(Week 3 - Saturday Aug. 16)
This week's series of columns about the credit card phenomenon was inspired by an article in Sunday's (August 10) edition of the New York Times titled "Credit Cards Tighten Grip Outside U.S." It was a report on how this American 'innovation' is spreading rapidly throughout the world, to the point where "More than two-thirds of the world's 3.67 billion payment cards circulate abroad."
The article goes on to provide anecdotal tales testifying to both the terrible effects and seeming benefits of this burgeoning trend. I do not dismiss the value of such a discussion, but it overlooks a vastly more fundamental story.
In the second week of this series of columns (particularly #'s 10, 11 & 12), I introduced the idea that the American Revolution was the result most specifically of the British refusal to agree to the colonists' demand that they be permitted to issue their own money through the public sector (the colonial government), instead of having to borrow their money supply from foreign bankers, thereby putting themselves perpetually in "debt" to and under the control of foreign creditors. This was a truly revolutionary concept that, I believe, was the critical factor that enabled the American colonies to bind together and form a powerful nation, while, for the most part, the other former colonial territories became what is today commonly called the "third world," which still struggles to escape its dependency status and ongoing revolving-door "debt."
The American experience demonstrated a shining way out from under the imperialist boot, but, it seems, we as a nation have forgotten our own authentic heritage and gift to the world; i.e. the example of a nation that could truly exercise its sovereignty and freely develop its own potential through assuming the power to issue its own money.
It is perhaps providential that the American monetary system even now reaches out into the world as a transformative force, but it is utterly paradoxical that it does so as the agent for spreading the financial machinery of money creation based on "debt." Even the Times article picked up on the underlying sense of contradiction when it observed wryly, "As the American blessing of credit cards became widespread, so did the American curse of debt."
Most of the article focused on Turkey, a largely Islamic nation that connects the East and West. The Islamic world still holds fast, relatively speaking, to the ancient prohibition against "usury" (using money to make money at the expense of one's fellow man), which is a foundation stone of the Judeo/Christian tradition also.
The people of the Islamic world, as well as other emerging nations, have a rightful interest in sorting out on their own terms how they would choose to adopt, or not, the material blessings of the Western world, but thoughtful consideration of such is increasingly overshadowed by the fact that "moving into the modern world" is effectively accompanied by the obligation to embrace American modes of finance. At this juncture this translates into having to accept virtually whole a system based on usury (as embodied in the private bank loan transaction). To many in the developing world this amounts to a profound betrayal of their deepest values, and seeing everything they hold dear in their lives becoming swallowed up in a tidal wave of commercialism and "debt."
I do not mean this as a blanket proscription against credit card use, or even export. In the right context, they could be a genuine benefit to those who use them wisely (as debit, credit union, and other non-money-issuance cards often are now).
At a time when some of the most powerful financial institutions are struggling to stay afloat, the Times article reports that VISA and MasterCard have become "Wall Street wonders," with VISA recently making the largest stock offering in American history, and the value of MasterCard's shares going up almost 500 percent since 2006, both largely due to their success in expanding operations to foreign lands.
It is an irony of breathtaking (and, dare I say, tragic) proportions that for the nation that fought a glorious revolution to establish in the world the right of a people to issue their own money, perhaps its most "successful" export has become a credit card industry, whose mode of operation is the very quintessence of the private-bank-loan transaction that is driving the world into dependency and "debt."
The complete set of columns from this series is posted at the following websites.