Kudos to The Bell for being the first to recognize Dr. Brown as the founder of a new Monetary Science – Brownian, ranking her with Keynes and Mises. Sweet. As Ellen has already responded and pointed out – she didn't make any of this up – she's standing on the shoulders of some great researchers, thinkers and philosophers – Franklin to Aristotle and all the way back to ancient Sumer. So her creative genius is being able to weave the Science of Money into a good tale. She has a knack for deconstructing the "econobabble" of the Establishment's Priesthood and making the purposely inscrutable principles of finance and banking easily understood by common men like me. – Jimi Bigbear, Daily Bell email
Dominant Social Theme: Money democracy of the state?
Free-Market Analysis: Still more emails continue to flow in on this topic! We didn't really want to return to Ms. Brown who has been patient all week long while we have tried as best we can to unravel her perspective – and the perspective of her influences — on money and the state. It is an important issue because she has actually synthesized a popular world view distinctly different than that of the Austrians and of course the Keynesians. We have given it a name – Brownian.
The Brownian view, to restate as best we can, is that a kind of communal money controlled via the community (not in the hands of modern bankers), one that would be perhaps interest free or at least not divisively acquisitive, is preferable to the current commercial banking and central banking of modern Western culture.
Additionally, the Brownian view is that apparently money is the province of the state and did not exist before the state – and is not necessarily backed by a specific commodity. Finally, there seems to be an element of feminism in the sense that the Brownian viewpoint identifies some monetary experiments that are deemed successful as matriarchal and the current failed Western system (we agree it is failing) as historically patriarchical.
While we jumped on a remark Ms. Brown sent us in an email about Depression-era paper money in a previous article on the subject, we should have pointed out that her historical perspective does extend backward significantly and that she grounds her arguments in a version of the historical, monetary process.
Our biggest issue with Brownian thinking then is that the monetary diagnosis being made is selective. She would hasten to point out that it is not her interpretation alone, but nonetheless it is an argument that is strange for those who believe in classical gold and silver monetary history and theory.
The hardest part of the Brownian approach for some to accept (we among them) is that gold and silver were not money apparently until the state coined the metal. We are not sure why this is such an important issue from a Brownian standpoint except that it perhaps sets up a paradigm in which those who want better money must insist that the state provide and protect it properly.
Brownian theory as we understand it has selected historical episodes of better money production (issued into the community apparently without aggressive debt attached and supervised by the state but not controlled by it) and has made the diagnosis that these episodes have triggered epochal prosperity throughout history around the world. One of the remarks Ms. Brown makes is that this sort of money existed in Britain for about 600 years and helped lay the groundwork for the Renaissance. By identifying epochs of prosperity and linking them to publicly controlled and non-usurious money, Ms. Brown makes a case for a certain economic framework that will buttress human endeavor and prosperity.
As free-market analysts, the problem we continue to have with the Brownian approach is that it downplays the role of private enterprise in creating money and substitutes a wise (if non-interfering) state for free-market currencies. The Brownian point would be that public money of some sort, issued out by the state instead of private "banksters" has proven time and again to be an engine of prosperity.
Yet this is a second area of disagreement so far as we are concerned (the first being the evolution of gold and silver as money). We identify epochs of great human vitality as having occurred as far back as Minoa some 5,000 years ago – which was possibly a decentralized trading culture and the foundation for the myth of Atlantis.
The second great Western historical efflorescence of thought came during the Athenian golden age when the scientific method was first propounded and philosopher-scholars taught among the groves of Academe. A third efflorescence came during the Roman Republic, a fourth during the Renaissance and a fifth during colonial America. Other eras of great intellectual accomplishment and social vitality can be found in China, India, Persia, Africa and elsewhere.
Brownian analysis might explain these various efflorescences as primarily monetary in nature. But from our point of view, many of these had to do with two factors. First there were distinct governmental units side by side with the same language. And second, individuals could migrate from one state to another. When citizens in one Greek nation state wore out a welcome, they could move to another nation state without entirely disrupting their culture and life's work. In Italy, the tiny city-states of the Renaissance provided the same sort of framework. The 13 states of colonial America did too. In each of these instances and many others so far as we can tell, historically, the ability to migrate from one place to another to avoid state sanction and oppression was key to unlocking human potential.
This is a critical point. From a free-market perspective the state NEVER seems to provide the wherewithal for true creativity or human progress within a Western tradition. It is only escaping from the state that does the trick. From a Brownian perspective, a better money does make a better state. But history seems to show that great periods of human endeavor corresponded with the ability to move freely from one state to another within a familiar linguistic tradition – and to avoid the state's influence altogether wherever possible.
The great free-market economist Murray Rothbard proclaimed himself stumped at one point because he could not figure out the historical precepts for the Athenian golden age. But Rothbard lived in a pre-Internet age. Today, plenty of material is available on the ‘Net if one knows where to look that deals with the issue of human creativity and industry and social and state structure.
The Brownian point of view is certainly more subtle than the Keynesian point of view. Ms. Brown herself has impressive and adult intellect. But Brownianism still apparently wishes to work within a state or communal setting to create a "better" money – and therefore a better community.
Our reading of history is that it was not money per se but certain sociopolitical conditions that mitigated state control of any type and created explosions of human talent and creativity we all have benefited from. A corollary of such freedom of movement and intellectual endeavor often seems to be the use of a private system of honest money – gold and silver.
The freer the marketplace and the freer the money, the better the result, in our estimation. It is not better money but freedom on all fronts – and the most minimal government possible – that lay the groundwork for great human endeavors and progress for all. "Improving" the state or the state's money is always an attractive idea. But ultimately the state is most difficult to improve. We would rather argue for freer markets than an improved government or an improved government-related money. Hope this is not unfair to Brownians or to Ms. Brown's impressive accomplishments and analysis.