I want to comment about Mexico and Guatemala, as a lead-in to comments about money.
In my house I have some tenants from Guatemala whose rent payments help me with my monthly expenses. (Each tenant has his own bedroom. There is also a Mexican tenant in another bedroom.)
One tenant from Guatemala speaks a Mayan language called Popti. Another speaks a Mayan language called Q’eqchi’. Still another speaks a Mayan language called Tz’utujil. When these three tenants want to talk with each other (or with me) they must speak in Spanish. I have listened to them talk on their cell phones in their own languages, and I have marveled how different their languages are from each other, and how totally different they are from Spanish and English. If my tenants did not speak Spanish (in addition to their native languages), then I could not communicate with them at all. I speak Spanish, but I do not understand one word of their indigenous languages.
Now, on this topic of languages, the conquistador Hernán Cortés invaded Mexico in 1519 to secure the area for Spanish colonization. Cortés and his men interacted with native tribes, fought some tribes, allied with others, and then attacked the Aztecs with the help of his native allies, and then he…
When Cortés’ expedition left Cuba en route to Mexico, not one of his 500 men in eleven ships spoke any of Mexico’s sixty-five indigenous languages. Nor did anyone in Mexico speak any Spanish. None.
So how did Cortés and his men communicate with the natives? It was not through “sign language,” or through grunting and pointing. Cortés and the natives actually spoke to each other. But how? I’ll give you a second to think about it.
People (including most historians) don’t stop to think. They take it for granted that Cortés and his men communicated with the natives, ummm…somehow.
This is an example of what I call sloppy thinking. It is pandemic among people when they discuss money, and it is one reason why there is so much poverty and inequality.
To answer our question, when Cortés landed in Yucatan, the Mayan Indians used hand gestures to convey to him that another Spaniard was already there, and was nearby in what is today Guatemala. When Cortés found this other Spaniard, his name was Aguilar, and he had previously been shipwrecked and taken captive by the Mayans. During Aguilar’s time as a prisoner, he learned to speak a Mayan language called Mopan. Cortés took Aguilar as his translator, sailed up north around the Yucatan Peninsula, and arrived at the Mayan town of Potonchan (Mexico) on 22 March 1519. When Cortés defeated the natives there, the natives gave Cortés a peace offering of food, gold, and twenty women. One of women, called Malanale, just happened to speak Mopan, plus the Nahautl language of the Aztecs. Therefore Cortés spoke Spanish to Aguilar, who spoke Mopan to the girl, who spoke Nahuatl to the Aztecs.
If Cortés had not chanced upon this woman, then the Spaniards probably could not have succeeded in Mexico, since they could not have communicated with the natives. This is a small detail but a crucial one, like the fact that the U.S. government does not need loans or tax revenue. Failure to note such details is sloppy thinking. And sloppy thinking is why we have so much poverty and inequality today.
Below are more examples of sloppy thinking…
Today I watched a video about the Battle of the Teutoburg Forest (9 A.D.) in which German tribes wiped out three Roman legions, plus six cohorts of mercenaries employed by Rome, a total of about 25,000 invaders killed. The video said the Germans were angry because Roman governor Publius Quinctilius Varus extracted money from them and…
The German tribes did not use money, and even if they had, their tokens would have been useless to the Romans. Nor did the Germans use Roman money. So how could Publius Varus have extracted money from them?
He didn’t. He extracted tribute in the form of grain, crops, slaves, livestock, leather goods, and so forth.
Again, this is a small detail but a crucial one, because if we don’t stop to ask questions, we will have false beliefs about money. And what keeps us enslaved by rich people is not guns and armies, but our false beliefs.
When I distinguish between money and tribute, you say, “Yes of course. That goes without saying.”
But does it? The video was in error. And if we don’t catch errors like this, we will be slaves of the rich. We will let politicians get away with their lies.
Before the French Revolution of 1789, French peasants criticized Marie Antoinette for spending lavishly on clothes. Peasants nicknamed her “Madame Deficit,” as though deficit spending was a bad thing, and as though the French crown could not create as many French livres out of thin air as it liked.
(The French currency was called “livres” until 1795, two years after Marie Antoinette was executed. After 1795 it was called French “francs.” On 1 Jan 1999 France adopted the euro, thus falling into permanently growing debt and austerity.)
Incidentally the French Revolution had many causes, but the trigger – as always – was hunger. Years of bad harvests and foreign war debts caused food shortages, which in turn caused inflation, which worsened the shortages, which triggered the Revolution.
Regarding those French war debts, this is where we get into sloppy thinking territory. The 90-minute video below is a good one, but it has errors.
France played a role in the American Revolutionary War (1775–1783). Motivated by a long-term rivalry with Britain, and to avenge their territorial losses during the French and Indian War, France secretly began sending money to the Americans in 1775, and…Whoops.
There it is again. Sloppy thinking.
French livres had zero value for the American colonists. The French crown sent war supplies, not money.
“Yes of course,” you say. But until I exposed it, the error was invisible to you.
Here is another error from the video above, at 08:05…
“Louis XV had lost the Seven Years’ War in which Britain had relieved France of most of her North American colonies. The contest nearly bankrupted France, whose coffers were nearly empty.”
Excuse me? How could French “coffers” be “nearly empty” if the French crown created infinite livres out of thin air? This is the kind of sloppy thinking that makes people falsely believe that a currency issuer is the same as a currency user. From this false belief comes the false belief that the central government is “bankrupt.” Therefore we must eliminate all social programs (except for multi-trillion-dollar bailouts and trillion-dollar wars and endless corporate subsidies and so on).
France did indeed have war debts, but in foreign currencies. Failure to distinguish between debts in domestic currencies and debts in foreign currencies is a classic example of sloppy thinking that keeps the masses impoverished and enslaved. Corporate media outlets intentionally fail to make this distinction, since they are owned by the rich.
The French crown did not have “coffers” for French livres, since the crown could create as many French livres as it liked out of thin air. So why did France have debt problems?
Recall your basic economics…
Every nation must obtain imports, since no nation is 100% self-sufficient. If a nation’s currency is not accepted outside the nation’s borders, then a nation must obtain foreign currency in order to buy imports. To get foreign currency, a nation must borrow it, or else sell goods and services to foreigners in exchange for foreign currencies. (The USA does not need foreign currency, since U.S. dollars are accepted worldwide.)
Therefore, when we say that French support for the American colonists caused France to “go into debt,” we do not mean in French livres, which the French government created out of thin air. We mean debt in foreign currencies. The French crown purchased war supplies from foreigners on credit, and sent those war supplies to the American rebels. The foreigners who sold these these war supplies to France expected to be paid in their own foreign currencies, or else be paid in French goods and services. If France had no foreign currency, and could not offer any goods or services that foreigners wanted, then France went into foreign debt. This caused foreigners to stop selling to France on credit. The result was French food shortages that triggered French inflation, followed by the French Revolution.
It’s all very basic, but sloppy thinking causes most people to shut up and submit to ever-worsening poverty and inequality.
From the video above at 14:35:
“French military intervention in the American war of independence cost France fifteen hundred million French livres; money raised from borrowing, and from taxing poverty stricken peasants.”
No. That is sloppy thinking again. The French crown did not need to tax French peasants for the war, since the French crown could create as many French livres as it wished. Thus the crown incurred no “costs” in livres, and it needed no tax revenues in livres. France’s war debts were in foreign currencies, not in French livres.
“The enormous war bill hastened an impending financial crisis. America bankrupted France because the French monarchy could not pay those debts.”
Pay debts to who? The video does not say. Actually the debt holders were foreigners who supplied goods to the French crown on credit, and who did not want to be paid for those goods in French livres. France did not have anything to pay the foreigners with, such as grain, because of years of bad harvests. Therefore foreigners stopped selling to France on credit. The result was shortages in France, which led to chaos.
Marie Antoinette continued to spend money on dresses and shoes and jewelry as if nothing had happened.
If those clothing goods came from France, then the spending of French livres (created out of thin air) helped the French economy until there were food shortages, at which point the livres caused inflation. But if the clothing goods came from outside France, then Marie Antoinette’s spending caused the French crown’s foreign debts to increase. Again the video is not clear about this, because of sloppy thinking. Therefore the video falsely pretends that the French crown needed tax revenues.
Sloppy thinking causes people to be stupefied even as the ground is literally stolen from under their feet. For instance, neoliberals in England are steadily privatizing the National Health System by starving the NHS of funding, and selling off NHS land from under the hospitals. I say England because this land theft is not (yet) happening in Scotland and Wales.
Prime Minister Theresa May is selling off (i.e. privatizing) the land on which clinics and hospitals sit, so the new owners can collect rent on it…forever. This will make healthcare prices rise so high that the British masses will beg for relief, even if it means privatizing the hospitals too.
Many people are good at spotting plot holes in movies, novels, and TV programs, but they remain blind to giant plot holes in the official narratives about government finances. In some ways people are sharp. In other ways they indulge in sloppy thinking. The penalty for that is poverty.
One other thing. An afterthought. Just now I was reading the article below when something jumped out at me.
Under a Medicare-for-all, single-payer system, the United States would join virtually every other Western country in recognizing health care as a fundamental right and providing insurance for every citizen. It would reduce the burden on employers, which bear the brunt of the cost of insurance today. It would be paid for with tax hikes on the wealthiest Americans, including a financial transactions tax that would curb risky high-frequency trading.
Tax hikes are not necessary. Such idiocy is why Americans cannot have Medicare-for-all.
Change of topic:
Q. What’s worse than Republican corruption?
A. Democrat hypocrisy.
Today’s Democrats sometimes make populist noises, but Democrats in practice are every bit as corrupt, plutocratic, and neoliberal as Republicans. And Democrats are even more pro-war than are Republicans. Democrats are forced to be this way, since they have nothing to offer average Americans except more poverty and inequality, just like Republicans. Therefore all that Democrats ever talk about is Trump and Russia.
Jamin Ben Raskin is a Democrat U.S. Congressman from Maryland. Last weekend Ruskin held a rally in Washington DC (video excerpt below). Did Ruskin call for Universal Medicare? Student loan debt relief? And end to the wars? Of course not, since Ruskin is a Democrat.
In the video below at 01:55 Ruskin says:
“If you read the report prepared by seventeen of our own intelligence agencies, you know the truth. Donald Trump is a hoax perpetrated on Americans by the Russians.”
This is a lie and Ruskin knows it. (I’m transcribing the video’s words so you don’t have to sit through its trash.)
At 04:10 Ruskin says,
“We know that Vladimir Putin is conducting active measure operations to destabilize liberal democracies and promote his brand of oligarchy and corruption all over the world. Brexit was part of this. Support for the right-wing Gilders in the Netherlands was part of it. In France the Russians hacked and trashed Macron in a bid to elect the right-wing immigrant-bashing Marine Le Pen. Orbán’s Hungary, Duterte’s Philippines, Assad’s Syria, the recent chaos in Venezuela, all the despots, dictators and kleptocrats have found each other, and Vladimir Putin is the ringleader of the unfree world. But Putin’s biggest and arguably most successful operation was arguably right here in the USA with the election of Donald Trump. Back in the home office in Moscow they’re still celebrating their disruption of our election.”
All lies, distortions, and neoliberal bullshit. For Ruskin, the entire planet is a “victim” of Russia.