars, sign them with a particular signature,
and threaten to punish every falsification of them. Then you distribute
this money to your assistants, and, under the name of duties and taxes,
you require everybody to give you such money or such notes with such
signatures, and so many of them, that a workman must give away all his
labour in order to get these notes or coins; and then you want to
convince us that this money is necessary for us as a means of exchange!
Here are all men free, and none oppresses the others or keeps them in
slavery; but money appears in society and immediately an iron law
exists, in consequence of which rent increases and wages diminish to the
minimum.
That half (nay, more than half) of the Russian peasants, in order to pay
direct and indirect taxes, voluntarily sell themselves as slaves to the
land-owners or to manufacturers, does not at all signify (which is
obvious); for the violent collection of the poll-taxes and indirect and
land taxes, which have to be paid in money to the government and to its
assistants (the landowners), _compels_ the workman to be a slave to
those who own money; but it means that this money, as a means of
exchange, and an iron law, exist.
Before the serfs were free, I could compel Iván to do any work; and if
he refused to do it, I could send him to the police-sergeant, and the
latter would give him the rod till he submitted. But if I compelled Iván
to overwork himself, and did not give him either land or food, the
matter would go up to the authorities, and I should have to answer for
it.
But now that men are free, I can compel Iván and Peter and Sidor to do
every kind of work; and if they refuse I give them no money to pay
taxes, and then they will be flogged till they submit: besides this, I
may also make a German, a Frenchman, a Chinaman, and an Indian, work for
me by that means, so that, if they do not submit, I shall not give them
money to hire land, or to buy bread, because they have neither land nor
bread. And if I make them overwork themselves, or kill them with excess
of labour, nobody will say a word to me about it; and, moreover, if I
have read books on political economy I shall be quite sure that all men
are free and that money does not create slavery!
Our peasants have long known that with a ruble one can hurt more than
with a stick. It is only political economists who cannot see it.
To say that money does not create bondage, is the same as to have
asserted, fifty years ago, that serfdom did not create slavery.
Political economists say that money is an inoffensive medium of
exchange, notwithstanding the fact that its possession enables one man
to enslave another. Why, then, was it not said half a century ago that
servitude was, in itself, an inoffensive medium of reciprocal services,
notwithstanding the fact that no man could lawfully enslave another?
Some give their manual labour, and the work of others consists in taking
care of the physical and intellectual welfare of the slaves, and in
superintending their efforts.
And, I fancy, some really did say this.