Jersey’s barn-building industry

Mervyn King, former Governor of the Bank of England (since 2013, Lord King of Lothbury), published a book earlier this year. Its title? The end of alchemy. Its sub-title? Money, Banking and the Future of the Global Economy.

Alchemy? The Oxford Dictionary definition: The medieval forerunner of chemistry, concerned with the transmutation of matter, in particular with attempts to convert base metals into gold or find a universal elixir (a preparation able to prolong life indefinitely).

Is there this false alchemy in this world’s money? Mervyn King makes a good case that money’s promises are not delivered in several respects. One of these relates to money being purportedly a “store of value”. It isn’t because money as a store of wealth is plagued by unquantifiable uncertainties, world crises and human scheming. It is wealth only through "monetary and banking alchemy".

 

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Maybe you didn’t know that the money in your bank account is not to be trusted. At present it will buy certain things. No body on earth guarantees that it will buy anything for you in 5 years time. The States of Jersey £1 note merely confirms that it will is exchangeable by the States - at any time -for another £1 note.

Also in this book Mervyn King confirms “the severity of the disequilibrium into which so many of the biggest economies of the world have fallen.” The shaking financial foundations of most nations today are debt-related.

Given these two factors – “monetary and banking alchemy” and “severe disequilibrium of the world’s biggest economies” - Mervyn King places his faith in nothing except “the power of pessimism”. He hopes that those who see these things will be forced, by pessimism, “to undertake bold reforms” (p. 369). “A long-term programme for the reform of money and banking and the institutions of the global economy will be driven only by an intellectual revolution.” There ends the book – with hope placed in a human intellectual revolution when one of the most intelligent men sees only pessimism.

Separately, Jersey continues its barn-building industry. See bold above. Barns are places where wealth is stored. Today most wealth is represented and transferred intangibly. Money, investments, loans, certificates of deposit, contracts for differences, and titles to property are all intangible. These forms of wealth still need barns – arrangements to hold these titles to wealth.

Jersey’s financial services industry builds these barns often in the form of companies and trusts. Barn--companies own bank deposits and all kinds of assets. The trustees of a barn-trust are the legal owners of assets which actually belong (beneficially) to others. Jersey-based barns hold hundreds of billions of pounds worth of assets.

We help people by building their barns. And, at the same time, build and place into our own barns the money-profit from this building activity.

Jesus Christ was asked by “someone in the crowd” to assist him in “telling his brother to share the inheritance with him”.   That seems perfectly valid. What can be wrong about that? Well, it seems that the danger for this “someone in the crowd” was that he might be succumbing to the “desire to have more”. But what’s wrong with being eager to have more?

 

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In Jesus’ parallel story, the evil for the barn-builder was not in the barns. The evil wasn’t even in what the barns contained. It was in the fact that the barn-builder became “not rich towards God”. In his “desire to have more”, in his barn-building, he lost his very being, his soul, himself as God made him.

Our barns today are, as Mervyn King has shown, replete with illusions. The greater disaster is when those illusions keep us from the true riches.