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At what age did you find out that the Wizard of Oz story is a criticism of fiat money?

July 31, 2020

The Americans have always been deeply suspicious of the idea of ​​the state. The culture of the United States is not much admired to rely on very large organizations. We have to remember that the country was founded by Protestant settlers from Europe. And religion had a strong impact on the social, political and economic life of the country due to the influence of the first settlers. And that’s why the north and south are so culturally different.

The internal configuration of the American differs radically from that of the Latin American. They look like beings from different planets. While the south is still looking for magical formulas in the style of the Dorado legend, large factions in the north have always claimed that magic is empty. I mean the real thing is hard work and the Wizard of Oz is a fake.

When we talk about the United States, we always fall for wrong descriptions. In fact, everything that is said is half the truth because the United States is called a homogeneous body. For this reason, criticism generally makes little sense. It is said to be a country of moral negligence, but it is also said to be a country of Puritans and Conservatives. It is the country of tolerance and at the same time the country of intolerance. We talk about consumer culture, credit cards, excesses and bad taste. But we have billionaires in monochrome flannels, jeans, and sneakers that donate millions to charity.

At what age did you find out that the Wizard of Oz story is a criticism of fiat money?At what age did you find out that the Wizard of Oz story is a criticism of fiat money?

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There is only one explanation for all of these obvious contradictions and mixed signals. There is not a single United States. There are thousands. The Liberal and the Conservative. Urban and countryside. Young and old. The religious and the layman. Southerners and Southerners. The one on the east coast and the one in the west. The cult and the ignorant. The fat and the thin. The worker and the businessman. The rich and the poor. The progressive and the reactionary. So, tEverything that is said about the United States is true and everything it says is a lie. Because everything has its representative and opposite.

In general, of course, we are faced with an individualistic, optimistic and entrepreneurial culture. The Protestant work ethic is based on constant effort, on the power of individual will and on personal sacrifice. The first settlers left Europe to work with their own hands. The dream was to be free to build your own destiny. On the other hand, The Spanish conquerors were looking for gold in order to be able to do nothing like the Spanish aristocracy of the 16th century. They are very different mental schemes.

However, Why so much history lesson to talk about the Wizard of Oz? Give context. L. Frank Baum wrote the children’s story The Wonderful Wizard of Oz after the panic of 1893 and published it in 1900. Deflation caused a deep economic crisis that created great political and social tensions. It took longer before crises than now. It was not uncommon for seizures to last 10 years or more. Baum was a somewhat liberal political activist socially, but economically but conservatively. A formula that we see a lot in Silicon Valley today. Baum was an advocate of women and Native Americans, but criticized the expansionary monetary policy of his time.

The populist party gained strength and monetary expansion was intensified by using silver as a solution to deflation. We have to remember that this was the “gilded age”, the era of industrialization in the United States. Railroads, oil, the rise of the first unions and the “robber barons” like Vanderbilt, Andrew Carnegie, Andrew Mellon, J.P. Morgan, William Randolph Hearst and John D. Rockefeller.

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Technological progress and industrialization increased production, which led to astonishing economic growth. However, What happens when you use gold when money and production go up? You have deflation. The gold price rises and the prices fall. And producing is becoming less and less profitable and there is an economic crisis in less than what a rooster crows. Deflation reduces income and leads to unemployment.

The solution is to increase the money supply to balance production. This makes economic sense, but it has a problem. It means government intervention in the economy. And the heavy legacy of the pioneers lives on in the Americans, who feel a natural reluctance in a large state. P.They refer to an ongoing crisis as the acceptance of central solutions. A personal way of the cross is better than being happy, but dependent. Protestants prefer pain to submission.

Protestantism is a movement that promotes personal relationships with God. This stimulates subjectivity. And when subjectivity comes, we usually have individualism in the social and anarchy in the political.

The Wizard of Oz as a political allegory and criticism of Fiat money does not come directly from the author. Actually, It is an interpretation made by historian Henry Littlefield in 1964 long after the work was published. However, his arguments are extremely powerful. And the story is no longer the same after reading this explanation. I always thought this story was about enjoying life and not looking for empty illusions on the other side of the rainbow. That is, it is better not to dream of little birds anymore and to appreciate our life. P.But history could have a different level if you look at the life of the author and the historical moment in which he lived.

“Oz” is a derivative of an ounce, the unit of weight used to measure gold and silver. The girl Dorothy embodies the naive American people. The scarecrow represents the farmer who thinks he has no brain, but deep down he can be very smart. The tin man represents the industrial worker, especially the steel industry, who lacks his heart, but the background has a great mysticism. And it is speculated that the cowardly lion refers to the political class that has given up its principles to solve the crisis.

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The golden path that leads us to Emerald City is an indication of gold and Dorothy’s silver shoes are a direct and clear indication of silver. Because silver was used in the aggressive monetary expansion of the time. Dorothy Ruby wore shoes in the Judy Garland film produced by Metro-Goldwyn-Mayer in 1936. But in L. Frank Baum’s original story, the shoes were silver. The witches with the names of the cardinal points refer to the regions of the country. And the Wizard of Oz is of course a scam. The populist politician who promotes monetary expansion.

The debate about Fiat Money at heart is more political than economic. The problem arises when economic (wrong) arguments are used and (valid) political positions are defended. The other is that critics of Fiat Money present their positions as absolute and undeniable truth. However, they forget that the majority of the population does not share this Protestant idea of ​​preferring pain to dependency. This is something very gringo (especially from libertarians). But the rest of the world will not give up deflation control to return to crises of 10 years or more for mainly ideological reasons. The system requires many reforms, but radicalism does nothing. We need change, but not with dogmas, but with common sense and pragmatism.

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