Sunday, May 9, 2010

Cook St. Village

I hate to say it too loudly, but this weekend we are finally getting a hint of summery weather. The horse chestnuts in Cook St Village are clad in their finest plumage, the blossoms shaped like vanilla ice cream cones. Most are very old, many of them rotted out on the inside. Pretty well every year one of them has to come down, whether by city work crews or high winds. I suppose if I could live anywhere in Victoria, it would be on any of the quiet, tree lined streets that flank Cook St Village. Easy walking distance to downtown, adjacent to Beacon Hill Park, and at the bottom, the ocean. It has a nice little bookstore, a few restaurants, coffee houses, and a decent Chinese grocery which provide most of the needful amenities- including a watering hole.
Street Market season has begun, and I went by the one in James Bay yesterday before the crowds were out. Quite homey and pleasant. I like the idea of people making things and offering them up for purchase. It's capitalism and free enterprise at its purest. Everybody gains, and the community as a whole is enhanced, made a little richer by this reciprocal relationship.
We all take these things so much for granted. Quiet, peaceful streets, friendly relationships with our neighbours, they are the essence of civilized life. We are so used to things being like this we forget how fragile it all is, how rare in history, and in the world at large.
But fragile it is, and one of the most underrated contributors to our welfare is something many of us pretend to despise while most of us do our best to accumulate as much of it as possible. I mean money. Filthy lucre. The love of which is the root of all evil. What Marxist purists wish to abolish. Even Aristotle, so prescient about so much, had an animus against lowly traders, who he believed should not be considered full fledged citizens. Money had not existed for very long in his day, but he was pretty sure that people who only bought and sold rather than made things were somehow a lower class of humanity.
Okay, a quick and dirty history of money.
Stage one: use of coins made of precisely measured discs of rare metals, mostly gold, silver and copper replaced the cumbersome bartering system. The fact that gold, though attractively coloured and shiny, is not especially useful by itself, and is uncommon as well as being incorruptible made it the material of choice. Coins had two properties. First, they were a unit of value against which any commodity could be measured. It's due to this characteristic that trade expanded rapidly after the invention of coins. The other property is that it was a store of value. You could sock it away for years buried in the back yard where bandits and invading armies couldn't find it. That's something you can't do with, say, a ton of hamburger.
Stage two: replacement of metals with entries in a book. This development seems to have occurred among the money traders of late medieval Italy. Our word bank comes from the Italian word for bench, which was what the Florentine money traders set up just like the trinket vendors do at the James Bay Market. Except in Florence it was the money trader who financed shiploads of merchandise. It was possible to become quite wealthy. It was also possible, and common, to come to ruin. At any rate, they found out that it was cheaper and safer to ship paper than to ship gold and silver. At first, the paper took the form of certificates and contracts. Very quickly these contracts became tradable by themselves, the transactions recorded in books. The trouble with gold was that if you wanted to save it you had to take it out of circulation. The advantage of keeping your assets in an entry on paper is that now it is available to be invested somewhere else. That's why Western economies have grown exponentially since then.
I'm trying to keep this short and simple, so I'll go straight to the point. Money is a figment of our imagination. Yes, money is made out of tangible paper and metal, but these are just markers. It's simple to use on an everyday level, but very hard to understand when it comes to monetary theory. Because though imaginary, it only works as long as certain rules are obeyed, and not even the experts know exactly what they can get away with without destroying a currency. When Roman emperors needed more money they diluted the gold in the coinage. When Robert Mugabe destroyed his country's economy he printed more money. But the trouble is the more you print the less value it has, so now it costs more to print the money than it's worth, no matter how many zeroes are on the bill.
This lesson should have been learned by now, because it has happened many times before.You could say that, "Oh, well, it's only Zimbabwe." When it was Rhodesia it had one of the strongest agricultural economies in Africa. Now the people don't have enough to eat. But now Greece looks like it could be on the verge of dragging down the Euro. And the Obama administration seems as clueless as Mugabe. Unless... George Soros has been a long standing patron of Obama's career, and George Soros has made his billions from currency devaluations in Britain and Southeast Asia. When everybody's savings are wiped out, he swoops in and buys everything up for cheap. I'm just sayin'.
Without a stable currency it is no longer possible to have a modern economy. Savings and pensions are wiped out. And I don't think anybody really understands how it all works, not even George Soros. He just knows enough to game the system, and since he is entirely lacking in scruples he will game it no matter what the cost to the rest of us. He's getting pretty old. Hopefully he'll die pretty soon.
All our currencies are vulnerable, and I believe it's because of our adoption of the socialist agenda. Socialists don't seem to understand how wealth is created. They only know how to divvy it up. As somebody once said, when a politician promises to rob Peter to pay Paul, he will usually get Paul's vote. But what happens when Peter runs out of money- or just decides not to work anymore? Then there's nothing left to divvy up.
Capitalist free enterprise is the most efficient way to organize human creativity and industry ever devised. It doesn't work if people are not allowed to benefit from their own efforts. If we want to stay prosperous and comfortable we had better wise up pretty fast. Without a healthy currency James Bay Market would not be possible.

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