Book review – Secrets of the Temple, How the Federal Reserve Runs the Country, by William Greider.
I usually complete the reading of a book before reviewing it, but in this case (I am a little more than halfway through its 700 plus pages) I am making an exception considering the current economic slowdown, since it gives insight into the current situation and its causes. Although the focal point of the book is the Reagan administration, it covers the history of the Federal Reserve and its predecessors in American economics, as well as tracing the concept of money to ancient times. Mr. Greider describes in great detail the various forces that drive markets and the factions behind them, including wealthy investors, banks and corporations, small entrepreneurs and the common folk. He shows that Federal Reserve manipulation has caused recessions over and over again, mainly by keeping interest rates high for prolonged periods of time (as we have just seen in the too little too late rate cuts of the past few months). His deconstruction of the intertwining ‘plumbing’ (as he calls it), with the numerous valves that affect the flow of money in our society, is quite illuminating, to say the least.
Not only is this a valuable resource for anyone that seeks to penetrate the mystique of modern economics and come to grips with Keynesian doctrine and monetarism, but it is an excellent thesis on the perennial link between theology and commerce. From Chapter 7, the God Almighty Dollar – “The historic connection between money and religion was established in one culture after another: the temple was the first mint, where coins were sanctified by priest-kings and therefore accepted as trustworthy by members of the tribe… Greeks, Babylonians, Egyptians – virtually every early society conferred sacred qualities on its currency. Centuries later, without benefit of clergy, gold and silver maintained their own religious connotations. The association originated in a mystical correlation with the Sun and Moon, supposedly confirmed by the mysteriously stable ratio in their values – 1:13.5 gold to silver – which astrologers decided was a precise replica of the heavenly cycles. The religious quality of gold and silver endured long after the astrology disappeared and modern banking began issuing paper. The precious metals were, after all, created by God, not man. Sophisticated modernity naturally resists the notion that money still retains religious content. On rare occasions, however, the connection is still expressed in the most explicit terms. A conservative Republican congressman from southern California, Bill Dannemeyer, wrote a newsletter to his constituents in which he explained how the U.S. government had offended God when it abandoned the gold standard. ‘It is not and accident [he wrote] that the American experiment with a paper dollar standard, a variable standard, has been going on at the same time that our culture has been questioning whether American civilization is based on the Judeo-Christian ethic or Secular Humanism. The former involves rules from God through the vehicle of the Bible. The latter involves variable rules adopted by man and adjusted as deemed appropriate.’ In most circles, the congressman’s suggestion – that the gold standard was somehow derived from God’s law – would be dismissed as reactionary fantasy. In an enlightened age of high technology, it was unfashionably primitive to believe such things. Archaic civilizations may have been governed by mystical money, but surely not the rational minds of modern times. Money was only money, a medium of commerce, a store of wealth, a unit of measure, nothing more.” Greider also examines the Freudian analysis of the concept of money being somehow tainted, and having an inherent evil power.
I guess my only criticism of his discussion of the religious aspects to commerce is that money is a medium of exchange in commerce, but is not necessarily an accurate measure of wealth. Water in India has always been the standard (and not gold). The Goddess Laksmi is always depicted seated upon a lotus in the water, and for good reason. Also, historically salt was controlled by the Roman and British empires, hence the defiant act by Mohandas K. (Mahatma) Gandhi in the making of salt. Certainly the is inherent power in currency and the amassing of it by power mongers, however the natural resources that provide us with clean food, air and water and energy sources like natural gas and electricity are far more significant in our overall standard of living.