FUNDAMENTALS OF NATURAL LAW: The Essence of Money as it Relates to Natural Law/Natural Rights

The Essence of Money as it Relates to Natural Law/Natural Rights

Many of the posts in this series, “FUNDAMENTALS OF NATURAL LAW,” may be less than captivating.  So, why would a person want to spend their time reading and trying to understand the principles and concepts discussed in this series?  Maybe because it is the duty of every citizen in a free and self-governing society to do so:

“If a Nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be…. If we are to guard against ignorance and remain free, it is the responsibility of every American to be informed.”

–Thomas Jefferson

This post is about the essence of money and how that relates to Natural Law and Natural Rights.  I started this series with this subject because I happen to agree with one of our most important founders:

“All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation.”

–John Adams

So what is money?  Well, this time, simply citing the definition in Webster’s is not going to answer our question because the definition in Webster’s does not go deep enough.  First, we must remember that form and function are what define a thing or idea.  It is its nature that makes it what it is, not the word by which we call it.  And while the Webster’s definition certainly describes some of the characteristics of the nature of money, it does not define all of them.  It does not define the characteristics of money’s nature that actually apply to Natural Law/Natural Rights.  That is what we need to examine to understand what money really is: those characteristics that are connected to Natural Law/Natural Rights because, until we do so, we cannot fully understand what Adams is actually saying.

Imagine early civilization, before the invention of money.  If you could not find, make or grow something yourself, how would you get it?  Well, you could take it, but that is a risky proposition in an environment without any form of social order to keep the peace and protect the rights of private individuals, so it might not be the wisest option.  But you could barter for it: you could trade something you could find, make or grow for those things you want or need but could not make yourself.  From everything archeologists can determine, this is the most likely form of the earliest economies: a barter system.

Now imagine that society has grown.  Maybe there is even a start of the first form of government to keep some semblance of order and to protect the rights of individuals.  And imagine that people have started to invent new things; new tools and new materials previously unknown.  And still others have started to invent new ways to use the materials and previous discoveries to make more new things that help you better your life.  In short, imagine that the economy has grown and the first signs of a division of labor have started to emerge in our barter system.  There comes a point when pure barter stops being as convenient as it once was, so people start looking for a way to replace it.  Maybe you replace it by trading something of universal value.

In this primitive world, gold may not have even been discovered yet.  The chances are, people are still concerned mostly with food, clothing and shelter.  Now suppose your community lives in an area where salt is very scarce.  In such a primitive environment, salt is extremely valuable if for no other reason than it can help you preserve large amounts of food.  So your community decides that some standard measure of salt is worth an hour of labor.  This allows you to trade a unit of salt with someone for an hour of labor, but it also allows people to start setting values for the other items they find, grow or make.  Those values are set against that unit of salt.  Suppose it takes two hours to make a wooden hoe.  A person might value that hoe at two units of salt.  This system of trade also has the benefit of being easier to use.  Instead of carrying around a bunch of hoes to trade, a person could carry around several units of salt instead.  What’s more, in the event that the person you want to trade with does not need or want a hoe, they will still trade because your salt has universal value.  In other words, they can use the salt as much as anyone in that community.  This is how money developed and how it works, but it is not yet what we are looking to find.  It is not the fundamental essence of money.

To get at the essence of money, we need to look at what it replaces.  What did the salt replace in our scenario?  It replaced labor.  And what is labor?  If you have read the posts under the “NATURAL LAW” header at the top of this blog, then you know that labor represents the exercise of a person’s free will.  It is essential to their ability to protect and preserve their body, and thus, their life; which in turn is essential to preserving their free will.  And if you have read the posts in this header, then you know that our free will is the most fundamental right that a person possesses.  By your very nature, you and you alone possess and command your thoughts and your inner will.  This makes your will is a Natural Right.  The rest of your Natural Rights are then derived from your free will.  So, when you work to make or grow something, you impart part of your will – your life force – into that object.  This is how you derive a right to private property; through an exercise of your free will.  By logical extension, this means you have property in your salt because it represents your labor, and thus, your free will.

Now, here is the point Adams is actually making.  Once we understand that a person has a private property right over their money because it represents their labor, and thus, their ability to sustain their life and their free will, then many of the issues we find ourselves arguing over in terms of the law and our Constitution fall away – so long as we understand and adhere to the principles of Natural Law, that is.  If you are ‘rich,’ and the rest of the community is ‘poor,’ I still cannot take your money without violating your Natural Right to your labor and free will.  Nor can I make a law authorizing society to do so, because Natural Law says I cannot give the government any authority I do not possess on my own.  And this means welfare of any sort is a violation of Natural Law because it violates the Natural Rights of those whose property – labor and free will – are being taken and given to others.  Properly understood, this also reveals that the only tax that is in accordance with Natural Law is the tax that is either apportioned equally among all individuals (per capita), or according to an election of free will (sales tax).

Do you see why Adams asserts that many of our problems would be resolved if we just understand the nature of money?  Of course, Adams is also supposing a virtuous society that understands and embraces Natural Law/Natural Rights, but that is where Jefferson’s admonishment comes into the social equation.  We have a duty to know these things and to teach them to our children because it is only when our society understands and embraces Natural Law/Natural Rights that the individual is protected and our society can remain free and self-governing and.

[NOTE: This also explains why no society/economy based on the principles of socialism has or can ever work.  No system that violates Natural Law can or will be sustained for very long.  If one looks to history, one will find no socialist system has ever lasted more than 70-something years, yet the founders’ system – based in Natural Law/Natural Rights – still exists after some 237 years.  Furthermore, if one looks at where we have the most problems in our society or with our system, one finds that – in every case – the problem is directly connected to an attempt to force something that violates Natural Law.]