Belmont Club

Money, money, money

Who says socialism doesn’t work? The country that has produced the most trillionaires in history isn’t America, but Robert Mugabe’s Zimbabwe. The Wall Street Journal describes what it is like to dine out on the town. “Buying anything is a ‘bizarre experience,’ said Lucy Chimtengwende from Bulawayo, who spent $12 U.S. on lunch recently, with the bill in local currency being an astonishing 1.1 trillion Zimbabwe dollars.” Inflation has been given a whole new meaning in Zimbabwe, whose currency has depreciated ten billionfold in twelve years, a rate that threatens to exceed the bounds of the database field sizes that the bank’s software developers thoughtlessly assumed would be enough. Consider the travails of a man who simply wanted to buy groceries.

Joshua Kipuru (not his real name, since he is concerned about reprisals for criticizing the government) told me via telephone that he gave up trying to get cash at his bank in Harare last week, since the lines were too long and slow moving. In the end Mr. Kipuru bought groceries with his debit card, which remarkably still works. The card, he explained, maxes out at just under 10 billion Zimbabwe dollars. So he had to run it 74 times, given that his food bill was nearly 730 billion Zimbabwe dollars.

The German security printers who provide Mr. Mugabe with his currency are finding their presses literally unequal to the task. Despite the herculean efforts of its presses and the nonstop shifting of tons in currency it managed to produce a relative pittance in US dollar equivalents, hardly enough to keep the wheels of bribery turning.

In the weeks prior to the March 29 election, the German company, Giesecke & Devrient (G&D), ran its printing presses at maximum capacity, delivering 432,000 sheets of banknotes to Mugabe’s government each week. The money, equivalent to nearly $173 trillion Zimbabwe dollars ($32 million at that time), was then dispersed among key constituencies, notably the security forces, as bribes.

Roger Bate of the WSJ believes that Robert Mugabe is literally burying himself, together with his entire wretched country, under a pile of worthless paper. If so, a well-intentioned effort to help the people of Zimbabwe by Western activists may have unintentionally postponed Mugabe’s demise when they pressured the German security printers into stopping their cataract of banknotes, an act of rationality that may ironically slow the hyperinflation that is drowning out Mugabe’s regime.

Pierre-Joseph Proudhon argued that “property is despotism”. That is perhaps why political movements that profess to hate money are the most interested in printing it. Recently, environmental activists in Britain have tried to create a form of carbon money which will effectively determine how ordinary people can spend what they earn. Another Wall Street Journal piece reports on the slow but inexorable march towards “carbon rationing” in the UK.

A Parliamentary committee in May proposed giving all British adults “carbon allowances” that they would be required to spend – along with, you know, real money – when buying gasoline, airline tickets, electricity or natural gas. Britons who wanted more credits than they were issued could try to buy them – again, with real money – from those who hadn’t spent their allotment. All of this is supposed to give people a financial incentive to reduce energy consumption and thus their carbon “footprint.”

The Labour government, already in a precarious political state, isn’t dumb enough to support the rationing plan, which Environment Minister Hilary Benn calls “ahead of its time.” Instead, it favors a climate-change bill that Parliament is on the verge of passing that would lay much of the necessary groundwork. But eco-eager Britons don’t have to wait for Westminster. A private test program for personal cap-and-trade began recently with 1,000 volunteers keeping tabs of their gasoline use.

Once “carbon ration cards” are in force; when the concept is no longer “ahead of its time”, the off-ration price of items — for example, an extra trip to see a sick relative that exceeds the carbon ration — will partly be a function of the ration supply. The tighter the rations, the higher the price of the extras. And like Robert Mugabe’s printing presses, it is also a form of power over the money supply. Now it turns out that in order to allow environmentalism to save the Earth, we also have to give it power over money. And why not? Since we’ve already accepted the principle that they can regulate industrial output, why should money be excepted? Just a little more. Always just a little more.

But deep down inside, even the most credulous may be feeling an unease; because like Robert Mugabe’s government, those who print credits can print more of them for themselves, whether it is to fly to exotic locales to attend conferences or to serve themselves eight course meals at global summits on the Food Crisis. And the heretical thought might occur to us that we’re being had.

Today what passes for revolution is often just despotism tricked out as a campaign to fight some supposedly great evil; for final victory against the White Farmers, Hate Speech, Global Warming or something else. But suppose it were really about money? Marc Gonsalves, one of the hostages recently rescued from the FARC, gave a moving speech of speech of thanks to his rescuers that described how so much of the revolutionary rhetoric of today is only an excuse to make a pile. “I want to tell you about the FARC … They say that they want equality; they say that they just want to make Colombia a better place. But that’s all a lie. It’s a cover story and they hide behind it and they use it to justify their criminal activity.” Say on Marc, but there are none so deaf as they who will not hear.

Tip Jar.