Chapter on Currency Destruction - Friedrich Georg Jünger

XX - THE DESTRUCTION OF MONEY

When we study the financial and currency system of today, we enter an area where there reigns profound confusion. There can be no doubt that we are living in an era of general deterioration of currencies. This is shown by the withdrawal of precious metals from circulation and by the constant migration of gold in its flight from danger zones to zones of greater financial safety. Inflationary and deflationary movements, devaluations, and withdrawals from circulation affect all currencies, which have to be protected artificially by the most intricate regulations. Possession of precious metals or foreign banknotes, export of holdings by the owner or his agents, re-importation of currency into the country of its origin – all are put under the strictest control. Eventually, under pressure of exchange difficulties, we see the state reverting to a kind of primitive barter economy, an economy of peculiar financial and economic consequences.

All these mysterious and often contradictory phenomena become clear once we perceive that progressive technology can have no interest in stable currencies, that, on the contrary, it interferes with the organization of finance in order to undermine the stability of currencies. It is childish to imagine that events like inflation, which deprive whole classes of the population of their savings and abandon them to impoverishment, are the work of a band of clever speculators. For even if we harbor exaggerated notions of the power of those behind what is popularly termed "high finance," or Wall Street, events like inflations are not thereby explained.

The fictions on which the money system rests are highly artificial, and this analysis is not the place to treat them in detail. There is no completely satisfactory theory of money, but the following may be said in this connection. The point of view from which technology looks upon money is a technical one. It looks at money from the viewpoint of circulation, for circulation is the most important technical function of money. Thus, technical progress is identified with an accelerated circulation of money – money is made to work more rapidly. Where treasures and possessions are by nature stable, unchangeable, and out of circulation – features which the technician abhors, because to him they signify sterility – the supporting of the currency by precious metals provides an element of financial stability. From a state of stability where paper money is redeemable in gold, instability begins as the obligation of the state to redeem its currency is suspended. Money is then still backed up by gold reserves, but as the gold reserves melt away, the state is increasingly compelled to try by every means in its power to obtain gold and gold values. The circulation of sheer paper money is rapid, and the more rapidly money circulates, the better does it fulfill its technical function, which is, first of all, to circulate. The deposit of all liquid funds in banks is now recommended and encouraged with the argument that money which is banked best discharges its function of circulation.

The more money is devaluated the faster it circulates. If there is gold, money runs to gold. If there is no gold, it runs to goods. It may be said that bad money runs away from itself. But precisely by doing this it fulfills splendidly its technical purpose. It takes on perpetual motion, circulating with sweeping speed, changing hands and so creating the illusion among the naive that there is a lot of good money, or even that all of us have become richer. The decay of currency is neither local nor transitory. It is a symptom of a certain phase of technical progress. It occurs at the precise moment when the financial needs of the technical organization go beyond those limits within which an orderly financial economy can be conducted."

- FG Jünger