He thought the only way to guarantee that the Great Monetary Settlement didn’t turn into a giant boondoggle for bankers was to put the standard beyond their—or the sovereign’s—control. And that was what his political theory told him must be the case anyway.
“So Locke ended up with the right idea about politics—that it should be Liberal and democratic—but the wrong idea about the monetary standard—that it had to be fixed. John Law was the opposite. He had the right idea about the standard—that it needs to be flexible—but the wrong idea about politics—that absolute monarchy is the right system to determine its adjustment. Now Law really was a murderer—or at least a duellist—but in the world of ideas he was no more a criminal than Locke was. Both of them were trying to solve the political and economic problems presented by the growth of monetary society—and each of them got halfway to the right solution.”
“All right. But why was it Locke’s view of money that became the conventional one, then? Like I said: if it is so obviously mistaken, why didn’t anyone stand up and say, ‘all this that Locke’s saying isn’t true: money isn’t silver, it’s transferable credit!’? Or rather, why didn’t everyone believe Lowndes when he said that?”
“Ah! That is a good question. Part of the answer is because of Locke’s prestige, of course. To most people, Locke was a great authority, even if the financial experts didn’t think him one on money. Law was a maverick. But the main reason—and this is what explains your ‘perfect crime’—is more fundamental. It is that Locke felt that in order to arrive at the conclusion which he felt was necessary to protect the Great Monetary Settlement from itself—that the standard needed to be fixed—one had to understand money as silver and value as a property of the natural world. I explained what the practical consequences of that kind of reasoning have been for economic and financial sector policy, as well as for the ethical disabilitiesof economics. But naturalistic reasoning of this sort has another effect as well.
“It’s well known to sociologists and anthropologists. Once people accept the idea of a particular set of social arrangements as a necessary fact of the natural world, rather than just a social contrivance, it becomes well nigh impossible for them to think critically about it—no matter how progressive they are, and no matter how morally wrong those social arrangements might be. History is full of examples. In the nineteenth century, there was a great fashion for ‘positive criminology,’ which claimed that felons could be identified by their physical attributes. It sounds bizarre to us today that anyone could believe that you could tell an anarchist by his ears, or a thief by the shape of his nose. But the point is that the people who believed all this had no vested interest in locking up people with unusual faces—they simply believed in the naturalistic explanation of criminality as a product of physiological factors. Likewise, ‘scientific racism’ was widely accepted as the truth in nineteenth-century America. The inferiority of non-white peoples could be ‘proved,’ it was believed, by physical differences. And again, it was the hallmark of a liberal outlook—not a reactionary one—to believe this kind of thing. The point is that naturalistic reasoning in the social sciences—claiming to explain social phenomena as objective truths of nature—is self-reinforcing. It spins social and political prejudices into a web of fake facts—and once the web has been spun, it is virtually impossible to escape. Or in terms of our Chinese proverb, naturalistic reasoning like Locke’s understanding of money is what fills the fishbowl with water.
“So when it comes to the eclipse of the correct view of money, I don’t think it’s fair to call it a murder, or John Locke a murderer, Monsieur Poirot—the verdict has to be one of
“So Locke ended up with the right idea about politics—that it should be Liberal and democratic—but the wrong idea about the monetary standard—that it had to be fixed. John Law was the opposite. He had the right idea about the standard—that it needs to be flexible—but the wrong idea about politics—that absolute monarchy is the right system to determine its adjustment. Now Law really was a murderer—or at least a duellist—but in the world of ideas he was no more a criminal than Locke was. Both of them were trying to solve the political and economic problems presented by the growth of monetary society—and each of them got halfway to the right solution.”
“All right. But why was it Locke’s view of money that became the conventional one, then? Like I said: if it is so obviously mistaken, why didn’t anyone stand up and say, ‘all this that Locke’s saying isn’t true: money isn’t silver, it’s transferable credit!’? Or rather, why didn’t everyone believe Lowndes when he said that?”
“Ah! That is a good question. Part of the answer is because of Locke’s prestige, of course. To most people, Locke was a great authority, even if the financial experts didn’t think him one on money. Law was a maverick. But the main reason—and this is what explains your ‘perfect crime’—is more fundamental. It is that Locke felt that in order to arrive at the conclusion which he felt was necessary to protect the Great Monetary Settlement from itself—that the standard needed to be fixed—one had to understand money as silver and value as a property of the natural world. I explained what the practical consequences of that kind of reasoning have been for economic and financial sector policy, as well as for the ethical disabilitiesof economics. But naturalistic reasoning of this sort has another effect as well.
“It’s well known to sociologists and anthropologists. Once people accept the idea of a particular set of social arrangements as a necessary fact of the natural world, rather than just a social contrivance, it becomes well nigh impossible for them to think critically about it—no matter how progressive they are, and no matter how morally wrong those social arrangements might be. History is full of examples. In the nineteenth century, there was a great fashion for ‘positive criminology,’ which claimed that felons could be identified by their physical attributes. It sounds bizarre to us today that anyone could believe that you could tell an anarchist by his ears, or a thief by the shape of his nose. But the point is that the people who believed all this had no vested interest in locking up people with unusual faces—they simply believed in the naturalistic explanation of criminality as a product of physiological factors. Likewise, ‘scientific racism’ was widely accepted as the truth in nineteenth-century America. The inferiority of non-white peoples could be ‘proved,’ it was believed, by physical differences. And again, it was the hallmark of a liberal outlook—not a reactionary one—to believe this kind of thing. The point is that naturalistic reasoning in the social sciences—claiming to explain social phenomena as objective truths of nature—is self-reinforcing. It spins social and political prejudices into a web of fake facts—and once the web has been spun, it is virtually impossible to escape. Or in terms of our Chinese proverb, naturalistic reasoning like Locke’s understanding of money is what fills the fishbowl with water.
“So when it comes to the eclipse of the correct view of money, I don’t think it’s fair to call it a murder, or John Locke a murderer, Monsieur Poirot—the verdict has to be one of
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