Leo Tolstoy Archive
Written: 1904
Source: Original Text from Gutenberg.org
Transcription/Markup: Andy Carloff
Online Source: RevoltLib.com; 2021
What is the origin of money? What are the conditions under which nations always have money, and under what circumstances need nations not use money?
There are small tribes in Africa, and one in Australia, who live as the Sknepies and the Drevlyans lived in olden times. These tribes lived by breeding cattle and cultivating gardens. We become acquainted with them at the dawn of history, and history begins by recording the fact that some invaders appear on the scene. And invaders always do the same thing: they take away from the aborigines everything they can take,—cattle, corn, and cloth; they even make prisoners, male and female, and carry them away.
In a few years the invaders appear again, but the people have not yet got over the consequences of their first misfortunes, and there is scarcely anything to take from them; so the invaders invent new and better means of making use of their victims.
These methods are very simple, and present themselves naturally to the mind of all men. The first is personal slavery. There is a drawback to this, because the invaders must take over the entire control and administration of the tribe, and feed all the slaves; hence, naturally, there appears the second. The people are left on their own land, but this becomes the recognized property of the invaders, who portion it out among the leading military men, by whose means the labor of the tribe is utilized and transferred to the conquerors.
But this, too, has its drawback. It is inconvenient to have to oversee all the production of the conquered people, and thus the third means is introduced, as primitive as the two former; this is, the levying of a certain obligatory tax to be paid by the conquered at stated periods.
The object of conquest is to take from the conquered the greatest possible amount of the product of their labor. It is evident, that, in order to do this, the conquerors must take the articles which are the most valuable to the conquered, and which at the same time are not cumbersome, and are convenient for keeping,—skins of animals, and gold.
So the conquerors lay upon the family or the tribe a tax in these skins or gold, to be paid at fixed times; and thus, by means of this tribute, they utilize the labor of the conquered people in the most convenient way.
When the skins and the gold have been taken from the original owners, they are compelled to sell all they have among themselves to obtain more gold and skins for their masters; that is, they have to sell their property and their labor.
So it was in ancient times, in the Middle Ages, and so it occurs now. In the ancient world, where the subjugation of one people by another was frequent, personal slavery was the most widespread method of subjugation, and the center of gravity in this compulsion, owing to the non-recognition of the equality of men. In the Middle Ages, feudalism—land-ownership and the servitude connected with it—partly takes the place of personal slavery, and the center of compulsion is transferred from persons to land. In modern times, since the discovery of America, the development of commerce, and the influx of gold (which is accepted as a universal medium of exchange), the money tribute has become, with the increase of state power, the chief instrument for enslaving men, and upon this all economic relations are now based.
In “The Literary Miscellany” there is an article by Professor Yanjoul in which he describes the recent history of the Fiji Islands. If I were trying to find the most pointed illustration of how in our day the compulsory money payment became the chief instrument in enslaving some men by others, I could not imagine anything more striking and convincing than this trustworthy history,—history based upon documents of facts which are of recent occurrence.
In the South-Sea Islands, in Polynesia, lives a race called the Fiji. The group on which they live, says Professor Yanjoul, is composed of small islands, which altogether comprise about forty thousand square miles. Only half of these islands are inhabited, by a hundred and fifty thousand natives and fifteen hundred white men. The natives were reclaimed from savagery a long time ago, and were distinguished among the other natives of Polynesia by their intellectual capacities. They appear to be capable of labor and development, which they proved by the fact that within a short period they became good workmen and cattle breeders.
The inhabitants were well-to-do, but in the year 1859 the condition of their state became desperate: the nation and its representative, Kakabo, were in need of money. This money, forty-five thousand dollars, was wanted as compensation or indemnification demanded of them by the United States of America for violence said to have been done by Fijis to some citizens of the American Republic.
To collect this, the Americans sent a squadron, which unexpectedly seized some of the best islands under the pretext of guaranty, and threatened to bombard and ruin the towns if the indemnification were not paid over on a certain date to the representatives of America.
The Americans were among the first colonists who came to the Fiji Islands with the missionaries. They chose and (under one pretext or another) took possession of the best pieces of land on the islands, and established there cotton and coffee plantations. They hired whole crowds of natives, binding them by contracts unknown to this half-civilized race, or they acted through special contractors and dealers of human merchandise.
Misunderstandings between these master planters and the natives, whom they considered almost as slaves, were unavoidable, and it was some of these quarrels which served as a pretext for the American indemnification.
Notwithstanding their prosperity the Fijis had preserved almost up to that time the forms of the so-called natural economy which existed in Europe during the Middle Ages: money was scarcely in circulation among them, and their trade was almost exclusively on the barter basis,—one merchandise being exchanged for another, and the few social taxes and those of the state being paid in rural products. What could the Fijis and their King Kakabo do, when the Americans demanded forty-five thousand dollars under terrible threats in the event of nonpayment? To the Fijis the very figures seemed inconceivable, to say nothing of the money itself, which they had never seen in such large quantities. After deliberating with other chiefs, Kakabo made up his mind to apply to the Queen of England, at first merely asking her to take the islands under her protection, but afterwards requesting definite annexation.
But the English regarded this request cautiously, and were in no hurry to assist the half-savage monarch out of his difficulty. Instead of giving a direct answer, they sent special commissioners to make inquiries about the Fiji Islands in 1860, in order to be able to decide whether it was worth while to annex them to the British Possessions, and to lay out money to satisfy the American claims.
Meanwhile the American Government continued to insist upon payment, and as a pledge held in their de facto dominion some of the best parts, and, having looked closely into the national wealth, raised their former claim to ninety thousand dollars, threatening to increase it still more if Kakabo did not pay at once.
Being thus pushed on every side, and knowing nothing of European means of credit accommodation, the poor king, acting on the advice of European colonists, began to try to raise money in Melbourne among the merchants, cost what it might, if even he should be obliged to yield his kingdom into private hands.
So in consequence of his application a commercial society was formed in Melbourne. This joint-stock company, which took the name of the “Polynesian Company,” formed a treaty with the chiefs of the Fiji-Islanders on the most advantageous terms. It took over the debt to the American Government, pledging itself to pay it by several installments; and for this the company received, according to the first treaty, one, and then two hundred thousand acres of the best land, selected by itself; perpetual immunity from all taxes and dues for all its factories, operations, and colonies, and the exclusive right for a long period to establish banks in the Fiji Islands, with the privilege of issuing unlimited notes.
This treaty was definitely concluded in the year 1868, and there has appeared in the Fiji Islands, side by side with the local government, of which Kakabo is the head, another powerful authority,—a commercial organization, with large estates over all the islands, exercising a powerful influence upon the government.
Up to this time the wants of the government of Kakabo had been satisfied with a payment in local products, and a small custom tax on goods imported. But with the conclusion of the treaty and the formation of the influential “Polynesian Company,” the king's financial circumstances had changed.
A considerable part of the best land in his dominion having passed into the hands of the company, his income from the land had therefore diminished; on the other hand the income from the custom taxes also diminished, because the company had obtained for itself the right to import and export all kinds of goods free of duties.
The natives—ninety-nine percent of the population—had never paid much in custom duties, as they bought scarcely any of the European productions except some stuffs and hardware; and now, from the freeing of custom duties of many well-to-do Europeans along with the Polynesian Company, the income of King Kakabo was reduced to nil, and he was obliged to take steps to resuscitate it if possible.
He began to consult his white friends as to the best way to remedy the trouble, and they advised him to create the first direct tax in the country; and, in order, I suppose, to have less trouble about it, to make it in money. The tax was established in the form of a general poll-tax, amounting to one pound for every man, and to four shillings for every woman, throughout the islands.
As I have already said, there still exists on the Fiji Islands a natural economy and a trade by barter. Very few natives possess money. Their wealth consists chiefly of raw products and cattle; whilst the new tax required the possession of considerable sums of money at fixed times.
Up to that date a native had not been accustomed to any individual burden in the interests of his government, except personal obligations; all the taxes which had to be paid, were paid by the community or village to which he belonged, and from the common fields from which he received his principal income.
One alternative was left to him,—to try to raise money from the European colonists; that is, to address himself either to the merchant or to the planter.
To the first he was obliged to sell his productions on the merchant's own terms (because the tax-collector required money at a certain fixed date), or even to raise money by the sale of his expected harvest, which enabled the merchant to take iniquitous interest. Or he had to address himself to the planter, and sell him his labor; that is, to become his workman: but the wages on the Fiji Islands were very low (owing, I suppose, to the exceptionally great supply of labor); not exceeding a shilling a week for a grown-up man, or two pounds twelve shillings a year; and therefore, merely to be able to get the money necessary to pay his own tax, to say nothing of his family, a Fiji had to leave his house, his family, and his own land, often to go far away to another island, and enthralled himself to the planter for at least half a year; even then there was the payment for his family, which he must provide by some other means.
We can understand the result of such a state of affairs. From his hundred and fifty thousand subjects, Kakabo collected only six thousand pounds; and so there began a forcible extortion of taxes, unknown till then, and a whole series of coercive measures.
The local administration, formerly incorruptible, soon made common cause with the European planters, who began to have their own way with the country. For nonpayment of the taxes the Fijis were summoned to the court, and sentenced not only to pay the expenses but also to imprisonment for not less than six months. The prison really meant the plantations of the first white man who chose to pay the tax-money and the legal expenses of the offender. Thus the white settlers received cheap labor to any amount.
At first this compulsory labor was fixed for not longer than half a year; but afterwards the bribed judges found it possible to pass sentence for eighteen months, and even then to renew the sentence.
Very quickly, in the course of a few years, the picture of the social condition of the inhabitants of Fiji was quite changed.
Whole districts, formerly flourishing, lost half of their population, and were greatly impoverished. All the male population, except the old and infirm, worked far away from their homes for European planters, to get money necessary for the taxes, or in consequence of the law court. The women on the Fiji Islands had scarcely ever worked in the fields, so that in the absence of the men, all the local farming was neglected and went to ruin. And in the course of a few years, half the population of Fiji had become the slaves of the colonists.
To relieve their position the Fiji-Islanders again appealed to England. A new petition was got up, subscribed by many eminent persons and chiefs, praying to be annexed to England; and this was handed to the British consul. Meanwhile, England, thanks to her scientific expeditions, had time not only to investigate the affairs of the islands, but even to survey them, and duly to appreciate the natural riches of this fine corner of the globe.
Owing to all these circumstances, the negotiations this time were crowned with full success; and in 1874, to the great dissatisfaction of the American planters, England officially took possession of the Fiji Islands, and added them to its colonies. Kakabo died, his heirs had a small pension assigned to them, and the administration of the islands was entrusted to Sir Hercules Robinson, the Governor of New South Wales. In the first year of its annexation the Fiji-Islanders had no self-government, but were under the direction of Sir Hercules Robinson, who appointed an administrator.
Taking the islands into their hands, the English Government had to undertake the difficult task of gratifying various expectations raised by them. The natives, of course, first of all expected the abolition of the hated poll-tax; one part of the white colonists (the Americans) looked with suspicion upon the British rule; and another part (those of English origin) expected all kinds of confirmations of their power over the natives,—permission to enclose the land, and so on. The English Government, however, proved itself equal to the task; and its first act was to abolish for ever the poll-tax, which had created the slavery of the natives in the interest of a few colonists.
But here Sir Hercules Robinson had at once to face a difficult dilemma. It was necessary to abolish the poll-tax, which had made the Fijis seek the help of the English Government; but, at the same time, according to English colonial policy, the colonies had to support themselves; they had to find their own means for covering the expenses of the government. With the abolition of the poll-tax, all the incomes of the Fijis (from custom duties) did not amount to more than six thousand pounds, while the government expenses required at least seventy thousand a year.
Having abolished the money tax, Sir Hercules Robinson now thought of a labor tax; but this did not yield the sum necessary to feed him and his assistants. Matters did not mend until a new governor had been appointed,—Gordon,—who, to get out of the inhabitants the money necessary to keep him and his officials, resolved not to demand money until it had come sufficiently into general circulation on the islands, but to take from the natives their products, and to sell them himself.
This tragical episode in the lives of the Fijis is the clearest and best proof of the nature and true meaning of money in our time.
In this illustration every essential is represented. The first fundamental condition of slavery,—the guns, threats, murders, and plunder,—and lastly, money, the means of subjugation which has supplanted all the others. That which in an historical sketch of economical development, has to be investigated during centuries, we have here, where all the forms of monetary violence have fully developed themselves, concentrated in a space of ten years.
The drama begins thus: the American Government sends ships with loaded guns to the shores of the islands, whose inhabitants they want to enthralled. The pretext of this threat is monetary; but the beginning of the tragedy is the leveling of guns against all the inhabitants,—women, children, old people, and men,—though innocent of any crime. “Your money or your life,”—forty-five thousand dollars, then ninety thousand or slaughter. But the ninety thousand are not to be had. So now begins the second act: it is the postponement of a measure which would be bloody, terrible, and concentrated in a short period; and the substitution of a suffering less perceptible, which can be laid upon all, and will last longer. And the natives, with their representative, seek to substitute for the massacre a slavery of money. They borrow money, and the method at once begins to operate like a disciplined army. In five years the thing is done,—the men have not only lost their right to utilize their own land and their property, but also their liberty,—they have become slaves.
Here begins act three. The situation is too painful, and the unfortunate ones are told they may change their master and become the slaves of another. Of freedom from the slavery brought about by the means of money there is not one thought. And the people call for another master, to whom they give themselves up, asking him to improve their condition. The English come, see that dominion over these islanders will give them the possibility of feeding their already too greatly multiplied parasites, and take possession of the islands and their inhabitants.
But it does not take them in the form of personal slaves, it does not take even the land, nor distribute it among its assistants. These old ways are not necessary now: only one thing is necessary,—taxes which must be large enough on the one hand to prevent the workingmen from freeing themselves from virtual slavery, and on the other hand, to feed luxuriously a great number of parasites. The inhabitants must pay seventy thousand pounds sterling annually,—that is the fundamental condition upon which England consents to free the Fijis from the American despotism, and this is just what was wanting for the final enslaving of the inhabitants. But it turns out that the Fiji-Islanders cannot under any circumstances pay these seventy thousand pounds in their present state. The claim is too great.
The English temporarily modify it, and take a part of it out in natural products in order that in time, when money has come into circulation, they may receive the full sum. They do not behave like the former company, whose conduct we may liken to the first coming of savage invaders into an uncivilized land, when they want only to take as much as possible and then decamp; but England behaves like a more clear-sighted enslaver; she does not kill at one blow the goose with the golden eggs, but feeds her in order that she may continue to lay them. England at first relaxes the reins for her own interest that she may hold them tight forever afterwards, and so has brought the Fiji-Islanders into that state of permanent monetary thralldom in which all civilized European people now exist, and from which their chance of escape is not apparent.
This phenomenon repeats itself in America, in China, in Central Asia; and it is the same in the history of the conquest of all nations.
Money is an inoffensive means of exchange when it is not collected while loaded guns are directed from the sea-shore against the defenseless inhabitants. As soon as it is taken by the force of guns, the same thing must inevitably take place which occurred on the Fiji Islands, and has always and everywhere repeated itself.
Men who consider it their lawful right to utilize the labor of others, will achieve their ends by the means of a forcible demand of a sum of money which will compel the oppressed to become the slaves of the oppressors.
Moreover, that will happen which occurred between the English and the Fijis,—the extortioners will always, in their demand for money, rather exceed the limit to which the amount of the sum required must rise, so that the enslaving may be earlier. They will respect this limit only while they have moral sense and sufficient money for themselves: they will overstep it when they lose their moral sense or even do not require funds.
As for governments, they will always exceed this limit,—first, because for a government there exists no moral sense of justice; and secondly, because, as everyone knows, every government is always in the greatest want of money, through wars and the necessity of giving gratuities to their allies. All governments are insolvent, and involuntarily follow a maxim expressed by a Russian statesman of the eighteenth century,—that the peasant must be sheared of his wool lest it grow too long. All governments are hopelessly in debt, and this debt on an average (not taking in consideration its occasional diminution in England and America) is growing at a terrible rate. So also grow the budgets; that is, the necessity of struggling with other extortioners, and of giving presents to those who assist in extortion, and because of that grows the land rent.
Wages do not increase, not because of the law of rent, but because taxes, collected with violence, exist, with the object of taking away from men their superfluities, so that they may be compelled to sell their labor to satisfy them,—utilizing their labor being the aim of raising the taxes.
And their labor can only be utilized when, on a general average, the taxes required are more than the laborers are able to give without depriving themselves of all means of subsistence. The increase of wages would put an end to the possibility of slavery; and therefore, as long as violence exists, wages can never be increased. The simple and plain mode of action of some men towards others, political economists term the iron law; the instrument by which such action is performed, they call a medium of exchange; and money is this inoffensive medium of exchange necessary for men in their transactions with each other.
Why is it, then, that, whenever there is no violent demand for money taxes, money in its true signification has never existed, and never can exist; but, as among the Fiji-Islanders, the Phœnicians, the Kirghis, and generally among men who do not pay taxes, such as the Africans, there is either a direct exchange of produce, sheep, hides, skins, or accidental standards of value, such as shells?
A definite kind of money, whatever it may be, always becomes not a means of exchange, but a means of ransoming from violence; and it begins to circulate among men only when a definite standard is compulsorily required from all.
It is only then that everybody wants it equally, and only then does it receive any value.
And further, it is not the thing that is most convenient for exchange that receives exchange value, but that which is required by the government. If gold is demanded, gold becomes valuable: if knuckle-bones were demanded, they, too, would become valuable. If it were not so, why, then, has the issue of this means of exchange always been the prerogative of the government? The Fiji-Islanders, for instance, have arranged among themselves their own means of exchange; well, then, let them be free to exchange what and how they like, and you, men possessing power, or the means of violence, do not interfere with this exchange. But instead of this you coin money, and do not allow anyone else to coin it; or, as is the case with us, you merely print some notes, engraving upon them the heads of the czars, sign them with a particular signature, and threaten to punish every falsification of them. Then you distribute this money to your assistants, and, under the name of duties and taxes, you require everybody to give you such money or such notes with such signatures, and so many of them, that a workman must give away all his labor in order to get these notes or coins; and then you want to convince us that this money is necessary for us as a means of exchange!
Here are all men free, and none oppresses the others or keeps them in slavery; but money appears in society and immediately an iron law exists, in consequence of which rent increases and wages diminish to the minimum.
That half (nay, more than half) of the Russian peasants, in order to pay direct and indirect taxes, voluntarily sell themselves as slaves to the land-owners or to manufacturers, does not at all signify (which is obvious); for the violent collection of the poll-taxes and indirect and land taxes, which have to be paid in money to the government and to its assistants (the landowners), compels the workman to be a slave to those who own money; but it means that this money, as a means of exchange, and an iron law, exist.
Before the serfs were free, I could compel Iván to do any work; and if he refused to do it, I could send him to the police-sergeant, and the latter would give him the rod till he submitted. But if I compelled Iván to overwork himself, and did not give him either land or food, the matter would go up to the authorities, and I should have to answer for it.
But now that men are free, I can compel Iván and Peter and Sidor to do every kind of work; and if they refuse I give them no money to pay taxes, and then they will be flogged till they submit: besides this, I may also make a German, a Frenchman, a Chinaman, and an Indian, work for me by that means, so that, if they do not submit, I shall not give them money to hire land, or to buy bread, because they have neither land nor bread. And if I make them overwork themselves, or kill them with excess of labor, nobody will say a word to me about it; and, moreover, if I have read books on political economy I shall be quite sure that all men are free and that money does not create slavery!
Our peasants have long known that with a ruble one can hurt more than with a stick. It is only political economists who cannot see it.
To say that money does not create bondage, is the same as to have asserted, fifty years ago, that serfdom did not create slavery. Political economists say that money is an inoffensive medium of exchange, notwithstanding the fact that its possession enables one man to enthralled another. Why, then, was it not said half a century ago that servitude was, in itself, an inoffensive medium of reciprocal services, notwithstanding the fact that no man could lawfully enthralled another? Some give their manual labor, and the work of others consists in taking care of the physical and intellectual welfare of the slaves, and in superintending their efforts.
And, I fancy, some really did say this.