Imposition of the Western Monetary System in Fiji 
Ph.D., Public Policy Analysis
Reading Selection (that I’ve used in six Undergraduate Courses):
- Foundations of Public Policy
- Economic Analysis of Public Policy
- Macroeconomics & Public Policy in Afrika & the Diaspora
- Economics of Money, Banking and Financial Markets in Afrika & the Diaspora
- International Business & Trade in Afrika
- Entreprenuership & Business Development in Afrika
Excerpt From: Leo Tolstoy, What Then Must We Do? 
“In a volume of literary productions there is an article by Professor Yanzhul which gives the recent history of the Fiji Islands. If I wanted to invent a most striking illustration of the way in which the demand for money has become in our days the chief instrument by which some men enslave others. I could not invent anything more glaring and convincing than this true story, which is based on documentary evidence and occurred the other day.
The Fijians live in Polynesia on islands in the Southern Pacific Ocean. The whole group, Professor Yanzhul tells us, consists of small islands covering about 8,000 square miles. Only half of them are inhabited, by a population of 150,000 natives and 1,500 whites. The native inhabitants, who emerged from savagery long ago, are distinguished among the natives of Polynesia by their ability, and are capable of work and of development, as they have proved by rapidly becoming good farmers and cattle-breeders. They were thriving, but in 1859 the kingdom found itself in a desperate position. The Fijians and their King Thakombau needed money. They needed $45,000 for contributions or indemnities demanded by the United States of America for violence said to have been inflicted by Fijians on some citizens of the American republic.
To collect this sum the Americans sent a squadron, which suddenly seized some of the best islands as security and even threatened to bombard and destroy the settlements unless the contribution was paid to the American representatives by a given date. The Americans had been among the first white men to settle in Fiji with missionaries. Selecting or seizing under one pretext or another the best plots of land on the islands and laying out cotton and coffee plantations they hired whole crowds of natives, whom they bound by contracts the savages did not understand, or obtained through contractors who dealt in live chattels. Conflicts between such planters and the natives, whom they regarded as slaves, were inevitable, and a conflict of that kind served as pretext for the American demand for compensation. Despite its prosperity Fiji till then had been in the habit of making payments in kind, as was customary in Europe till the Middle Ages. The natives did not use money, and their trade was entirely done by barter; goods were exchanged for goods, and the few public or government levies were collected in country produce. What were the Fijians and their King Thakombau to do when the Americans categorically demanded $45,000 under threat of dire consequences in case of non-payment. For the Fijians the figure itself was incomprehensible, not to speak of the money, which they had never seen in such quantities. Thakombau consulted with the other chiefs, and decided to turn to the Queen of England. At first he asked her to take the islands under her protection, and later on asked her simply to annex them. But the English treated this petition cautiously and were in no hurry to rescue the semi-savage monarch from his difficulties. Instead of a direct reply they fitted out a special expedition, in 1860, to investigate the Fiji Islands, in order to decide whether it was worth spending money on satisfying the American creditors and annexing the islands to the British dominions.
Meanwhile the American government continued to insist on payment, took possession, as security, of some of the best positions, and having observed the prosperity of the people, raised its demand from $45,000 to $90,000, and threatened to raise it still further if Thakombau did not pay promptly. So, pressed on all sides, poor Thakombau, who was ignorant of European methods of arranging credit transactions, began, on the advice of European settlers, to seek money from Melbourne merchants on any terms, even if he had to yield his whole kingdom to private persons. And so in Melbourne, in response to Thakombau's appeal, a trading Company was formed. This Company, which took the name of the Polynesian Company, concluded an agreement with the Fiji rulers on terms very favourable to itself. Undertaking to meet the debt to the American government and engaging to pay it by certain fixed dates, the Company under its first agreement obtained 100,000, and later 200,000 acres, of the best land at its own selection, with freedom for all time from all taxes and duties for its factories, operations, and colonies, and for a pro-longed period the exclusive right to establish banks in Fiji with the privilege of unlimited issue of bank-notes. Since the signing of that contract, finally concluded in 1868, the Fijians were confronted, side by side with their own government under Thakombau, by another power - the influential trading Company with great landed possessions on all the islands and a decisive influence in the government. Till then Thakombau's government for the satisfaction of its needs had contented itself with what it obtained by various tributes in kind and by a small customs duty on imported goods. With the conclusion of this agreement, and the establishment of the powerful Polynesian Company, its financial position changed. An important part of the best land in its dominions passed over to the Company and so the taxes diminished; on the other hand, as we know, the Company had a right to the free import and export of goods, as a result of which revenue from the customs was also reduced. The natives, that is to say 99 per cent. of the population, had always been but poor contributors to the customs revenue, for they hardly used any European goods except a little cotton stuff and some metal ware; and now, when through the Polynesian Company the wealthier European inhabitants escaped the payment of customs dues, King Thakombau's revenue became quite insignificant and he had to bestir himself to increase it. And so Thakombau consulted his white friends as to how to escape from his difficulties, and they advised him to introduce for the first time in the country direct taxation, and, no doubt to facilitate matters for him, it was to be in the form of a money-tax. The levy was instituted in the form of a general poll-tax of £1 on each male and four shillings on each woman in the islands.
Even to the present day in the Fiji Islands, as we have already mentioned, the cultivation of the soil and direct barter prevails. Very few natives have any money. Their wealth consists entirely of various raw produce and of cattle, but not of money. Yet the new tax demanded, at fixed dates and at all costs, a sum of money which for a native with a family came to a very considerable total. Till then a native had not been accustomed to pay any personal dues to the government except in the form of labour, while the taxes had all been paid by the villages or communes to which he belonged, from the common fields out of which he, too, drew his chief income. He had only one way out of the difficulty: to obtain money from the white colonists that is, to go either to a trader or a planter who had what he needed-money. To the first he had to sell his produce at any price, since the tax-collector demanded it by a given date, or he was even obliged to borrow money against future produce, a circumstance of which the trader naturally took advantage to secure an unscrupulous profit; or else he had to turn to a planter and sell him his labour, that is to become a labourer. But it turned out that wages on the Fiji Islands, in consequence probably of much labour being offered simultaneously, were very low, not exceeding, according to the report of the present administration, a shilling a week for an adult male, or £2.12s. a year; and consequently merely to obtain the money to pay his own tax, not to mention his family's, a Fijian had to abandon his home, his family, his own land and cultivation, and often to move far off to another island and bind himself to a planter for half a year, in order to earn the £1 needed for the payment of the new tax; while for the payment of the tax for a whole family he had to seek other means. The result of such an arrangement can easily be imagined. From his 150,000 subjects Thakombau only collected £6,000; and then an intensive demand, previously unknown, began for taxes, and a series of compulsory measures. The local administration, previously honest, soon came to an understanding with the white planters who had begun to manage the country. The Fijians were taken to court for non-payment and sentenced, besides the payment of costs, to imprisonment for not less than half a year. The role of prison was played by the plantation of the first white man willing to pay the tax and legal costs for the prisoner. In this way the whites obtained cheap labour to any desired extent. At first this handing over to compulsory labour was permitted for a period of six months only, but later on the venal judges found it possible to sentence men even to eighteen months' labour and then to renew the sentence. Very soon, in a few years, the picture of the economic condition of the inhabitants. of Fiji had completely changed. Whole flourishing districts had become half-depopulated and were extremely impoverished. The whole male population, except the old and the feeble, were working away from home for the white planters to obtain money needed for the payment of the tax, or to satisfy sentences of the court. Women in Fiji do hardly any agricultural labour, and so, m the absence of the men, the land was neglected or totally abandoned. In a few years half the population of Fiji had become slaves to, the white colonists. To improve their condition the Fijians again turned to England. A new petition appeared, to which were appended the names of many of the most notable persons and chiefs, begging to be made British subjects, and it was presented to the British consul. By this time England, thanks to its scientific expeditions, had not only studied but had even surveyed the islands and was well aware of the natural wealth of that beautiful corner of the globe. For these reasons the negotiations this time were crowned with full success, and in 1874, to the great dissatisfaction of the American planters, England officially entered into possession of the Fiji Islands, adding them to its colonies.
Thakombau died and a small pension was assigned to his heirs. The government of the islands was entrusted to Sir Hercules Robinson (Lord Rosmead), the Governor of New South Wales. During the first year of its annexation to England Fiji was without a government of its own, but Sir Hercules Robinson appointed an administrator. On taking the islands in hand the English government had a hard task to solve in fulfilling all that was expected of it. In the first place, the natives expected the abolition of the hateful poll-tax; the white colonists (who were partly American) either regarded the British rule distrustfully or (the British section) expected from it all kinds of benefits, for instance, the recognition of their dominion over the natives and the legalization of their claims to land they had seized, and so forth. The English government, however, proved competent to deal with the problem, and its first act was to abolish for ever the poll-tax which occasioned the enslavement of the natives for the profit of a few colonists. But here Sir Hercules Robinson was confronted by a serious dilemma. It was necessary to annul the poll-tax to escape from which the Fijians had appealed to the British government, but at the same time, by the rules of English colonial policy, the colony had to pay its own way, that is to say, had to find means to meet the expenses of its administration. Yet with the abolition of the poll-tax the whole income of Fiji (from the customs dues) did not exceed £6,000, whereas the expenses of the administration demanded at least £70,000 a year. So Robinson, having abolished the money tax, devised a labour tax, that is, imposed obligatory labour on the Fijians, but this did not bring in the £70,000 required for his Own and his assistants' maintenance. And matters did not progress till the appointment of a new Governor, Sir A. M. Gordon (Baron Stanmore), who, to obtain from the inhabitants the money needed for his own and his assistants' support, devised the plan of not demanding money until there should be enough of it in circulation on the islands, but of collecting produce from the natives and selling it himself.
This tragic episode in the life of the Fijians is the clearest and best indication of what money is and of its significance. Here all is expressed: the first basis of slavery - cannon, threats, murder, the seizure of land, and also the chief instrument - money, which replaces all other means. What has to be followed through the course of centuries in an historic sketch of the economic development of nations, is here, when the various forms of monetary coercion have been fully developed, concentrated into a single decade. The drama begins with the American government sending ships with loaded cannon to the shores of the land, whore inhabitants it wishes to enslave.
The pretext for the threat is monetary, but the drama begins with cannon directed against all the inhabitants: women, children, the aged, and the innocent: an occurrence now being repeated in Africa, China, and Central Asia. That was the beginning of the drama: 'Your money or your life,' repeated in the history of all the conquests of all the nations; $45,000 and then $90,000, or a massacre. But there were no $90,000 available. The Americans had them. And then the second act of the drama begins: brief, bloody, terrible and concentrated slaughter has to be postponed, and changed for less noticeable, but more prolonged sufferings. And the tribe with its ruler seeks means to substitute monetary enslavement - slavery, for the massacre. It borrows money, and then the monetary forms of the enslavement of men are organized.
These forms at once begin to act like a disciplined army and within five years the whole work is done: the people are not only deprived of the right to use the land, and of their property, but also of their liberty; they are slaves.
The third act begins: the situation is too hard and the unfortunate people hear rumours that it is possible to exchange masters and go into slavery to someone else. (Of emancipation from the slavery imposed by money there is no longer any thought.) And the tribe calls in another master, to whom it submits with a request to mitigate its condition. The English come, see that the possession of these islands will make it possible for them to feed the drones of whom they have bred too many, and the English government annexes these islands with their inhabitants, but does not take them as chattel slaves and does not even take the land and distribute it to its own supporters. Those old methods are now unnecessary. All that is necessary is that a tribute should be exacted; one large enough on the one hand to keep the slaves in slavery, and sufficient on the other to feed a multitude of drones.
The inhabitants had to pay £70,000 sterling. That is the fundamental condition on which England agreed to rescue the Fijians from their American slavery, and at the same time this was all that was necessary for the complete enslavement of the natives. But it turned out that under the conditions they were in the Fijians could not possibly pay £70,000. The demand was too great. The English modify the demand for a time, and take part of the claim in produce, in order, in due course, when money should be in circulation, to raise their exaction to its full amount. England did not act like the former Company, whose procedure may be compared to the first arrival of savage conquerors among a savage people, when all they want is to seize what they can get and to go away again, but England acts as a far-seeing enslaver: it does not at once kill the hen that lays the golden egg, but will even feed it, knowing the hen to be a good layer. At first she slackens the reins for her own advantage, in order later to pull them in and reduce the Fijians to the state of monetary enslavement in which the European and civilized world finds itself, and from which no emancipation is in sight.
Money is a harmless medium of exchange, only not when at the shores of a country loaded cannon are directed against its inhabitants. As soon as money is forcibly exacted at the cannon's mouth, then inevitably that is repeated which occurred on the Fiji Islands and has been repeated, and is repeated, everywhere and always: in the case of the old Princes of Russia and the Drevlyans, and with all governments and their subjects. People who have the power to coerce others will do it by the forcible demand of such a quantity of money as will oblige the coerced to become the slaves of the coercers. And besides this, what happened in the case of the English and the Fijians always happens, namely that the coercers, in order to hasten the enslavement, will in their demands for money always exceed rather than understate the limit of what is needed for the purpose. They will reach that limit without exceeding it only if a moral feeling is present, and even if that feeling does exist, they will always reach it when they are themselves in want. But governments will always exceed that limit, first because a government has no moral feelings, and secondly because, as we know, governments are themselves in extreme want, due to wars and to the need of paying their supporters. Governments are always irredeemably in debt and, even if they wished to, could not help following the rule expressed by a Russian statesman of the eighteenth century, that 'one must shear the peasant and not let him get overgrown'. All governments are irredeemably in debt, and this debt in its totality (apart from fortuitous diminutions in England and America) increases from year to year in a terrifying progression. Similarly do the budgets grow, that is the necessity of struggling with other aggressors and making payments of money and land to those who aid its own aggressions, and therefore the charges on land grown the same way. Wages do not grow - not on account of the law of rent, but because there is an exaction by violence, of payments to the state and for the land, which has the purpose of taking from people all their surplus so that to satisfy this demand they must sell their labour: for the exploitation of that labour is the object of the imposition. of the taxes. But the exploitation of that labour is only possible when, in the aggregate, more is demanded than the workers can pay without depriving themselves of nourishment. Raising the scale of wages would destroy the possibility of this slavery, and therefore, while there is violence, it never can be raised. And this simple and intelligible action of one set of men on another, economists have called the 'iron law' while the instrument by means of which this action is produced they call a 'medium of exchange'.”