Principles of Economy
by Martin A. Armstrong
Throughout the course of man’s history, government has always been in pursuit of not merely power but wealth. Regardless of the form of government, we find that it is often the “reluctant receipiant” of its own consequences.
Government has always been the source of major inflation. Over time, this has been created by the debasement of coinage prior to the invention of paper money or the printing of currency since the 18th century. The record of history clearly demonstrates that republics, democracies, dictatorships and monarchies have all acted in the same manner for the very same reasons – the pursuit of power.
During the Great Monetary Reform of 211 BC, the Roman Republic devalued its main currency by 50% – the bronze Roman As. This devaluation, according to Pliny the Elder, enabled the government to pay-off its war debts. At the same time, they then refused to accept taxes in the new devalued bronze coinage and instead assessed all weath in terms of silver.
Under the imperial reign of Valentinian I, we find that the Roman government refused to accept its own currency in payment of taxes. Instead, all coin was melted down and taxes collected according to weight rather than by denomination. The number of underweight gold solidii in circulation meant that government had for years cheated the public in terms of bullion. With that degree of underweight currency in circulation, the government felt that it was being cheated on its revenues and hence ordered taxes to be paid by weight.
One of the causes of the American Revolution was a decree by King George III that all taxes collected from America were to be paid in silver or gold. When money to the colonies was to be paid, England paid in copper. Obviously, such a situation would become intollerable and as such the American Revolution was born due to this reluctant receipiant.
The battle over taxation within the United States during the late 20th century is another example of the reluctant receipiant. Democrats for decades opposed any cut in capital gains taxation rates. When a cut was finally introduced in 1997, it still was not INDEXED to inflation. This is an example of tyrany as in any other example. By refusing to index taxation for the effects of inflation, they are in modern ways refusing to accept the consequences of their own actions. Like Valentinian I, they refuse to accept the depreciated currency in payment for taxes and instead insist upon collecting capital gains taxes in terms of pre-inflation currency. Tyrany is still tryany regardless of the form of government.
If man is ever to learn from the mistakes of the past, we must safeguard against government refusing to accept the consequences of its own fiscal irresponsibility. At NO time, may taxation be treated any different from government’s own monetary policy. This above all, cheats mankind out of his labour for the sole benefit of the state. In a new consitution, this must be one of the key principals of moral foundation.