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  • A Truly Diabolical Monetary Policy

    Posted by David Foster on December 19th, 2008 (All posts by )

    In Goethe’s Faust, Mephistopheles desires the introduction of paper money. At his instigation, courtiers approach the emperor at a masked ball and get him to sign the following document:

    To all it may Concern upon Our Earth
    This paper is a thousand guilders worth
    There lies, sure warrant of it and full measure
    Beneath Our earth a wealth of buried treasure
    As for this wealth, the means are now in train
    To raise it and redeem the scrip again

    In the bright sunlight of morning, the now-sober emperor observes hundreds of pieces of paper, each bearing his signature and claiming to be equivalent in value to gold, and demands to know what is being done to apprehend the counterfeiters.

    Treasurer: Recall–Your own self signed it at the time,
    Only last night. You stood in Great Pan’s mask
    And with the Chancellor we approach to ask:
    “Allow yourself high festive joy and nourish
    The common weal with but a pen’s brief flourish.”
    You signed: that night by men of a thousand arts
    The thing was multiplied a thousand parts
    So that like blessing should all accrue
    We stamped up all the lower series too
    Tens, Thirties, Fifties, Hundreds did we edit
    The good it did folk, you would hardly credit.
    Your city, else half molded in stagnation
    Now teems revived in prosperous elation!
    Although your name has long been widely blessed
    It’s not been spelt with such fond interest
    The alphabet has now been proved redundanct
    In this sign everyone finds grace abundant

    Emperor: It circulates like gold of true assay?
    The Court, the Army take it in full pay?
    I scarce believe it, though you say I ought

    Marshal: The fugitives could never now be caught
    The stuff was scattered broadside in a wink
    The money-changers benches groan and clink
    Each single sheet is honored in their court
    In gold and silver, though a trifle short
    To butcher, baker, inn it next flits down
    Just feasting seems to busy half the town
    The other half show off their fine new clothes
    The draper cuts the bolt, the tailor sews
    Here cellars toast the Emeror, barrels plashing
    There waiters jostle, steaming platters clashing

    Mephistopheles. You roam the terraces alone, it happens
    And meet a beauty decked in costly trappings
    One eye by haughty peacock feathers hidden
    The other winks, by such a voucher bidden
    More swiftly than by turn of speech or wit
    The rich rewards of love are lured by it
    One is no longer plagued by purse or package
    A note borne next the heart is easy baggage
    It aptly couples there with love epistles
    In priestly breviaries it chastely nestles
    The soldier, too, for ease of hips and loins
    May now discard the ponderous belt of coins
    Your Highness pardon if his stately matter
    I seem to slander by such lowly chatter

    ….

    Emperor: I’ll grant a gift to everyone at Court
    What will they use it for? Let each report.

    Page: I’ll live as gaily as in paradise
    Another: I”m off to buy my love a chain and locked
    Chamberlain: From now on I drink wine at twice the price
    Another: My word, the dice are itching in my pocket
    Baron: I’ll clear of debt my manor house and field
    Another; I’ll lay it by, more interest to yield
    Emperor: I hoped for pluck and zest for ventures new
    I should have known you, and what each would do
    For all new bloom of wealth, it’s plain to see
    That each remains just what he used to be

    (Fool enters)

    Fool: You deal out favors–let me have a few

    Emp: So you revived in time to waste these too!
    Fool: Those magic leaves! I cannot grasp them quite.
    Emp: No wonder, for you do not use them right.
    Fool: Some more come fluttering down–what shall I do?
    Emp: They fell your way, so let them fall to you.

    (Emperor exits)

    Fool: Five thousand guilders–wondrously collected!
    Meph: Wineskin on legs! Have you been resurrected?
    Fool: Been often raised, but never to such profit.
    M: You’re in a sweat with the excitement of it
    F: Look–does this really work in money’s stead?
    M: Enough to keep you drunk and overfed
    F:Can house and land and ox be bought for it?
    M: Why not? Just make your bid and seal a writ
    F: A hunt, a trout-stream, park and lodge?
    M: Yes all!
    I’d love to see you in your manor hall!
    F: This night I dote on deeds of property!

    (Fool exits)

    Mephistopheles: Not every jester is a fool, you see!

    (Excerpts are from the Norton critical edition: Walter Arndt, translator, and Cyrus Hamlin, editor)

     

    4 Responses to “A Truly Diabolical Monetary Policy”

    1. Lexington Green Says:

      Spengler talked about this passage recently.

    2. veryretired Says:

      The notion that we could return to specie money is fool’s gold. In fact, paper money and coinage will probably become increasingly rare and even obsolete, as personal checks are rapidly becoming, replaced by electronic and plastic “accounting ledger” money.

      Paper money can be “zimbabweed” too easily by unscrupulous governments, which is to say any government.

    3. Simon Kenton Says:

      Benjamin Graham mentioned it too – said it was inspired by ‘the notorious French assignats.’

    4. david foster Says:

      It’s interesting to note that Goethe, in addition to his work in literature, art, and science, was a senior counselor to his friend the Grand Duke of Saxe-Weimar-Eisenach….thus, he probably had practical experience with monetary policy.

      Also, I’m betting that Germany is the only major country whose great national work of literature contains a passage dealing with the management of the currency. Surely, most if not all of the Weimar officials who presided over the great hyperinflation had read “Faust”–I wonder if any of them ever though about it during that period?