The principle of universality as applied to money is an age-old principle, developed and taught by age-old arguments. The principle captures the idea that each market participant should be in an equal position regarding access to and relationship with the medium of exchange. The principle was known to be fair and was once held as a near inviolable truth by monarchs, governments and people the world over1. The law did not deviate for the trends of the times. It was un-forgiving in a sense, ensuring that abuses of its precepts went punished, and yet it also ensured that prudent actions and behaviour were rewarded.
This principle is no longer held as paramount by the world at large, nor is it remotely in place in today’s governance, finance, and social systems. For this reason a second article has been linked to this one. The second article presents two theories on the origins and nature of money, and explores the arguments in support of the systems of today. Both lenses are valid, and both should be understood.
This article details the principle, offers only a mere introduction to the corollaries of the principle, and presents some associated writings. How is the principle discovered?
The Lone Man in Nature:
In studying natural law, one aims to understand the essence of situations, and from that fundamental understanding all later nuances and outcomes may be extrapolated, or balanced back to the essential truths earlier discovered. With this in mind, imagine a lone man in nature. There are no other humans. There is man, his thoughts, his body, and the natural world as we know it to exist, complete with all manner of flora and fauna, water, earth, the sun and all other celestial bodies*.
How is one to live? In order to survive, he will use his mind to design a plan and his body to put the plan into action. In order to consume, he must first produce. In order to relax, he must first have saved. In order to increase his efficiency or standard of living, he must first invest time and effort. All these many things he will manage. Every thought and every action of his will produce a consequence, with which he necessarily must live. There are no politics. No economics save those ideas which may aid him to wisely manage resources. There is no concept of control, no medium of exchange and no laws aside from those inherent in nature.
The Commencement of Society:
Now introduce another person, or many others, it matters not how many. All of human history has been a struggle of how these interactions should now occur. At the heart of this conundrum there are only two core paths, although many shades between the two exist.
Firstly, the people can work together. They may share, they may specialise and trade, or they may choose to remain non-interacting and yet at peace. On this first core path, all people must still produce in order to survive, or, they live off the voluntary charity of the other.
Secondly, they can use force and degrees of control to attempt to live off the production and efforts of the other. There is no third alternative to these two paths. In them, all plausible paths, considering all the vast natures of man, are covered. Note well, by granting creation and distributive control of the medium of exchange to a person, that person is immediately living off the production and efforts of the others who are producing.
Civil Society and Governance:
Of course, things are not so simple and in every single instance of human interactions a governance structure has established itself. Emer de Vattel put it in this way, “Man is a social animal; society is natural to him; indeed, it is even essential to him if he is to pass his life happily.” Emer continues, “If society is useful and even necessary to him, and this society is unable to subsist without laws observed by all its members, he is obliged to follow them. He ought not even to consider sacrificing them to an immediate advantage, because they are what guarantee him enjoyment of all his other goods.2”
From this acceptance of living in society stems the great study of natural law; what laws are in harmony with nature and thus true and good to be instituted as laws to govern society.
Money and the Principle of Universality:
Life under a gold coinage:
“When I attempt to find a simple formula for the period in which I grew up, prior to the First World War, I hope that I convey its fulness by calling it the Golden Age of Security. Our currency, the Austrian crown, circulated in bright gold pieces, an assurance of its immutability. Everyone knew how much he possessed or what he was entitled to, what was permitted and what forbidden. This feeling of security was the most eagerly sought-after possession of millions, the common ideal of life. Only the man who could look into the future without worry could thoroughly enjoy the present.3” – Stefan Zweig
A medium of exchange is of use to a society. The key attribute required of this medium of exchange, for the purpose of this principle, is that it can not be created and accessed by any citisen in preference to or at the exclusion of any other citisen.
The idea at play is that each profession is composed of men and women who’ve each a claim to equal treatment under law, with no exceptions; not for Pharaoh, Monarch, Banker or Priest. The principle holds under any society having a medium of exchange and wishing to associate under laws observed by all its members.
Corollaries to the Principle:
One corollary is the type of energy encouraged in the marketplace. The population now has a true impact with how their efforts and beliefs shape their society. Each profession, each person, is tied to the other in a fair & understood manner; governors and bankers included. Consider, if the banker is not responsible to his depositors, and not talented at his profession, he will not long have funds with which to carry on business.
A related corollary is the constraint on power that such a principle imparts. There is a well-known analogy for the politician under the systems of today, “the politician under our printing press money system is in the position of a fireman running into a burning building with a hose that is not connected with the water plug. There is no sustained hook-up with the taxpayers to give him strength.4” Although written in 1948, this remains in-tact today. The people can offer no true support to the politician, nor the politician loyalty to his constituents, as the strings of power tie to finance and not to the producers of societal wealth.
Now that the principle is understood, your intellect is as good as any other to conclude on the many and varied flow-on impacts of this principle. To list some others in brief; the ‘store of wealth’ attribute of money is established5, 6. Certain virtues become rewarded as they become useful, think honesty, industry, prudence and frugality7. Mismanagement is punished in an unforgiving but fair and known manner. Subsequently, the motivation to work, and work efficiently, is immense as every participant in on level footing.
The letters above provide one lense through which a society may be viewed. The principle of universality operated and survived intact for many centuries across many cultures. Furthermore, this is the perspective from which our ancestors deviated when departing from a gold coinage and/or a gold standard monetary system. It is important to grasp that we are no longer in a system that in any way resembles that portrayed above, and that our departure from such a system is not a recent event. To view the principles inherent in the system today, refer to our piece on the Origins of Money.
- The Law of Nations, or, Principles of the Law of Nature, Applied to the Conduct and Affairs of Nations and Sovereigns, with Three Early Essays on the Origin and Nature of Natural Law and on Luxury by Emer de Vattel, originally published 1758. Liberty Fund Inc., 2008, page 754.
- The law of nations by Emer de Vattel, Liberty Fund Inc., 2008, page 143.
- The world of yesterday: Memoirs of a European by Stefan Zweig (1942). Pushkin press, page 23.
- Human freedom rests on gold redeemable money by Howard H. Buffett (1948).
- The coming battle, A complete history of the national banking money power in the United States, by Martin W. Walbert (1899).
- Money in crisis, the federal reserve, the economy, and monetary reform by Barry N. Siegel (1984).
- The Protestant ethic and the spirit of capitalism by Maximilian K. E. Weber (1905), page 52.
*The man’s understanding of a god is so far as he has pieced together, or as He has revealed to him. Refer to the second article for more.