Gresham’s Law and Modern Politics
Posted by Orrin Woodward on December 23, 2013
Here is a portion of my chapter on the Five Laws of Decline (FLD) from the new book I am working on. The more I study history and society, the more I realize how true the FLD are in real life. Modern politics merely confirms what the FLD teaches – that most men will sell out their character if the price is right. Oliver DeMille and I explain how the Five Laws of Decline work within society in our book LeaderShift. If you haven’t read that book, I encourage you to do so. The goal of LIFE Leadership is to educate the world on life-changing principles that make a difference in a person’s life.
Sincerely,
Gresham’s Law – Bad Behavior Drives Out Good Behavior
Thomas Gresham’s Law
Thomas Gresham, an English financier, developed his law through the study of monetary policy and wrote, “when government compulsorily overvalues one money and undervalues another, the undervalued money will leave the country or disappear into hoards, while the overvalued money will flood into circulation”. In short, bad money drives out good money. There are many historical case studies of this phenomena (for example, my book RESOLVED: 13 Resolutions for LIFE discusses colonial New England’s disastrous paper money experiment) where fiat paper money causes gold and silver specie to disappear from the marketplace. Why, in effect, would anyone pay for goods and services in real dollars when the State issues non-backed fiat paper as its legal tender? Real money is quickly stored by society’s members until the fiat legal tender paper fraud runs its course. Gresham’s Law, however, can also be applied to other fields besides just money. For instance, as the “political means” of wealth grows within society, Gresham’s law works to drive out good politicians who, after realizing they cannot restore justice, exit the political field rather than play by the new unjust rules. In effect, real leaders refuse to surrender their character to political bosses who demand “political means” of wealth creation for those they elect. Therefore, the best politicians are eliminated from the selection process and are replaced by less noble souls who sell out their ethics to be elected in the service of exploiters.
Accordingly, the growing FLD within society force the politicians to either play by the unethical rules or exit themselves from the game. Either way they fulfill Gresham’s Law as the good is driven from the field. Another way of viewing Gresham’s Law is to understand that what is rewarded increases while what is punished decreases. Few have described Gresham’s Law in action better than Bertrand De Jouvenal did when he wrote:
Through the prestige of its leaders and the popularity of its principles the group brings victory to its candidates, whom it has chosen less for their personal worth than for the pledge of their obedience to itself; moreover, they will be the more faithful to their party from the inability to make their way without it. The first result of this is a degradation of the assembly, which no longer draws its recruits from the best men. . . So far the debasement of the electors and the degradation of the assembly are only accidental. They are to become by progressive stages systematized. Syndicates of interest and ambitions will soon take shape which, regarding the assembly as a mere adjunct of Power and the people as a mere cistern for the assembly, will devote themselves to winning votes for the installation of tame deputies who will bring back to their masters the prize for which they have ventured everything, the command of society. . . Soon they secured for themselves the selection of the candidates, and, naturally, chose men in their own likeness: they did not choose Catos. From this has followed a prodigious drop in the level of parliaments and in the level of government. . . Parliament is then no longer a sovereign assembly in which an elite of independent citizens compare freely formed opinions and so arrive at reasonable decisions. It is now only a clearing-house in which the various parties measure their respective parcels of votes against each other’s.
An example from modern times that confirms Gresham’s Law is alive and well was the impeachment proceedings against President Bill Clinton. Regardless of the particular party one supports, doesn’t it seem curious that an impeachment vote on non-party moral issues could follow party-lines so closely? For how does anyone argue that party affiliation is the main indicator as to whether Clinton’s behavior was ethical or non-ethical? If the impeachment proceeding proved anything, it proved that party loyalty trumps personal ethics whenever they conflict. The impeachment trial validated De Jouvenal’s 1945 outlook while teaching that politics, if anything, is more subject to Gresham’s Law in the twenty-first century than it was in the preceding one. Gresham’s Law, to sum up, has driven independent thinkers from the political arena and substituted obedient servants who follow the party line instead of their internal conscience. The politicians are no longer leaders with independent thoughts, but rather mere subjects beholden to the party if he desires to stay in power.
22 Responses to “Gresham’s Law and Modern Politics”
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Lee Weishar said
Wow, I never really though of the impeachment process from that point of view before; what a great example!
James Deming said
Very good explanation of how we lose our best and brightest from even entering the political arena. How can they when many dont agree with the political, ethical and moral examples coming from the different party lines. Great article, can’t wait to read the book.
Chad Waters said
Ho Orrin,
I can’t wait for the book to study, underline and most of all help educate others!
Merry Christmas
God Bless
george guzzardo said
Thanks again for diligently going through the research making it possible for all of us to grow. I feel that the influence to change this corruption and lack of character won’t come from the political arena but from a new industry called leadership where men and women refuse to sell out. I’m honored to be part of that new industry. George
Jesus Hernandez said
” Syndicates of interest and ambitions will soon take shape which, regarding the assembly as a mere adjunct of Power and the people as a mere cistern for the assembly, will devote themselves to winning votes for the installation of tame deputies who will bring back to their masters the prize for which they have ventured everything, the command of society. . . ” Very powerful stuff!! Leadership truly is a romantic battle!
Maura Galliani, Sons of Liberty said
I enjoy your passion for history, Orrin, but more importantly your passion for the truth — thank you for sharing both. And you do a fantastic job of using great examples of the past and the present to illustrate your teachings. God bless you and yours, have a Merry Christmas, and a “fired up” New Year!
Rob Robson said
Orrin, your delivery of these principles is so clear and concise. I CAN”T WAIT FOR THIS BOOK TO BE AVAILABLE! Hope your family has an awesome Christmas!
David Fidler said
Very powerful and to the point. It does make me want to jump in even more and try to get my fellows to better understand what is really going on. While once upon a time I had a strong desire to get into politics this very aptly shows why I have refrained from that endeavor and shied away from it.
Keep up the good work and I look forward to reading your book.
Steve Meixner said
Orrin , I just love reading the Information you post. I continue to read about the Five Laws of Decline and see them everywhere. Funny that I began collecting Silver Coins back in the 60’s as a kid, I’m sure I never thought of it as Gresham’s Law back then 🙂 I can’t Thank You enough for all I’ve learned and continue to learn. Merry Christmas to You and Your Family from
Steve & Madeline Meixner
Tim Miller said
Orrin,
Your clear understanding of what we are witnessing is refreshing.
Ken Hendon said
We love the truth! Thanks for giving truth a voice.
Larry said
Orrin, thanks for the straight insight on this behavior. Its clear to me I have so much to learn. Larry
Anthony Trucano said
That’s some great information about political parties. I have to say that I’ve been taking for a couple years about the dangers of political parties. I’m glad to see that I’m finding like-minded people since joining LIFE. I can’t wait to change this world!
Olivier Jean-Baptiste said
Thanks Orrin!
We all need to be reminded to be principle centered and value driven in any of our dealing.
Without a the North Star we all will sooner or later fall into relativisme and pragmatisme.
Olivier
Richard Kroll Jr. said
Orrin… what may have been evident in 1945 to a French philosopher, political economist, and futurist, is now COMMON PLACE in our American political system! Gresham’s Law seems to take on momentum as the good is pushed out with the bad!?
How sad that most, if not all, our political parties are now devoting themselves “to winning votes for the installation of TAME DEPUTIES who will bring back to their MASTERS the prize for which they have ventured everything, THE COMMAND OF SOCIETY”!?!
Time for a LeaderShift!!!
Richard Kroll Jr. said
Sorry… that should have read: Gresham’s Law seems to take on momentum as the good is pushed out BY the bad!?
Tim Marks said
Orrin
Sad but true.
Thanks so much for getting this truth out
Tim
Stew Weatherbee said
As I have been following these excerpts from your new book, I cannot help but be reminded of Sir Winston Churchill during the 1930’s. He spent much of his time writing and speaking about the looming menace of Hitler and the resurgent German nation, predicting – correctly- that Britain and the world would be embroiled in another world war. Churchill was roundly condemned by most of the establishment in Britain and other countries as well.
Your forthcoming book is illuminating as great, if not greater, threat to the freedom of the people of the West. Just as Churchill was condemned and even persecuted, so too will you, especially once the government sees that your insights are being taken to heart by many because of the influence of Life Leadership. Just as you and Oliver predicted in Leadershift, entrenched politicians and bureaucrats will take action against you (think IRS vs Tea Party for starters.) I pray that you will have the strength to endure the “gathering storm.”
Stew Weatherbee
Team of Hope
Paul Brostowitz said
Sadly our elected politicians conform to the Gresham’s Law that says most men will sell out their character for a price. And in doing so, have sold us into the slavery of the corrupt system so entrenched in our government. Well done Orrin!
jonathan gauthier said
Wow thx you orrin for this blog 🙂
robert wilcox said
I just cannot wait for your new book!!!! The knowledge and wisdom you have attained is just Genious. I am sure you know this…but even more astounding is how you take the complex issues and make them understandable through your writings!! Thank you!
Steve Leurquin said
Orrin,
I just read chapter 9 (The Law of the Vital Few) in Oliver’s new book then I read this blog. It is amazing the signs that are all around us if only a few more would read them. I strongly feel there are more of the “vital few” out there than we think, but that they have no idea where to go or where to start. It is a great reminder to keep going house to house. Steve