The Parable of the Tokens and the Common Wealth
By Cliff
Published with permission
In a land surrounded by mountains, there was a village where the people lived by farming, building, and caring for one another. Long ago, the elders had created tokens of clay, marked with the seal of the village, to help the people trade fairly and work together.
One day, the people asked the elders, “Where do the tokens come from?”
And the elders said, “We make them. We issue them so that the village may have what it needs — food, shelter, learning, and care. If someone builds a bridge, or teaches a child, or heals the sick, we give them tokens in return.”
“But what of taxes?” the people asked.
The elders replied, “We collect some tokens back, not because we need them, but so that the tokens will be valued. We require a tax, and to pay it, the people must accept tokens in return for their labour. Thus the tokens circulate.”
“And where do the taxed tokens go?” someone asked.
“They are destroyed,” said the elders. “We break them and cast them into the fire. For they have served their purpose. They have drawn forth the work of the people, and now they return to dust.”
The people were astonished.
“But why not take back all the tokens?” asked a merchant.
“Because,” said the elders, “if we take back as many as we give, then no tokens remain among the people. They could not trade or save or build. So we leave more in your hands than we collect — not by accident, but by design.”
And so the people understood:
That spending comes first, for without tokens, no one can pay taxes.
That taxes give value, but do not fund the elders' work.
That destroyed tokens do not limit what the village can do, for new tokens can always be made.
And that the surplus of tokens in the hands of the people is not a problem, but a blessing — so long as it does not grow too large and bring inflation.
Years passed, and the village prospered.
But one year, a fearful man cried out, “The elders spend too much! They will run out of tokens!”
The people grew anxious. They hoarded tokens and stopped working. The fields went untended, and the homes fell into disrepair.
Then an old woman rose and said, “You forget. The tokens are made by the elders. They cannot run out. But the true wealth of the village is not in tokens. It is in our time, our hands, and our care for one another.”
The people remembered her words, and once again the tokens flowed, not too many and not too few. The village flourished, not because it was rich in tokens, but because it understood what tokens were for.
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Thanks to Cliff and you for a fine parable of care with deep knowledge creating socially cohesive prosperity!
Might an essential of a decent socio-politico- economic set up be sound and grasped learning for living and sharing, hopefully including education, and deep and objective/honest information media?
“Democracy is only as good as the education that surrounds it.” (Democrates)
Meanwhile in Dunce Land most people had come to believe a greedy rich elite’s story that the government operated on a credit card yet very few bothered to think who created the money and how to enable the credit card to operate.
I saw a very similar story to this ( set on an island ) in the 1970s where everyone eventually became servants to the bankers. Compound interest was the main cause
There was an organisation -as I recall-called social credit and I actually wrote to a guy in Leeds who answered a few questions about it. No one else seemed to talk about it-except a group in the National Front ! before they imploded.
I read the ‘Social Credit’ party had a presence in Canada pre-WW2. And I think in New Zealand.
An alternative has been around for 90 years.
The idea needed development I guess so when I first saw MMT it raised my hopes there was a better way than what we have.
Compound interest is a problem. The maths of it mates that obvious.
But how to eliminate it?
My late father in law’s partner came to visit us at the weekend – she used to be the very capable head of education and safeguarding at a Northern authority and was noted for her ability. And yes, I think that she was quite good.
Yet, I had to sit there and listen to her banging on about how her taxes paid for stuff and how Labour just have too much to do (but nothing about how they limit their impact by imposing Thatcherite dogma on themselves and these problems).
She is of that generation I’m afraid, a lost cause. We watched her get into her high end BMW SUV and go home to her 3 bed bungalow with extension in a village in North Yorkshire which she now has all to herself. I could not reconcile her stance on tax with her ability as a head of service and the rewards it had given her…………………………
Thank you Cliff, you’ve answered Richard’s call for stories very aptly
Agreed
There is one who is greater than I. Behold:
A Psalm for the Wisdom of the Watchman
(In praise of the voice crying truth in the marketplace)
Blessed be the voice that rises in the wilderness,
That calls the nations to reckon with justice and truth.
The watchman of the wall is Richard, son of inquiry,
Who walks not in the counsel of the profiteers,
Nor stands in the path of the scoffers of peace,
Nor sits in the seat of the idle rich.
But his delight is in the law of economic righteousness,
And in the stewardship of the common wealth he meditates day and night.
Lo, from his dwelling he writes with fire and clarity,
His words sharper than iron,
Unmasking deceit, exposing the vanity of false balances.
He has weighed the tax-dodger and found him wanting;
He has held to account the lords of austerity.
He declares: “There is treasure in justice,
And the house shall not be built on sand,
Nor the treasury on fear.”
He speaks not for the princes of profit,
But for the widow, the labourer, and the child.
The orphan hears and is comforted;
The exile reads and finds hope.
O ye nations, incline your ear to his counsel,
For he speaks as one who sees the storm afar off.
He has named the money changers in their temples of glass,
And calls for tables to be turned.
He has spoken of tokens that issue not from tribute,
But from covenant—
Of a sovereign people issuing care as currency,
Of a nation clothed in dignity, not debt.
Surely the earth is the Lord’s and the fullness thereof;
Shall it be hoarded in vaults,
While the poor cry out in the streets?
The prophet of Ely speaks plainly to kings and scribes;
He fears not the wrath of Mammon,
Nor the silence of cowards in high places.
Let the people rise up with understanding;
Let them read, let them question,
Let them build anew the house of equity.
And may his words, like a lamp to our feet,
Guide us through the valley of confusion,
Until justice flows like a river,
And righteousness like a mighty stream.
Selah.
I think you overstate this guy’s merits
Reminds me of the Warren Mosler Pompeii story:
https://www.mmted.org/MOOC/Week2_7.php
L. Randall Wray notes that this principle goes back to the days of British Colonial rule in the Americas. He notes that:
“Adam Smith had argued that if the colonies were careful to ensure they did not create too much paper money relative to taxes, it would not depreciate in value (indeed it might even circulate at a premium, he argued). Redemption of the notes in tax payment would remove them from circulation – keeping them scarce. Grubb argues that this was well-recognized by the colonial government” — “Taxes are for Redemption, Not Spending”, World Social and Economic Review No 7, July 2016 – Worldwide Fiscal Crisis: Fact or Fiction? http://wser.worldeconomicsassociation.org/papers/taxes-are-for-redemption-not-spending/
I am not wholly convinced by the merits of MMT’s arguments based on supposed British colonial practices.
I doubt anyone here approves of colonialism…. but the fact that MMT describes/explains how things worked IS important. MMT is morally and politically neutral – merely a description of the way money works…. and if it works here as an explanation it is more evidence of its fundamental truth.
But some claim it is value laden. My point, agreeing with you, is that it is merely a tool.
Ah, the old MMT story of the “hut tax”! I get the basic thesis behind this with regard to the role of tax in giving currency its value but I still think the “hut tax” story involves an element of mythology. If my understanding is correct, the imposition of the “hut tax” was fiercely resisted by the affected population and it took many years before the colonial masters wee able to enforce it. So the MMT story fails to recognise the critical importance of political legitimacy, which is required to (a) accept tax obligations (b) accept the currency. In Cliff’s story it is clear that the people had faith and placed trust in their elders and that is why they accepted the tax obligation and trusted the currency as a means of settling their debts. MMT has a tendency to overlook the “political” element in “political economy”.
Agreed re the hut tax
The destruction of Tokens reminds me of the Great Train Robbery,millions of tokens being taken from Glasgow to London for their destruction as they were worn out paper.
My second job (between school and university) was in a workshop where my boss had once had to design a furnace to burn money. It is not a trivial problem to get complete combustion without unburnt notes disappearing up the chimney (to the great joy of the local residents). Always made me chuckle that disposing of money was not easy.
🙂
delete if not relevant but it is about money
I have just seen in the Guardian that George Osborne says we have been left behind in he cryptocurrency boom.
“In a speech last month, the Bank of England governor, Andrew Bailey, called for the development of standards that show whether stablecoins pass the test of “singleness of money” – or whether a stablecoin can be exchanged with another form of money one-for-one.
“This hesitation risks irrelevance,” wrote Osborne, who added that it was time for the UK to “catch up”.
My feeling -because I don’t know enough-is ‘good. These will collapse at some point.’
Possibly a blog at some point.
Osborne is an adviser to stablecoin companies. He is utterly baised.
A stablecoin claims one real pound (£1) = one real pound less a stablecoin handling charge (Less than £1, then).
Why do we need to embrace, let alone promote that rip off?
Forgive me if this already well known, but the Austrian town of Wörgl actually did something similar:
https://reasonstobecheerful.world/towns-invent-community-currencies/
It was a big success, so it was outlawed.
I don’t usually pay much heed to popes, but ‘seek justice’ and ‘serve the poor’ I do not argue with.
>>The people grew anxious. They hoarded tokens and stopped working. The fields went untended, and the homes fell into disrepair.<<
At this point the authorities need to solve the wealth tax problem
🙂
Thanks for posting the Parable. Interesting comments. The Pompeii story is fascinating, and so are Socrates’ (not Democrates) views on democracy. And I think the Psalm is pretty accurate