Central Banks and Food

In a recent piece in National Review, James Lileks has some fun at the expense of “locavores”—that is, people who do not appreciate the ways in which importing food from other areas improves our quality of life.

"If you can walk to the berry patch, go to a duck farm, and cook it all up in five minutes, well, aren’t you in great shape. But I’m not going to feel bad for buying a box of cereal instead of farming it. FARMING IT. Wheat, waving in the backyard! Wheat, bending to the humble scythe! Wheat, threshed and separated! Wheat! Noble honest home-grown wheat! I admit it would come in handy if you’d been eating hypothetical breakfasts, but when you have actual loaves of bread from the store, you’re less inclined to start the day by firing up the peat-fueled oven and yoking the oxen to grind the grains."

There is no doubt some good sense in Lilek’s critique, but it brought to mind a few lines from Ezra Pound’s Canto 45 (“On Usury”):

with usura, sin against nature,
is thy bread ever more of stale rags,
is thy bread dry as paper,
with no mountain wheat, no strong flour….

Pound was an expatriate American poet who (in his own words) “began [in 1918] investigation of causes of war, to oppose the same.”  As a result of his investigation, Pound came to believe that the primary cause was the ability of modern banks to create currency out of nothing, loan it, and receive it back with interest.  This sort of lending is made possible on an almost unlimited scale by the existence of central banks, such as the Federal Reserve System, and is what Pound has in mind when he uses the word “usura” (or usury).  (There is much legitimate controversy surrounding Pound, and I have found it necessary in my study of his thought to separate the wisdom from the folly.)

As Pound understands it, our debt-based agricultural system arose not because it is good for farmers or good for those who eat their food, but because it is good for bankers who “hath benefit of interest on all moneys which it, the bank, creates out of nothing” (from Pound’s Canto 46).  Under this debt-based system, farming becomes so capital-intensive that only large operators survive, and food must be grown as cheaply as possible so that farmers can not only earn a living but pay back the interest on their loans.  Heavy reliance on chemical fertilizers, chemical pesticides, genetically engineered, proprietary seeds, mono-culture, expensive equipment, and huge mortgages characterize this modern form of agriculture.  The final result for us consumers, according to Pound, is food that does not taste as good as it once did, and is not as nutritious.  (Wendell Berry’s Unsettling of America is well worth reading for an intelligent discussion, by another American thinker and poet, of problems with modern American agriculture.)

If Pound is correct, the modern agricultural system is not the wonder that Lileks wholeheartedly praises, and his breakfast of Raisin Bran, bananas, coffee, pork sausage, and orange juice may not be a great as he thinks.  (The decreasing quality of our food might also direct our attention to the flimsiness of other products we consume, such as the bedroom door I tried to repair the other day, only to find that the places where the hinges attach are little more than paper.)  All of this is in addition to the fact that most Americans are in perpetual debt (77 million Americans have “debt in collections,” according to CNN), a state of affairs that clearly benefits banks, but is of questionable value to the rest of us.

N.B. I am well aware that discussions about banking sometimes veer off in strange directions (such as anti-Semitism), and in my study of it I have found it necessary to keep my focus on the phenomenon of modern banking itself.  There are good, short videos available to the novice that can serve as introductions to this study, such as “Fear the Boom and Bust,” “Fight of the Century,” and “The Biggest Scam in the History of Mankind.”  Too few Americans, I believe, are aware that all  of our “money” came and continues to come into existence when banks create currency out of nothing and loan it to their customers--that is, our entire “money” supply represents debt that individuals must repay with interest to banks.  It is at least worth knowing that there were once great battles against central banking in the U.S. (that of Andrew Jackson and Martin van Buren against the Second Bank of the United States, for example) and that Founders such as Thomas Jefferson and John Adams (as opposed to Alexander Hamilton), believed that banks such as we have today should be (in Adams’ words) “outlawed to all eternity.”