THE MONEY QUESTION

Welcome. We are honored to have guest writer Mwarang'ethe who will discuss the money issue as pertains to the Draft Constitution. We welcome reader comments so please feel free to agree, disagree or offer suggestions.
THE MONEY QUESTION,
THE DRAFT CONSTITUTION
&
FREEDOM
By Mwarang’ethe
The strongly held belief in the 21st Century that bankers have a divine right to create money out of thin air, and thereafter charge interest/usury and thereby enslave those who honestly labor, will be looked at by the future generations as an obnoxious idea as we look today at the vicious idea pregnant with peril, of the bygone ages that, kings had divine right to rule.
The Prayer
The Kenyan total national debt is expected to reach Sh1.33 trillion by 2012. Such a monstrous debt that enslaves the current and the future generations without their consent arises from the entrenchment in our laws the DEBT BASED MONETARY system. Given this grim milestone, we beseech the Committee of Experts and the whole nation to embrace the CREDIT BASED MONETARY system in the New Constitution. Credit based monetary system is the only way of ending this debt servitude by providing debt free, stable and honest currency and thereby ensure just distribution of power and wealth. To achieve this, we urge Kenyans to preserve and entrench the fundamental and natural right to issue money
in the New Constitution. This must be so, for right to issue money is the basis of all other rights.
Fundamental Declarations:
1. The utilization of money as a medium of exchange does not depart from barter trade. Thus, the sole OBJECTIVE of money is to split barter into two halves. The receiver of money gives value thereof, but, receives only a promise of value. When this promise of value is handed to the subsequent seller, the original receiver of money requisitions his half of the barter transaction. All money does is to bring about time element into barter and thereby give the receiver of money the power to requisition his half from any other trader and in any commodity or service, at any time. This way, money expedites and multiplies exchange leading to greater variety of production and thereby raises the living standards.
2. Money being a liberator of exchange is also a vehicle of human trust and confidence. Its substance is the pledge that he who takes will also give. This pledge of faith is the sole basis of the power to issue money. Thus, he who issues money to cover his purchases must be prepared to redeem his pledge by selling on the tender of the monetary instrument from any person.
3. From above it follows therefore, that the SOURCE of money must be in tune with:
(a) The first cardinal truth of money that no one, whether the government or the individual can ISSUE/CREATE money without BUYING something.
(b) The second cardinal truth of money that sound money must be BACKED with something and the act of backing can only be the act of SELLING.
(c) From these two undeniable laws of money, it follows therefore, that; contrary to universal, but, ignorant opinion, commercial banks (excluding savings banks) do not issue or loan money. Banks do not lend their capital, surplus or depositors funds. They merely authorize the so – called borrowers to increase money supply i.e. issue money and the deposit so created is what is called a loan. This gives bankers who create nothing an unchecked and a dangerous monopoly. They use this monopoly to reject genuine requests to issue money for productive sectors of the economy and when they do, they demand a tribute for no services delivered from wealth creators. Thus, banking as constituted today greatly hampers commercial exchange and therefore, retards human progress.
4. The tap root of freedom is unrestricted exchange. All other freedoms are appendixes of this tap root. We are free to the degree we are able to enjoy social intercourse. The enjoyment of the social intercourse is measured by our mental and material wealth. Our mental and material wealth is dependent upon our productivity. Productivity is dependent on our exchange facility since we produce for ourselves indirectly through exchange with other men. Therefore, unhampered exchange is the neck of the bottle of freedom and happiness. If growth of freedom is dependent on freedom of exchange, whatever impedes exchange must be rejected while that promotes exchange and therefore, freedom of mankind should be welcomed.
5. Unrestricted exchange is dependent on the freedom to issue money which is rooted in natural law. Given its roots in natural law, any man made law that attempts to thwart it has no validity. This is so because to the extent this fundamental freedom is curtailed; all other freedoms, so loudly proclaimed in human rights instruments are equally curtailed for they are an offshoot of the freedom of exchange. More importantly, curtailment of this fundamental
right converts the government into a master and not a servant and thereby, renders the citizen a subject of his own creation.
6. So as to ensure unhampered exchange, and therefore, freedom that invention of money paper money promised, we urge the Kenyan people to abandon the current debt based monetary system for not only does it hamper exchange between wealth creators who are the majority and therefore their freedom at the behest of the few bankers who create nothing, but, also, perverts democracy because the source of money determine the social, economic and political outcomes. The current system makes money readily available to speculators who create financial bubbles while limiting and making it expensive to those who are in the productive sectors of the economy.
7. For money to be sound, stable and adequate, it must spring from where wealth springs from, namely, the wealth creators. Ability to create money must be matched by the ability to produce wealth. By so doing, we can be sure that money is backed by value and thereby prevent inflation so as to maintain stable prices. This will enable effective coordination between production and consumption. This requires adoption of a monetary system designed as a utility and responsive to the needs of mass distribution. The only monetary system that can meet the needs of the people is the credit monetary system which will enhance exchange while not perverting political democracy.
Money Question in the Harmonized Draft Constitution
Although not exhaustive, the following sections in the Harmonized Draft
Constitution is relevant to the vital question of money
1. S.253 empowers the national government to borrow money from any source.
2. S.254 (1) gives the devolved government powers to borrow money.
3. S.555 declares public debt of the Republic a charge on the Consolidated Fund.
4. S.269 establishes the Central Bank of Kenya and gives it monopoly to issue the currency of Kenya
5. S.270 requires the Central Bank of Kenya to:
(a) Promote and maintain the stability of the value of the currency of the Republic.
(b) Issue notes and coins.
(c) Promote balanced and sustainable economic growth.
(d) Promote efficient banking and credit system.
6. Chapter Seven which deals with Land and Property
The question is, has the Harmonized Draft Constitution come up with a sound law or framework for issuing stable bona fide money or medium of exchange that is necessary for a proper functioning of free enterprise economy which we must have so as to create sustainable economy for the new Republic?
Having gone through the above sections of the Draft Constitution, we are forced to conclude that, Kenyans are yet to appreciate the true cause of their miseries and tribulations. Consequently, they have not removed these causes, for they remain embedded in their new Constitutional dispensation. Simply, it is a case of old wine in new wine skin. As a result, there will be no change and the consequence will be more disillusionment and perhaps, total failure of the Kenya state in the near future.
Contrary to popular delusions and fantasy, the true causes of Kenyan miseries have not been President Kenyatta, Moi or Kibaki. They have been twofold.1 These are:
(a) The monopolization of land by a few.
(b) Monopolization of money by a few.
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1 Other factors include monopolization of media as well as external factors like neo – mercantilism dressed in the language of free trade by the rich nations. Through neo – mercantilism policies, the rich nations appropriate wealth of the poor nations and especially Africa. How Africa may counter these policies is a subject for another day.
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We have discussed how land should be dealt with as an inalienable birthright elsewhere. Here, we deal with money and how to link land and money creation powers.

This particular article then goes on to define what money is and tells of the Consequences of Money Creation Monopoly by Government and Bankers. It is a very enlightening but lengthy read to post here in its entirety so we urge the reader to email us for the full copy. Read it and comment and let’s get a discussion going