We had the privilege last week of joining a small private dinner in London in honour of Baroness Thatcher.

I took the opportunity to congratulate her on her unswerving insistence on Honest Money. See eg this speech in 1984:

Today we have the lowest rate of inflation since the 1960s. Rising activity, which was patchy at first, is spreading across the economy. We now have the highest rate of growth in the Community. Recent CBI surveys have shown optimism growing with each successive month. Last year was a record for consumer demand, 1983 the best ever for new car sales.

These successes are a victory for honest money.

For years UK governments tried to beg and borrow their way to economic success. Instead, they fathered a massive inflation and destroyed both jobs and growth. We fell a long way behind our competitors.

Our present recovery is not based on a high and unsustainable government deficit. It is not a short-lived boom on the back of inflation …; Productivity is growing rapidly. Our goods are becoming more competitive. We have a healthy balance of payments surplus. We have paid off many of our overseas debts. Capital investment is thriving, with companies transforming their operations by buying new machinery.

… This time there are no prices or incomes controls waiting to release their coiled spring and knock recovery on the head.

There is now a government dedicated to making markets work again…

Which world leaders presiding over governments reeling under the weight of their own confusion now would dare get up and urge on us the virtue of honest money?

Which of them would be able to express cogently and clearly not only the technical arguments in favour of honest money but also – and above all – the moral arguments?

Which of them would even know that those moral arguments exist and know what they are?

Think about it.

Deals struck between two free people or businesses using Honest Money are an expression of mutual trust and rational mutual interest now.

Investments made now and debts incurred now using Honest Money are an expression of integrity and generosity by people now towards those future generations who either will reap the benefits of those investments – or have to repay those debts.

The Obama gazillion dollar creation of Governmentuan looks like the exact opposite – a cynical attempt to buy collectivist entrenched gains for favourite Democrat causes now by piling sprawling debt on future generations.

And look at the creakings of the Eurozone. Is part of the deep problem that the Euro in fact is Dishonest Money?

A currency phenomenon created for political not moral purposes, and which rests on the dishonest principle that its internal disciplines count for little – plus a place where huge irresponsibility or incompetence in one or more countries now compels everyone else to provide a huge bail-out?

When the FCO Board came to Warsaw in 2007 I invited the genius behind Poland’s transition from communism, Leszek Balcerowicz, to address them after dinner.

I introduced him with some of this famous declaration on the moral force of money which has never been bettered – and which has huge new urgency now:

So you think that money is the root of all evil?" said Francisco d’Anconia. "Have you ever asked what is the root of money?

Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them.

Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value…  Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. 

… Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?

… Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed.

… If you ask me to name the proudest distinction of Americans, I would choose–because it contains all the others–the fact that they were the people who created the phrase ‘to make money.’

No other language or nation had ever used these words before; men had always thought of wealth as a static quantity–to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.

… Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men…

Leszek Balcerowicz restored Honest Money in Poland after long decades of Soviet-inspired violent communist looting and mooching. A magnificent technical – and moral – achievement.

Thank you, Margaret Thatcher, for keeping these profound and subtle ideas alive in our country today.