When I lived as a student in London 1991-92, one day I decided to visit the Bank of England to see what they would do if I presented a 5-pound note for redemption of the promise to pay the bearer “five pounds” on demand. The tale was told in a guest reflection in Liberty in 1994.

The guest reflection:

Funny money — There’s some funny language on the money in England. The five-pound note contains the statement, “Bank of England: I promise to pay the bearer on demand the sum of five pounds.” Five pounds of what? If you ask anybody on the street, the note is five pounds, and they obviously aren’t talking about units of weight—so what could that statement possibly mean? I decided to visit the Bank of England in downtown London to make them make good their promise. What would they do—hand me back another five-pound note in exchange for the one I offered?

I was stopped at the door by a security guard. I explained that my note said that the Bank would give me five pounds upon demand for it, and that I was hereby demanding they fulfill their obligation. He explained I couldn’t get past the front desk without wearing a three-piece suit and having “official business.” The man behind the front desk had little patience, telling me that perhaps I’d find some information if I went to the Bank of England Museum around the corner.

So I left and went to the museum, which is quite nice, actually. I explained to a curator what had happened, and that I was interested in finding out what exactly the language could mean. It obviously didn’t function as a promise to pay me five pounds—the bank wouldn’t even let me through the door! She disappeared into a back room and, finally, dug up an old photocopy from God-alone-knows-where, which attempts to explain the meaning and evolution of the “I promise to pay the bearer” language. I took the pages home and tried to understand them [note: these pages are included in the attached PDF file]. Apparently, the Bank is now contending that the language only means, and only ever meant, that it has an obligation to replace old, out-of-circulation pound notes with new, in-circulation ones.

Right. That’s what “I promise to pay the bearer on demand the sum of five pounds” means.
—guest reflection by N. Stephan Kinsella

[Mises]

Update:

I just received (Jan 24, 2015) an interesting bit of correspondence about this:

Dear Mr Kinsella,
I was just reading an excellent Economist article [1] that pointed me to your own article [2]:
[1] www.economist.com/blogs/freeexchange/2015/01/switzerlands-monetary-policy — 21Jan15, by Simon Cox
[2] https://stephankinsella.com/2010/03/the-bank-of-england-and-me — 21Mar10, by you

In Sep10, I wrote to Andrew Bailey, (BoE Chief Cashier at the time), along the same lines:

“… On every banknote, you make a promise to “pay the bearer on demand the sum of… pounds”. Which begs the question: how could I take you up on this promise??
If I walked into the Bank of England (well I don’t suppose I would get through security, but let’s ignore that practical detail for a moment) with a tenner say, and asked to call in that particular promise, the what would you do? Hand me another tenner in exchange for mine I suppose?”

Remarkably, Mr Bailey took the time and trouble to reply. In case you are interested, I have appended our correspondence below.
Yours sincerely, [A.]
…

——– 27 Sep 10 ——–
Subject: How could I take you up on your promise??
Mon, 27 Sep 2010 14:40 From: [A.]  To: Andrew Bailey

Dear Mr Bailey,

I just enjoyed your short interview “The man who signs your banknotes” on BBC News (http://news.bbc.co.uk/1/hi/business/7883393.stm). I am very glad to hear you would like to see more fivers in circulation:-)

Anyway, there is a conundrum that probably has no sensible answer, but if anyone has one it surely must be you… On every banknote, you make a promise to “pay the bearer on demand the sum of… pounds”. Which begs the question: how could I take you up on this promise??
If I walked into the Bank of England (well I don’t suppose I would get through security, but let’s ignore that practical detail for a moment) with a tenner say, and asked to call in that particular promise, the what would you do? Hand me another tenner in exchange for mine I suppose? It all seems rather circular and pointless.

Yes I know a little about the gold standard.

It just tickles me that the most(?) widely published promise is, actually, meaningless (unless I am missing something).

Regards, [A.]

——– 30 Sep 10 ——–
Thu, 30 Sep 2010 07:34  From: Andrew  Bailey
Dear [A.]

Thanks for getting in touch. There is a point to the “Promise to Pay” but it isn’t quite the purpose that my forebears had in mind. You are correct that in the past, the Promise was a commitment to convert into gold. Convertibility came to an end around eighty years ago, and hence the Promise is today a commitment to exchange one banknote for another.

There is however one area where the Promise has real meaning. A Bank of England note can always be exchanged at the Bank’s counter. From time to time we withdraw a note design from circulation and issue a new more secure design. After a period of co-circulation while the changeover takes place, we withdraw legal tender status from the old design. A fairly small proportion of the old notes are not returned before legal tender status is withdrawn. However, all Bank of England notes, however old, will always be honoured and exchanged by the Bank. In this sense the Promise is a commitment to exchange at all times for a current note.

I hope this helps

Andrew

11:47 From: [A.]

Dear Andrew,

Thank you very much for taking the time to reply, which I read with much interest.

It certainly does help, and I must say I am very happy to hear that it isn’t actually meaningless!

Regards, [A.]

***

Further comments from the same correspondent:

They probably get asked a few times. After all, when you print something a billion times, that’s somewhat meaningless, it isn’t really surprising. And there’s no really good answer to the question: fiat money is based on trust, belief and credibility. Hence the imposing (physical) architecture of the BoE’s premises.

And another from one of his cc’s:

About a dozen years ago, I remember reading about a student art project called the “monetary inquiry association” by Simon Goldin. The student asked the BoE to make good on its promise of ten pounds. The results were amusing. He also wrote to a bunch of experts asking them to define money. Most provided boring textbook answers. One economist however explained that money was memory. Anthony Horsley of LSE also gave a thoughtful reply if I recall correctly.

You’ve just prompted me to look it up on the interweb. It’s still there. Here’s the link:

http://library.uniteddiversity.coop/Money_and_Economics/MIA_Progress_Report.pdf

Update: See art project: what is money?:

[3/18/2004]

Shedding some light on the darkness surrounding money is (or apparently was) the aim of the Monetary Inquiry Association (MIA), founded by British artist Simon Goldin. The MIA claims to have endeavored to become a leading authority on the questioning of money.

As a first activity, Simon Goldin sent a 10-pound note to the Bank of England and asked the bank to give him the ten pounds, as promised on the note to the holder in such a case. This was to implicitly question what those ten pounds are all about. A letter of the same name was also sent to 45 experts from the London School of Economics and to the heads of the nine largest banks in Great Britain asking them to provide their definition of money.

Goldin’s request to the Bank of England led to a curious exchange of letters, which you can see below.

More detailed information, including answers from the experts, was previously available on the MIA’s apparently discontinued website at www.monetaryinquiryassociation.org. The report (pdf) is still available: MIA_Progress_Report.pdf .

I also found the following blog entry from 2010 on www.stephankinsella.com: The Bank of England and Me .

 

 

***

From my journal 1993:

BIG ENOUGH

Oktoberfest Munich 1991, with Paul Comeaux

I wrote this poem related to why I don’t believe in God (atheism) or government (anarchism), and why I think these views are complementary and consistent, and both correct as well. When I went to the Oktoberfest in Munich in 1991 (3 Oct. 1991, I believe it was), one night we met several folks at one of the beer halls. One of the waitresses was a girl named Bettina, whom I talked with for quite a while. She ended up sitting down and talking philosophy with me for about 30 minutes or maybe longer, even though that meant she was missing out on tips. She was Austrian, beautiful, and a student. And a feminist type who hated waiting tables–despite the fact that she did it voluntarily and was well paid. She thought it degrading etc. Well she was interested in a philosophy book I happened to have with me that night in my fanny-pack, called From Socrates to Sartre: The Philosophic Quest, by T.Z. Lavine. And I recommended some other books for her to read. Well, being European, of course she was a socialist (and even admitted it), but she at least had the good sense to be an atheist. I asked her why she was an atheist, and she said, “because it’s too easy to believe in God.” I thought about it, and really liked that reasoning, skimpy though it was.

From 1990, the year before, with Paul Comeaux and Tony Tramontana

So I told her, “Yes, but don’t you see that it’s also too easy to believe in government?” Which she didn’t grasp, again validating my theory above that socialism is inferior to capitalism. But anyway, it inspired me to write a poem, called “Big Enough. ” I actually think of it more as a song, sung by Edie Brickell of the New Bohemians. Here it is:

Big Enough

You know it’s hard to believe
That so many believe
What they believe

It’s so hard to believe
What they believe

And it’s hard to believe
It’s so easy to believe

It’s too easy

It’s too easy
To believe in God and Government
Oh, the fools who believe

In the God of Government

To believe
It’s too easy

The world is big enough
To believe in it
And I am big enough
To believe in me
You are big enough–
Are you big enough?–
To believe in you
Are you big enough
For me to believe in you?
It’s not that easy . . .
It’s not too easy to believe
To believe in the fools
Who are not big enough

It’s too easy

The Government of God
Is not big enough
It’s smaller than the world
The world is smaller than me
If you are smaller than the world
You are not big enough
You’re too easy

The God of Government
Is not big enough
To believe in
It’s smaller than the Government of God

Where is your size?
Where lies?

I am bigger than–
If you are bigger than–
Then it’s all easy

***

Update: see Legal Positivists Are Natural Lawyers: The error is thinking there is a tradeoff between mysticism and relativism. The theists usually side with mysticism to avoid relativism (natural law types do too—they just substitute natural law for God—me, if I’m gonna accept the stupid dichotomy, I’d take mysticism over relativism (since my choosing good unavoidably does this), and if I’m gonna take mysticism, I’ll take a real, established religion rather than a fake, pretend, in-denial one like “natural law,” or, worse, stateocracy).

See also KOL461 | Haman Nature Hn 119: Atheism, Objectivism & Artificial Intelligence; The HUGE Flag.

Ayn Rand Lexicon, “Religion“:

PLAYBOY

Has no religion, in your estimation, ever offered anything of constructive value to human life?

RAND

Qua religion, no—in the sense of blind belief, belief unsupported by, or contrary to, the facts of reality and the conclusions of reason. Faith, as such, is extremely detrimental to human life: it is the negation of reason. But you must remember that religion is an early form of philosophy, that the first attempts to explain the universe, to give a coherent frame of reference to man’s life and a code of moral values, were made by religion, before men graduated or developed enough to have philosophy. And, as philosophies, some religions have very valuable moral points. They may have a good influence or proper principles to inculcate, but in a very contradictory context and, on a very—how should I say it?—dangerous or malevolent base: on the ground of faith.

More or less explicitly libertarian/Austrian: Amy Allen’s “Revolution”; Neema V’s rap “I Own Myself”; and John Papola’s Hayek Keynes rap “Fear the Boom and Bust”. Libertarian-related include “Peace” by the Luminaries and others linked in this post.

So says Big Copyright, which adopted the term for copyright infringers because of “its suggestions of theft, destruction, and violence.” But now, the “pirates”have  “co-opted the term, adopting it with gusto and hoisting the Jolly Roger across the Internet (The Pirate Bay being the most famous example).”

I agree. Copyright infringers should not be called pirates. A pirate is a robber, plunderor, predator. The term much better describes the patent and copyright lobbies, which use state monopoly grants to plunder and rob the masses.

[Mises; AM]

I spoke earlier this month at the Austrian Scholars Conference 2010 on the Author’s Forum about Property, Freedom and Society: Essays in Honor of Hans-Hermann Hoppe (Mar. 11, 2010). The audio and video files are here; the YouTube below.

Mises blog

The O.P. Alford III Prize in Libertarian Scholarship is a $1000 prize awarded by the Mises Institute each year for the the article published in the preceding volume of Libertarian Papers that best advances libertarian scholarship, as chosen by the journal’s Editor and Editorial Board.

There were forty-four articles were published in Libertarian Papers in 2009. The 2009 award was given by Mises Institute President Doug French at the Austrian Scholars Conference 2010 to Gil Guillory and Patrick C. Tinsley, for their article “The Role of Subscription-Based Patrol and Restitution in the Future of Liberty.” This paper is a pioneering effort to advance the theory of the private production of justice. Guillory and Tinsley integrate and blend the theoretical and the practical, and set forth a detailed and practical plan to begin to establish such private institutions. Their article is creative and bold, informed by existing libertarian theory while extending it. As one member of the journal’s Editorial Board noted, “This paper presents a carefully worked out business plan for organisations that would provide an effective, superior alternative for tax-funded monopolies in deterring common types of crime and  providing restitution to victims of such crimes. It is an original and path-breaking effort not only because of its concern with practical matters but also because of its deep understanding of the issues involved in developing a libertarian theory of social organization. While the paper’s primary focus is on the United States of America, a relatively young but highly developed and complex society, it opens up lines of enquiry and suggests methods that are bound to be of interest to libertarians everywhere.” Guillory and Tinsley are to be commended for their careful, meticulous, and systematic study.

The video of the award presentation is in the first 5 minutes of the following:

[Mises; LP]

(See also Auto mechanic for President – The phony populism of Stephan Kinsella, reproduced below)

Palin “Reeks of Local” — The Dumb, Dumb Demonrats

Related posts:

• Fleming on Woods
• The Trouble with Feser (Feser on Libertarianism)
• Luker on 10 Most Harmful Books
• Minarchists as Statist-Aggressors

Fleming on Woods

Related posts:

• Fleming on Woods
• The Trouble with Feser (Feser on Libertarianism)
• Luker on 10 Most Harmful Books
• Minarchists as Statist-Aggressors
• Feser: What Libertarianism Isn’t and The road from libertarianism

Reply to Feser on Block

Ed Feser’s recent Contra the Rothbardians yet again: A Reply to Walter Block is the latest entry in the author’s growing separation from libertarianism.

I’m sure Block will reply, but I jotted a few notes down when reading his piece, and assemble some of them here. [continue reading…]

From my 2006 LRC post. As the editor of Libertarian Papers, I can relate to Higgs’s experience with such authors.

Heroic Higgs v. “diZerega”

Libertarian Papers, Vol. 2 (2010), Art. #8: “Voltairine de Cleyre: More of an Anarchist than a Feminist?,” by Steve J. Shone.

Abstract: The recently rediscovered Michigan-born poet, essayist, and political philosopher, Voltairine de Cleyre (1866-1912) has been celebrated by modern scholars as both an anarchist and a feminist. In this paper, however, it is argued that detailed scrutiny of her writings perhaps suggests de Cleyre, who spent much of her life in Philadelphia, was consistently an anarchist thinker, but that her ideas are not nearly so compatible with feminism as they have been portrayed.

[Mises]