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News ::
The Modern Keepers of the Vault (english)
04 Jun 2003

By Sam Marcy (Oct. 8, 1992)
[This article was written shortly after the previous Gulf War and before the 1992 election, when a contraction of the capitalist economy led to the defeat of George Bush.]

By Sam Marcy (Oct. 8, 1992)

[This article was written shortly after the previous Gulf War and before
the 1992 election, when a contraction of the capitalist economy led to
the defeat of George Bush.]

Once upon a time there was a young prince who was deeply concerned that
his father, the king, was in failing health and was rapidly
deteriorating. Worried about the heavy burden that would fall upon him,
he soon became obsessed with the magnitude of his tasks.

Not much later the king passed away and the young prince was proclaimed
king. Preparations began for the coronation, which, the new king
decided, should be of such splendor and magnificence as to reach the
outermost parts of the world. He would invite all the foreign princes
and make the coronation the most luxurious and elegant they had ever
seen. All who came would learn to respect and honor his kingdom.

Soon enough all the royal advisers were upon him, but his eye and mind
were fixed on the keeper of the royal vault. "May I have a word with
you?" he signalled to the royal keeper of the vault and thereafter the
two disappeared into the basement.

"Tell me," said the prince to the royal keeper, "how much do we have in
the royal vault?"

"I cannot tell you exactly at the moment, but I can show you something
of interest in planning the coronation. This small vault," he pointed to
one, "was full when your father ascended to the throne. Now it is empty.
With your divine wisdom and youthful mind you will, I'm sure, succeed in
refilling it."

Astonished, the prince became pensive. Then suddenly the prince picked
up a coin from the stack of gold coins and asked, "How much gold is in
this coin?"

Again the royal keeper of the vault said, "I do not know. My eyesight is
not what it used to be and my hands are no longer as sensitive, either.
But I will call in the royal goldsmith who has travelled far and wide
throughout the world and understands the mysteries and magical qualities
of this precious metal."

When the goldsmith came in, the prince asked him, holding up the coin:
"How do you assess it?"

"Your Highness, this is about a troy ounce and should have 480 grains of
gold in it," the goldsmith answered.

"Tell me, goldsmith, can you replace a mere 40 or 50 grains of gold from
this coin with lead?"

"Oh certainly, your royal Highness," said the goldsmith.

"And can anybody, besides you, tell the difference?"

"I dare say no," said the goldsmith, "not if it is skillfully and
correctly done."

"You see this empty vault?" said the prince. "I hope to fill it in the
early period of my reign. And I do not wish even so much as to touch the
royal vault. But what I want most of all is a splendid coronation for
all the world to see. And it shall be an inspiration to all in our
realm. How can this be done? We shall purchase all our needs for the
coronation with the debased metal and, as you say, no one shall know
except the three of us. The secret we shall take to our graves."

Thus the deal was struck and the most elegant and most luxurious of
coronations in the ancient world took place.

The prince bought the best and finest of what was available for the
coronation and a great time was had by all. None of the merchants from
whom so much was bought showed the slightest suspicion that the gold was
indeed debased. It was not until months and months later that the keeper
of the royal vault called in his royal Highness, the king, and advised
him that all the debased coins he had used to pay for purchases had now
been returned in the form of taxes.

Appalled, the king exclaimed, "We have thereby gained nothing?"

"No," replied the keeper of the gold, "we have not. We have much to make
up for. We cannot raise taxes; our nobles will not stand for it. We
cannot squeeze the peasants; they are already burning the estates of the
landlords. We are in a time of trouble. And the merchants and traders
are becoming more arrogant and rude every day. There is talk in the
marketplace that the peasants will soon march on the palace."


It is not quite a century and a half since Karl Marx dealt precisely
with the point of this story. He did so in a book called "The Poverty of
Philosophy," a celebrated polemic against Pierre Joseph Proudhon (1809-
1865), a French anarchist economist.

Proudhon wrote: "Money is born of sovereign consecration: the sovereigns
took possession of gold and silver and affixed their seal to them."

Marx asked in reply: "Was it the sovereign who took possession of gold
and silver to make them the universal agents of exchange by affixing his
seal to them? Or was it not, rather, these universal agents of exchange
[the gold and silver] which took possession of the sovereign and forced
him to affix his seal to them and thus give them a political

Marx continued: "It has been proved times without number, that if a
prince takes into his head to debase the currency, it is he who loses.
What he gains once at the first issue he loses every time the falsified
coinage returns to him in the form of taxes, etc."

The worldwide financial crisis that has been wracking Europe should have
brought this point forward for honest public discussion. Such is not the
case. Instead, there was a well-hidden meeting of 172 central bankers
and finance ministers in Washington on Sept. 24 [1992]. It would be
generous of us to merely describe them as the descendants of the keeper
of the vault and the goldsmith. In truth, they are among the most
ruthless and predatory exploiters the world has known. There is no crime
they will not commit to uphold the social system whose creatures they

Apparently the point made by Marx and the experience of the prince had
not the slightest effect on them. Yet this is not altogether true.

These bankers and finance ministers included Alan Greenspan, chairperson
of the U.S. Federal Reserve Bank, and Nicholas Brady, Secretary of the
Treasury. Their hurried, nervous meeting, without the fanfare and glare
of big-time television, speaks volumes.

After meeting secretly and issuing no report, these keepers of the vault
have "gone their 172 separate ways," as a New York Times report on Sept.
25 aptly remarks. There was no meeting of the minds, there was no
agreement. Why? Because each is concerned with debasing their coins in
their own way, for the salvation of their own ruling class.

The capitalist currency crisis reflects the inability of the central
bankers and finance ministers to do more than the ancient keepers of the
vault. Today's goldsmiths have the unhappy task of advising them that
the clipping of the coins has become a world capitalist scandal.


There was a time when anybody who had paper money in some quantity could
go to the U.S. Treasury, for instance, and get gold in return, as it
said on the paper money. But today all the U.S. paper money, which used
to say "Exchangeable for gold," now merely says "In God We Trust."

Governments throughout the capitalist world no longer pay in gold except
by specific special agreement. The currencies in the capitalist world
today reflect not so much the amount of gold a government has in its
treasury as the economic stability of the social system. Of course, it's
the Gross National Product that is the main determining factor over a
period of time. But that in turn is dependent on the stability of
capitalist relations--the stability of the relationship between the
exploiter and the exploited.

In times of capitalist overproduction, instability has become so
excessive that even artificial stimulants, like military expenditures
and imperialist wars, are unable to lift the depressed economy out of
its morass.

The keepers of the vault, their goldsmiths and their politicians have
proven their utter inability to master the situation. If the current
crisis demonstrates anything, it is the correctness of the Marxist
analysis of the capitalist mode of production. The bankers and
politicians do not manage the economy; the capitalist nature of the
economy manages them.

It has been almost a century and a half since Marx explained to leading
anarchist economists that it is not the will of the king that determines
the value of his coins, but rather it is the coins that determine the
will of the king.

If one thinks, for instance, that a meeting of the 172 bankers and
ministers is perhaps too clumsy and too large to determine such delicate
matters as the value of the dollar, the mark or the franc, let us
remember that only last week that tiny little club of the seven largest
imperialist robbers--the United States, Japan, Germany, France, Britain,
Italy and Canada--also met in private and were unable to accomplish
anything. If they did anything at all to dam the flood of economic "bad
news," they have kept it secret. Any overt manifestation that the
deepening of the financial crisis has been arrested is utterly lacking.


The agreement between Paris and Bonn to prevent a free fall of the franc
is actually designed to be a weapon in the psychological war between
these two larger imperialist powers and the smaller ones. It is an
attempt to club the latter into a European straitjacket where French and
German capital will be able to dominate them. The effort to unify
capitalist Europe can only create a mechanism for boxing in the
capitalist contradictions.

The inevitable inter-imperialist rivalries are due not to some
misunderstandings, not to a lack of technical knowledge of market
conditions, nor to the productive forces having stopped growing. No, the
fundamental obstacle to a coordinated, cooperative union of the European
states is the preservation of private property in the means of

That means the only solution is socialism. All the maneuvers, all the
hurried meetings, all the arming and talk of disarming, cannot obviate
the fact that the means of production are owned by ever-growing
predatory monopolies. This private ownership stands as the fundamental,
insurmountable obstacle to a stable solution of the current crisis.

Apparently standing aloof are the Wall Street bankers and their top
politicians. They are engaged, one would say completely consumed, by the
presidential elections. It's not because the elections will cause one
wing of the capitalist class to be battered or lose its control over the
finances of the capitalist state to another capitalist group. The
electoral struggle is over which group of politicians should manage the
capitalist state on behalf of the whole ruling class. What's involved is
the substitution of one managerial group by another, but both serve the
common good and welfare of the exploiters and the oppressors.

As far as the masses are concerned, their view must be to look beyond
the elections. Once aroused, the invincible might of the working class
is the only force capable of dealing with the monstrous growth of
poverty, hunger, unemployment and all the other ills of capitalist

- END -

(Copyright Workers World Service: Everyone is permitted to copy and
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