Ace of Spades HQI was thinking about this earlier today, or last night. Before the “Economic Traitor” bomb got dropped.
During the French Revolution, the leftist (they were leftists) totalitarian government attempted to inflate away its problems by just printing up a crapton of paper money. This was a very early example of paper money. Technically, it wasn’t money per se, but rather each bill represented a share of the government’s eventual “profits,” if you can call them that, from the sale of property they had confiscated from the Catholic Church and from aristocrats declared traitors.
One of their cute moves was to declare someone a traitor, and then, when he fled to England or Austria to escape the lynch mob, to confiscate his lands as he had “abandoned” them.
So this paper money, called assignats, actually had, or was supposed to have, a fixed value — each of the (say) ten million “bills” printed was supposed to represent one ten millionth of the eventual “profits” from selling off confiscated land. I guess rather like a bond? I don’t know.
Now even though France had these assignats, they were by no means the standard currency; the standard currency of trade was still gold and silver coins.
The leftist government — which was busily turning the plazas red by guillotining citizens by the thousand — soon found itself getting into, get this, cashflow problems,* so they began just printing up more assignats to pay their bills.
Now you can see the first problem here: the total sum of wealth devoted to satisfying the facial value of each assignat remained more or less constant (oh, some new estates were added to the pile as more Traitors were discovered, the biggest pile of loot was stolen from the Catholic Church in the early days; for all intents and purposes, the value of the stolen property remained constant). And yet a lot more assignats were being printed up.
And the government insisted that assignats — now thoroughly inflated so that they had but a fraction of their Official value — still retained their official value. As regards, importantly, the exchange rate for gold and silver.
And now we come near to my point: Breadmakers in Paris soldbread for assignats, which is a currency the urban poor had (as the government was pumping it out in their hands), but had to pay for wheat in gold.
And wheat’s price in gold did not go down. (In fact, it went up, as this was a tumultuous time with lots of blood and fire.)
So breadmakers were being forced to pay in gold for wheat, and then were required to sell the bread at maximum prices in assignats set by the state.
For a loss. For a drop-dead loss.
Well, many breadmakers realized they sort of would go bankrupt if they were required to sell a week’s worth of bread for, say, the equivalent of twenty silver livres and yet also had to pay farmers thirty silver livres for the wheat required to make that bread.
So what they did was to begin storing wheat, in hopes that the price of bread would one day be high enough to make a profit on. And they made less bread, seeking to only sell to those who could pay in coin.
And so what then happened is that the government declared this Illegal Hoarding and trooped off a bunch of bakers to the guillotines for their appointment with the National Razor.
The charge? Economic Treason.
My point here is that this is inevitable in a socialist system. The schemers assert that they will impose their will — their crude, ignorant, mewling will — on the iron laws of economics.
They always fail, because, in the end, Math doesn’t care about your Intentions and Five Year Plans.
And what next comes is that the Schemers have to begin offering reasons for their latest failure.
And their go-to excuse is that they’re being stabbed in the back byEconomic Traitors.
President Barack Obama’s senior White House adviser and former campaign manager David Plouffe accused House Republicans of “committing economic treason” during the partial government shutdown on Thursday.
This isn’t just David Plouffe, either. Jeff Schweitzer, who identifies himself as a “Former Senior Policy Adviser for the White House,”writes pungently of the New Treason at, where else, the Huffington Post.
When Radicalism Becomes Treasonous…
Conservative opposition to Obamacare has transitioned from obsessive to treasonous. Here is the simple definition of treason: the betrayal of allegiance to the United States. One caveat: treason applies only to acts committed during times of war. Well, we are in the middle of the war on terrorism, no? So that qualifies.
I’m glad you’ve put so much thought into this accusation of capital treason against your fellow countrymen.
The GOP could point to a fuller definition of treason to argue their actions are not treasonous: “the betrayal of one’s county by waging war against it or by consciously or purposely acting to aid its enemies.”Well. How could anyone argue that willingly damaging the good faith and credit of the United States is not purposely acting to aid our enemies? The shutdown and impending default already caused Obama to miss a critical meeting in Asia, allowing China to dominate; an outcome clearly aiding our enemy. How could our enemies not benefit from a weakened and insolvent United States?
This man, incidentally, says he’s some sort of scientist. I imagine he fancies himself as a sophisticated, enlightened, nuanced thinker.
Mm-hm.
Just checking here: Despite a key administration official and his former flunkies making slapdash Stalinist accusations of Economic Treason, we’re still the extremist, emotional, screaming anarchists, right?
Right. I thought so.
We’ve come an awfully long way from “Dissent is the ultimate patriotism,” haven’t we?
A government and its sycophants branding its critics “traitors.”
This should work out well. There’s nothing at all here to be alarmed about, except for Everything.
* I should say that they began with cashflow problems. The Revolution was sparked by… debt and an inability to pay for it. That’s the whole reason the Estates General were called, in order to break the usual rules against the King’s imposing higher taxes on the commoners.
And then it all went sort of sideways, squiffy, and pear-shaped, as a British guy might say.
Oddly enough, most nobles were not taxable, either due to straight-up Nobel Privilege or due to previous cash-generating schemes, like Cardinals Richelieu and Mazarin selling future immunity to taxation in exchange for a lump-sum current payments — a great way to raise money in the moment, but that will cause problems with income in the “out years,” as they say.
I guess I should also point out that they were then in a bit of World War, as well.
this way of handling inflation is not restricted to socialist systems. In “Debt, the First 5000 Years”, you can read how empires have continuously ran into this issue. how they have always needed the same naming/scapgoating to keep the game going.
In agreement about “are we in a war?” my exhibit: Snowden et al, the treasonous journalists in times of “unpeace.”