[Some of these links were not properly transferred to this page. I will be updating this article with fresh links very soon... As well, I'm taking an anthropology course that deals with our origins so I will likely write an entirely new essay. (April 2016)]
Based upon modern understanding of the Neolithic Age, during the period of approximately 12,000- to 5,000-years ago, Humans lived in mostly egalitarian societies with no stratification or hierarchy at all. Archaeological evidence dating from this time suggests that Humans had developed a profound respect for the Earth, the Sun, and the stars. To show this respect for these various objects, our ancient ancestors began creating many different forms of art including paintings, pottery, statues, elaborate burial chambers and even structures that were utilized to observe astronomical phenomena throughout the solar cycle, such as Stonehenge and the pyramids in and around Egypt. In order to explain these phenomena, a series of allegorical myths were created to anthropomorphize, or personify, the apparent movements of the Sun, the Moon and the stars through the sky. This expansion of literary and artistic expression corresponded with and was perhaps directly influenced by a steady increase in technical understanding and capabilities. Before this new Age, hunter-gathers used predominately stone tools. This was known as the “old” Stone Age, or Paleolithic Age. Thus, the term Neolithic can be broken into ‘neo-‘ from the Greek neos, meaning “new” or “recent”, and ‘lithic’ from the Greek lithikos, meaning “stone”. ‘The Neolithic Age’ translates to ‘the New Stone Age’ and represents the third and most recent prehistoric phase of the Stone Age—a period that began approximately 2.5-million years ago. When the Neolithic Age began, Earth was transitioning out of what is known as the Pleistocene Epoch and running its natural cycle of global temperature shifts; the warmer of which we are still in to this day. However, not only was the Earth transitioning to a new geological epoch—the Holocene Era—Humans, too, were evolving both physically and intellectually. Genetically-proven migration evidence from anthropologists, such as Dr. Spencer Wells, suggests that the Neolithic Age represents a monumental shift in the evolutionary processes of the Human species. Not only was this highly influential to the ancients’ ways of thinking, but also proved critical from a biological standpoint.
Around 40,000 years after the first group of Humans migrated out of South Africa, where Paleolithic to Mesolithic hunter-gatherers subsisted on a diet of mainly wild animal proteins with some vegetation, the new agricultural methods being developed through advancements in technology enabled Neolithic communities to produce and distribute an abundance of an increasing range of domesticated plants and animals; thus, leading to a new diet largely consisting of vegetation with far fewer animal proteins. Then, around 7,000 years ago the climatic change mentioned earlier occurred and specifically turned most of Egypt into desert, except for the area lining the River Nile. It was along this river where agricultural methods were honed and a relatively rapid expansion occurred in the development of Egyptian artistry, architecture, language, technology, mathematics and science. Ultimately, due to the newly realized ability to create abundance of agriculture, hierarchical social structures began to flourish, laying the foundation for the Bronze Age. As technical capabilities and understanding increased rapidly, a system of exchange eventually manifested known as bartering. (It is important to quickly note that practically all of the information regarding the Paleolithic, Mesolithic, and some of the Neolithic Ages has been interpolated due to the lack of written historical records. However, nearly all of this information can be firmly supported by the many archaeological, biological and geological studies conducted over the past century as well as by comparisons of modern hunter-gatherer tribes around the world.) Now, you may be thinking, ‘Hey, thanks for the Anthropology 101 lesson, but what does all this have to do with money?’ Well, before we get into money, let’s talk about barter.
Barter is the “direct exchange of goods or services without the use of money or any other intervening medium of exchange.” Early bartering consisted of the exchange of various forms of livestock; all of which were generally known as “chattel”. Although bartering still exists all over the world, as the Bronze Age progressed and metallurgy became more refined, the third major transitional phase in Human understanding of technology eventually cultivated the Iron Age in and around 1,200 B.C.E., and bartering essentially became outmoded. The first coins are attributed to Croesus of Lydia whom reigned from around 560-545 B.C.E., conquered the Greeks and was later overthrown by the Persians. This single development of coinage planted the seed that would eventually grow into one of the most corrupt systems ever created by our species—one that has literally been subjugating the Human population for the past two millennia. Of course, many other institutions materialized during this climatic and culturally evolutionary period of time including the fifteen astro-theological religions predating the Judeo-Christian/Pagan belief system, as well as the master/slave political, societal and governmental ideologies that had a profound influence on Humankind’s progression ever since. However, the number of topics pertaining to this particular period of time are far too numerous for a single blog entry. But, it should be noted that from the conception of coinage up until the 1600s, a large portion of written history indicates only minor changes in the coinage process other than the fact that counterfeiting had been replete ever since and that the decimations of entire populations almost always were ‘justified’ by at least three rationalizations: 1. Religious expansion through mass indoctrination; 2. Resource extraction; and, 3. Slavery. Furthermore, these topics would take an extraordinary amount of time to expound and would more than likely constitute an entirely new series of books for each. Therefore, we will jump ahead from this period of the mid-6th Century B.C.E. in Anatolia to the early-17th Century C.E in what was considered one of the largest and most prosperous cities in all of Europe—Amsterdam.
With goals to constrict taxation powers of mints, to adequately cope with the massive influx of foreign coinage, and also to safeguard depositors against currency debasement, the city of Amsterdam established the Amsterdamshe Wisselbank (Bank of Amsterdam). The bank essentially provided a center for currency exchange and replaced the private cashiers that were issuing currency with no guarantee of coin quality or value. Bank Money, as it was called, was then created by the bank through bookkeeping alone. This Bank Money was represented by a simple credit (deposit) receipt, guaranteed by the bank in silver, and, in turn, was “traded” with depositors for their physical coin currency. The bank became very popular around Europe because, as the nominal values on the many different coins coming into the bank varied immensely, the value of the Bank Money remained fixed in accordance with minting standards and was actually worth more than physical coinage. Furthermore, the city banned cashiers while the bank offered free giro, or free transfer payments from one account (the payer) to another (the payee), and also required debtors to settle all bills worth 600 guilders through the Bank of Amsterdam. While the bank profited solely from withdrawal and money changing fees, it successfully created a municipal monopoly of banking and served as merely a catalyst for what was soon to come.
In the century before the Bank of Amsterdam, goldsmith-bankers had begun trading receipts for gold deposits, loans and transfer funds. This was perhaps the basis for the bank established by the city of Amsterdam. These receipts, known as “running cash notes”, were filled out in the name of the depositor and had a payment on demand promise just like the Bank Money. However, in the 80 years after the establishment of this institution, many problems, such as debasement of coin currency, were actually created and compounded by the fact that two different coins, the rixdollar2 and the patagon2, were essentially battling for dominance of value between ‘the market’ outside the bank, and the deposits within the bank itself. In 1638, the rixdollar became obsolete and in 1645, the city allowed the bank to lower the value of the patagon. This, however, did not alleviate the problem because there were still two different values maintained—the market value and the bank deposit value. Then, in 1659, the patagon was replaced by the dukaat and by 1681 two new coins, the daalder and the guilder, were introduced to the Republic. Two years later, a new receipt system was put into practice. A receipt represented an option to withdrawal the particular type of coin associated with the receipt; however, soon after, this method was used as a divisionary tool to be used to pry the coins of real value out of the peoples’ hands and create a barrier so that coins could no longer be extracted from the bank without a receipt. This idea was the precursor for the founding of the most pervasive system of money creation the world has ever known.
Throughout the 1600s, England was engaged in a number of different wars with the French, Spanish and Dutch. In addition to wealth and power, these wars seem to have revolved around a central issue—religion. But, we will focus on the financial aspect. (As an aside, however, it is worth mentioning that in 1606 King James I of England granted the Jamestown Charter to the Virginia Company. This charter would establish a municipal corporation in the Chesapeake area in North America and in 1607 the first group of Virginia Company explorers, led by the famous Captain John Smith, landed on Jamestown Island. Later, in 1624, the King declared Jamestown, and thus Virginia, a crown colony due to the settlers’ “failures of security from the Natives.” In around 1650, the money changers had profited so much due to funding Oliver Cromwell’s rebellion against King Charles I, a portion of land known as the ‘City of London’ was incorporated. And finally, Isaac Newton, the famed founder of Classical Mechanics and co-founder of Calculus, became Master of the Royal Mint in 1699. In this role, Newton implemented an idea to quell counterfeiting; a method which is still used today when minting coins: milled edges.) Now—by 1693, with wars still raging on and the government owing around £3-million, England was in a state of financial turmoil. English merchants were finding it nearly impossible to transport goods without their ships being raided or destroyed. Unwilling to resort to heavy taxation, King William III of England decided to search for another way to satisfy his and all future debts. A permanent ‘National Debt’ was created in 1693 when a man named William Paterson proposed a plan for private investors to essentially become incorporated as the Bank of England and loan the government whatever money it needed. This plan was approved by King William III in July of 1694 by the Royal Charter and within a matter of weeks the first loan of £1.2-million was made. Functioning as both a commercial bank and a new loan agency that would finance the government, the Bank of England quickly grew and soon after began issuing bank notes, much like the Bank Money in Amsterdam, in exchange for any deposits. As a for-profit corporation, from the outset this bank utilized a method of loaning out more promissory notes than could be satisfied by the deposits it held in its vaults. Known as Fractional Reserve Banking, this process would not be detailed in any publication until over two and a half centuries later.
During the 18th Century, this Fractional Reserve process expanded rapidly as the government of England continued to borrow more and more money from the bank. Meanwhile, in 1743 at Frankfurt, Germany, a counting house was opened by a goldsmith whose family would grow to become the wealthiest, most powerful family on Earth: Amshall Moses Bower. Above the door of his coin shop, Bower hung a red shield with a Roman eagle. The business became known as the ‘Red Shield Firm’, or ‘Rothschild’ in German. After inheriting the business, Bower’s son Mayer Amshel changed his last name to Rothschild. Soon after, Rothschild realized that while money changing fees and loaning to the public was quite profitable, loaning to kings and governments proved much more lucrative. Back in England, the national debt was soaring into the hundreds of millions of pounds while Parliament began passing a number of acts geared at taxing the British colonies in the New World. And, when asked by the Bank of England in 1763 how the North American Colonies could account for such prosperity, Benjamin Franklin replied,
“That is simple. In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay no one."
The Colonial Scrip had no gold or silver to back the value and was only printed to regulate trade; not to generate profit. As this was not the plan or prerogative of the Bank of England, Parliament passed the Currency Act in 1764 which banned all forms of paper currency as legal tender in the Colonies. Later that same year, the Sugar Act was passed and was used exclusively for revenue accumulation by expanding the list of taxable imports. (Another extremely important aspect of this Act was the fact that it shifted smuggling cases from courts of Common Law to Admiralty courts—which would essentially lay the groundwork for our present-day Birth Certificate Bond that is traded on the stock exchange. But, don’t take my word for it. Do the research.)
Back to the 18th Century: Along with the various Parliamentary Acts making their way to the colonies in 1764, a brand new edition of John Locke’s Two Treatises on Government was released there as well. This book, published originally in 1690, laid the foundation for modern ‘capitalism’—whatever that means—and set the stage for the corruption-generating ideology known as private property. Basically, Locke stated three requirements for this system to function properly, 1. There must enough resources left over for everyone else; 2. We must not let the resources spoil; and 3. Labor must mix with the resources in order to establish value. Interestingly, Two Treatises on Government was widely read throughout the colonies on the eve of the Revolution and was the basis for the famous phrase coined by protestors of Parliament at the time, “No taxation without representation.” A year later, in 1765, The Stamp Act was passed by Parliament in another attempt to relieve some of the debt building from the many wars England had been and was still engaged in. The colonies responded with mass protests and refusals by shopkeepers to sell British imports; igniting a fury within the colonists that eventually led to the founding of a group that is virtually synonymous with the Revolution: The Sons of Liberty. Lasting only a year, Parliament repealed The Stamp Act in 1766 in response to both the violent protests as well as the many newspaper articles written by proponents of The Sons of Liberty; most of which owned the very same newspaper, stamp, book and document printing companies that were being heavily taxed. However, Parliament immediately responded by passing The Declaratory Act, which announced the continued authority of Parliament and the Crown over the Colonies. Just one year later, after King George III of Hanover took the throne, Parliament began passing a new series of acts that would burden the British colonies with even more taxes from across the ocean. The Townshend Acts, as they were known, were initiated by The Revenue Act in 1767, which granted any British authority, operating under the crown, the right to enter any private residence, break locks and doors, search anywhere and seize any ‘prohibited’ or ‘uncustomed’ goods or merchandise. This, of course, resulted in another Non-importation agreement in 1768. An article written by the founder of The Sons of Liberty, Samuel Adams, known as the Circular Letter was distributed throughout the Colonies in order to raise awareness of the over-reaching hand of Parliament. And as tensions grew over the next two years between Parliament and the Colonies, the fuel finally ignited in what would become known as The Boston Massacre—where British troops opened fire on a crowd of Colonists, killing five. This incident has been cited as the catalyst for the American Revolution; however, if we take an objective step back and examine the overall causes for the Revolution, we will see that the financial aspect is surely the most prominent.
Following the Boston Tea Party in 1773, the First Continental Congress in 1774 and the beginning of Second Continental Congress in 1775, it became strikingly clear to the Colonists that the only viable option to break the stranglehold Parliament and the Crown had on them was to officially declare independence—even if it meant going to war. Unfortunately, no one seemed to notice those that were profiting most from this constant shift of currency—the banks; specifically, the Bank of England. Then, in February of 1776, Thomas Paine, an unwritten Founding Father of the United States, published a book that sparked in the minds of the Colonists a sense of urgent necessity to end the tyrannical control of Great Britain. The very next month, Adam Smith published the nearly thousand-page critique on government intervention of economics, entitled The Wealth of Nations. Essentially, Smith expanded upon John Locke’s idea of economics by introducing the famous ‘Invisible Hand’ theory. (I can’t help but chuckle every single time I say that phrase: ‘Invisible Hand of the Market’.) In any case, one thing is clear: neither of these political/economic philosophers took into account the fact that we live on a finite planet with finite resources. Instead, an infinite growth paradigm was created which did not stop Thomas Jefferson from basing almost the entire Declaration of Independence on Lockean ideology. Hence, bringing all of this information together, we can see once again that it seems as though financial attributes—specifically, taxes—had the greatest influence on what sparked the Revolution. So, finally, on July 4th, 1776, a month after Richard Henry Lee proposed a Resolution in Congress that called for independence, Jefferson’s Declaration of Independence was unanimously enacted by the Second Continental Congress at the Pennsylvania State House in Philadelphia. In November of 1777, Congress enacted the Articles of Confederation, which established a loose union of the several sovereign States. Meanwhile in England, amidst the political turmoil, the first Industrial Revolution was in full swing as technical advancements had begun a trend of exponential growth—initiated by such ubiquitous figures as James Watt and Eli Whitney. This is an important aspect of this period of time to point out; as it is during this Industrial Revolution that, if those in the financial and/or technical fields would have taken a giant step back and taken an objective look at the trends, we as a species could have begun the process of replacing Human labor with machine automation to create a higher standard of living for everyone on the planet. Obviously, this was not the case and ever since, along with an exponential expansion in technological advancements, abuse of technological advancements has also grown exponentially…
Over the course of the next 10 years, the experimental confederacy was evaluated heavily and in 1787 delegates attending the Constitutional Convention wrote and proposed a Constitution for the United States of America. Essentially, this document is corporate in nature and quite literally lays out the structure of the new corporation that would take on the epithet ‘Government’. If you read through the various terminology presented throughout, keeping in mind that most of the men who outlined the provisions of this new union were slave-owning businessmen and/or lawyers educated mostly in English Law, it will soon become apparent that indeed, this document was in fact written for the sole purpose of establishing a structure for an entity to function as a parent corporation to all other corporations. In order to rally support from the general population for the new Constitution, and thus new Federal Government, Alexander Hamilton, John Jay and James Madison began publishing a series of papers under the name “Publius” in October 1787 that explained the influences, necessity and details of the new Constitution. Known as The Federalist Papers, these publications contributed greatly over the next seven months to bringing mass awareness to the colonies and in June of 1788, 9 states ratified the Constitution; a sufficient majority for it to officially become the ‘Law of the Land.’
