An anarchist guide to gold

Our spring issue saw the first in our series, An Anarchist Guide to. It was kicked off by the Debacle Reading Group, an anarchist economics institution and literary experimentation space, who took a closer look at gold and alternative currencies like Bitcoin.

“To be effective, protest against the corporate banking hegemony must rupture the blanket acceptance of government-backed, bank-created fiat money”

Illustration: Lucy Nurnberg

An Anarchist Guide to Gold by The Debacle Reading Group

Some aspects of the dominant economic system we are all a part of – are all subjected to – are so ubiquitous and naturalised that they exist largely unquestioned, even by those that make the interrogation of power their duty. To ask the kind of questions that might genuinely threaten the entrenched corporate and private banking structures blighting our existences, our understanding must go beyond the puppet theatre of media driven politics, into the real terrain of capital: finance, markets and money.

Since 1971, when Richard Milhous Nixon closed the gold window to pay for the Vietnam war, so called ‘free market capitalism’ has been underpinned by a global fiat monetary system backed by nothing more than the faith and credit of individual governments; banks create money as debt, and government’s got their back. Despite the unprecedented scale of government debt, and the ever diminishing trust in politicians, this faith in the dollar, the Euro and the pound largely abides; a belief akin to trusting a proven liar and committed debt-junkie to make good on his i.o.u’s and promises.

To be effective, protest against corporate banking hegemony must rupture the blanket acceptance of government-backed, bank-created fiat debt-money.  A movement of resistance must sew doubt in the minds of the faithful – not just in the ‘fairness’ of corporations and banks, but in our most commonly held conceptions about money. The emperor’s new clothes are made of dollars and pounds; we must train our eyes to see through money and, as ugly as the reality may be, reveal the emperor’s gross nakedness. So let it be shouted in the streets: there’s nothing there! The dollar is worthless and the pound is too.

The threat to power of this anti-fiat position can be guaged by two relatively recent ‘interventions’. It is no secret that the West went to war in both Iraq and Libya to stake bomb-backed claims on oil. What’s less debated is the evidence that the violent dictators in both those countries were snuffed out because they planned to sell oil in something other than dollars – Euros in Iraq, and a pan-African gold-backed currency in Libya. Overtly jeopardising the dollar’s supremacy as the world reserve currency would have set an extremely dangerous precedent for those institutions that dominate the financial system.

As long as money could be easily created – essentially out of thin air – to exchange for oil, Western governments blithley ignored the oppression and violent abuses taking place in these countries; only when the dollar’s (and, by extension, the pound’s) desirability was questioned were the bombs and war-planes unleashed.  The essence of their global economy is creating dollars to buy oil, and killing anyone who doubts their creation’s worth. These wars make clear that, instead of gold, the fiat system is now backed by military might.

The money exchange merely ‘connects strangers as strangers’, and relations based on something other than this exchange should be fundamental to a resistance movement. A global communism in which money is unnecessary is a distant, utopian dream; but if part of money’s power is creating connections between those who have no connections, the consistency of these connections – the authority to decide what money is – must be wrestled from the those in power.  Many activist groups, charities and unions are starting to realise that the financial system is rigged by banks and protected by the political class; they need a method for undermining the monopoly on the determination of money – a practical, immediate alternative to the current fiat currency grid.

There are several arguments that suggest gold can be integral to this shift away from the dictatorship of fiat. Converting pounds to gold takes money out of the fractional reserve banking system and prevents it being multiplied as debt.  Gold’s value is based not on the promises of corrupt, corporate managed governments, but on its intrinsic natural properties, including it’s high malleability, resistance to corrosion, and it’s near universal recognisability. These attributes combined with finite availability mean gold is historically unrivalled as the best method humans have found to store wealth. Free from the requirement of laws to imbue it with value, it’s no coincidence that people who have traditionally lacked faith in central banks, and looked for freedom from state control, have used gold; as a currency, it is anarchist in essence.

But for those interested in radical new ways of forming societies, it would be a mistake to argue for an outright return to a gold standard; we need to continually destabilise prevailing conceptions of money, not replace one dominant paradigm with another. However, gold can exist as money in a multiplicity of non-state currencies. The growing use of bitcoin, a digital currency developed in the wake of the financial system’s attempt to starve Wikileaks of funding, show there are workable alternatives. While bitcoin shares gold’s freedom from government involvement, it has attributes that set it apart, and compliment gold’s wealth preserving characteristics. Any number of bitcoins, potentially worth millions of pounds, can be transported as weightless data encrypted on a memory stick, or sent through the internet. So with a currency like this, who need banks? You may baulk at the idea of purely digital money, but concerns over a unit of exchange backed by only an algorithm seem redundant when we consider how much of our infrastructure is already run by computers – and the fact that around 97% of all the pounds stirling in circulation are merely digital data as it is.

As well as returning to an ancient form of metal money, and becoming familiar with a contemporary, computer-based one, we can also look to new forms developing in the currency eco-system, including local variants and time-banks. Mayer Amschel Rothschild was right when he said ‘let me issue and control a nation’s money and I care not who writes the laws’; to shake off our financial oppression we need a money they can’t control, a distributed money, free from the state and it’s corporate banking parasites. There is a way out from under the fiat currency yoke, a way to exit the great capitalist casino and cash in your chips, the one’s with the Queen’s head on them: swap them for gold, get some bitcoins. The pound is a worthless promise and the emperor is shivering in his transparent coat.


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