"Our whole system of banks is a violation of every honest principle of banks. There is no honest bank but a bank of deposit. A bank that issues paper at interest is a pickpocket or a robber. But the delusion will have its course....An aristocracy is growing out of them that will be as fatal as the feudal barons if unchecked in time." ~ John Adams
A Novel Takes Flight
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George F. Smith, a regular fellow contributor to Strike The Root, has written a crackerjack novel which all here will enjoy, and could acquire to give or lend to friends whose interest in the great money swindle may have been piqued by the recent $750 billion government "failout." With the intriguing title The Flight of the Barbarous Relic, it's a cleverly crafted story which also presents a good introduction to the Austrian theory of fiat money and the business cycle.
Keynes coined (or at least printed) the term "barbarous relic" to describe in his 1924 book "Monetary Reform" the gold standard, rather than gold itself, although I've no doubt that he'd have said the same or worse about a free market in money, which is not the same thing--for a standard implies a central authority to set it. It's not a difference which is explored in "Flight", perhaps because either would be such a vast improvement over what we have. Meanwhile, George Smith uses Keynes' phrase as the name of a biplane, which took off one sultry afternoon in Maryland on a short flight that changed history.
While preparing this review, I asked George why he'd chosen a novel as the medium in which to explain how the US money system works. He replied that he wanted to make it easier for an interested, intelligent layman to grasp, while acknowledging that books like Rothbard's What Has Government Done to Our Money? treat it more deeply. I've never attempted to write a novel, and may well never do so, because it's such a difficult undertaking. This is George's first, and it's a highly creditable effort.
If you're like me, you want a novel's plot to be tight and the pages to cry out to be turned--whether the tale is a "whodunnit" or a Victorian romance whose most dramatic moment is a tensely-awaited proposal of marriage. I expect the story to conform to all details given, and characters to be realistic and their actions true to what they are portrayed to be; and I feel cheated when the author fails to accomplish that. Once, I bought P.D. James' Death in Holy Orders, but when the villain was at length revealed, he was not at all credible as such, so I asked the author for an apology and invited her to refund my purchase price; but (can you believe it?) she never even replied!
So I have high standards for George's Flight to meet. He went a long way to meet them.
The story concerns a fictional Chairman of the Federal Reserve Bank, portrayed as a believer in gold, whom the back cover tells us is a "renegade", out to "destroy the Fed." The way in which he sets out to do so, in full public view, is highly imaginative and just credible; and part of that credibility comes from the historical fact that one in his position (Alan Greenspan) did and possibly still does actually believe in gold as money, or at least in a gold standard. Where Flight departs from history is that its character in that spot stops pretending and acts dramatically to expose the total, destructive fraud of fiat money, perpetrated these many decades by the deliberate policy of the Federal Government; it's what Greenspan might have done, but never did.
George Smith's style is to present one corner or smidgen of his story at a time, rather like a painter who sketches a small part of his canvas in rough, then visits it later to fill in some more, then adds color and detail until the whole is complete and ready to be framed and admired. He teases, tantalizes, and so moves the reader to turn the page. It's artful, and it works; throughout, the reader demands to know how this will turn out, whether these disparate glimpses will hang together and form a whole. They do.
His style also reminds me of Ayn Rand, who was supreme master of the didactic novel--though Flight is, you'll be relieved to learn, much shorter than her monumental Atlas Shrugged. Even so, at tale's end comes a comprehensive "Galt's Speech" to ram home and summarize the powerful lessons that have been presented prior to that point, to expose the outrageous fraud of paper money, inflation, debt, war and big government.
Thoughts about paper money are well stimulated by the book, and a couple it triggered in my mind may be worth reporting. First, I was reminded that if the FedGov in some year has a $200 billion deficit and "monetizes" that debt (instead of borrowing it from domestic lenders), then the Fed will oblige by kiting a check for that amount which, when deposited in the banking system, results in due course in new money totaling ten times as much, thanks to the Fractional Reserve racket; thus, $2 trillion is added to the money supply which (as M3) we might assume is $10 trillion at the time. Hence, a year or so later, inflation should be running at 20%, less any productivity increases. But in fact inflation is reported as much less than that--five times less, maybe. Put that puzzle alongside the Fuzzy Numbers in Chris Martenson's Crash Course, and we have the answer: government systematically lies to everyone in its published statistics, grossly understating inflation. Hence, in recent years, the "housing bubble"; the CPI doesn't include house prices, so high inflation snuck in unnoticed until the bubble burst.
One of George's characters says that "if inflation were a disease, it would be considered the number one killer of human life"--but my second thought was to wonder about that. In four years when it didn't have a central bank (1861-65), the FedGov killed as many Americans as it did in both World Wars when it did have a central bank; for in the War Against Secession, money was printed regardless--by both sides. So that assertion seems to me incorrect, along the lines that "guns don't kill people, people do." Inflation--fiat money--is only a weapon that government uses to wreak its devastation. Granted that I can think of no peaceful use for inflation, the culprit is still not the weapon, but its wielder.
Flight is not without a flaw or two, and this review must name those I noticed. The first is cosmetic, though perhaps important; the line spacing is much wider than is customary, and the pages are not justified to the right margin as well as the left. Thus, the appearance of each page is less than conventional. I figure that a book by an unknown author competes with others on the bookshelf, and well can do without that disadvantage. My other bleat is that the main characters, at least, could do with "filling out" so that the reader can better identify or empathize with them. On my first read of Flight, I felt that they were too wooden, and so had difficulty recalling what part each had played earlier in the story, when I encountered them later in the book; this made it less easy to follow the plot even though it is actually well worked. I don't call for such intensive introspection as John LeCarre' uses--I just wish that there was rather more depth than is given, so that we could better appreciate the emotional anguish, for example, of the hero's ex-wife.
George's work is enhanced with some flashes of humor, for example when one character summarizes the whole of the Austrian economics in four words, plucked from a box of breakfast cereal--adequately for me, if not for the author of Human Action, who never used one Germanic word when three would do; and for another when he discovers two words to describe an unloaded gun, which had me laughing out loud. Read The Flight of the Barbarous Relic--you'll enjoy it too.